Prelude platform will be the world's largest floating facility – longer than four football fields and weighing six times as much as the biggest aircraft carrier.
It will be constructed in a shipyard in South Korea with the equipment to convert gas into a liquid in the middle of the ocean, ready for shipment to the Asian consumer.
Liquefied natural gas (LNG) has transformed the world's energy markets, as it was previously only transportable by pipeline. The new mobility and availability of gas has seen Asian countries take more of an interest in the fuel.
Shell, Europe's biggest energy company, is making a big push to increase its gas production relative to oil production over the next few years.
According to commonwealth data, there is 160 trillion cubic feet of so-called stranded gas, that is, gas that cannot be economically recovered by conventional technologies. Prelude accounts for about 3tcf of that potential. The controversial Sunrise gas project in the Timor Sea is of a similar, though slightly smaller, size.
Shell is, of course, a partner in Sunrise, which is operated by Woodside. And that JV wants to use the Shell FLNG technology to translate that resource to wealth.
Shell's Brinded is so confident in his technology that he reckons on delivering FID on several new FLNG projects between now and when Prelude enters production around 2016. If Timor's objections to the current plan can be overcome, Sunrise would be an early contender for the next nod.
Just on Sunrise, the commentary offered in support of Woodside by Resources Minister Martin Ferguson was typically encouraging.
Ferguson noted the treaty arrangements with Timor were generous and were premised on the operator being free to pursue the "optimum commercial outcome" for development.
Woodside says the FLNG is a $US5bn better outcome than landing the gas in Timor. Nonetheless, Timor says it wants Sunrise gas processed on home soil and that it will not approve any other option.
Ferguson left little doubt that the Commonwealth would support Woodside's position.
Meanwhile, Prelude's numbers rolled off even Martin Ferguson's sometimes tied tongue. The project will add $45bn to Australia's GDP over its planned 25 year productive life, will sustain 1000 local jobs, contribute $12bn in tax revenue with another $12bn to be spent on local goods and services and will boost our balance of trade by $18bn. Ferguson was also bubbling about the training, education and research opportunities that would flow to Australians. Again, this excitement is based on the real rather than the hoped for.
Shell's local chair and local upstream boss, Ann Pickard, said Perth would be Shell's "global centre for FLNG learning and research" before announcing new education partnerships with Curtin University and Challenger Institute along with the funding for a new chair in marine environmental studies at WA University.
The most immediately important reason for government contentment over this decision, though, is that it comes in the middle of the debate over carbon tax and its potential impact. Shell has decided to invest in ignorance of what the government has planned, though Ferguson stressed the government maintained a robust and constant dialogue with the LNG industry and reiterated his belief that an acceptable outcome could be forged as it was in 2008 when the discussion was all about an emissions trading scheme.
Shell's Pickard said the financial modelling for Prelude included a price for carbon dioxide emissions that, over the longer term, was expected to hit $40 a tonne, and assumed that a trading scheme would be in place.
For all that, Pickard was diplomatic but plain about Australia's first-mover risk on carbon. "We don't want to see, in the short term, Australian projects disadvantaged.
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