Sakhalin Energy Drills First Offshore Gas Wells in Russia

This platform will be the first gas producing offshore platform in Russia, located in Lunskoye gas and condensate field some 15 kilometers offshore North-Eastern Sakhalin. The platform is designed for a year-round operation in a harsh climate and withstands rough seas, severe ice conditions and high seismic activity.

Sakhalin Energy's CEO Ian Craig said: "2007 is a pivotal year in bringing our project on stream. The commencement of drilling of the first wells from Lunskoye-A platform is a major development milestone. Lunskoye-A will provide the main volume of gas for LNG production, opening the new energy markets in Asia-Pacific and North America for Russia. Other key milestones of this year include the commissioning of Russia's first LNG plant, installation of the PA-B topsides and the completion, testing and commissioning of the pipelines. "

The plan for 2007 is to drill two wells – one for re-injection of drill cuttings and one for gas production. Overall Lunskoye-A Phase 2 drilling program comprises 14 wells, including a drill cuttings re-injection well, an oil rim appraisal well, a produced water re-injection well and 11 gas producers.

Lunskoye-A will operate with zero drilling discharge to the environment, which means that neither drilling waste, nor drilling muds will be discharged overboard. The first well to be drilled will be a special well for re-injection of drill cuttings that will allow safe disposal of all drilling waste.

The drilling waste from the Lunskoye-A CRI well will be transported to and re-injected into a well on the Molikpaq platform, which has practiced the zero drilling discharge approach since May 2004. A similar approach will also be used on the PA-B platform.