Sakhalin Energy: LNG production on the rise at Russia’s sole export plant

Sakhalin Energy, the operator of Russia’s only LNG export plant, said the terminal is currently producing 11 percent above its design capacity and the company is actively engaging with buyers as part of LNG marketing for the third liquefaction train.

The LNG facility located in Prigorodnoye on Russia’s remote Sakhalin Island started producing the chilled fuel back in 2009 from two liquefaction trains with a total production capacity of 9.6 million tonnes of LNG per annum.

Due to debottlenecking, production capacity at the Sakhalin-2 LNG facility was increased from the initial 9.6 to 10.8 million tonnes of LNG per annum, the amount produced in 2015.

“But the company never stops looking for new growth and optimisation opportunities. As part of our effort to improve production, we completed a major turnaround campaign at LNG train 2 this year,” Sakhalin Energy production director Ole Myklestad told the 20th annual Sakhalin Oil & Gas Conference on Wednesday.

“In 2015 and 2016, apart from refurbishment and maintenance activities, the company successfully implemented modifications to main cryogenic heat exchangers at both LNG trains, which further increased LNG production capacity by 2.5 percent,” Myklestad said.

The LNG plant shipped 166 LNG cargoes last year with the majority of them delivered to Japan, South Korea and China.

According to Myklestad, despite the low oil prices and global economic instability, Sakhalin Energy has managed to secure “competitive terms for the sale of our hydrocarbons and to expand the pool of buyers.”

“Oil and LNG shipping has and will always remain a focus area for the company. In 2016, the company executed a long-time charter agreement for the Ob River LNG carrier, and we are currently exploring the opportunity of chartering three additional oil tankers.”

Speaking on the development of the third liquefaction train, Myklestad noted that the company and its shareholders are “fully committed” to further project expansion and are “actively engaging with buyers as part of Train 3 LNG marketing.”

To remind, Sakhalin Energy in June launched a tender for the construction of the third liquefaction train at the terminal on Sakhalin Island. The contract is expected to be awarded in March of 2018.

Sakhalin Energy shareholders are Gazprom (50% plus one share), Shell (27,5% minus one share), Mitsui (12.5%) and Mitsubishi (10%).

LNG World News Staff