Fire at Shell LNG plant threatens Asian gas supply

James Fernyhough and Stephen Stapczynski, Bloomberg December 22, 2022

(Bloomberg) — Shell Plc suspended production at a floating liquefied natural gas facility off the west coast of Australia after a fire broke out, tightening fuel supplies to Asia right as winter starts to boost consumption.

The “small fire” at the Prelude LNG facility was detected on the afternoon of Dec. 21 and was “quickly contained using a hand-held extinguisher,” Shell said in a statement..”

The outage comes just after Prelude resumed loading this week following roughly two months of maintenance. This is another setback for the world’s biggest floating LNG plant, which has struggled with ongoing technical issues since it started in 2019.

The disruption also threatens to exacerbate the global energy shortage as winter demand for LNG from Shell’s Asian customers hits its peak. The London-based oil and gas major did not say when production would start again at the facility, which has the capacity to produce 3.6 million tons of LNG per year.

Prelude’s outage may force Shell to procure more LNG supply from the spot market in order to fulfill deliveries to customers.

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