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Oil & Gas Journal: Sakhalin-2 partners seeking swifter financing

Eric Watkins
Senior Correspondent

LOS ANGELES, Mar. 4 — Sakhalin Energy, operator of the Sakhalin-2 gas and oil project, reported it is no longer seeking loans from the US Export-Import Bank or the UK’s Export Credits Guarantee Department due to possible delays on loan decisions.

A Sakhalin Energy spokesman said Ex-Im Bank might require lengthy consultations over the loans, but that the project’s tight start-up and operating schedule dictated the need to seek a swifter financing decision, not environmental or political concerns.

Sakhalin Energy, which needs a reported $5 billion for project financing, will continue to hold discussions with other potential creditors such as the Japanese Bank for International Cooperation and major commercial banks.

Phase 2 construction of the Sakhalin-2 project is nearing completion with some 90% of work already accomplished. The company hopes to finish the second phase by yearend and start production of LNG shortly after.

The company’s work plan this year includes starting of drilling at platform Piltun-Astokhskoye-B and start-up of the Molikpaq tie-in modules to establish year-round production of oil.

Also in the plan for this year are continued drilling at gas platform Lunskoye-A; commissioning the OPF to receive hydrocarbons from all three offshore platforms; completion of construction of the onshore pipelines and booster Station 2; and the commissioning of Trains 1 and 2 of the LNG gasification plant.

Sakhalin Energy partners include OAO Gazprom, 50% plus 1 share, Royal Dutch Shell PLC 27.5%, Mitsui 12.5%, and Mitsubishi 10%.

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