Shell's Prelude LNG to close for at least two weeks: press

Shell's 3.6mn metric tons/year Prelude floating LNG facility will close for at least two weeks amid a strike action by the Australian Workers Union over pay conditions, Reuters reported June 29.

Prelude LNG typically loads a tanker every seven to 10 days, meaning the industrial action will prevent at least two cargoes from being sent out.

In the ongoing pay talks, Shell has tabled an employee vote on a new offer that recommends a 30% rise in the offshore allowance for Prelude LNG employees, to A$117,000 ($80507.70)/year, and a 43% increase in the commuting allowance to A$10,000/yr.

The AWU says Shell must also drop working conditions that allow the UK major to hire contract workers at cheaper rates than formal employees undertaking similar work.

Prelude spent much of the first quarter of 2022 offline after a fire incident and power outage late last year. Shell owns a 67.5% stake in the project, which is situated offshore in Western Australia's Browse basin, 475km off the coast of Broome. Japan's Inpex holds a 17.5% equity share, followed by South Korea's KOGAS (10%) and Taiwan's CPC (5%).

The extended closure of the gas liquefaction terminal will further exacerbate market pressures globally. With European markets scrambling to cover reduced Russian gas deliveries, global customers including Asian buyers are still absorbing the supply shock caused by Freeport LNG's unexpected 90-day downtime in the US, which has removed 20% of US liquefaction capacity.