Ian Craig, Chief Executive Sakhalin Energy
Hello I’m Ian Craig, Chief Executive of Sakhalin Energy.
We’re here in the south of Sakhalin in Aniva Bay with the heart of our project behind us;
the LNG Plant and the Oil Export Terminal,
and this is what most visitors see when they come to the island.
But the story starts much further north,
800 kilometres north of here where we have the oil and gas reservoirs.
These reservoirs are not particularly unusual apart from their size;
they have about 4 billion barrels of oil equivalent.
But they are in the north-east of the island and there we have sea ice,
moving sea ice for about 6 months of the year which poses a real challenge for development.
We have 3 oil and gas platforms in that vicinity
each of them have to resist the loads from the moving ice
and from seismic events that also happen in the same area,
and they form the base for drilling the wells which include the largest gas wells in Russia.
But that sea ice movement prevents us from having normal oil and gas export activities using tankers,
it’s just not possible, so we elected to have the export point here in the south of the island.
So the oil and gas goes from the platforms through sub-sea flow lines below the depth of ice
scour onshore where it goes through a processing facility.
The condensate is stripped out from the gas and the condensate is mixed with the oil;
the oil goes down a 24-inch oil pipeline; the gas goes down a 48-inch gas line.
To give you an idea of the scale of the pipeline system if we were in the UK,
this is the equivalent of having the platforms just offshore of Aberdeen,
the onshore pipeline starting Dundee and the LNG facility in London.
The oil and the gas comes down here to the south of the island to the terminal behind me.
The oil goes into storage tanks,
two-large 100-cubic metres each storage tanks and then it goes to the tanker loading point
out in the Bay over my shoulder here.
There we load the oil tankers and they set sail for the various markets in the world.
At peak production we will be producing about 150,000 barrels of oil a day
and that will give us roughly 100 oil tanker movements per year.
The gas has to be treated before we can refrigerate it.
We remove any last traces of water; we remove also any CO² and any H2S
because this could damage the system downstream.
We then refrigerate the gas in two steps,
first of all down to minus 50 degrees then down to minus 160 degrees.
This requires a lot of power the second refrigeration alone requires about 80 megawatts.
And here we get an advantage because the colder the climate
the less power you need to generate the same volume of LNG.
And we can actually make more LNG in the winter than we can in the summer
and that matches the market demand, fortuitously.
So the LNG is chilled down to minus 160 degrees and it shrinks in volume to 1/600th of its size,
its volume at room temperature.
It’s also stored in two storage tanks 100 cubic metres each
and then it can be shipped into carriers like the one behind me here.
This is about 145,000 cubic metres of LNG, or 65,000 tonnes.
Our capacity is about 9.6 million tonnes per annum,
that’s the equivalent of about 150 ships like this every year.
Most of these ships will be supplied by our customers;
they all bring their vessels here and pick up their cargo.
This one is actually on charter to us for 20 years.
It’s the first ever Russian LNG carrier operated by Sovcomflot on our behalf.
So, 150 ships a year LNG; 100 oil tankers from the oil terminal itself.
This is going to be a very busy port; one of Russia’s newest ports.
When you see what’s been achieved here over the years it fills me with immense pride.
It’s the result of huge efforts by 25,000 people here at peak on the island - 45 different nationalities.
And on a frontier project like this you can never anticipate all the problems up front.
You have to be able to adapt and learn in some areas as you go along
and that’s what we’ve had to here to overcome the challenges.
We’ve been helped immensely by the strength of the joint venture:
Gazprom with its tremendous onshore pipelines experience;
Shell with its technology in LNG and offshore developments;
and of course Matsui and Mitsubishi with their huge knowledge of the LNG market.
When you see it all coming here together you realise just what it takes
to develop projects such as this in this sort of environment.
It’s been very challenging but also very very satisfying.
And I’d like to think that what we’ve done here,
this blend of national expertise and international resources,
is perhaps a model for future projects like this.