Sakhalin II Starts Year-Round Oil Export

Yuzhno-Sakhalinsk, 12 December 2008. - Today Sakhalin Energy marked the commencement of year-round oil export from its new oil export terminal. The terminal is located in Aniva Bay in the south of Sakhalin and forms part of the Prigorodnoye port, which was purpose built for the year-round export of oil and liquefied natural gas (LNG).

The first cargo is oil from Molikpaq, Sakhalin Energy’s first platform, but later this month the Piltun-Astokhskoye-B platform will also begin sending oil into the system. Gas condensate from the third platform in the Lunskoye gas field will further boost production in the coming weeks.

“This first cargo from Prigorodnoye is a key milestone in the commissioning of the facilities,” said Sakhalin Energy CEO Ian Craig. “The construction phase is nearing completion. We are now focused on commissioning of the full production system, with LNG processing starting in the next few weeks.”

“Today’s achievement is the result of dedicated work of tens of thousands of people and it marks a new chapter in the development of the Sakhalin Island,” noted Craig.

Sakhalin Energy has produced over 100 million barrels of the Vityaz crude since 1999. Oil has been exported through an offshore facility, which limited production to about six months of the ice-free season. Year-round oil production has become possible due to the commissioning of the TransSakhalin oil and gas pipeline system. The system connects three offshore platforms in the north east with the new terminal and port in Aniva Bay in the south of the Island.

The oil is exported through a tanker loading unit which is installed 4.5 km offshore in Aniva Bay and is connected to the export terminal by an undersea pipeline. In the winter of 2008/2009 oil will be delivered to customers by two specialised tankers, Governor Farkhutdinov and Sakhalin Island.

Year-round production and export of the Sakhalin II oil will significantly enhance energy security in the Asia Pacific and strengthen Russia’s position in the world markets.

Contact Information:

Sakhalin Energy
+7 4242 662000

Sakhalin Energy
+7 495 956 1750