(WoodMac, 30.May.2022) — Shell has sanctioned the development of the Crux gas field in Australia’s Bonaparte Basin.
Wood Mackenzie research analyst Michael Song said: “The development is expected to cost US$2.5bn, and will produce 1.6 tcf gas, 60 mmbbl of condensate and 40 mmbbl of LPG. Crux will be produced through an unmanned platform tied back to the 3.6 mmtpa Prelude FLNG facility.
“Crux has long been the leading candidate for providing new supply for Prelude FLNG. It has been a case of when rather than if the project would reach sanction, as the volumes are needed to ensure the FLNG facility produces at nameplate capacity into the 2030s.
“A significant portion of the LNG will be lifted into Shell’s global portfolio. These volumes will supply growing Asian LNG demand, in support of coal-to-gas switching and lower carbon emissions.
“With future supply secured, Prelude partners must ensure there are no further technical issues onboard the vessel and maintain stable production to take advantage of current LNG prices. First gas is targeted for 2027, which should be achievable given the small-scale upstream development.
“In a global context, Crux is an example of the type of incremental, shorter-cycle, high-return development that the industry is targeting as it maintains capital discipline despite strengthening commodity prices. That being said, the volumes will enter the market at a time when we see significant new supply ramping up. Across 2026-8 we expect more than 100 mmtpa of new LNG supply to enter the market from Qatar, the US, Nigeria and Canada.”
Wood Mackenzie research director Andrew Harwood said: “In maintaining output from the Prelude facility, Crux will support Shell’s belief in LNG’s key role in the energy transition. Shell is also making substantial investments in its Renewables and Energy Solutions business in Australia, as it seeks to diversify away from its legacy oil and gas business.”
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