Saipem Awarded Sakhalin II Pipeline Contract

A consortium of a consortium comprising Saipem, an Eni company, (leader), Starstroi (a Saipem LUKoil-Neftegazstroy joint venture), LUKoil-Neftegazstroy and Amec Spie Capag, has been awarded a lump sum turnkey contract for an onshore oil and gas pipeline system associated with the Sakhalin II Development project in the Russian Sakhalin island.

The contract, awarded by the Sakhalin Energy Investment Company, has a total value of approximately USD 1200 million. Saipem's share is approximately US $600 million.

The project covers engineering procurement and construction (EPC) of a 800-km onshore twin pipeline system connecting the Piltun-Astkhskoye and Lunskoye fields landfall pull-in heads, north-west of Sakhalin to a liquefied natural gas plant and an oil export terminal located in the southern part of the island. The completion of activities is expected in the second half of 2006.