Gas Marketing
Gas marketing development and sales remain a high priority for the project. With natural gas resources estimated at 17 trillion cubic feet (485 billion cubic meters), the three fields in the Sakhalin-1 production area can provide a large, long-term commercial supply of gas for export and also supplement regional domestic supplies in Russia.
Signing agreements
The Sakhalin-1 Project signed gas sales agreements with two Khabarovsk Krai buyers, OAO Khabarovskenergo and OAO Khabarovskkraigas on September 26, 2005. The sales agreements are the first ever concluded between investment project participants under a Production Sharing Agreement (PSA) and domestic Russian gas buyers for long-term gas sales based on international market pricing and commercial terms.
Deliveries of gas to Khabarovsk Krai started on October 1, 2005, with the production start-up at Chayvo. Natural gas sales and deliveries from the Sakhalin-1 Project to customers in the Khabarovsk Krai are a significant step in the Russian Far East Gasification Program. The natural gas for domestic sale is produced from the Chayvo Field and sold at a delivery point near the field facilities. The gas is transported by the Rosneft-SMNG and Dal'trangas pipeline systems.
As of August 2008, domestic gas sales totaled 105 billion cubic feet (3 billion cubic meters). with an average supply rate of 115 million cubic feet/day (3.27 million cubic meters/day) in 2007. During a time period in January 2008, local natural gas sales reached a peak of slightly above 200 million cubic feet/day (5.85 million cubic meters/day). ENL is strongly committed to provide timely and stable supplies of gas to the Russian domestic consumers. Cooperation between the Project and Khabarovsk Krai gas consumers has ensured minimal operational interruptions. The initial domestic gas sales are expected to plateau at annual average rates of 270 million cubic feet (7.65 million cubic meters) per day.
Opening the valve - 1 October 2005
Sakhalin's geographical location and proximity to gas markets in Northeast Asia present a unique opportunity to access markets with pipeline gas. The Sakhalin-1 Consortium members view pipelines as the most economic method to deliver gas to Northeast Asian markets. Pipelines will enable Sakhalin gas to be delivered to a broader mix of markets and customers, thus providing additional diversity. Also, pipelines will enable natural gas to create additional gas penetration by reaching markets that are not easily served by LNG. Lastly, established markets in Northeast Asia have the opportunity to diversify their gas transportation options which will help creates additional supply security.
An assessment of gas export markets in Japan and China has been completed and the Consortium has concluded that a pipeline, built to international design standards, would be the most cost-effective method to deliver gas to these export markets. Export pipeline gas marketing discussions continue in several markets in NE Asia as the Sakhalin-1 Project considers all options for pipeline gas export sales.