AEA Technology International Consultancy published the Sakhalin-2 project independent environmental due diligence report.

AEA report states that Health, Safety, Environmental and Social Action Plan (HSESAP) developed by Sakhalin Energy for Sakhalin-2 project generally meets Russian and international legislative requirements related to the environmental and industrial safety.

In particular, the report emphasizes the activities of the Western Gray Whale Advisory Panel, safety management of drilling muds, upgrade of municipal landfills, year round use of double hulled tankers, development of an effective Indigenous Minorities Development Plan, provision of funds to social projects and sustainable development programs, as well as the upgrade of the health care infrastructure.

“Further Sakhalin Energy HSE plans meet a large majority of the requirements against which the project has been assessed and the Company’s individual activities obviously deserve appreciation,” states the report.

Reference:

??? Technologies plc is a leading independent oil and gas industry environmental consultant. 

??? has been carrying out Sakhalin-2 investigation for the potential lenders of the project namely UK Export Credits Guarantee Department, Japan Bank for International Cooperation, and US Export-Import Bank since September 2001.

Sakhalin-2 is the world’s largest integrated oil and gas projects with the reserves valued at 4 bln barrels of oil equivalent.

The present-day production potential of Sakhalin-2 is 80 thousand barrels of oil equivalent per day. Thanks to Development Phase 2, the project production potential will grow to 395 thousand barrels of oil equivalent per day, taking account of 9.6 mln tons of LNG to be produced per annum.

The work scheduled for Phase 2 has been completed by nearly 80 per cent, with some US$ 13 bln so far invested. At present 17 thousand people are involved in the construction work, with 70 per cent being the Russian Federation citizens. Under the contracts with customers from Asia Pacific, the project partners have so far sold the amount of LNG equal to the projected capacity of an LNG plant.

The Sakhalin-2 project is regulated by a Production Sharing Agreement (PSA); the project shareholders finance construction expenses, undertake the project related risks and offset these expenses by oil and gas sales. As of today, the total project revenues of the Russian Federation in the form of royalties, bonuses and taxes have accounted for almost US$ 600 mln.

The Sakhalin-2 project covers:

• Three marine production platforms: Molikpak (Piltun-Astokhskoye-A), Piltun-Astokhskoye-B and Lunskoye as well as an offshore pipeline system with a total length of 300 km;
• The onshore production facility designed for the receipt and treatment of gas and oil produced in both fields;
• Onshore 800-km-long oil and gas pipelines running to the South of the Island
• An oil export terminal with the year-round operating capacity;
• Russia’s first LNG plant and LNG exporting installations; 
• Upgrading activities for onshore infrastructure: motor and rail roads, bridges, sea ports and airports, health care facilities.

On April 18, 2007, Gazprom and Sakhalin Energy shareholders (Royal Dutch Shell plc, Mitsui & Co. Ltd and Mitsubishi Corporation) where Sakhalin Energy is the Sakhalin-2 project operator signed Purchase and Sale Agreement, which stipulates Gazprom acquisition of a 50 per cent plus one share stake in Sakhalin Energy.

On April 16, 2007 the Board of Directors of the Company decided to establish its Representative Office in the Sakhalin Oblast.