Shell has said that it is shutting down production at its
Prelude floating liquefied natural gas (FLNG) facility off Western Australia because
of increased levels of industrial action.
It said on Monday July 11th that it would not be able to
supply cargoes until at least July 21st and that it would be sending workers
off the huge FLNG vessel. Shell said that strikes were impacting the ability of
the company to moor carriers at the site in order to collect cargoes of LNG.
It was only in March that Shell was given the green light
to resume operations at Prelude after an incident in December last year.
Located in the Browse Basin, Prelude was offline for four months from December
2nd due to power failures caused by a fire that put a stop to a steady six
months of production.
On Monday workers rejected the company’s latest pay
offer, with 95% opposed, reported the Offshore Alliance, which combines the
Maritime Union of Australia and Australian Workers’ Union.
The move could not come at a worse time for the LNG
market, which has suffered serious disruption as a result of restricted Russian
energy flows and disruptions at other LNG export terminals, including a fire at
Freeport LNG in the US, which will likely restrict supply for the rest of 2022.
Shell operates Prelude with a 67.5% stake in the
operation. Partners in the project included Japan’s Inpex with a 17.5% stake,
Korea’s Kogas with 10%, and Taiwan’s CPC, which holds a 5% interest.
