Sakhalin-1 oil export system commissioned

Eric Watkins
Senior Correspondent

LOS ANGELES, Sept. 8 -- An international consortium led by Exxon Neftegas Ltd. has announced the commissioning of the oil export system for the multiphase Sakhalin-1 project off Eastern Russia.

It said construction has been completed on a 24-in., 225-km pipeline that will transport crude produced from wells in the Sea of Okhotsk and processed onshore at Chayvo, west across Sakhalin Island and the Tatar Strait to the newly constructed DeKastri terminal in the Khabarovsk Krai in the Russian Far East.

It said Nippon Steel Corp. and its Russian affiliate, NS Nephtegazstroy Ltd., as well as two Russian companies—Global Stroy Engineering and SMU-4—were involved in the construction of the pipeline, with more than 50% of the pipe supplied by the Russian Vyksa Metallurgical Plant.

First oil entered the line Aug. 29, and the consortium expects loading of the first tanker to begin this month at the DeKastri terminal, which provides storage in two 650,000 bbl tanks and a single-point mooring tanker loading facility.

The consortium said oil production will ramp up to an estimated peak rate of 250,000 b/d by yearend on completion of its onshore processing facility.

The Sakhalin-1 project began operations last October, and it has been producing as much as 50,000 b/d of oil, along with natural gas production of some 60 MMcfd.

The consortium has been selling its oil the Russian Far East and marketing its gas to two domestic customers in the Khabarovsk Krai: OAO Khabarovskenergo and OAO Khabarovskkraigas.

The ExxonMobil Corp. unit serves as project operator with 30%. Partners are Japan's Sakhalin Oil & Gas Development Co. Ltd. 30%, Russia's RN-Astra 8.5% and Sakhalinmorneftegas-Shelf 11.5%, and India's ONGC Videsh Ltd. 20%.

Contact Eric Watkins at hippalus@yahoo.com.

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