Weatherford Awarded Sakhalin II Pre-Commissioning Contract

Saipem UK Ltd has awarded Weatherford (WEUS, Inc.) a contract for pipeline pre-commissioning services for the Sakhalin II project on Sakhalin Island, Russia. Worth more than €3.5 m, the work started in 2004 and is scheduled for completion in 2006.

The work scope, being carried out by Weatherford's Pipeline & Specialty Services (P&SS) group, includes project management, initial and final flooding, cleaning, gauging, hydrostatic testing, integrity leak testing, dewatering, drying and dry air packing of a variety of oil, gas, multiphase and MEG pipelines at Piltun, Lunskoya and Aniva Bay locations. Caliper geometric inspection of the pipelines will also be provided. The operations team will include some of the Russian technicians first trained and employed by Weatherford for the Bluestream project.

Weatherford's project manager said, "We are delighted to be working with Saipem once again and are excited about our involvement in the high-profile Sakhalin project. Our experience of working with Saipem in Russia and Kazakhstan was undoubtedly one of the important factors in winning this work."

The Sakhalin II project is a development of offshore oil and gas fields on the northeastern shelf of Sakhalin Island. Two production fields are associated with the project. Piltun-Astokhshoye (PA) is an oil field with associated gas, and Lunskoye (LUN) is a gas field with associated condensate.

The Phase 1 development, comprising the PA-A platform and oil export facilities, was installed in 1998, and production commenced in July 1999. During the Phase 2 development, the PA-B and the LUN-A platforms will be installed together with infrastructure and facilities for export of oil and gas.

Crude oil and stabilized condensate will be pumped together through a single onshore pipeline from the onshore processing facilities (OPF) to a new oil export terminal (OET) at Prigorodnoye. Gas from the OPF will be transported through a single onshore pipeline to a new liquefied natural gas (LNG) plant, near a new OET at Prigorodnoye. Stabilized oil will be transported through an offshore pipeline from the OET to a tanker loading unit (TLU) located offshore from Prigorodnoye.

WEUS INC., located in Yuzhno (southern Sakhalin), is a licensed branch of a Moscow established company, which is wholly owned by Weatherford.