Sakhalin-1 project makes full use of Russian companies
Large-scale project generates significant revenues, provides numerous jobs
MOSCOW August 26, 2002 -- ABB announced today that more than US$100 million in supply orders and subcontracts, representing 78% of the US$128 million of commitments made to date under their engineering, procurement and construction (EPC) contract for the Sakhalin-1 Project, have been placed with Russian companies. This work is for the development of onshore oil and gas processing and well-site support facilities for the Sakhalin-1 Project. Of these contracts, US$44 million were awarded to Sakhalin Oblast companies.Among those Russian suppliers and subcontractors recently granted contracts are Amursky Shipbuilding Plant, Gidromash, SMNG Alaska Projects, United Metallurgical Company, Technicom, Domen and Dalmostostroy. Amursky received a contract to build 54 diesel storage tanks. Gidromash successfully entered a bid for diesel pumps. SMNG Alaska Projects is performing early construction work. Sakhalin Island-based Technicom is providing inspection and certification services. Domen is drilling water wells and United Metallurgical Company has produced steel piles for the well site. Dalmostostroi has been awarded a contract for the design, permitting, procurement, fabrication and construction of an 830-meter steel span bridge at Chayvo. These subcontracts awarded to Russian companies by ABB are part of its contract for detailed engineering, procurement and construction (EPC) work for onshore facilities for the Sakhalin-1 Project.
The scope of work entrusted to ABB requires competent suppliers with high-caliber skills and top-quality standards. "We're committed to maximizing Russian capabilities in this project. ABB's long-term experience in Russia enables us to involve potential Russian resources that can contribute to this prestigious assignment," says George Arzymanow, project director for ABB Lummus Global.
The Sakhalin-1 Project is the largest direct foreign investment into the Russian economy and generates significant revenues for the Russian Federation. Developed in accordance with a Production Sharing Agreement (PSA), the oil and gas project is employing numerous Russian material suppliers, equipment manufacturers, engineering and design institutes, and construction and service companies. In addition, the Sakhalin-1 Project will create thousands of jobs for Russian citizens over the next four years, including jobs on Sakhalin Island.
Exxon Neftegas Limited is the operator for the multinational Sakhalin-1 Project with a 30 percent participating interest. Other consortium members are the Japanese company Sakhalin Oil and Gas Development Co. Ltd.; Indian company ONGC Videsh Ltd.; and Russian companies Sakhalinmorneftegas-Shelf and Rosneft-Astra.
ABB (www.abb.com) is a global leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies employs 150,000 people and operate in more than 100 countries worldwide, with personnel located in both Moscow and Yuzhno in support of the Sakhalin-1 Project.