OREANDA-NEWS. February 29, 2008. Infrastructure construction under Phase 2 of Sakhalin II Project is nearing completion with some 90% of work already accomplished.

A large scope of work is planned for 2008. Its completion will allow startup of the Phase 2 project. As always safety and reliability remain the main priorities for Sakhalin Energy.

2008 will be the year when individual construction projects from the north to the south of Sakhalin will be integrated into a single production system. Oil and gas will be delivered from platforms through offshore pipelines to the onshore processing facility (OPF). After processing, hydrocarbons will be transported via 800 km of onshore pipelines to the liquefied natural gas (LNG) plant and oil export terminal (OET) in the south of Sakhalin. From there crude oil and LNG will be exported to customers.

In 2008 the scope of work for Sakhalin Energy includes:

- commencement of drilling on the oil platform Piltun-Astokhskoye-B (PA-B);
- start-up of the Molikpaq, (PA-A) Tie-In Modules to establish year-round production of oil;
- continue drilling on gas platform Lunskoye-A (LUN-A);
- to commission the OPF to receive hydrocarbons from all three offshore platforms;
- complete construction of the onshore pipelines;
- complete construction of the booster station 2;
- commission LNG plant (trains 1 and 2).

The Sakhalin II LNG capacity volume has been pre-sold even before construction of the LNG plant has been completed and before commercial production of LNG started. When both LNG trains are commissioned, they will contribute about 6% of LNG to the world LNG supply.

A new specialised port Prigorodnoye will begin operations as part of the future deliveries of hydrocarbons. It is the first port in Russia constructed to service oil tankers as well as LNG carriers.

At peak the port will service approximately 160 LNG carriers and 100 Aframax oil tankers each year, which means one every two days.

Oil reserves of the Sakhalin II project are equivalent to three years of the current total volume of Russian oil exported. In 2007 Russia exported around 240 mln tons of oil (1,8 bln barrels). In addition the Project’s gas reserves are equal to almost four-years of all Russian gas exports. In 2007 Russia exported around 172 bln m3 of gas.