Sakhalin Energy approves project schedule for Sakhalin-2
The first meeting of the board of directors of Sakhalin Energy with the participation of the newshareholder Gazprom (RTS: GAZP) took place in Yuzhno-Sakhalinsk on Thursday, Interfax reports. Shell Russia chief and Sakhalin Energy Chairman of the Board Chris Findlayson said at a press conference after the meeting that the main thing is that shareholders again approved the schedule for the project and the start of supplies of liquefied natural gas in the third quarter2008, adding that the project has made significant progress. He said that the board also discussed two events - a ceremony this week to mark the launch of the Piltun-Astokhskoye-B (PA-B) topsides in Korea and the supply next month of the first consignment of liquefiednatural gas from Japan for test work at the LNG plant in Prigorodnoye.In turn, Sakhalin Energy Executive Director Ian Craig said that the company is happy with Gazprom's inclusion in the project, as this has brought an experienced and competent partner. He said that Gazprom provided invaluable help in preparing an environmental protection planand that Sakhalin Energy is counting on its help in testing and commissioning a trunk pipeline.He said that Gazprom experts that visited Sakhalin in March 2007 and researched all the infrastructure being built, including problem sections on the pipeline, made significant adjustments to the environmental plan. He said that a meeting would be held with Gazprom specialists next week on pressure testing and commissioning thepipeline.Craig also said that future supplies of the project's LNG to Japan would account for 8% of total annual consumption in that country. In previous years over 70% of Sakhalin-2 oil was also supplied to Japan. He said that the oil is not being supplied under long-term contracts, andthat it is being bought by the company that offers the highest price. He said that this situation might change and that in the future the U.S. market might take most of the Sakhalin-2 oil.Mitsui General Manager Itiro Maekava said at the press conference that another Sakhalin project - Sakhalin-1 - supplies 15% of the Japanese market. Gazprom finalized a deal on April 18, 2007 to acquire a controlling stake in Sakhalin-2 operator Sakhalin Energy. After the deal Gazprom has 50% plus one share, Shell - 27.5%, Mitsui - 12.5% and Mitsubishi - 10%.