World's largest floating LNG platform begins output

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Royal Dutch Shell announced on Wednesday that its Prelude floating liquefied natural gas (FLNG) facility has started production in Australia. FLNG is the world’s largest floating production structure.

Shell said in a statement that wells have now been opened at the Prelude facility, which is located in Browse Basin, north of Broome. This means Prelude has now entered the initial phase of production where gas and condensate - which is an ultra-light form of crude oil - is produced and moved through the facility.

Prelude is expected to have an annual LNG production capacity of 3.6 million tonnes, 1.3 million tonnes a year of condensate and 400,000 tonnes a year of liquefied petroleum gas (LPG).

Analysts estimate exports to start by early next year, with condensates likely to start first. "First LNG cargo is still several weeks assuming all proceeds as planned, but the timing of first cargo and pace of ramp-up is still subject to technical risk,” said Saul Kavonic, energy analyst at Credit Suisse in Sydney, according to Reuters.

FLNG makes the eighth LNG project Australia has built within the last decade. Australia overtook Qatar as the world's largest exporter of LNG in November, while Australia is China's biggest source of LNG. Demand for Australian LNG grows as China shifts away from coal and promotes natural gas as a cleaner alternative.

China's imports of LNG continued fast growth in November, hitting a new record at 5.99 million tonnes, data from the General Administration of Customs shows.

China accounted for 13 percent of global LNG imports last year, overtaking the Republic of Korea. It is second to Japan in importing LNG, but is expected to become the world's top importer as soon as next year. China imported 41.6 million tonnes from January to October, surpassing the 39 million tonnes it imported for the whole year of 2017.

(With input from Reuters)