Sakhalin II project partners award contract for LNG storage tanks

By OGJ editors

HOUSTON, June 27 -- Partners in the Sakhalin II LNG project on Russia's Sakhalin Island have awarded $95 million in lump sum contracts for the construction of two LNG storage tanks at a planned natural gas liquefaction plant at Prigorodnoye on Aniva Bay, Sakhalin Island (see map, OGJ, Oct. 1, 2001, p. 58).

The contracts were awarded to CB&I Europe BV and CMP Holdings BV, both units of The Woodlands, Tex.-based Chicago Bridge & Iron Co. NV (CB&I).

Under the contracts, the CB&I units will handle the engineering, procurement, and construction of two 100,000 cu m LNG storage tanks, which will be the first LNG tanks designed and constructed in Russia, according to CB&I.

The CB&I units were selected to construct the tanks by Chiyotec Ltd. and CTSD Ltd., both of which were awarded contracts along with their Russian partners, NIPIgasperabotka and Khimenergo Consortium, for the implementation of the overall LNG project by the project's owner, Sakhalin Energy Investment Co. Ltd. (SEIC). SEIC shareholders are Shell Sakhalin Holdings BV, Mitsui Sakhalin Holdings BV, and Diamond Gas Sakhalin BV.

"The Sakhalin II project represents the largest single foreign direct investment project in Russia to date," CB&I said, "with a total investment estimated at $10 billion." The Sakhalin LNG production facility will comprise two trains, each with 4.8 million tonnes/year of liquefaction capacity.

CB&I said that completion of the tanks is anticipated in spring of 2007 and first LNG is expected to be delivered from the terminal sometime during 2007, the company reported.

"(Sakhalin) island's remote location in the Sea of Okhotsk, north of Japan, and the harsh climate and the region's seismic activity combine to make this project challenging for the owner and contractors alike," CB&I said.

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