First Russian LNG plant launched in Sakhalin
The Sakhalin Island (Prigorodnoye settlement) hosted today celebrations dedicated to the launch of the first Russian liquefied natural gas (LNG) plant as part of the Sakhalin II.
Taking part in the event were Dmitry Medvedev, President of the Russian Federation, top-ranking statesmen from the countries-partners of the Sakhalin II project including Taro Aso, Prime Minister of Japan, Prince Andrew, Duke of York, Maria van der Hoeven, Economic Affairs Minister of the Kingdom of the Netherlands. Also present were heads of the companies-shareholders in Sakhalin Energy: Alexey Miller, Chairman of the Gazprom Management Committee, Jeroen van der Veer, Chief Executive Officer of Royal Dutch Shell, Shoei Utsuda, President and Chief Executive Officer of Mitsui, Yorihiko Kojima, President and Chief Executive Officer of Mitsubishi Corporation. In addition, the event was attended by heads of the companies-purchasers of the Sakhalin LNG and international financial organizations.
From left to right: Jeroen van der Veer, Alexey Miller, Shoei Utsuda and Yorihiko Kojima
“Today we have launched LNG production in Russia. This will give a powerful impetus to economic development in the Far East of Russia. The Sakhalin II project implementation will make it possible to reinforce Gazprom’s position on the global energy market, promote the trade and economic relations between Russia and Asia Pacific, facilitate diversification of gas supply sources, thus enhancing its energy security,” said Alexey Miller, Chairman of the Gazprom Management Committee.
“Sakhalin has established itself on the global energy map. We thank shareholders of Sakhalin Energy, the Government of the Russian Federation and the Sakhalin Oblast Administration for their continuous support and cooperation in delivering the ambitious and challenging Sakhalin II project.
After reaching its full capacity the Sakhalin II project will ensure around 5 per cent of the global LNG production and contribute significantly to strengthening the global energy security,” underscored Ian Craig, Sakhalin Energy’s Chief Executive Officer.
The first Russian LNG plant on the Sakhalin Island consists of two process trains, each having the throughput capacity of 4.8 million tons of LNG per annum. The plant is projected to reach its design capacity (9.6 million tons per annum) in 2010.
This large-scale project has been constructed since August 2003. About 10 thousand of workmen and experts from more than 40 countries were involved in the construction process.
The LNG plant of the Sakhalin II project applies a special method of gas liquefaction involving the double mixed refrigerant raising the production effectiveness using the benefits of the cold climatic conditions of Sakhalin.
Even before the construction terminated all the production from the LNG plant was contracted on the basis of long-term arrangements (validity period of 20 years and more). Around 65 per cent of the Sakhalin LNG will be supplied to 9 purchasers from Japan, which is the world’s top LNG sales market. The remaining volumes are intended for consumers of South Korea and North America.
The LNG plant is a part of the world’s largest comprehensive oil and gas Sakhalin II project. The project provides for developingt two oil and gas fields north-west offshore the Sakhalin Island (Piltun-Astokhskoye and Lunskoye fields), extraction of oil and production of liquefied gas with their subsequent export.
On April 18, 2007 Gazprom and the shareholders of Sakhalin Energy (Royal Dutch Shell plc, Mitsui & Co. Ltd and Mitsubishi Corporation), being the Sakhalin II project operator, signed the Purchase and Sale Agreement providing for the acquisition by Gazprom of a 50 per cent plus one share stake in Sakhalin Energy.
On April 16, 2007 the Gazprom Board of Directors took a decision to open Gazprom’s Representative Office in the Sakhalin Oblast.