SAKHALIN-1 CONSORTIUM ANNOUNCES CHAYVO BRIDGE CONSTRUCTION PLANS
Russian Content Tops $US 1 Billion
SAKHALIN, August 21, 2002 -- Exxon Neftegas Limited (ENL), operator for the Sakhalin-1 Consortium, announced today that OAO Dalmostostroy, a Russian company based in Khabarovsk in the Russian Far East, has been awarded a contract for the Chayvo bridge construction.Work is expected to begin in August 2002, and be completed by mid-2003. The 830 meter-long bridge will connect the Chayvo wellsite to the onshore production facilities. Initially the bridge will be used to transport the heavy (600 MT) production equipment and once production begins, it will be used daily to transport people and supplies to the wellsite. Engineering design for this contract will be performed in St. Petersburg, Moscow and Khabarovsk, and materials will be purchased throughout Russia.
Founded in the 1970s, OAO Dalmostostroy has built more than 1000 bridges with a total length in excess of 100 km, including a 1500 m long bridge across the Amur river in Komsomolsk-na-Amur, a 1100 m long bridge across the Zeysk reservoir and multiple other bridge and construction projects on the Baikal-Amur railway, in Vladivostok, Khabarovsk and Yuzhno-Sakhalinsk.
According to Neil Duffin, President of ENL, since the Sakhalin-1 project moved into the development phase, project spending has increased significantly, resulting in a greater number of contracts being awarded to Russian companies.
"In 2002, many large contracts were awarded to Russian entities, bringing the local content value of contracts awarded to date for the Sakhalin-1 project to more than $US 1 billion. This latest contract is another significant example of the Consortium's commitment to maximizing the Russian content of the Sakhalin-1 project."
The Chayvo Bridge construction is one of several sub-contracts recently awarded to Russian companies by ABB Lummus Global Moscow as part of its contract for detailed engineering, procurement and construction (EPC) work for onshore facilities for the Sakhalin-1 project. Others include SakNIPI (engineering); SMNM (roadworks); Volzhsky (steel piling); and Amur Shipbuilding (tankage).
The Sakhalin-1 project, the largest foreign direct investment project in Russia, has recoverable resources of approximately 2.3 billion barrels of oil and 17 trillion cubic feet of gas. The Sakhalin-1 Consortium plans to develop the project in four phases. The first phase, with development costs of around $US4 billion, will focus on planned oil production, with limited gas supplies available to help meet the Russian domestic demand. First oil production from the Chayvo field is scheduled to commence at the end of 2005, and reach a daily plateau rate of around 250,000 barrels.
In addition to ENL (30 % interest, operator), the Sakhalin-1 Consortium members are the Japanese company Sakhalin Oil and Gas Development Co., Ltd. (30 %), Indian company ONGC Videsh Ltd. (20 %) and two Russian companies, Sakhalinmorneftegas-Shelf (11.5 %) and RN-Astra (8.5 %).
For more information, please contact:
Glenn Waller (Moscow 095 564-8950) or Michael Allen (Yuzhno-Sakhalinsk 4242 468 812) or logon to www.sakhalin1.ru