Future Project Phases
The Sakhalin-1 consortium is utilizing a phased approach to develop the three major fields that comprise the Sakhalin-1 project—Chayvo, Odoptu, and Arkutun-Dagi.
A phased development approach allows Chayvo Phase-1 “lessons learned” to be applied to the future phases, thereby enhancing the efficiency and cost-effectiveness of these new developments. Experience gained in extended reach drilling, modularization, logistics, winter work productivity, contracting strategies and Russian contractor expertise, regulatory processes and design criteria, and other key factors all are playing a role in maximizing the successful advancement of the next project phases.
In addition to the Chayvo Phase 1 development which represents the oil and gas currently being produced by the project, the Sakhalin-1 project includes the following additional project phases:
- Odoptu field oil and gas development;
- Arkutun-Dagi field oil and gas development;
- Non-associated Chayvo field gas development;
- Late-life gas development (+2032).
These future phase developments are expected to extend the Sakhalin-1 project through 2050, and will continue and expand the benefits of the project to Russia and its citizens.
Odoptu Development
The Odoptu development, the next phase of the Sakhalin-1 project, will produce oil and gas from the Odoptu field, located off the northeast coast of Sakhalin Island near Piltun Bay, approximately 35 miles (55 km) north of current Chayvo operations. The Odoptu onshore facilities are being located on the Piltun Spit on the elevated portion of the coastal benches along the Sea of Okhotsk.
A “first stage production” approach will be implemented for the field in order to confirm drilling and reservoir parameters. The first stage production will maximize capital efficiencies through the re-use and modification of existing Chayvo assets, and will utilize additional capacity at the Chayvo OPF and DeKastri Oil Export Terminal.
Development plans include the construction of access roads to the Odoptu site and the establishment of on-site housing and work facilities. The Yastreb drilling rig, which has been utilized at Chayvo Phase 1 operations, has been dismantled and relocated to the Odoptu site where it will be used to drill onshore extended reach wells to the offshore field. An onshore oil & gas treatment facility will also be located at the Odoptu site. A new 49 mile (79 km) 16-inch flowline will transport the oil and gas to the existing Chayvo Onshore Processing Facility, where the pipeline to the De-Kastri Terminal will further transport the oil for sale.
The Odoptu development is currently advancing through Sakhalin-1 Consortium and regulatory and government reviews. Initial site preparation, road, and flowline work has begun and the Yastreb rig has been relocated to the Odoptu site. The project will be undertaking additional construction activities as required project regulatory reviews and approvals are obtained.
Arkutun-Dagi Development
The Arkutun-Dagi development will produce oil and gas from the Arkutun-Dagi field, located approximately 25 kilometers off the northeast coast of Sakhalin Island, just east of the Chayvo field. The project plans include developing the field through a new offshore drilling and production platform, which includes a gravity base substructure and topsides facilities. A new flowline will transport the oil and gas to the existing Chayvo Onshore Processing Facility, where existing pipelines will further transport the oil and gas for sale. The A-D development is currently advancing through Sakhalin-1 Consortium and regulatory and government reviews.
Over 30 Russian Design Institutes and contractors are involved in the development. Future contract opportunities exist for material supply and construction.
Chayvo Field Phase 2 Commercial Gas Development
The Sakhalin-1 Consortium members have been supplying natural gas to domestic customers in the Russian Far East that is produced in association with oil production from the first phase of the Chayvo field. It is expected that natural gas supplies to these domestic customers in the Khabarovsk Krai will double to 3 BCM/year by mid-2011. The Chayvo Phase 2 gas development will substantially expand natural gas production by developing and producing non-associated gas which requires a multi-billion dollar upstream investment. This expanded production will enable increased gas sales for both domestic and export markets.
Phase 2 non-associated gas development requires the significant expansion of existing onshore and offshore facilities, including new drilling, processing, compression, power, and other infrastructure investments.
In October 2006, a Heads of Agreement was signed with China National Petroleum Company (CNPC) for gas pipeline sales from Sakhalin-1 to China. Other regional gas sales options continue to be evaluated.