Shell Leads LNG Competitors Out to Sea With Biggest Ship: Energy

http://www.bloomberg.com/news/2012-09-19/shell-leads-lng-competitors-out-to-sea-with-biggest-ship-energy.html

For more than a decade, the world’s biggest liquefied natural gas producers led by Royal Dutch Shell Plc (RDSA) plotted how to move their $170 billion industry onto barges at sea to tap remote fields. Now they’re finally doing it.

Shell will forge the hull of a floating LNG plant in South Korea by year-end that will be the world’s largest vessel, weighing six times the biggest aircraft carrier, a Nimitz-class warship. Some 5,000 workers will build the factory to produce LNG off Australia’s northwest coast in a $13 billion project that also will shield Shell from escalating costs it would have to pay at the country’s onshore plants.

Rivals from Malaysia’s Petroliam Nasional Bhd. to GDF Suez SA of France likewise want to compress gas into liquid at sea, where many of the largest finds were made in the last decade. It’s a generational change for a land-based industry that started about 50 years ago in Algeria, where Shell provided technology for Camel, the first commercial LNG plant. Today those facilities typically cost at least $20 billion to build.

“We remove the need for the pipeline and use about 50 percent of the raw materials for an equivalent onshore plant,” said Neil Gilmour, Shell’s FLNG general manager. He’s overseeing construction of the world’s first floating LNG vessel, which will be as long as the Empire State Building, for use by the Prelude venture partners.