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MEETING THE EXECUTION CHALLENGES OF SHELL PRELUDE FLNG

Alain Poincheval

Executive Project Director Technip, France

Jun Cheol Kim

EVP, FLNG Project Management Offshore Production Facilities Business Unit

Samsung Heavy Industries, Republic of Korea

Nicholas Kauffmann General Manager Integrated Gas Projects East Shell Projects & Technology, The Netherlands

ABSTRACT Floating Liquefied Natural Gas (FLNG) has gained wide recognition as one feasible and attractive method for the monetisation of offshore gas fields. It is an exciting technology that will enable

the development of gas resources where, for a range of reasons, an onshore development is not

viable. FLNG can mean faster, cheaper, more flexible development and deployment strategies.

Today, this recognition comes from one outstanding project.

In May 2011, Shell started the entire LNG and gas industry in a new direction when it took the Final Investment Decision on Prelude FLNG and gave the Technip-Samsung Consortium, or TSC,

Notice to Proceed.

Prelude FLNG is a project backed with the industry’s best resources. Years of careful planning and

front end engineering and design have been the basis for this ground breaking project, but the current progress would not be possible without the vigilance, professionalism and collaboration of

all involved during execution of this complex project.

The TSC project directorate proposes to look back jointly with Shell project management over the

years from notice to proceed in a paper that focuses on solving some of the expected and also the unexpected challenges that are always inevitable in a large, complex and first-of-its-kind

project.

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OVERVIEW OF THE SHELL PRELUDE FLNG

THE INNOVATIVE CONCEPT AND TECHNOLOGY OF FLNG

The novel concept of FLNG has been extensively studied over the last 15 years or so. It consists

of a combination of several technologies that aim to liquefy natural gas offshore. FLNG solutions

have the potential to place gas liquefaction facilities directly over offshore gas fields, and unlock

new energy resources offshore. They will enable access to stranded gas reserves that, up to now,

were too costly and difficult to exploit. The Shell Prelude FLNG project is especially well placed to

help meet the growing natural gas demand of Asia.

The Shell Prelude FLNG facility will chill natural gas produced in the field to –162°C (-260°F),

shrinking its volume by 600 times so it can be shipped to customers, where the gas is needed.

Once constructed, the facility will be towed to its location, some 475 kilometres (around 300

miles) north-east of Broome, Western Australia. There, the facility will be moored and connected

to the undersea infrastructure and the whole production system commissioned.

Shell Prelude FLNG will remain permanently moored at the location for around 20-25 years before

needing to go back to the dock for inspection and overhaul. The LNG, LPG and condensate

produced will be stored in tanks in the hull of the facility. LNG and LPG carriers will moor

alongside to offload the products with tandem off-loading for condensate.

Most of the technologies used on the FLNG facility have been used successfully onshore by Shell.

Some have been adapted or modified in order for the processes, such as liquefaction and

offloading, to run at sea, as we will see later on this paper.

Important attributes of Shell’s Prelude FLNG design are:

it can provide high production rates of 5.3 million tons per annum (mtpa) of liquids

(including LNG, LPG and condensate);

it can process a wide range of gas compositions and can export LPG and condensate;

it uses an efficient double mixed refrigerant liquefaction cycle;

it can stay on station and does not have to be moved during severe weather

conditions such as cyclones, which will increase the availability of the plant.

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SHELL PRELUDE FLNG KEY FACTS

Table 1. Key facts about Shell Prelude FLNG

Location Browse Basin in Australia, 475km North-North East of Broome

(see figure 1)

Depth ~250 metres

Interests Shell 67.5%, INPEX 17.5%, KOGAS 10%, OPIC 5%

Fields Prelude and potentially other Shell natural gas assets in the

region

FLNG facility production

capacity

5.3 million tons per annum (mtpa) of liquids: 3.6 mtpa of LNG,

1.3 mtpa of condensate and 0.4 mtpa of liquefied petroleum gas

Key contractors Technip-Samsung Consortium

Shell Prelude FLNG is the largest floating facility ever built (see figure 2). In numbers this means:

488 metres long (more than four FIFA football pitches) and 74 metres wide.

260,000 tons of steel, the equivalent of 36 Eiffel towers.

With its cargo tanks full, Prelude will weigh roughly six times as much as the largest

aircraft carrier.

The total storage capacity is equivalent to around 175 Olympic swimming pools.

The world’s largest non-disconnectable Turret Mooring System, taller than the Statue

of Liberty with its base (93 metres high).

Living quarters of the size of the Paris Arc de Triomphe.

50 000 m3/h of cold water will be drawn from the ocean to help cool the natural gas.

-162° Celsius (-260° Fahrenheit) is the temperature at which natural gas turns into

LNG and 1/600 is the factor by which a volume of natural gas shrinks when it is

turned into LNG.

117% of Hong Kong's annual natural gas demand could be met by the facility's

annual LNG production.

20-25 years is the time the Prelude FLNG facility will stay at the location.

More than 600 engineers worked on the facility’s design option (1.6 million hours

during the engineering and design phase).

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Figure 1. Prelude field map.

Figure 2. Infographic of Shell Prelude FLNG’s size in comparison to famous constructions.

THE HISTORY OF SHELL PRELUDE FLNG

Following the Master agreement signed with Shell in 2009, Technip started to carry out a Generic

FLNG FEED (Front-End Engineering and Design) and, in 2010, it was adapted to the Prelude field.

On May 20, 2011 Shell took the final investment decision (FID) on the Prelude FLNG project.

The construction and integration phase of the Prelude FLNG project are well under way and

commissioning has now started. Shell, Technip and Samsung Heavy Industries’ common aim is to

deliver Prelude FLNG safely and to do it right. This means developing a facility that is safe,

robust, and reliable and with high availability to enable continuous, stable LNG production.

Prelude is a global project, with fabrication of components taking place all over the globe. A key

location is Geoje, South Korea, where the Prelude FLNG substructure and topsides are being built

at the SHI shipyard – which has one of the few dry docks in the world big enough to construct a

facility of this size.

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In November 2013, the project celebrated the launch of the Prelude FLNG hull. For a whole year,

steel was welded together by thousands of workers at the SHI yard to create the biggest hull

ever built. Once structurally complete, and weighing approximately 200,000 tons, the hull was

floated in the massive dry dock before it was towed by nine tug boats through the Geoje harbor

to its new position on the quay, where it is secured by 32 heavy mooring ropes.

At Geoje, the topside process and utility modules, each weighing as much as a single typical

offshore platform, were installed on the hull one by one, with the final module lifted in June 2015

(see figure 3). The 140-metre flare tower (figure 4), was installed in November 2015. At the field

off the North Coast of Western Australia, Technip’s Deep Orient and Deep Energy have already

installed 12 km of flowlines and eight PLETs.

As many as 5,000 people work on the Prelude FLNG facility on any given day at Geoje.

Safety and Quality are the priority at all Prelude Project locations. Together, Shell, Samsung

Heavy Industries and Technip are constantly working to ensure that Goal Zero, Shell’s

overarching objective of no harm and no leaks, is maintained every day. Our Zero Defect

objective, supporting our quality vision at site, is conducted through all the teams, including

construction, vendors and commissioning, with full compliance with the flawless programme.

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Figure 3. Last module integration onto Shell Prelude FLNG with floating crane in June 2015.

Figure 4. Shell Prelude FLNG in November 2015.

MANAGING THE CHALLENGES IN SHELL PRELUDE FLNG EXECUTION

The challenge of Shell Prelude FLNG is to develop an offshore version of an onshore Liquefied

Natural Gas (LNG) plant on an area that is one-quarter the usual size. The traditional supply

chain for LNG consists of the upstream phase, the pipelines, the onshore treatment and

liquefaction, the transport, the regasification and the distribution. The Shell Prelude FLNG design

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concept allows for the four first phases of this supply chain to be centralized and operated in a

single place – a single FLNG – Prelude.

Through the engineering, procurement, commissioning, offshore installation and start-up of this

project, TSC is contributing to today’s most ambitious energy infrastructure project. Technip is

proud of the contribution to this making of history and its support to a visionary client – Shell, by

using existing technologies in novel applications.

However, several challenges were faced by engineers designing this “first of a kind” FLNG:

engineering challenges, construction and commissioning challenges, and challenges in terms of

project management and HSSE.

ENGINEERING CHALLENGES

Despite its impressive proportions, the FLNG facility is located on an area that is one-quarter the

size of an equivalent plant on land. Therefore engineers had to find different and innovative

solutions to optimise the space, such as to design components that will stack vertically to save

space, or to build the plant to the shape of the modules (see figure 5).

The operating plant, for example, will be placed above LNG storage tanks, themselves being

integrated into the hull. By pumping cooling water from the cold of the ocean depths to cool the

gas, this helped to reduce the size of the cooling facilities. An assembly of eight one-metre

diameter pipes will extend from the facility to about 150m below the ocean’s surface to deliver

around 50,000 cubic metres (m3) of cold seawater each hour. This helps to cool the gas from

below the facility, saving deck space.

Figure 5. Shell Prelude FLNG module construction in August 2014.

In terms of optimisation during engineering, deck space management, together with module

congestion and weight had to be considered. This was done through two key approaches:

Use of hull machinery space for certain process units.

Constant assessment of module “liftability” with the 8,000 ton floating crane while

monitoring the center of gravity and adjusting with weight shedding.

At the same time, Shell and Technip engineers also had to solve several marine environment

challenges:

Mechanical:

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Side-by-side offloading LNG/LPG between two vessels on the high seas both of which

are moving

Equipment and piping loads and fatigue generated by motion (towing & in-place

conditions)

LNG tank sloshing over 25 years without dry docking

Industrial Maturity vs. FLNG specifications

Robustness for the extreme climatic conditions of the region

Process:

Gas processing facilities adapted to marine environment

Compact design (weight and volume)

Designing for motion compared to static onshore plant

Engineering:

Specific new challenges for Compliance to Australian regulation and offshore safety

design.

To be more precise, some new technologies that have been developed for FLNG include LNG

tanks that can handle sloshing, close coupling between the producing wells and the processing

facility, LNG offloading arms, cooling water intake risers, turret and mooring systems, and the

marinisation of processing equipment such as absorption columns and the main cryogenic heat

exchangers. All of these technologies have been extensively modelled and tested to ensure they

can operate safely and efficiently under marine conditions.

For example, the Prelude FLNG facility has been designed to withstand to category 5 cyclones

(the highest intensity on the Saffir-Simpson Hurricane Wind Scale) and winds up to 400 km/h. To

make sure it can do so, a model 1/60 of 8 meters long and 4.5 tons, was used to test the

behavior of the future FLNG if impacted by high winds and strong swells (see figure 6).

Figure 6. Model of Prelude during test of Prelude FLNG behavior in high climatic circumstances.

CONSTRUCTION CHALLENGES

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As a consequence of the engineering challenges, the engineering/construction execution plan had

to be optimised, both for the hull/substructure and topsides of the FLNG.

Substructure:

Full 3D model integration between hull engineering and topside engineering

Early freezing of deck penetrations (piping/E&I/Handling Hatches)

Deck load support (deck reinforcement & doubling plate vs. deck finishing)

Very early delivery of Long Lead Items installed inside the hull (ex: power

generation/Instrument Air Compressor).

Topsides:

Detail design adapted for pancake/flip-over construction.

Early freezing of main skid loads to “unlock” primary structure work.

Prioritize secondary structure design completion versus:

o Main structural support design and final stress calculation.

o Accommodate late vendor interface information.

Early issue of isometrics to start spooling versus:

o Late vendor information.

o Early insertion of large bore spools prior to deck stacking.

“Requested on Site Date” for equipment driven by deck erection and stacking sequence.

Due to vertical deck stacking sequence, priority is to start “fit in position” of piping and

then “nozzle-to-nozzle” work.

COMMISSIONING CHALLENGES

The commissioning critical path goes through utility completion, starting first with steam

generation for steam blowing. As a result, construction completion (i.e. radiography, pressure

testing, insulation etc.) has a strong overlap with commissioning which needs to be managed

carefully through strong Simultaneous Operations (SIMOPS) management and planning. In

addition, the critical path is also going through the main compressors’ nitrogen run and the

necessity to use steam for their steam turbines drivers. This generates late completion of High

Pressure Leak test and subsequently late completion of cold insulation just before sail away.

PROJECT MANAGEMENT CHALLENGES

To succeed with the challenges of the execution of the Shell Prelude FLNG, Technip and Samsung

Heavy Industries (SHI) chose to be organised under a Consortium (Technip-Samsung Consortium

- TSC) to engineer, build and deliver Prelude FLNG project to its owner and operator Shell. In the

Consortium, Technip provides the overall TSC project management as well as the Utilities/Process

engineering, procurement, commissioning and final offshore Hook-up and commissioning. On the

other hand, Samsung Heavy Industries (SHI) performs all of the construction on Prelude and has

engineering, procurement and commissioning responsibility for the hull and associated systems.

TSC is contractually obliged to its client and operator of FLNG: Shell.

To carry out the engineering of Shell Prelude FLNG, TSC mobilised more than 1,000 engineers

during 24 months to work on the design of this first-of-a-kind project. For Samsung, this team

was primarily based in France (Paris) and Korea (Geoje). For Technip, this involved the know-

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how of its engineers in several operating centers: France (Paris), India (Chennai), Malaysia (Kuala

Lumpur) and Australia (Perth). Technip relied on the expertise of two major subcontractors: SBM

Offshore for the Turret Mooring System, as well as FMC Technologies for the marine loading arms

which had been jointly developed with Shell.

Both Technip and Samsung Heavy Industries also rely on an international vendor network,

located in more than 40 countries, mainly in Europe, America and Asia.

All these stakeholders work closely together respecting the same methods and standards (HSSE

policy – Goal Zero, Quality – Zero Defect Policy).

However, this makes the Shell Prelude FLNG a mega multi-center project, and as such involves

significant project management challenges. Interface management and novelty management are

examples of these challenges.

Interface Management

The mapping of the different interfaces can be shown below:

Figure 7. The mapping of the different interfaces.

A “Collaborative mode” between Technip and Samsung Heavy Industries has been a key

ingredient in the Consortium’s success, with all the interfaces managed and controlled by the

Topsides designer (multi-query database).

In particular, interface management is critical to deliver a consistent engineering package free of

rework with construction, into constrained schedule priority driven by the hull early construction

into the dry dock.

Novelty Management within an EPCI contract

The novelty management within an EPCI contract is known as a major contribution to potential

failure in delivery if not properly recognized in its specificity. For Shell Prelude FLNG, novelties

were mainly recognized in the following areas:

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Turret Mooring System

Mooring chains, due to size and load

Water Intake Risers: 8 x 42”

LNG Marine Loading Arms (side by side loading with LNG/LPG carrier)

The project implemented a “gate” type delivery approach and followed a thorough qualification

programme as shown below:

HSSE CHALLENGES

Safety is the primary focus in Shell’s FLNG design, construction and operation, with multiple

formal safety assessments at various stages of the project confirming that an FLNG facility would

be at least equally as safe and reliable as other modern offshore production facilities currently in

operation.

The HSE studies conducted in close collaboration with Shell indicate that Prelude will be an

extremely safe and reliable facility despite the new challenges. The layout of the Prelude FLNG facility reflects the following principles that were adopted at an early stage:

Higher risk process and storage areas are located furthest away from living quarters

(LQ).

Blast-rated bulkheads, utility modules and safety gaps separate the LQ from the

process modules.

The Living Quarters of both the LNG carrier and the FLNG are aligned during

offloading.

20m safety gaps, open process and turret areas layouts minimise the consequences

of a potential incident and the likelihood of escalation.

Flammable material storage areas separated from ignition sources.

Lifting equipment is deployed to facilitate maintenance access.

Handling routes avoid lifting over live process areas.

Dual helidecks increase helicopter operations availability.

Escape routes, temporary refuges and means of evacuation in sufficient number and

redundancy.

As an integral part of the project, the Shell 12 Golden Safety Rules are dictated to all

stakeholders under direct control of Shell, Technip, Samsung and SBM, and outline the

fundamental expectations for all employees and subcontractors to comply at all times. These are as follows:

Work with a valid work permit when required

Conduct gas tests when required

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Verify isolation before work begins and use the specified life protecting equipment

Obtain authorisation before entering a confined space

Obtain authorisation before overriding or disabling safety critical equipment

Protect yourself against a fall when working at height

Do not walk under a suspended load

Do not smoke outside designated smoking areas

No alcohol or drugs while working or driving

While driving, do not use your phone and do not exceed speed limits

Wear your seat belt

Follow prescribed Journey Management Plan

Figure 8. The 12 Golden Safety Rules.

CONCLUSION The challenges in the execution of the Shell Prelude FLNG facility were numerous:

Developing an offshore version of an onshore LNG plant.

Specially designed equipment Impact on the Layout & Logistics.

Constructability (liftability, congestion, module density).

Iterative design (blast, motion acceleration etc.) matching construction sequence and

procurement cycle.

Shell, Samsung and Technip met these challenges thanks to a mutual understanding within a

multicultural environment, a fit-for-purpose mindset, a large and efficient network of engineering

and expertise centers and suppliers, strong expertise in managing and delivering large-sized

complex mega-projects and building mutual trust in a first-of-a-kind environment.

Ultimately, the vision of Zero Defect for Quality and Goal Zero for Safety will be the true mark of

success for this giant of the seas.