It took eight weeks for the world's largest floating gas production vessel to be hauled by tugboats from a South Korean shipyard to the spot almost 500km off the north-west coast of Australia where it was moored last month.
For the next 25 years this red-hulled Goliath — the length of four football pitches and nine-times the weight of the UK's new aircraft carrier when fully loaded — will harvest gas from subsea wells and convert it into super-cooled liquefied natural gas. Tankers will visit the ship once a week to offload its LNG for export.
The $14bn Prelude project, led by Royal Dutch Shell, is the latest in a surge of new LNG capacity which promises to reshape the oil and gas industry — and with it, the energy markets they serve. Chevron's Wheatstone LNG development in Australia is due to start producing this month, on the heels of its nearby Gorgon project last year, after a combined $88bn of investment. ExxonMobil, BP, Total and Eni have also made big commitments.
Supplies of LNG are on course to increase by 50 per cent between 2014 and 2021. That implies the opening of a new LNG "train" — the facilities that condense gas into liquid form to allow it to be transported long distances by ship — every two to three months. Spencer Dale, chief economist at BP, calls that a "quite astonishing" rate of growth.
The investments are part of a wider dash for gas among the biggest energy companies, as the industry bets that the clean characteristics of gas compared with oil and coal will allow it to keep growing as other fossil fuels decline.
Gas emits half as much carbon dioxide as coal when burnt to generate electricity, and at least 75 per cent less nitrogen oxide and other health-harming particles. This makes gas a potential ally in the fights against climate change and air pollution, while providing a hedge for industry against the threat of electric vehicles eroding demand for oil.
Companies that once treated gas as the poor relation to "black gold" are now gambling that the colourless commodity can help secure their future in a decarbonising world. Of the 16 new BP projects due on stream between this year and 2021, 12 involve gas rather than oil. Similar shifts are under way across the industry. Gas outweighs oil by a factor of two-to-one among pre-development resources awaiting investment decisions, according to Wood Mackenzie, the energy consultancy.
"In the past, when you struck gas rather than oil in this industry you were disappointed, but now we go looking for it," says Claudio Descalzi, chief executive of Eni, the Italian group due to bring the huge Zohr gasfield off the coast of Egypt on stream by the end of this year.
The gamble on gas rests in large part on the sector's ability to squeeze coal out of the global energy system and compete with the rise of wind and solar power.
"Renewables will dominate in the long run but during the transition, and maybe even at the end of it, there will need to be a stable source of electricity that can step in when wind and solar are not available," says Maarten Wetselaar, head of Shell's gas business. "I'm absolutely convinced that gas will provide that role."
Nowhere is more important to the prospects of gas than Asia. China and India alone are expected to account for half of the 30 per cent increase in global energy demand forecast by BP between now and 2035. Coal still accounts for about 60 per cent of electricity generation in China and India, but rising concern about smog — as well as both countries' commitments under the Paris climate accord — is creating an opening for gas. China aims to increase the share of gas in its total energy consumption from 6 per cent to 15 per cent by 2030. There are signs of growth: Chinese LNG imports increased 38 per cent in the first half of this year, compared with the same period in 2016.
"We'll not squeeze out coal overnight, but air pollution is becoming a political problem in China," says Mr Wetselaar. "The priority has been jobs and cheap electricity but, when you cannot go outside for 30 days because of smog, environmental factors count for more."
The need for regulatory help in driving out coal explains why all the big oil groups support the taxation of carbon emissions — a measure, so far only sporadically adopted around the world, which makes coal more expensive relative to gas. But producers are not relying solely on political intervention to stimulate demand. They are also finding ways to deliver gas more economically. Floating storage and regasification units, or FSRUs — ships which can receive LNG and convert it back into gas — have sprung up on coastlines around the world as a low-cost alternative to building permanent onshore terminals.
The number of countries importing LNG has almost doubled in the past decade to 35, in large part because FSRUs have made it affordable in places such as Pakistan, Jordan and Colombia. "It used to take four years and $500m to build an LNG-receiving terminal. Now you can have an FSRU floating off your country 18 months after taking the decision," says Mr Wetselaar.
France's Total is leading a consortium building an FSRU and associated gas pipelines in Ivory Coast, an example of producers investing in downstream infrastructure to open new markets.
As well as seeking a bigger role in electricity generation, gas producers also see growth in the industrial, chemicals and transport sectors. In ships, for example, LNG can be used as a cleaner alternative to heavy fuel oil as the maritime industry faces regulatory pressure to reduce emissions. Carnival, the cruise line operator, has ordered seven LNG-powered ships and Shell is investing in gas infrastructure at ports including Rotterdam and Singapore to encourage cargo carriers to follow suit.
"Heavy transport by ships, trucks and buses can't be electrified and the lowest carbon alternative is for them to use LNG," says Mr Wetselaar.
Yet for all the optimism, projects such as Prelude and Wheatstone are fraught with commercial risk. The arrival of large-scale Australian LNG has coincided with the surge of US shale gas. The US is on course to become a net exporter of gas this year for the first time since 1957, as numerous LNG terminals are brought online. By 2022, the US is likely to be vying with Australia and Qatar to be the biggest exporter of LNG, according to the International Energy Agency.
This surge of new capacity is calling into question the economic assumptions underpinning the Australian LNG projects and others such as ExxonMobil's in Papua New Guinea, BP's in Indonesia and Total's in Russia. Gas prices in Europe and Asia — the biggest LNG markets — have fallen by over 40 per cent in the past five years, reducing returns on investment below the level anticipated when the projects were approved.
"An oversupplied LNG market is helping alter the dynamics of the gas market by shifting the balance of power from producers to customers," says Dan Smith, an analyst at Oxford Economics. "LNG buyers are able to be more demanding and have been pushing for shorter and more flexible contracts."
A market once dominated by long-term contracts between a small number of suppliers, and an equally exclusive club of buyers such as Japan and South Korea, has been blown open by the influx of US gas. A decade ago, more than 95 per cent of LNG contracts were for 10 years or more. Today, that figure is down to about 60 per cent.
"Up until now, LNG has been a technology with high barriers to entry," says Noel Tomnay, head of global gas at Wood Mackenzie. "The US is democratising the market and now any Tom, Dick or Harry can access LNG."
Mr Wetselaar insists that moderate prices and proliferating sources of flexible supply and demand are good for customers and producers alike. "Gas needs to be affordable. To grow profitability of this business we need volume growth not margin growth, because margin growth means higher prices which will drive demand away."
Despite the positive signs in China, low prices have so far failed to stimulate a boom in global gas demand. Consumption growth has slowed from an average of 3 per cent a year in the first decade of this century to about 1.4 per cent annually since 2010.
"This slowdown has put some producers in a tight corner," the IEA said in its latest annual outlook. "While gas is set to perform much better than other fossil fuels over the coming decades, some of the pillars on which a bright future for gas have been constructed look a little less solid than they have in the past."
Demand for gas has been held back by two main factors. One is rapid growth in renewable power. In Europe, this has led to the mothballing of some gas-fired power stations as rising wind and solar generation pushes down wholesale electricity prices. The other is that coal remains cheaper to burn than gas in many parts of the world.
Gas producers portray their product as a "bridging fuel" between the eras of hydrocarbons and renewables. The risk for the industry is that advances in battery technology — which allows surplus wind and solar power to be stored for future use — could allow the world to leapfrog gas direct to renewables.
Carbon Tracker, a group which monitors climate policy, estimates that $532bn of existing and planned gas projects would become obsolete if the world pursues the aggressive emission cuts needed to limit temperature increases to below 2C above pre-industrial levels, as agreed in the Paris accord.
"This over-investment in natural gas infrastructure is likely to lead to either emissions overshooting the Paris goals, or a large number of stranded assets as the shift to cheaper renewables takes place," says Andrzej Ancygier of Climate Analytics, a green think-tank.
Shell's Mr Wetselaar insists that, under any scenario, gas will be needed to smooth the transition. While batteries can deal with short-term fluctuations in renewable power, they cannot yet address seasonal variations.
In the UK, solar power can account for more than a fifth of electricity generation on a sunny summer day, but contribute almost nothing on a gloomy winter afternoon.
Gas has been critical to Britain's success in pushing coal to the brink of elimination from its electricity system and reducing emissions to their lowest level since the 19th century, without sacrificing energy security.
While the long-mooted "golden age of gas" has yet to fully materialise, global consumption growth is forecast to increase at an average rate of 1.6 per cent a year between now and 2035, according to BP. That is more than twice the 0.7 per cent projected for oil.
LNG growth is expected to outstrip the wider gas market and analysts say overcapacity could quickly give way to a supply crunch in the early 2020s once new production is absorbed.
After delays and cost-overruns in Australia, companies are cautious about further LNG spending at a time when weak oil prices continue to strain industry finances. Smaller developments are likely to prevail over megaprojects in future. But Eni's go-ahead in June for the Coral South field in Mozambique — seen as the next big LNG frontier — suggests the dash for gas has further to run.