Dutch Shell be assumed?
For such a large capital project I am sure the economic viability of Prelude was scrutinized closely.
With respect to health and safety risks my assumption is that the project team assured the Board that the risks of FLNG had been demonstrated to be as low as is reasonably practicable. Despite health and safety risks to the crew of Prelude being higher than an onshore LNG plant my assumption is that Directors are aware of this. Given that the potential consequences of explosion and fire offshore must be higher than onshore, the only way this can be refuted is if Shell can guarantee that the probability of loss of containment on Prelude is negligible. No one will do that.
Offshore Installations have a poor track record in preventing loss of containment
Gas and oil leaks in the highly regulated North Sea are recorded in government statistics. These are either minor leaks or significant leaks. With reference to gas leaks, a significant leak is one where a flammable atmosphere exists as a result of the leak which could explode if it came into contact with a source of ignition. In a recent years significant gas leaks were occurring somewhere in the oilfield every 5 days, i.e. 83 leaks that year in total. Shell has had more than its fair share of leaks; on Brent Charlie for example it had 6 such leaks in one day. Shell reacted and tried to keep ahead off this problem on all its installations by fitting temporary clamps to hydrocarbon carrying pipes. From its own data, not disputed, hundreds of these repairs were not approved by a competent person prior to installation. A public inquiry in 2006 attributed the cause of deaths on Brent Bravo to a materially defective temporary repair. So Shell has previous form. Hopefully this North Sea behavior by Shell is non-transferable down under. The data on North Sea gas leaks covered circa 200 installations and many other Operators, but still it makes the striking, and irrefutable point that offshore installations by their very nature, have challenging technical integrity issues.
Can loss of containment of LNG, LPG, condensates or gas be considered a negligible probability on Prelude?
From all the above loss of containment of hydrocarbons is likely to occur on Prelude during its operational life, either through flaws in the design, human error or failure to inspect and maintain. It’s almost inevitable. It’s only to be hoped that the consequences of these losses never reach their full potential.
In the end, are we confident the Shell board of directors understands fully the risks of FLNG?
In the last analysis, through application of due diligence, Royal Dutch Shell Plc must be satisfied at Board level (otherwise the concept would not have been approved), that the incremental increase in risk to the health and safety of persons on the installations such as Prelude, although higher than for an onshore plant, are still at levels that are tolerable. And that these risk levels, particularly the potential for loss of life is at a level acceptable not only to RDS, its stakeholders, employees, and the industry regulator, but also to Society in general.
This is a bold assumption, but hope as they say, springs eternal.
COMMENT POSTED ON SHELL BLOG BY “dutchdude”: 22 FEB 2014
To Bill C: You wonder if at board level the risks of Prelude are understood? Must be rhetorical, because you know as well as I do that management at the top is mainly by sound bites and assurances by other lower ranking staff members. Each level going up has a benefit in portraying the project in the best possible light. Safety concerns are at best noted down but “extreme views” are never tolerated. The principle of ALARP is one of the most misused safety concepts around. It is fair to assume that many people worked parts of Prelude and that components are reasonably safe. It is also fair to assume that nobody understands the total aggregate risk of all these components together. Irrespective of all the massive QRAs produced. Prelude is a fantastic undertaking, let’s hope it is not a similar tale as Babel