Shell is currently in the front-end engineering and design phase for a floating LNG facility at its wholly owned Prelude and Concerto gas discoveries in the Browse Basin off Western Australia. The project is designed to produce 3.6 million mt/year of LNG, 400,000 mt/year of LPG and 1.3 million mt/year of
condensate.
The company has previously flagged its intention to make a final investment decision on the Prelude project in 2011. First LNG would be expected in 2016.
"This is a large-scale project that is using world-first technology," Burke said in a statement. "We can't risk getting it wrong, so I have set very strict conditions to help ensure our precious marine environment will be protected."
Burke said the start of operations at Prelude would be dependent on several plans getting his approval.
"Shell must develop an oil spill contingency plan, to the government's satisfaction, specifying how it will minimize the risks of oil spills and how it will minimize the environmental impacts in the event of an oil spill," he said. "Should such an accident occur, the company will pay for any environmental rehabilitation needed."
Greenhouse gas emissions must also be addressed, the minister added. "Shell must develop a greenhouse gas strategy, which must be made publicly available, that will detail the measures and offsets it proposes to reduce greenhouse gas emissions, and the project will not be able to begin until I am satisfied the strategy is acceptable."
Shell will also be required to submit -- and make publicly available --an environmental performance report detailing how it has adhered to the approved plans and strategies. Burke's department will be able to audit the project at any time to ensure the company is complying with the approval
conditions.
"Receiving environmental approval is an important milestone as we continue to work on the development of the Prelude project," Shell's Australian Country Chair Ann Pickard said. "Deploying our floating LNG technology reduces the project's cost and environmental footprint, as it
removes the need for offshore compression platforms, long pipelines to shore, nearshore works such as dredging and jetty construction, and onshore development such as building roads, laydown areas and accommodation facilities."
By reducing the cost of a project, the floating FLNG technology can provide a means of developing smaller and more remote offshore gas resources that may otherwise stay in the ground, Shell added.
The Prelude project's draft environmental impact study was released in October 2009. The company said the EIS demonstrated the project would have a low impact on the environment, and that compared with developing the gas via a similar onshore facility, it would produce less carbon dioxide and use significantly less materials, land and seabed area.
The Prelude environmental assessment period was extended by the federal government several times since the original deadline of April 29, 2010.
Prelude is the third LNG project to be given federal environmental clearances by Burke since he was appointed on September 14, following Australia's August 21 general election. On October 22, Burke gave the go-ahead to two coalseam gas-based LNG projects, to be built by UK gas major BG Group
and a consortium headed by local player Santos, on Curtis Island in the eastern state of Queensland.
BG subsequently made a final investment decision to proceed with its Queensland Curtis LNG project, which is expected to cost $15 billion and start up in 2014. QCLNG will produce 8.5 million mt/year of LNG.
