Above $1.3 billion worth of lost earnings if we are to take one Australian union's word for it. That's how much Shell Prelude Floating Liquefied Natural Gas (FLNG) is missing out. Since July 6th, the facility has been producing nothing due to crippling workers' actions.
Namely, the 140 or so personnel that run the FLNG ceased operations to a complete stop in anticipation of the Enterprise Bargaining Agreement talks results. The negotiations between Shell and the Offshore Alliance (the union representing the Prelude employees.) began in June and will continue until early September.
In a Facebook post, the Offshore Alliance expressed their opinion on the matter in a rather radical tone. "Shell's losses work out at over $5 Million per Prelude employee - plus they have canceled the Turnaround scheduled to commence in two weeks' time."
According to the same source, the losses are the highest for any company in the history of Australian bargaining disputes. This action alone would make headlines, given the absolute dimensions of the labor conflict. The fact that this facility is the record holder for the largest man-made floating structure ever is another reason.
At 1,601 (488 meters) feet long and 660,000 tons heavy, its sheer magnitude is only dwarfed by its estimated price tag - well north of $10 Billion (with estimates going as high as $17 billion - as Shell never disclosed the final costs of the project).
However, the 3.6 Million tons of LNG a year facility holds a key position in another most stressing issue. The war in Ukraine has brought about drastic market shifts for oil, gas, and LNG.
Since the end of February, when Russia invaded Ukraine, natural gas and LNG prices have soared. And, with the cold season just a couple of months away, analysts predict that the general situation will only worsen.
Europe highly demands natural gas, as almost half of its 2021 imports came from Russia. With the war in Ukraine casting a shadow of deep uncertainty over the Russian gas supply, the Australian LNG production facility is more significant than ever.
The Prelude was designed and built to cut production costs for LNG, shorten market-delivery times, and turn offshore gas fields more economically efficient. Constructed to operate for 25 years without significant interruptions or extensive shore-side maintenance, the facility now lies barren off the northern coasts of Australia, at the mercy of the Pacific, the union strike, and global energy markets turmoil.
In a Facebook post, the Offshore Alliance expressed their opinion on the matter in a rather radical tone. "Shell's losses work out at over $5 Million per Prelude employee - plus they have canceled the Turnaround scheduled to commence in two weeks' time."
According to the same source, the losses are the highest for any company in the history of Australian bargaining disputes. This action alone would make headlines, given the absolute dimensions of the labor conflict. The fact that this facility is the record holder for the largest man-made floating structure ever is another reason.
At 1,601 (488 meters) feet long and 660,000 tons heavy, its sheer magnitude is only dwarfed by its estimated price tag - well north of $10 Billion (with estimates going as high as $17 billion - as Shell never disclosed the final costs of the project).
However, the 3.6 Million tons of LNG a year facility holds a key position in another most stressing issue. The war in Ukraine has brought about drastic market shifts for oil, gas, and LNG.
Since the end of February, when Russia invaded Ukraine, natural gas and LNG prices have soared. And, with the cold season just a couple of months away, analysts predict that the general situation will only worsen.
Europe highly demands natural gas, as almost half of its 2021 imports came from Russia. With the war in Ukraine casting a shadow of deep uncertainty over the Russian gas supply, the Australian LNG production facility is more significant than ever.
The Prelude was designed and built to cut production costs for LNG, shorten market-delivery times, and turn offshore gas fields more economically efficient. Constructed to operate for 25 years without significant interruptions or extensive shore-side maintenance, the facility now lies barren off the northern coasts of Australia, at the mercy of the Pacific, the union strike, and global energy markets turmoil.