Rosneft and ExxonMobil to develop LNG plant on Sakhalin Island, Russia

Rosneft and ExxonMobil have agreed to jointly develop a liquefied natural gas (LNG) liquefaction plant on Sakhalin Island in the Russian Far East.

The plant, which is scheduled to be launched in 2018, will receive natural gas from Rosneft’s reserves in the Far East and other Sakhalin gas reserves.

The companies have already started the contractor selection process for design and engineering work at the plant.

By the end of 2014, Rosneft and ExxonMobil plan to complete design work, including selecting liquefaction technology and identifying major equipment requirements.

The companies will also perform engineering surveys, develop front end engineering and design (FEED) and Russian Proyekt documentation for the LNG plant, hydro-technical marine facilities and a source gas pipeline, and also perform environmental impact assessment (EIA).

The design phase will focus on minimising the environmental impact on Sakhalin Island and promoting the development of local infrastructure.

Once operational, the LNG plant will have a production capacity of around five million tonnes per year.

Rosneft president Igor Sechin said: "Construction of the LNG plant and essential infrastructure will rely on the full resources of the Russian manufacturing and construction industries (primarily those based in the Far East) applying international best practices."

In December 2012, Rosneft signed an agreement with ExxonMobil to explore the possibility of commercial production of tight oil fields in Western Siberia, Russia. The companies will establish a joint venture to undertake a pilot programme at the Bazhenov and Achimov formations.

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Image: Rosneft president Igor Ivanovich Sechin. Photo: courtesy of Dyor.