Shell Decides to Move Forward With Groundbreaking Floating LNG

The Hague, The Netherlands (ots/PRNewswire) - The Board of
Royal Dutch Shell plc (Shell) has taken the final investment decision
on the Prelude Floating Liquefied Natural Gas (FLNG) Project in
Australia (100% Shell), building the world's first FLNG facility.
Moored far out to sea, some 200 kilometres from the nearest land in
Australia, the FLNG facility will produce gas from offshore fields,
and liquefy it onboard by cooling.

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The decision means that Shell is now ready to start detailed
design and construction of what will be the world's largest floating
offshore facility, in a ship yard in South Korea.

From bow to stern, Shell's FLNG facility will be 488 metres long,
and will be the largest floating offshore facility in the world -
longer than four soccer fields laid end to end. When fully equipped
and with its storage tanks full, it will weigh around 600,000 tonnes
- roughly six times as much as the largest aircraft carrier. Some
260,000 tonnes of that weight will consist of steel-around five times
more than was used to build the Sydney Harbour Bridge.

"Our innovative FLNG technology will allow us to develop offshore
gas fields that otherwise would be too costly to develop," said
Malcolm Brinded, Shell's Executive Director, Upstream International.
"Our decision to go ahead with this project is a true breakthrough
for the LNG industry, giving it a significant boost to help meet the
world's growing demand for the cleanest-burning fossil fuel."

Brinded continued "FLNG technology is an exciting innovation,
complementary to onshore LNG, which can help accelerate the
development of gas resources".

The facility has been designed to withstand the severest cyclones
- those of Category 5. Ocean-going LNG carriers will offload
liquefied gas, chilled to minus162 Celsius and shrunk in volume by
600 times, and other products, directly from the facility out at sea
for delivery to markets worldwide. Until now, the liquefaction of
offshore gas has always involved piping the gas to a land-based
plant.

Shell has progressed the Prelude FLNG project at a rapid pace,
with first production of LNG expected some ten years after the gas
was discovered.

The FLNG facility will tap around 3 trillion cubic feet
equivalent of resources contained in the Prelude gas field. Shell
discovered the Prelude gas field in 2007.

Some 110,000 barrels of oil equivalent per day of expected
production from Prelude should underpin at least 5.3 million tonnes
per annum (mtpa) of liquids, comprising 3.6 mtpa of LNG, 1.3 mtpa of
condensate and 0.4 mtpa of liquefied petroleum gas. The FLNG facility
will stay permanently moored at the Prelude gas field for 25 years,
and in later development phases should produce from other fields in
the area where Shell has an interest.

Ann Pickard, Country Chair of Shell in Australia said "this will
be a game changer for the energy industry. We will be deploying this
revolutionary technology first in Australian waters, where it will
add another dimension to Australia's already vibrant gas industry."

Brinded added "beyond this, our ambition is to develop more FLNG
projects globally. Our design can accommodate a range of gas fields,
and our strategic partnership with Technip and Samsung should enable
us to apply it progressively faster for future projects. We see
opportunities around the world to work on other FLNG projects with
governments, energy companies and customers."

Shell's decision to make FLNG a reality culminates more than a
decade of research and development. It builds on the company's
extensive know-how in offshore production, gas liquefaction, LNG
shipping, and delivering major projects that integrate the gas value
chain-from wellhead to burner.

The Prelude FLNG project will be the first Australian upstream
project in which Shell is the operator. Australia is one of Shell's
key growth provinces, and Shell's upstream investment in Australia
should reach some $30 billion over the next five years, including the
Prelude and Gorgon projects, and on-going exploration and feasibility
studies in the country.

Prelude FLNG is part of Shell's industry-leading portfolio of
medium term growth options, where the company has around 30 new
upstream projects under study world-wide, to support long term
profitable growth.

Note to editors:

Shell is a global, integrated energy company with operations in
more than 90 countries and territories, with businesses including:
oil and gas exploration and production; refineries and chemical
plants; processing and marketing of liquefied natural gas (LNG) and
gas-to-liquid (GTL) products; marketing and shipping of oil products
and chemicals; and renewable energy sources, such as biofuels.

Gas resources are found all over the world in remote offshore
accumulations. In Australian waters alone there is an estimated 140
trillion cubic feet of such "stranded" gas, according to a 2008
report by the Commonwealth Scientific and Industrial Research
Organisation ( http://www.solve.csiro.au/0608/article5.htm). Shell
FLNG technology will make it feasible to develop such resources,
since it reduces both the cost and environmental footprint of their
development. Having the gas-processing and gas-liquefaction facility
located at the site of an offshore field removes the need for:
gas-compression platforms; long subsea pipelines to shore; near-shore
works, such as dredging and jetty construction; and onshore
construction, including roads, storage yards and accommodation
facilities. Another plus is that FLNG can accelerate LNG
developments. This is because an FLNG vessel can be ordered at an
earlier stage of appraisal of a new gas field, with less guarantee of
production longevity than needed to underpin an onshore greenfield
investment; if and when the gas resources in the first field are
exhausted, the FLNG can be redeployed to another field.

Shell is the operator and 100% equity holder of the WA-371-P
permit in the Browse Basin, where the Prelude field is located. The
field is approximately 475 kilometres north-northeast of Broome,
Western Australia, and over 200 kilometres from the nearest point on
the mainland. Shell plans to have initially seven subsea wells at the
Prelude field. From these wells, gas will travel through flexible
pipes to the FLNG facility.

Shell has been doing business in Australia for 110 years,
including participation in major LNG projects such as the North West
Shelf and Gorgon.

Cautionary Note

The companies in which Royal Dutch Shell plc directly and
indirectly owns investments are separate entities. In this press
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used for convenience where references are made to Royal Dutch Shell
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interest" is used for convenience to indicate the direct and/or
indirect (for example, through our 24% shareholding in Woodside
Petroleum Ltd.) ownership interest held by Shell in a venture,
partnership or company, after exclusion of all third-party interest.

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2011. Neither Royal Dutch Shell nor any of its subsidiaries
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Contact:
Enquiries: Shell Media Relations: Australia: Claire
Wilkinson,Claire.Wilkinson@shell.com, +61(0)416924822; Group: Kirsten
Smart,kirsten.smart@shell.com +31-70-3773600