The Aspects of the Shell Prelude - Research Paper Example

?INTRODUCTION This report will discuss the aspects of the Shell prelude (FLNG) project developed by Shell Australia. Innovative ideas and leading edge technology of the company has given it the potential to bring revolution in the processes of producing natural gas. The Floating Liquefied Natural Gas (FLNG) project is the world’s first such project. Shell has the benefit of being a pioneer in the production of Liquefied Natural Gas (LNG) for over more than five decades (Williams, 2013). Initiation of such a project will decrease the potential environmental hazards and reduce the cost of building infrastructure on land. Producing and processing gas in sea where it is extracted is a major contributing factor towards innovation and reducing cost. It will also make new energy sources accessible. The major characteristics of a project are that it is temporary in nature (Pinto, 2010). This means that it has a starting date and an ending date. Besides this the outcome of the project must be unique in nature. It must be either in the form of a product, service or result. This project initiated by shell has several societal benefits and it has the potential to bring revolution in the ways natural gas is produced. BACKGROUND OF THE PROJECT This section of the report will discuss about the project and discuss measures which initiate the project. The expected deliverables and the outcomes of the project will be discussed along with the organizational details. Overcoming certain barriers like cost, time, quality, scope and risk are the main objectives of the project (Atkinson, 1999). This is because all these factors contribute directly to its success. The main objective of the project is to save cost and utilize the time that is allotted to the project in the most efficient manner (Harrison, and Lock, 2004). Timely completion of the project and proper management of the resources will improve the quality delivered. New projects or expansion strategies of the business involve risk associated to it. The efficiencies of implementation of the process can reduce the risk (Hamilton, 2004). The project of Shell prelude (FLNG) is owned by Shell. It is located on the Western shore of Australia. The project was started in 2011 and is expected to be completed in 2015 (Shell, 2013a). Shell is planning to develop large gas resources and explore more reserves across Australia. The company also has interest in acquiring new coal reserves and expanding its exploration boundaries. The development phase of Prelude FLNG project was constructed from the contribution of six hundred engineers from across the world. A model of the project was designed which was tested in artificial sea conditions. This was done to test the model against the pressure of winds and waves (Shell, 2013c). The FLNG project after construction is estimated as the largest floating offshore facility (Offshore Technology, 2012). It will be 488 meters long and it will weigh 600,000 tons if loaded to full capacity. The total weight of steel used for building the FLNG project would be 260,000 tons (Shell, 2013a). This project is innovative because it will accommodate all the functions which were performed on land earlier. The FLNG will allow ease of production, liquefaction of natural gas, storage of gas in liquid form to reduce the storage cost and allow transfer at sea. Initiation of developing projects like these will help open offshore natural gas fields (Shell, 2013b). These projects are costlier to operate and difficult to develop on land. Development of FLNG will resolve these issues. Shell has initiated this project with the collaboration of contractor Technip Samsung Consortium (TSC). TSC has an agreement with Shell of providing multiple facilities like engineering, manage the procurement of goods required for production, provide construction facilities and ensure proper installation of the FLNG facility. The site selected for the project is of the prelude gas field located on Northwest coast of Australia. After completion of this project about 350 direct jobs and 650 indirect jobs will be created. This will prove to be a major boost for the economy (Shell, 2013e). The project is assumed to be moored on the docks for about 20-25 years and it is intended to move form there only for the purpose of inspection and overhauling. The project is expected to benefit the economy in several (Shell, 2013a). This project will create new jobs for the people, tax revenues will increase for the economy and new business will be created. Australia has a lot of reserves located underwater. This will provide a chance for easy extraction of those reserves. ORGANIZATIONAL OBJECTIVES The aim of any organization is to minimize cost and maximize the returns. This project will increase the returns for the company and it will also increase the economic returns generated. The economic returns include increased taxes, creating new jobs, etc. With the initiation of the project Shell is aiming to take extraction of resources to a whole new level. This revolutionary innovation of shell will change the way natural gas was extracted before completely. The idea of mooring FLNG project in the sea will save time, cost and resources. This project is huge in terms of innovation and it is compact in terms of design as compared to the plant which is built on land. Shell is operating for more than five decades extracting Natural Gas. It now has the privilege of innovating methods to extract and process gas in the sea where it is found. This has made new energy sources reachable and accessible. Extracting LNG requires a cooling system which is easier to manage in the sea. Cooling the gas from the extraction points saves the space utilized on the decks. The storage tanks will also be located below the decks which will again save space. This process has accomplished most of the organizational objectives. This project has benefited the organization as it is now recognized globally as an innovator of the FLNG project. This project has made extraction of natural gas reserves located within the sea easier. Earlier with the traditional extraction methods this process would have incurred a lot of cost which could be considered as unfeasible for the project. With this innovation the extraction process has become easier and much feasible than it was earlier. The resources of the company are being utilized more efficiently. Extraction process within the sea saves a lot of cost for the company. The cost of building a plant on land and operating it is much higher as compared to operating a plant on land (Shell, 2013b). MANAGING THE PROJECT Managing the project is a challenging task for the management as every project is different in nature and needs to be managed in a different way (Lewis, 2006). This project has been formed under the supervision of more than six hundred engineers. Shell has outsourced the functions like engineering, procuring, assembling etc. to Technip Samsung Consortium (TSC) (Technip, 2011). The manufacturing of the plant is being done on the South Korean shore on the ware house owned by TSC. The project had been finalized in 2011. The estimated completion of the project was expected during or after the year 2015. The areas of prelude and Concerto are very oil rich places. The area has secured reserves of 3 trillion cubic feet (Technip, 2011). Managing the FLNG project is very simple because the project has a low cost and the environmental hazards that are associated are also less. Currently Shell Australia is the innovator of the FLNG project. It is not located elsewhere in the world. The outcomes that might be attained by the project are only based on assumptions. The assumptions made for the expected outcome show that some of the stranded reserves that were thought to be uneconomical earlier due to traditional methods will become accessible with the completion of this process. To manage the workforce the company is spending billions of dollars on the capital and operating expenditure. This will increase business opportunities of business for the Australians. This will provide better business opportunities for the locals. Shell will invest on the workforce and their training. This will increase specialization in FLNG operational excellence. CONCLUSION The project discussed in this report of Shell prelude (FLNG) project is owned by Shell. The project is an innovation of setting up Natural Gas extraction plants on the Northern and Western shores of Australia. This project is the first of its kind and has not been used elsewhere. Shell has been operating for the extraction of LNG for over more than five decades. This innovation will give it a competitive edge over the existing firms functioning in the same industry. The project will prove to be beneficial for the company and the economy both. The company will save cost and acquire a competitive edge. The areas which were rich with reserves but were stranded could now be explored because of the FLNG project. RECOMMENDATIONS The project is located on the shore of Western Australia. The management has decided to export the goods directly from the plant. The hazards to the environment and the safety of aquatic life must be ensured. The project and the methods used for implementing the project can be offered to the third world countries which can generate opportunities for jobs and help them in extracting and utilizing the resources. This technology will succeed in acquiring attention of many countries which have stranded resources. In the past extraction of resources were difficult and were estimated to be costly in the traditional manner. With this innovation several economies will aim at implementing the extraction process on their reserves. The training center can be developed to train the existing workforce and it can be used in the future to provide specialization to student willing to pursue a career in FLNG operations management. References Atkinson, R. (1999). 'Project management: cost, time and quality, two best guesses and a phenomenon, it is time to accept other success criteria'. International Journal of Project Management, vol.17, no. 6, pp. 337–42. Hamilton, A. (2004). Handbook of Project Management Procedures. TTL Publishing, Ltd: London. Harrison, F., and Lock, D. (2004). Advanced project management: a structured approach. Gower Publishing, Ltd: Surrey. Lewis, R. (2006). Project Management. McGraw-Hill Professional: London. Offshore Technology. (2012). Shell's Prelude FLNG Project, Browse Basin, Australia. Available from http://www.offshore-technology.com/projects/shell-project/ [Accessed 15 August 2013] Pinto, J. (2010). Project management : achieving competitive advantage. N.J.: Prentice Hall. Shell. (2013a). Shell lays keel for world's first floating LNG project. Available from http://www.shell.com.au/aboutshell/media-centre/news-and-media-releases/2013/preludeflng-keel-08052013.html [Accessed 15 August 2013] Shell. (2013b). Prelude FLNG - an overview. Available from http://www.shell.com/global/aboutshell/major-projects-2/prelude-flng/overview.html [Accessed 15 August 2013] Shell. (2013c). A revolution in natural gas production. Available from http://www.shell.com/global/aboutshell/major-projects-2/prelude-flng/revolution-natural-gas-production.html [Accessed 15 August 2013] Shell. (2013d). Prelude FLNG. Available from http://www.shell.com/global/aboutshell/major-projects-2/prelude-flng.html [Accessed 15 August 2013] Shell. (2013e). Prelude FLNG in numbers. Available from http://www.shell.com/global/aboutshell/major-projects-2/prelude-flng/by-numbers.html [Accessed 15 August 2013] Technip. (2011). Technip Samsung Consortium to start detailed design and construction of Shell’s innovative FLNG facility. Available from http://www.technip.com/en/press/technip-samsung-consortium-start-detailed-design-and-construction-shell%E2%80%99s-innovative-flng-faci [Accessed 15 August 2013] Williams, P. (2013). WA to benefit from Prelude FLNG: Shell. The West, Available from http://au.news.yahoo.com/thewest/a/-/newshome/18460314/wa-to-benefit-from-prelude-flng-shell/ [Accessed 15 August 2013] Read More