Prelude to LNG: Shell hails Aussie gas find

ROYAL Dutch Shell reportedly made a major gas discovery in Australia in the first half of the year.

Prelude to LNG: Shell hails Aussie gas find

According to Reuters, chief executive Jeroen van der Veer told a London news conference the oil major had made the find while drilling its Prelude prospect in the Browse Basin off the coast of northwest Australia.

“We think it may be an important new resource,” he was quoted as saying.

Shell has made no secret of its aim to develop a northwest Australian liquefied natural gas hub.

In its winning bid for the WA-371-P permit, the company committed to 12 wells in the first three years, an activity rate believed to be more than double that of the next highest bidder and an Australian record until Hess’ 16-well winning bid for the gas-prospective WA-390-P block in the North West Shelf region.

The Prelude find could well be an extension of Ichthys, the giant gas field in the neighbouring WA-285-P permit, whose 12 trillion cubic feet of gas has been earmarked for a 6 million tonnes per annum LNG development by partners Inpex and Total.

Outside of WA-371-P, Shell has proved fleet-footed in dealing with a mid-cap working in the Browse, Melbourne-based Nexus Energy.

In January, Shell agreed to earn up to 34% of Nexus’ Echuca Shoals discovery by spending $US55 million ($A71.3 million) drilling two appraisal wells and paying Nexus $US5 million in cash. The Echuca Shoals-2 appraisal well, a step-out from the Woodside discovery well in the early 1980s, is due to spud in the second quarter of 2007 using a rig contracted by Shell.

At Nexus’ Crux project, meanwhile, Shell paid the junior $A53 million for the gas rights while Nexus retained the rights to the field’s light oil. Subject to ongoing appraisal drilling, Nexus planned to commit to a development at the end of the second quarter of 2007. The concept involved stripping condensate from the gas, which would be re-injected into the reservoir for potential later production (by Shell).

Nexus’ managing director Ian Tchacos said the alliance with Shell was a big boost for his company.

“One of the reasons we went with Shell is that they don’t already have their own Australian LNG project,” he said.

“So they’re very hungry, but they are also world leaders in LNG and gas technology. It’s not just the money we are after – it’s their capabilities as well.”

There are persistent rumours that Shell is considering developing a floating LNG processing plant.

In other news, Van der Veer reportedly said the major had made a material oil and gas find, offshore northwest Sabah in Malaysia.


A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.


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