The Australian government has deferred a decision on energy major Royal Dutch Shell Plc’s (RDS.A) proposed Prelude floating liquefied natural gas (LNG) project for a fourth time. The environmental review for the development – located in the Browse basin off northwestern Western Australia – was expected on the first of October but was pushed back as new Environment Minister Tony Burke evaluates the venture. The government approval to the $5.7 billion project will pave the way for a final investment decision in early 2011.
First shipment from Prelude, which has estimated reserves of 2.5–3 trillion cubic feet of gas deposits plus 120 million barrels of condensate, is expected in 2016. The project will consist of an LNG train aboard a huge vessel that will then produce gas from far-off fields which have been inaccessible up to now, before liquefying it and transferring it to an LNG tanker.
The business environment for LNG remains robust, with demand likely to grow at around 8% − 10% annually over the next few years in all major markets. The Prelude project – a brand new application of LNG technology – provides Shell an attractive strategic position for serving the fast-growing economies of China and India, plus other Asian countries.
Royal Dutch Shell, which currently retains a Zacks #2 Rank (short-term ‘Buy’ rating), owns one of the largest integrated oil and gas businesses in the world. The group has operations all over the world and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources and other energy-related businesses.
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