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Sakhalin II operator begins oil exports via new terminal

RIA Novosti

YUZHNO-SAKHALINSK, December 12 (RIA Novosti) – Sakhalin Energy launched year-round oil export deliveries on Friday via a new oil terminal as part of the Sakhalin II oil and gas project off Russia’s Pacific Coast, the company said in a statement.

“This first cargo…is a key milestone in the commissioning of the facilities,” the statement quoted Sakhalin Energy CEO Ian Craig as saying.

“The construction phase is nearing completion. We are now focused on commissioning the full production system, with LNG processing starting in the next few weeks,” he said.

Located on Aniva Bay in the southern part of Sakhalin Island, the new oil export terminal has a total storage capacity of 1.2 million barrels of oil.

An underwater pipeline to a tanker-loading unit (TLU), which is located about 4.5 kilometers (3.1 miles) offshore, is able to pump oil at a rate of 50,000 barrels per hour.

The $20 billion Sakhalin II project includes the Piltun-Astokhskoye and Lunskoye oil and gas fields on Sakhalin Island’s northeastern shelf, with recoverable reserves estimated at 150 million tons (1.1 billion bbl) of oil and 500 billion cubic meters of natural gas.

The minority partners in the project, Royal Dutch Shell, Mitsui and Mitsubishi, currently hold 27.5%, 12.5% and 10% stakes in the project respectively. Gazprom acquired a controlling stake (50% plus one share) in the project in December 2006.

Sakhalin Energy has produced over 100 million barrels of crude since 1999.

“Year-round production and export of Sakhalin II oil will significantly enhance energy security in the Asia Pacific region and strengthen Russia’s position in the world markets,” the company said.

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