Production at the Sakhalin-1 and Sakhalin-2 Projects Has Been Fully Restored
Production at the Sakhalin-1 and Sakhalin-2 offshore projects has been fully restored, Governor of the Sakhalin Region Valery Limarenko told reporters on Monday.
“Production at Sakhalin-1 and Sakhalin-2 has fully recovered, this is the main joy that we have over the past month, we have received important information. We expect that investment flows will also recover in the resource zone,” said head of the region.
Limarenko stressed that this will increase investments in the region’s fixed assets, which are planned for 2023 in the amount of 290-300 billion rubles.
Sakhalin-2 is an oil and gas project that develops two oil and gas fields in the northeast of the Sakhalin shelf – Piltun-Astokhskoye (mainly oil) and Lunskoye (mainly gas). The infrastructure includes three offshore platforms, an integrated onshore processing facility, an oil export terminal and an LNG plant with a design capacity of 9.6 million tons per year. The project provides Japan with about 9% of all LNG it imports. On August 3 last year, the Government of the Russian Federation decided to create a new Sakhalin-2 operator represented by Sakhalin Energy LLC with registration in Yuzhno-Sakhalinsk.
The new operator was created on August 5 with a 50% stake in Gazprom Sakhalin Holding. The Russian government allowed the Japanese companies Mitsui and Mitsubishi to transfer their shares in the project (12.5% and 10%, respectively). Shell, which accounted for the remaining 27.5%, said it would not participate in the new operator. Also, contracts with the new operator, Sakhalin Energy, were signed by energy consumers: JERA, a joint venture between energy companies Tokyo Electric Power Co. (TERCO) and Chubu Electric Power Co, Osaka Gas, Kyushu Electric Power Company, Tokyo Gas, Tohoku Electric.
The Sakhalin-1 project is 30% owned by the Japanese company Sodeco, in which 50% is owned by the Japanese government represented by the Ministry of Economy, it also includes Itochu, Japan Petroleum Exploration (JAPEX), Marubeni and INPEX Corporation. After in March 2022 the former operator of the Sakhalin-1 project, Exxon Neftegaz Limited (an ExxonMobil subsidiary), announced its intention to withdraw from the project, and in April about the introduction of a force majeure regime, the work of the project was almost suspended. In early October, Russian President Vladimir Putin ordered the government to create a new, Russian, operator of the Sakhalin-1 project, which would take over the rights and obligations of Exxon Neftegaz limited. The new operator of the Sakhalin-1 project will be managed by the Rosneft structure Sakhalinmorneftegaz-Shelf.
