Shell's Prelude LNG is a carbon disaster

Shell's Prelude floating LNG facility produced 2.3 million tonnes of greenhouse gases for one solitary LNG cargo, making it the fifth biggest industrial emitter in Western Australia.

The Prelude first received gas from its subsea wells in December 2018 and by the end of June 2019 had produced 2.32 million tonnes of greenhouse gases, according to emissions data released by the Clean Energy Regulator today.

In those seven months just two condensate tankers and one LNG carrier were loaded from the facility that is moored off the Kimberly coast.

Conservation Council of WA director Piers Verstegen said the emissions data was absolutely shocking and suggested that Shell was making no effort to reduce Prelude's emissions.

"It is clear that an effective policy solution is urgently required to control emissions from Australia’s LNG export industry," Verstegen said.

"The outcome of this is that Australian taxpayers will have to pick up the bill for Shell’s pollution increases.

"At a modest carbon price of $25 per tonne, Australia taxpayers or other industries will have to bear a cost of nearly $60m to cover Shell's 2.3 million tonnes of pollution for the last year."

The Prelude is permitted emit 2.7 million tonnes of carbon emissions a year to produce its annual capacity of 3.6 million tonnes of LNG, 1.3 million tonnes of condensate and 0.4 million tonnes of liquefied petroleum gas.

Under those condition the carbon intensity of LNG from Prelude should be 0.75 tonnes of CO2 equivalent for each tonne of LNG, much higher than most Australian LNG projects.  

LNG projects are normally more carbon intensive in the first few months of commissioning as production is low and intermittent production shutdowns cause large amounts of excess gas to be flared. However the initial emissions performance of the Prelude is way beyond the norm.

Boiling Cold asked Shell what portion of the emissions resulted from flaring. Shell did not provide an answer. A Shell spokesperson said controls on the Prelude have been improved and monthly flaring rates have fallen by more than 60% since the facility started up.

The Valencia Knutsen LNG carrier that shipped the first LNG cargo in June 2019 can hold 173400 cubic metres of LNG, or about 83,000 tonnes. So last financial year the carbon intensity of Prelude LNG was almost 28 tonnes of CO2 equivalent for each tonne of LNG.

Boiling Cold asked if the continued operation of Prelude was consistent with Shell's stated commitment to a less carbon-intensive world.

The Shell spokesperson said Prelude was an integral part of Shell’s global portfolio and played "an important role in meeting the growing demand for more and cleaner energy."

The Prelude was completed late, is reportedly hugely over budget, is subject to an order by the offshore regulator NOPSEMA to fix basic safety procedures. Production was shut down in February due to power generation problems.

"Work is underway to restart production on Prelude, with our focus on a facility that is safe, robust and reliable," the Shell spokeperson said.

Updates from 1PM 26 March 2020

1. 3PM 26 March - Shell comments added.

Main Picture: Prelude floating LNG facility with an LNG carrier alongside.

Source: Shell Australia