Shell Continues Exporting LNG From Australian Facility Despite Strike

Shell continues to load liquefied natural gas from the offshore Prelude facility in Australia despite industrial action, Reuters has reported, citing the company.

According to the report, Shell has loaded and shipped a tanker of LNG from Prelude this week.

The supermajor warned a week ago there would be loading disruptions at Prelude because of a workers' strike that has reduced the rate of operation at the facility.

"We have issued a notice to customers that cargoes will be impacted until at least mid-July due to the industrial action," Shell said on June 29.

The floating LNG production facility in northwestern Australia has an annual capacity of 3.6 million tons.

The news of a halt to operations adds to an already difficult situation for gas importers after Russia reduced the flow along the Nord Stream 1 pipeline by 60 percent, and an explosion took the Gulf Coast Freeport LNG out of commission for at least three months.

According to Reuters, at normal rates, Prelude LNG loads one tanker every 7 to 10 days. Now, operations have been scaled down as workers dispute wage terms with the supermajor. A vote on a new proposal by Shell is expected at the start of next week.

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News of the industrial action emerged in early June, just two months after Shell restarted operations at the facility after a four-month suspension resulting from a large-scale power failure. The outage contributed to the gas price rise in Europe that began last year.

The Prelude FLNG facility, which shipped its first cargo in 2019, is one of a series of massive-scale LNG projects in Australia that allowed the country to briefly take the crown of top world LNG exporter from Qatar a while ago.

Currently, Australia's total LNG capacity is on par with Qatar's, with the country shipping 77.7 million tons of the superchilled fuel abroad last year.

By Irina Slav for Oilprice.com

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