CONSORTIUM ANNOUNCES COMMISSIONING OF EXPORTS FROM SAKHALIN-1 PROJECT IN RUSSIA
Moscow, September 7, 2006 -- The consortium led by Exxon Neftegas Limited, a subsidiary of ExxonMobil Corporation, and including Sakhalin Oil and Gas Development Co., Ltd., ONGC Videsh Ltd. and affiliates of Rosneft, RN-Astra and Sakhalinmorneftegas-Shelf, announced today the commissioning of the crude oil export system for the multiphase Sakhalin-1 project offshore Eastern Russia. Construction has been completed on a 24-inch, 140 mile (225 kilometer) pipeline to transport crude produced from wells in the Sea of Okhotsk and processed onshore at Chayvo, west across Sakhalin Island and the Tatar Strait to the newly-constructed DeKastri terminal in the Khabarovsk Krai in the Russian Far East.First oil entered the line on August 29, and it is expected that the initial tanker will begin loading at DeKastri this month. Oil production will ramp up to an estimated peak rate of 250,000 barrels (30,000 metric tons) a day of oil, a volume expected to be reached by the end of 2006 following completion of the Onshore Processing Facility.
The export system is designed to meet the challenges unique to the Russian Far East environment, and a number of advanced technologies have been employed to ensure safe operations.
Nippon Steel Corporation and its Russian affiliate, NS Nephtegazstroy Limited, as well as two Russian companies - Global Stroy Engineering and SMU-4 - were involved in the construction of the pipeline, with more than 50 percent of the pipe supplied by the Russian Vyksa Metallurgical Plant.
The DeKastri export terminal provides storage and a single point mooring tanker loading facility that will accommodate year-round crude oil export to world markets. The terminal includes two 650,000 barrel (100,000 cubic meter) capacity storage tanks to hold the Sakhalin-1 crude oil prior to tanker transfer and shipment.
More than 80 percent of the value of contracts on the terminal was awarded to Russian and Russian Far East companies. Enka-Technostroyexport, a Russia-Turkey JV, performed the terminal site preparation work, including design, clearing, grading, compacting and finishing grade work. Koksokhimmontazh, a 100-percent Russian company, constructed the tanks. DalÂ’mostostroy, a construction company from Khabarovsk Krai, partnered with Poong Lim of Korea on construction of the terminal itself.
"ExxonMobil, through the operatorship of Exxon Neftegas Limited, is pleased with the timely start-up of Sakhalin-1 crude oil export operations that will provide additional needed energy supplies to Asian and other global markets," said Stuart McGill, Senior Vice President of Exxon Mobil Corporation. "This project employs leading-edge technology including the use of artic development technologies, and is a significant example of our ability to develop energy resources in the most cost effective, efficient, and environmentally sound way possible."
The Sakhalin-1 project began operations in October 2005, and has been producing up to 50,000 barrels (6,300 metric tons) a day of oil, which has been sold to Russian Far East domestic customers. Natural gas production averaging 60 million cubic feet (1.7 million cubic meters) per day is being marketed to two domestic customers (OAO Khabarovskenergo and OAO Khabarovskkraigas) in the Khabarovsk Krai.
Exxon Neftegas Limited is operator for the Sakhalin-1 project(ExxonMobil interest 30 percent), which includes the Japanese company Sakhalin Oil and Gas Development Co., Ltd., (30 percent); affiliates of Rosneft, the Russian state-owned oil company, RN-Astra (8.5 percent), Sakhalinmorneftegas-Shelf (11.5 percent); and the Indian state-owned oil company ONGC Videsh Ltd. (20 percent).
CAUTIONARY STATEMENT: Estimates, expectations, and business plans in this release are forward-looking statements. Actual future results, including production rates and sales volumes, cost efficiencies, project plans, schedules, and costs, and commercial arrangements could differ materially due to changes in long-term oil and gas price levels or other market conditions affecting the oil and gas industry; political or regulatory developments; reservoir performance; timely completion of development projects; technical or operating factors; the outcome of commercial negotiations; and other factors discussed under the heading "Factors Affecting Future Results" included in Item 1 of ExxonMobil's most recent Form 10-K and posted on our website (www.exxonmobil.com). References to barrels of oil, gas, and resources include quantities of oil and gas that are not yet classified as proved reserves but that we believe will be produced in the future.