Shell Decides to Move Forward With Groundbreaking Floating LNG

Shell Announces Final Investment Decision on Prelude Floating LNG Project in Australia

THE HAGUE, The Netherlands, May 20, 2011 - 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 (
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
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Enquiries: Shell Media Relations: Australia: Claire Wilkinson, Claire.Wilkinson at shell.com, +61(0)416924822; Group: Kirsten Smart, kirsten.smart at shell.com +31-70-3773600