Using floating LNG technology, Shell plans to process gas from its Prelude and Concerto fields in the Browse Basin off Australia's undeveloped Kimberley coast, where more than a third of the nation's known offshore gas is located.

"Australia is a critical country for us, especially for growth in the LNG sector," Malcolm Brinded, Shell's executive director of upstream international said, Bloomberg reports.

Brinded said Shell was still assessing the total gas in the two fields, but he was confident that annual production could total 3.5 million tons, in addition to condensate and LPG. Shell would not disclose when it expects the first LNG production to begin.

The facility, to be about 480 meters long, 75 meters wide and weigh about 600,000 metric tons, will be ''the largest vessel in the world" and designed to survive a "one-in-10,000-year cyclone," according to Shell.

In July, Shell awarded a contract to a consortium of France's Technip SA and Korea's Samsung Heavy Industries Co. to build a $5 billion floating LNG plant ship, with an option to order nine more over the next 15 years.

Floating LNG facilities may take less than half the time to build compared with onshore units and may cost a third of the amount of an onshore plant, according to estimates by Citigroup Inc. In July Citigroup reported that expenditure on floating LNG facilities is forecast to reach $27 billion between 2009 and 2015, quoting independent research firm Douglas Westwood.

Brinded suggested that Shell could use a floating facility for other projects.

''It is our view that this technology is one where you want to design one and build many because we see economies of scale in doing that,'' Brinded said, the Sydney Morning Herald reports. ''We think this will be the first and that blazes the trail for subsequent ones," he said, noting the vessel's design for a generic model would be "straightforward to adapt for Sunrise."

Brinded said the floating facility would result in 20 percent fewer greenhouse gas emissions than in onshore processing. Shell would consider using a carbon capture and storage technique at the plant, Brinded said, if it can be proven at a commercial scale.

Shell's announcement is a sign Australia is cementing its status as a leader in the global LNG market and a "highly attractive and secure destination for investment," Energy Minister Martin Ferguson said in a statement.

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