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

Sapura Energy Nets $720M from Multiple Drilling Services Contracts

McDermott Concludes Work at PTTEP’s Kikeh Gas Field Off Malaysia

Abu Dhabi's NMDC Group Gets $1.1B Subsea Gas Pipeline Job in Taiwan

Saipem’s Castorone Vessel on Its Way to Türkiye’s Largest Gas Field

RINA to Conduct Pre-FEED Study for Petronas’ CCS Project in Malaysia

CNOOC Brings Bohai Sea Oil Field On Stream

Seatrium and Cochin Shipyard Form Alliance to Deliver India’s Jack-Up Rigs

Makin' a List ... Trump Prioritizes Energy Exploration, Production, Export

TotalEnergies and Oil India to Jointly Tackle Methane Emissions Issues

Keppel Reclaiming Control of 13 Rigs to Cash In on Offshore Drilling Market's Growth

Current News

Woodside Inks Long-Term LNG Supply Deal with China Resources

CNOOC Starts Production at Two New Oil and Gas Projects

Argentina YPF to Shed Offshore Exploration Projects

Cairn India Might Invest in US Oil Servicing Firms to Increase Production

All Gas from Conrad’s Mako Field to be Sold to Indonesia’s PLN

ORE Catapult and Japan’s FLOWRA to Jointly Advance Floating Wind

Shell Hires Noble’s Drillship for Work in Southeast Asia

Second Hai Long Substation Heads to Project Site Offshore Taiwan

Shell Launches Next Phase of Malaysia's Deepwater Project with First Oil Production

CNOOC Discovers ‘Vast Exploration Prospects’ in China’s Beibu Gulf Basin

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