Sakhalin Energy extends cooperation with Sovcomflot

Companies signed contracts for long-term operation of three vessels for the Sakhalin-2 project.

Moscow, 7 July 2014: Sakhalin Energy Investment Company Ltd. (Sakhalin Energy) and Sovcomflot Group (Sovkomflot) have signed contracts for the construction and long-term operation of three multifunctional icebreaking standby vessels to serve the Sakhalin-2 offshore energy platforms. Operations under the contract will continue for 20 years.  The vessels will be used as year round personnel carrier and also as supply vessels for offshore platforms in the Sea of Okhotsk. In case of emergency, the vessels will be deployed for personnel evacuation and oil spill response.   

The contracts are a continuation of the memorandum of understanding and the contract for supply of the multi-task ice-class supply vessel for Sakhalin-2 offshore platforms signed between Sovcomflot and Sakhalin Energy on the 18th of April, on the date of the Sakhalin Energy’s birthday.

On the occasion of the signing the contracts Roman Dashkov, Chief Executive Officer of Sakhalin Energy, noted:  “Signing of the agreements for the supply of three multifunctional vessels for the Sakhalin-2 project is the result of the successfull long term work that lasted for more than two years. We are glad to continue our cooperation with Sovkomflot, the corporation that has consistently demonstrated its status as a reliable and competent partner. Sakhalin Energy strives to maximize Russian content in the Sakhalin-2 project. Today we have signed the contracts for the supply of icebreaking standby vessels that are designed in accordance with all Russian and international standards of safety of navigation”.

Sergey Frank, President and CEO of Sovcomflot, said: “This agreement is a logical extension of many years of successful cooperation between Sovcomflot and Sakhalin Energy. It follows preparatory work which was undertaken by technical specialists from both sides and the Russian shipbuilders. The arrival of these three advanced vessels of their class in the Sea of Okhotsk will enhance the safety of shipping in the area whilst minimizing the associated environmental risks. We are grateful to our partners for the opportunity to extend our participation in the Sakhalin-2 project, and to continue our record of providing best-practice, safe and reliable transportation services. SCF Group’s development strategy places a high priority on developing our operations within harsh climatic areas, involving projects and providing employment in the remote offshore areas of the Russian Far Eastern region. We support the participation of Russian shipbuilders in the project to deliver technologically advanced ships.
Over recent years, Sovcomflot has established a successful track record in operating an IBSV fleet. Our fleet has four vessels of this kind, one of which is successfully working in the Sakhalin-2 project. In short, we provide our clients with safe and reliable marine transportation in the harsh climatic conditions of the Sakhalin shelf”.

Information for Editors:
Sakhalin Energy Investment Company Ltd. (Sakhalin Energy) is the operator of Sakhalin-2, one of the world’s largest integrated oil and gas projects, which has developed major infrastructure for hydrocarbon production, transportation and processing. The Company exports crude oil produced in the Sea of Okhotsk and LNG produced at Russia’s first LNG plant built by Sakhalin Energy in the south of Sakhalin. The Company’s shareholders are Gazprom (50% + 1 share), Royal Dutch Shell (27.5% - 1 share), Mitsui and Co. Ltd. (12.5%) and Mitsubishi Corporation (10%).
The project’s infrastructure created by the Company includes, among other things, three offshore ice resistant platforms, the Trans-Sakhalin Pipeline System, which comprises 300km long offshore pipelines, an onshore gas pipeline and an onshore oil pipeline, 800 km long each, the Onshore Processing Facility (OPF), the Oil Export Terminal (OET), and Russia’s first and so far the only LNG plant which accounts for over 4 percent of the world’s LNG.
The main buyers of Sakhalin Energy oil and LNG are countries of the Asia Pacific Region. At present, oil is delivered to China, Japan, South Korea, Indonesia, the USA, the Philippines, and Taiwan. The main LNG buyers are power companies in Japan, South Korea and China.
In 2013, the Company produced over 42 million bbl of oil and around 11 million tons of LNG, and shipped 60 cargoes of oil and 166 cargoes of LNG to its buyers. Produced hydrocarbons are transported by oil tankers and LNG carriers, which either are on a long-term charter to the Company or belong to the buyers of oil and gas.
LNG carriers of the Grand series were built specially for the Sakhalin-2 Project. For the first time in Russia, they are operated by Russian companies Sovcomflot and PRISCO which are part of international consortia.

Sovcomflot Group (SCF) is Russia’s largest shipping company and a world leader in the maritime transportation of hydrocarbons as well as the servicing and support of offshore exploration and oil and gas production. SCF is the largest operator of ice class LNG gas carriers in the world. The company’s fleet (owned and chartered) specialises in hydrocarbon transportation from regions with challenging icy conditions and includes 153 vessels with a combined deadweight of over 12,64 million tonnes. A third of these vessels have a high ice class.
Sovcomflot supports large-scale offshore energy projects in Russia and overseas, including: Sakhalin-1, Sakhalin-2, Varandey, Prirazlomnoye, Tangguh, and Peregrino.
The company is registered in Saint-Petersburg and has representative offices in Moscow, Novorossiysk, Murmansk, Vladivostok, Yuzhno-Sakhalinsk, London, Limassol, Madrid, Singapore and Dubai.