Shell approves Crux gas project off Western Australia [Update]
[Adds comments from Wood Mackenzie]
Shell Australia and its joint venture partner, SGH Energy, have taken a final investment decision to approve the development of the Crux natural gas field, off the coast of Western Australia, the company said on May 30. Crux will provide further supplies of natural gas to the existing Prelude floating LNG (FLNG) facility.
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“This project forms an important part of Shell’s integrated gas portfolio,” said Wael Sawan, integrated gas, renewables and energy solutions director at Shell. “Natural gas from Crux will play a key role in helping Asian customers move from coal to gas as a cleaner-burning fuel. The project will help us to meet the increasing demand for LNG as the energy market transitions to a lower-carbon future."
The Crux field is in Commonwealth marine waters in the northern Browse Basin, 620 km northeast of Broome. The development will consist of a platform operated remotely from Prelude. Five wells will be drilled initially, and an export pipeline will connect the platform to Prelude, which is around 160 km to the southwest of Crux.
The project has been granted a production licence by the National Offshore Petroleum Titles Administrator and the National Offshore Petroleum Safety and Environmental Management Authority has accepted the Crux offshore project proposal, being key regulatory approvals.
Crux will have the capacity to supply the Prelude FLNG facility with up to 550mn ft3/day. Construction will start in 2022 and the first gas is expected in 2027.
"The development is expected to cost US$2.5bn and will produce 1.6 trillion ft3 gas, 60mn barrels of condensate and 40mn barrels of LPG," Wood Mackenzie research analyst Michael Song said. "Crux has long been the leading candidate for providing new supply for Prelude FLNG. It has been a case of when rather than if the project would reach sanction, as the volumes are needed to ensure the FLNG facility produces at nameplate capacity into the 2030s."
Song added that with future supply secured, Prelude partners must ensure there are no further technical issues onboard the vessel and maintain stable production to take advantage of current LNG prices. First gas is targeted for 2027, which should be achievable given the small-scale upstream development, he said.