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How Shell lost control of its $24B Prelude floating gas factory

WAtoday

How Shell lost control of its $24B Prelude floating gas factory

By Peter Milne

In early December a small fire on Shell’s 488-m Prelude gas facility off WA’s coast kicked off a cascade of failures that left about 250 workers, 475 km from Broome, without communications, lights, running water or access to helicopters.

With almost every system on Australia’s most complex offshore facility out of action workers scrambled to restart power that everything depended on, with at least two stretchered to the Prelude’s hospital with heat exhaustion.

The Anglo-Dutch energy giant had not only lost production, it had lost control on what was meant to be a showpiece of its technical prowess.

“What happened on the Prelude under Shell’s watch earlier this month is unforgivable,” said Brad Gandy, AWU WA branch secretary and spokesman for the Offshore Alliance that represents many Prelude workers.

“This is not the first time similar failures have occurred on the Prelude and clearly Shell has not learned from its past mistakes.”

On Thursday evening, December 2, Shell had achieved a rare event since the Prelude arrived in Australian waters from a South Korean shipyard 4½ years ago: several months of incident free production.

Then at about 10:45PM an alarm sounded and more than 200 crew lined up in the mess to be checked off while incident and emergency response teams went to work.

In the mess “fire in the aft machinery space” was announced over the public address system.

A fire had been detected in an enclosure housing batteries for backup power. It was automatically extinguished and did not spread. Once it was confirmed that the fire presented no danger Shell should have been able to dismiss the mustered crew and return the Prelude to normal operation. That did not happen.

The Prelude “went black” about an hour after the alarm started: emergency lighting only and no ventilation or air conditioning, which is vital for crew in the tropics working in confined spaces.

Shortly after the power loss the general platform alarm, that had not stopped, changed to the abandon platform alarm.

“That creates a lot of fear,” a crew member said.

“That means we’re going to the lifeboats, we’re getting off.”

A few minutes later the crew were told there was no need to take to the water. That short time had been a long wait: if things go badly wrong on the Prelude the crew has a lot to worry about.

The Prelude is like no other offshore gas facility in Australia. It is three times the length of the oval at Optus Stadium and fully laden weighs 600,000 tonnes. It is the largest floating vessel in the world.

Gas produced from wells on the seabed 250 m below and cooled to -162 degrees celsius to be stored as liquefied natural gas in vast tanks for export.

All other Australian LNG projects have gas production distant from the LNG plant, which has accommodation many kilometres away to ensure worker’s safety if anything goes wrong.

On Prelude complex gas processing plant and accommodation is only separated by a blast wall and worker’s lives depend on an array of sophisticated control and safety systems.

Those vital systems have multiple backup power sources that failed again and again.

It is understood when the small fire was detected the control systems incorrectly initiated an emergency shutdown of all gas processing. A vast amount of gas was vented to Prelude’s giant flare tower that can light up the night with a flame up to 100 m high.

Without gas to produce steam for the main power generation system a diesel emergency generator should have quickly started up to provide temporary power until two larger diesel units could be brought into operation.

The fast start generator never worked and each time the two larger units started they tripped and had to be started again.

Mr Gandy said the systems onboard the Prelude were unable to ensure the safety of the crew. “This is unacceptable and a complete abdication of Shell’s responsibility to these workers,” Mr Gandy said.

At one stage Prelude had no direct communications with the mainland. A marine VHF radio was used to reach surrounding support vessels that sent texts to Perth with a satellite phone. Shell then rang families of crew members to assure them they were safe.

The bulk of the crew spent about nine hours mustered in the mess before they were released on Friday morning. Temperatures rose quickly without ventilation or air conditioning. Toilets that need power to empty were quickly blocked.

Makeshift toilets were later set up with cardboard trays that each user emptied into a bin.

The next night, while Shell’s staff in Perth enjoyed the company Christmas party, some Prelude crew slept on the helideck to escape the heat. Daytime temperatures reached the mid-thirties with high humidity. Cramped machinery spaces with no ventilation were much hotter and became almost intolerable.

No power also meant no lifts. From the lowest machinery decks to the top of the accommodation block the Prelude is sixteen stories high.

Workers on stretchers with heat exhaustion had to be carried upstairs to the hospital. A large diesel tank ran dry as the pumps to fill it lacked power, so 20 litre drums were also ferried up via stairs.

Helicopters that could have taken some workers to shore were turned around as helideck lights were not working. Two support vessels left with about 25 workers each for the 30-hour trip to Broome.

On Sunday afternoon, after 2½ days, reliable power was finally restored.

Almost three weeks after the incident started offshore safety regulator NOPSEMA is close to concluding its investigation of the incident.

Mr Gandy said the recent incident was a more serious repeat of a power failure in early 2020 and offshore safety regulator NOPSEMA should take swift action.

“Anything short of strong action from NOPSEMA will do nothing but discourage Shell and other operators from maintaining a safe workplace,” Mr Gandy said.

Prelude’s management fronted the crew in a virtual meeting last Friday. The messages were that Shell was sorry for what the crew went through, had not yet determined the root cause, and until it could provide a safe workplace the Prelude would have a reduced crew, understood to be about 150 workers.

A Shell spokeswoman said while work was underway to restore main power production was suspended.

A NOPSEMA spokeswoman said the regulator visited the Prelude on December 9 and 10 and expected to issue a draft report to Shell this week and a final report shortly after with instructions for Shell to promptly provide it to Prelude’s health and safety representatives.

The regulator will also conduct an investigation into broader issues on the Prelude that “may take some time.”

“Prelude is a large and complex facility with a large number of people on board involving novel technologies,” the spokeswoman said.

“Where the operator fails to manage risk appropriately NOPSEMA will take action.”

SOURCE

Peter Milne covers business for WAtoday, The Age and The Sydney Morning Herald with a focus on WA energy, mining, construction and property.Connect via Twitter or email.

ARTICLE ENDS

RELATED WARNINGS 

 


The links below are to a series of articles, many triggered by a well-placed whistleblower directly involved in the pioneering Royal Dutch Shell Prelude project. Includes articles by Mr Bill Campbell above, the retired distinguished HSE Group Auditor of Shell International and another retired Shell guru with a track record of spotting potential pitfalls in major Shell projects.

ARTICLE: Voser wisely abandons an unstable ship: 28 December 2013

ARTICLE: Royal Dutch Shell Prelude to disaster?: 10 Jan 2014

ARTICLE: Shell Prelude FLNG: loss of containment of hydrocarbons almost inevitable: 21 Feb 2014

ARTICLE: What should frighten stiff Royal Dutch Shell shareholders: 15 March 2014

ARTICLE: Tales of the Unexpected and Royal Dutch Shell Prelude FLNG: 28 March 2014

ARTICLE: Prelude FLNG: A case of all your eggs in the one basket: 10 July 2014

ARTICLE: Prelude FLNG risks are on par with modern offshore oil and gas facilities say Shell – but are they?: 23 Sept 2014

ARTICLE: Royal Dutch Shell Prelude Project ‘A Step Too Far’: 25 Sept 2014

ARTICLE: SpaceShip Two: Shell Prelude another pioneering venture fraught with risk: 2 November 2014

ARTICLE: WA turns spotlight on FLNG safety: 11 November 2014

ARTICLE: Prelude a giant production and processing barge masquerading as a ship: 11 November 2014

ARTICLE: Sunday Times Article: Prelude a potential white elephant: 11 November 2014

ARTICLE: Damning Verdict on Shell’s Prelude FLNG Propaganda: 12 November 2014

ARTICLE: Combustible pioneering behemoths – the Hindenburg and Shell Prelude: 21 November 2014

ARTICLE: Key role of Shell lawyers in pioneering Shell Prelude FLNG: 05 December 2014

ARTICLE: The Future of Natural Gas: LNG vs. FLNG: 26 Feb 2015

ARTICLE: The Sydney Morning Herald: WA inquiry shines spotlight on floating LNG safety fears: 8 May 2015

ARTICLE: THE WEST AUSTRALIAN: Delays slow Prelude’s sail-away: 11 April 2016

ARTICLE: THE WEST AUSTRALIAN: Gas industry needs to work harder, innovate: Shell boss: 12 April 2016

ARTICLE: ENERGY VOICE: GE starts production on Shell’s Prelude risers, must withstand a 1-in-10,000-year cyclonic event: 11 April 2016

ARTICLE: THE AUSTRALIAN: Shell chief Ben van Beurden backs FLNG program:13 April 2016

ARTICLE: THE WEST AUSTRALIAN: Enthusiasm cools for Prelude FLNG: 13 April 2016

ARTICLE: BY JOHN DONOVAN: Musings about the OPL 245 Shell/ENI corruption scandal and the sinking confidence in Prelude: 13 April 2016

ARTICLE: BY BILL CAMPBELL: Project Prelude – A case study in the generation of real material debt: 17 April 2016/a>

Hazardex: Shell Australia’s giant Prelude floating LNG project likely to come on stream in 2017: 20 Sept 2016

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

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