Rosneft, ExxonMobil line up contractors at Russian Far East LNG project

Rosneft and ExxonMobil are progressing on their proposed LNG project in the Russian Far East with the launch of the contractor selection process for design and engineering work, the companies said on Wednesday.

Rosneft and ExxonMobil said that in 2013 and 2014, they plan to complete design work, including selection of a liquefaction technology and identification of major equipment requirements.

Also in that timeframe, the companies plan to perform engineering surveys and develop front-end engineering and design (FEED) and Russian Proyekt documentation for the LNG plant, hydro-technical marine facilities and a source gas pipeline.

“Rosneft’s offshore license areas hold massive hydrocarbon resource potential, most of which is natural gas," said Rosneft president Igor Sechin. "Given the fact that offshore fields are difficult to reach and are not connected to the national gas supply system, the most efficient way to monetize these resources is to liquefy the natural gas and sell the LNG in export markets."

Special attention during the design phase will focus on minimizing environmental impact to the unique ecosystem of the Sakhalin island and encouraging development of local infrastructure, according to Rosneft officials.

The companies say a joint team of experts from Rosneft and ExxonMobil will apply best practices from both companies to complete the project in the shortest possible time period.

“We are optimistic about prospects for LNG export liberalization in Russia in the near term and are pleased to announce that we have entered an important stage of the LNG project jointly with our strategic partner ExxonMobil," said Sechin.

“I would also point out that construction of the LNG plant and essential infrastructure will rely on the full resources of the Russian manufacturing and construction industries (primarily those based in the Far East) applying international best practices," he added.

Capacity of the LNG project to be located on Sakhalin Island in the Russian Far East is expected to be 5 million tpy, subject to further expansion. The liquefaction plant, the launch of which is scheduled for 2018, will receive natural gas from Rosneft’s reserves in the Far East and other Sakhalin gas reserves.

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