The Minister for Resources and Energy, Martin Ferguson AM MP, today welcomed the decision by the Minister for Sustainability, Environment, Water, Population and Communities, Tony Burke, to grant environmental approval to Shell's Prelude Floating Liquefied Natural Gas (LNG) Project, located in the Browse Basin off the northwest coast of Australia.
Minister Ferguson noted that the project is subject to strict environmental conditions designed to ensure that any environmental impacts are managed and minimised.
Floating LNG is the use of a specialised floating facility to process gas into LNG for export directly at the gas field.
There are environmental and commercial benefits from using floating LNG, through eliminating the need for lengthy and expensive offshore pipelines and the requirement for onshore facilities including the LNG plant, jetties, roads, power and other supporting infrastructure.
Minister Ferguson commented that the Shell Prelude Floating LNG Project will be the first use of this innovative technology anywhere in the world.
"Floating LNG opens up the prospect of Australia developing smaller and isolated gas fields around the north and west of our coastline. Many of these fields are not practical to develop through conventional land-based LNG projects, which require large reserves and expensive offshore infrastructure and pipelines, or as domestic gas projects, because they are too far from the customers," said Minister Ferguson.
Floating LNG provides a third string to Australia's LNG development bow, with conventional LNG hubs operating ,being developed or proposed, at Onslow, Karratha and James Price Point in Western Australia and in Darwin in the Northern Territory, while only last month the go ahead was given to Queensland's first coal seam gas based LNG plant.
Without the development of floating LNG, these small gas resources would be uneconomic and left in the ground.
Shell intends to take a final investment decision on the Prelude Project in 2011.