Sakhalin Energy celebrates 20th anniversary

Sakhalin Energy Investment Company Ltd., the operator of the Sakhalin-2 project, has celebrated its 20th anniversary on Friday, April 18.

Sakhalin Energy has been established in 1994 to operate one of the largest oil and gas industry projects – Sakhalin-2.

The sheer complexity of the challenges in engineering oil and gas export infrastructure from square one in subarctic conditions of Sakhalin, including 800 kilometre-long pipeline and LNG plant, is unprecedented. Sakhalin Energy were able to overcome these challenges with prolific support from Federal and Regional government, Russian and international buyers, lenders, all other stakeholders and in close partnership with the Company’s shareholders. Today their shareholders are world known companies: Russian Gazprom (50% + one share), Royal Dutch Shell (27.5 % minus one share), and two Japanese corporations – Mitsui & Co., Ltd. (12.5%) and Mitsubishi Corporation (10%).

“We are proud to be first to achieve outstanding milestones in Russian and international history of oil and gas export,” said Roman Dashkov, Chief Executive Officer of Sakhalin Energy. “We were the first to start operations under Production Sharing Agreement. We were the first to obtain largest project financing in Russia in the amount of USD 6.7 billion. In 1999, we were the first to start oil export from Molikpaq – our offshore asset; in 2006 we have installed Lunskoye-A – gas export platform. In 2009, we have started shipping out liquefied natural gas, the new type of energy source, to Asia Pacific.”

Thanks to Sakhalin Energy efforts Russia has become one of the key players in promising markets of Asia Pacific. About 4.5% of global LNG supply comes from Sakhalin LNG plant. Sakhalin Energy exports LNG to Japan, South Korea, China, India, Thailand, and Taiwan, with Japan and South Korea taking the bulk of the Sakhalin LNG. About 9.8% of total Japanese LNG import is coming from Sakhalin. Sakhalin-2 oil is mainly exported to China, Japan, and South Korea. In twenty years of operations Sakhalin Energy has produced and exported over 233 million barrels of oil and over 51 million tons of LNG. Also, the project supplied the Russian Party with 3.3 billion cubic metres of natural gas.

More than 30 000 specialists from 36 countries were engaged in construction of Sakhalin Energy assets – both Company’s employees and contractors.

Over the course of the project implementation Russia has received more than USD 7.5 billion in revenue. The project has become a driver behind upgrade of Sakhalin roads, bridges, sea- and airports, hospitals etc. The Company allocated over USD 600 million for infrastructure upgrade.

Number of environmental and social projects initiated by Sakhalin Energy have received international recognition. Today, the Company’s standards are perceived as leading in the area of corporate social responsibility.

Sakhalin Energy continues to lead the charge toward its primary goal – to be the premier energy source for Asia Pacific. Presently, the Company started the preparation of the FEED documentation for the LNG Train 3.

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Press Release, April 21, 2014