Sakhalin to see 8% rise in liquids production this year

28 September 2016, Week 38, Issue 900

Oil production in the vicinity of Sakhalin Island in Russia’s Far East is due to climb by 8% this year, according to a regional official.

Vera Sherbina, who heads the Sakhalin regional government, told reporters at a conference today that liquid yields were set to rise to 18.1 million tonnes (363,000 barrels per day), up from 335,000 bpd in 2015.

Sakhalin came into focus as a new frontier for oil and gas production following the collapse of the Soviet Union. It currently accounts for around 3% of national output, with the bulk of yields coming from two massive offshore developments – Exxon Mobil’s Sakhalin-1 and Gazprom’s Sakhalin-2.

Sakhalin-1’s remaining shareholders are Russian oil giant Rosneft, Japan’s Sodeco and India’s ONGC. Besides Gazprom, the Sakhalin-2 consortium consists of Royal Dutch Shell and Japanese firms Mitsui and Mitsubishi.

“Our key task is to maintain production levels we have now,” Sherbina said, without offering any forecasts for years to come.

Sakhalin-2 encompasses Russia’s only existing LNG terminal. The project partners are currently discussing plans to add a third train at the 9.6 million tonne per year plant by 2021. Rosneft, meanwhile, is looking to launch its own liquefaction facility at Sakhalin-1 after 2023. The plant would have an initial capacity of 5 million tonnes per year, but this could ramp up to 10 million tonnes at a later date.

Alexander Zharov, a department head at the company, was quoted by Reuters as saying at the conference that the consortium aimed to reach a final investment decision (FID) on the scheme in 2017-2018.

A third project, Sakhalin-3, is led by Gazprom and consists of the Kirinskoye, Ayashskoye and Vostochno-Odoptinskoye offshore fields. Kirinskoye, which was brought on line in late 2013, yielded an output of 600 million cubic metres and 2,000 bpd last year. Just last week, Gazprom announced a fresh gas discovery in close proximity to the field.

Rosneft, meanwhile, launched exploration work in the Sea of Okhotsk this summer with the help of Norway’s Statoil. Zharov told the conference that the two partners were drilling at sea depths of less than 150 metres, which is not in violation of international sanctions.

Joseph Murphy

Edited by

Joseph Murphy

Editor

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