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New energy source comes onstream at Sakhalin II


Russian President Medvedev inaugurates the first LNG plant in Russia.

Yuzhno-Sakhalinsk, 18 February 2009: President Dmitry Medvedev today opened Russia’s first liquefied natural gas (LNG) plant built by Sakhalin Energy Investment Company Limited (Sakhalin Energy).

The LNG plant is the heart of the Sakhalin II Project, one of the largest integrated oil and gas projects in the world.

The innovative and challenging Sakhalin II construction is near completion, and a new major energy source is now coming onstream. The infrastructure includes three offshore platforms, an onshore processing facility, 300 km of offshore pipelines and 1600 kms of onshore pipelines, an oil export facility and the LNG plant.

This frontier project lays the foundation for Russia to become a leading energy exporter to the highly competitive energy markets of the Asia-Pacific region. LNG exports are expected to begin shortly.

The strategic importance of the Sakhalin II project for the region was reflected in the distinguished guests at the ceremony, which included Taro Aso, the Prime Minister of Japan, Prince Andrew, Duke of York, Maria van der Hoeven, the Minister of Economic Affairs of the Netherlands, other high-ranking officials and guests from Russia and countries that are co-partners in the project (the UK, the Netherlands and Japan). Among the guests of honour - Sakhalin LNG customers, representatives from international financial institutions and senior executives of the Sakhalin Energy shareholders – OAO Gazprom, Royal Dutch Shell plc, Mitsui & Co., Ltd. and Mitsubishi Corporation.

Christopher Finlayson, Chairman of the Board of Directors of Sakhalin Energy, said: ”This achievement is a take-off point, which opens up a new era in the history of Sakhalin. This has only been possible thanks to the cooperation between Sakhalin Energy and its shareholders, the Russian Federal government and the Sakhalin Oblast authorities”.

Nearly all of the 9.6 million tonne annual production capacity of the LNG plant has already been committed in long-term contracts to supply customers in Japan, Korea and North America. Sakhalin LNG will be the first Russian gas supplied to these regions. It paves the way for Russia to new markets in the Asia-Pacific region and gives the country the status of a global energy power.

Sakhalin Energy’s Chief Executive Officer Ian Craig said: “Sakhalin has now firmly established its position on the global energy map. When the Sakhalin II project is fully on stream, it will supply around 5% of the world’s LNG and make a significant contribution to strengthening global energy security.”


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