Gazprom, Shell JV Begins Year-Round Oil Export from Sakhalin II Project

Today Sakhalin Energy marked the commencement of year-round oil export from its new oil export terminal. The terminal is located in Aniva Bay in the south of Sakhalin and forms part of the Prigorodnoye port, which was purpose built for the year-round export of oil and liquefied natural gas (LNG).

The first cargo is oil from Molikpaq, Sakhalin Energy's first platform, but later this month the Piltun-Astokhskoye-B platform will also begin sending oil into the system. Gas condensate from the third platform in the Lunskoye gas field will further boost production in the coming weeks.

Sakhalin II is the world's largest integrated, export-oriented oil and gas project as well as Russia's first offshore gas project. At its peak it will produce some 395,000 boe/day. The LNG plant will have a capacity of 9.6 million tonnes per year from its first two trains.

The Sakhalin II project stipulates phased development of the Piltun-Astokhskoye and Lunskoye fields located 13-16 km offshore the northeastern coast of Sakhalin Island in the Sea of Okhotsk.

Sakhalin Energy’s Chief Executive Officer, Ian Craig said that the first cargo of year-round oil is a key milestone in the commissioning of facilities for the Sakhalin II Project. "The construction phase is nearing completion. We are now focused on commissioning of the full production system with LNG processing starting in the next few weeks."

Craig also praised the efforts of the tens of thousands of people whose dedicated work had made the achievement of first year-round oil possible.

Oil from the Molikpaq platform had a long journey to reach its destination. Starting with a 50km flow through the subsea pipeline to the shore and then to the Onshore Processing Facility (OPF) before travelling more than 800 km through the TransSakhalin pipeline to the Oil Export Terminal at Prigorodnoye. A mere 4.5 km through the underwater pipeline to the Tanker Loading Unit was the final stage in its journey before transfer to a waiting oil tanker.

The Governor Farkhutdinov and Sakhalin Island oil tankers will transport Sakhalin II oil to customers in the Asia-Pacific region and elsewhere. Both tankers are on long term charter to Sakhalin Energy from the Primorsk Shipping Corporation (PRISCO).

Production and export of seasonal oil from the Molikpaq platform, through an offshore facility, began in 1999. Production was limited to around six months of the year during the ice-free season. More than 100 million barrels of Vityaz crude oil has been produced and exported during ten production seasons.

Phase 2

Launched in 2003, the phase 2 development envisages an integrated oil and gas development of the Piltun-Astokhskoye and Lunskoye fields. It involved:

  • Further development of the Astokh structure for year round operation including field pressure maintenance programme in the Piltun-Astokhskoye-B (PA-B) platform.
  • Installation of the Piltun-Astokhskoye-B (PA-B) platform on the Piltun structure.
  • Installation of a single marine gas production platform at the Lunskoye gas field (LUN-A).
  • Hydrocarbon preparation at the integrated coastal technological complex where the marine oil and gas pipelines pass from the all three marine platforms.
  • Transportation of oil and gas via 800 km onshore pipelines to Prigorodnoye from the north to the south of the Island.
  • LNG production at the first LNG plant in Russia located in Prigorodnoye, south of the Sakhalin Island.
  • LNG and oil offloading to buyers from offloading facilities in Prigorodnoye, south of the Sakhalin Island.

Sakhalin Energy selected LNG as the best, fastest and most practical opinion to deliver gas to Asia and North America because it enables customers to use existing facilities and at the same time allows Sakhalin Energy to build up sales volumes rapidly across several customers in different countries.

Interests in the Sakhalin II project are as follows: Shell 27.5%, Gazprom 50%, Mitsui 12.5%, Mitsubishi 10%.


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