Prelude FLNG shut in over industrial dispute

Production at Shell Australia’s Prelude floating LNG vessel in Browse basin offshore Western Australia has been shut in due to a work-to-rule action by union workers on board banning cargo offtakes.

Shell confirmed the suspension due to work bans in force under protected industrial action by members of the Offshore Alliance (a partnership of the Australian Workers’ Union and the Maritime Union of Australia) and the Electrical Trades Union.

“Until the bans on offtake of cargoes are lifted and the plant can be safely restarted, staff required to perform critical functions will remain on board while all other workers will be demobilized,” the company said.

The union members are in their second month of protected industrial action on Prelude.

The union says members are fighting for job security, transparent level progression within their classification structure, Tier 1 remuneration rates, and fair and effective dispute resolution procedures.

This week, a majority of Prelude workers rejected a proposed enterprise agreement and stepped up their industrial action.

“Shell recognizes the entitlements of all workers to exercise their rights, including the right to participate in industrial action,” the company said, adding that “the safety and welfare of people on our site remains our highest priority.”

Previous shut-in

This latest stoppage adds to the troubles—technical, safety, and personnel related—that have plagued Prelude since its arrival off Western Australia in 2017.

The vessel came on stream in late 2018 and first LNG cargo was shipped in June 2019.

Technical problems caused a shut in from February 2020 until January 2021. The vessel then lost power in December 2021, compromising lighting, safety systems, communications, potable water systems, sewage treatment, and air conditioning.

Australian regulator NOPSEMA ordered Shell to investigate, create a correction plan, and demonstrate that the vessel could operate safely in the event of power loss before restarting production.

Shell complied and shipments were allowed to resume in April this year.

Prelude has a production capacity of 3.6 million tonnes/year (tpy) of LNG, 1.3 million tpy of condensate, and 400,000 tpy of LPG.

Shell is operator with 67.5% interest. Partners are Inpex 17.5%, Kogas 10%, and CPC 5%.