Shell Sanctions $2.5B Crux Gas Field Development Offshore Australia

Sonali Paul
Monday, May 30, 2022

Shell said on Monday it had given the go-ahead to develop the Crux gas field offshore Australia, which analysts estimated would cost around $2.5 billion.

Construction is expected to start in 2023 with first gas expected in 2027, which will feed the 3.6 million tonnes a year Prelude floating liquefied natural gas (FLNG) facility, the oil and gas major said in a statement.

Shell said the project would help its Asian customers move from coal to gas, and also provide a secure supply source, a key factor following the imposition of sanctions on Russia.

"The project will also boost our customers' security of supply, which is becoming an ever more significant consideration for global consumers," said Wael Sawan, Shell's director of integrated gas, renewables, and energy solutions.

A Shell spokesperson declined to comment on the project's cost saying the company does not comment on capital investments on an individual asset level.

"The use of Prelude's existing infrastructure enables significantly reduced development costs, making Crux competitive and commercially attractive," Sawan said.

Energy consultants Wood Mackenzie estimated it would cost about $2.5 billion, also cited by Credit Suisse analysts.

"In a global context, Crux is an example of the type of incremental, shorter-cycle, high-return development that the industry is targeting as it maintains capital discipline despite strengthening commodity prices," Wood Mackenzie analyst Michael Song said in a note.

However, he said the Crux volumes would enter the market at the same time as around 100 million tonnes a year of new LNG would be coming to the market from Qatar, the United States, Nigeria and Canada.

Credit Suisse analyst highlighted long-running problems at Shell's Prelude FLNG facility potentially hurting returns on the Crux development, which would otherwise be highly valuable as it will use existing infrastructure. 

"There is still risk to Shell achieving sustained production rates at the Prelude FLNG facility that could impact Crux value," Kavonic said.


(Reuters - Reporting by Sonali Paul; Editing by Rashmi Aich and Christopher Cushing)

Categories: Energy Subsea Pipelines Industry News Activity FLNG Australia/NZ

Related Stories

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

MDL Secures Cable Laying Job in Asia Pacific

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

Chinese Contractor Secures Offshore Oil and Gas ‘Mega Deal’ from QatarEnergy

Saipem Bags $1.5B Contract for Türkiye Largest Offshore Gas Field

PTTEP Hires McDermott for Deepwater Subsea Job off Malaysia

PTTEP Greenlights $320M Offshore CCS Project at Arthit Gas Field in Thailand

CNOOC Brings Online Another Oil and Gas Project in South China Sea

Subsea7 Secures Work at Black Sea Field off Türkiye

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Current News

Malaysia’s Petronas and Oman’s OQEP Strengthen Oil and Gas Ties

Southeast Asia’s 2GW Cross-Border Offshore Wind Scheme Targets 2034 Buildout

Pharos Energy Kicks Off Drilling Campaign Offshore Vietnam

Viridien to Shed More Light on Malaysia’s Offshore Oil and Gas Potential

US Pressure on India Could Propel Russia's Shadow Oil Exports

Energy Drilling’s EDrill-2 Rig Starts Ops for PTTEP in Gulf of Thailand

RINA Wins FEED Contract for Petronas’ Flagship CCS Project in Malaysia

ABL Secures Rig Moving Assignment with India's ONGC

Pakistan, Türkiye Deepen Oil and Gas Ties with Offshore Indus-C Block Deal

Eni-Petronas Gas Joint Venture Up for Launch in 2026

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com