Sakhalin-1 Joins Upgrades to Sakhalin West Sea Port in Kholmsk
Yuzhno-Sakhalinsk - August 24, 2005 -- Exxon Neftegas Limited, the operator of the Sakhalin-1 project, reported today that it had signed an agreement with Sakhalin Energy, the operator of the Sakhalin-2 project, to carry out a joint project to modernize the Sakhalin West Sea Port in Kholmsk (southwest coast of Sakhalin Island).Recognizing the importance of uninterrupted and safe logistical support for offshore operations off the coast of Sakhalin, in June 2004 the two companies formed a joint committee to draft an agreement and a technical assignment for the modernization of the existing port.
The resulting agreement specifies upgrades of some existing equipment (the 32-ton Sokol crane) and purchase of new equipment (gantry cranes, forklifts, pipe carriers and a powerful new Condor 60-ton portal crane). Plans for the near future also call for the construction of storage facilities for pipe and offshore drilling platform supplies equipped with a modern stacking system and a port office building with a cafeteria, medical aid station, and shower rooms. The modernization is expanding the port's capabilities to service all of Sakhalin's marine cargo traffic in addition to the vessels needed to support offshore oil and gas operations such as the FESCO Sakhalin icebreaker, designed to deliver materials and equipment to the oil and gas production area year round.
The upgrade of Sakhalin West Sea Port was financed by the Sakahlin-1 project Consortium and Sakhalin Energy on a parity basis, with Sakhalin Energy acting as the manager of the upgrade work. A five-year port operations management contract has been signed with the Sakhalin Shelf Services Company of Sakhalin.
According to Mark Hackney, Vice President of Exxon Neftegas Limited, the modernization of the Sakhalin West Sea Port in Kholmsk is an important part of the successful operation of Phase 1 of the Sakhalin-1 project and will provide benefits to the local community and the Sakhalin economy as well. "At the same time, this major upgrade of an important commercial cargo hub will improve the utility of the port for all users, not just the Shelf Projects. This will serve as another aspect of infrastructure improvements that have resulted for Sakhalin-1 and Sakhalin-2 projects and that support the Sakhalin region's economy," Mr. Hackney added.
The Sakhalin-1 project includes the Chayvo, Odoptu, and Arkutun-Dagi Fields. Over the life of the project plans call for producing approximately 307 million tons (2.3 billion barrels) of oil and 485 billion cubic meters (17 trillion cubic feet) of gas. Total investment in full development of the fields has been estimated at more than 12 billion US dollars (2002 dollars). By now contracts worth more than 3 billion US dollars have already been signed with Russian companies. In addition to Exxon Neftegas Limited (the operator of the project, 30% participating interest share), the Sakhalin-1 Consortium also includes the Japanese company Sakhalin Oil and Gas Development Co. Ltd. (30%), the Indian company ONGC Videsh Ltd. (20%), and two Russian companies - Sakhalinmorneftegaz-Shelf (11.5%) and RN Astra (8.5%).
Glenn Waller (Moscow 095 564-8950) or Michael Allen (Yuzhno-Sakhalinsk 4242 468 812) or logon to www.sakhalin1.ru--->