Sakhalin II — Russia’s First LNG Project

    Sakhalin II, one of the world’s largest integrated oil and gas project, was an entirely new type of project for Russia. It is Russia’s first commercial natural gas liquefaction project, with a proprietary natural gas liquefaction process.

    The project is a greenfield development covering the production of oil and gas from Piltun-Astokhskoye and Lunskoye offshore fields in the north of Sakhalin island, exportation of crude oil and natural gas in the form of LNG.

    For the first time in Russia, six large sub-projects have been simultaneously implemented in a remote region with limited infrastructure and harsh environmental and climatic conditions. The project includes three large offshore production platforms in the north east of Sakhalin, an Onshore Processing Facility (OPF), Russia’s first natural gas liquefaction plant in the south, an oil export terminal and a large onshore and offshore pipeline system to connect all these facilities.

    The products of the Sakhalin II project are LNG and Vityaz crude oil.

    The LNG plant official commissioning ceremony took place on February 18, 2009.

    All of the output of the plant was contracted under long-term (for 20 or more years) sale and purchase agreements before the construction completion. About 65% of the Sakhalin LNG delivered to Japan, the world’s largest LNG market. The balance of the project’s LNG is destined for buyers in South Korea and North America.

    In 2010 the LNG plant reached its designed production capacity and as a result Sakhalin Energy has become a reliable source of LNG and will account for up to 5% of the global suppliers of LNG.