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ExxonMobil and Rosneft start pre-studies on Sakhalin LNG project

CB&I and Foster Wheeler in competitive pre-FEED

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolThe two super giant companies Rosneft from Russia and ExxonMobil from USA have awarded contracts to the engineering companies CB&I and Foster Wheeler Energy from USA to perform the first phase of the front end engineering and design (pre-FEED) for their joined project of liquefied natural gas (LNG) plant in Sakhalin Island.

Although the national oil company (NOC) Gazprom is benefiting from the exclusive rights to export gas from Russia, Victor Sechin, Rosneft Chief Executive Officer, had announced in April 2013 his plan to export LNG from Russia in expanding  the existing Sakhalin-1 facilities with a LNG Plant.

Rosneft_ExxonMobil_Sakhalin-LNG_project_mapIn order to compete on the East Asia gas markets with the LNG projects envisaged in Australia, Canada, USA, East Africa , Mr Sechin estimated that all the Russian projects to export LNG should enter commercial operations no later than 2018.

Obviously President Poutine got Mr Sechin’s message and is supporting indirectly Rosneft, as well as Novatek with Yamal LNG project, to open breaches in Gazprom monopoly.

Therefore in the same way as Novatek, Total and China National Petroleum Corporation (CNPC or PetroChina) are developing their Yamal LNG project in the upper north of Siberia, Rosneft and ExxonMobil have decided to gear up on the Sakhalin-1 LNG project in selecting CB&I and Foster Wheeler Energy to provide them pre-FEED work.

FEED on Sakhalin LNG to be completed by end 2014

With the initial phase of the FEED being awarded to CB&I and Foster Wheeler Energy, Rosneft and ExxonMobil expect the FEED work to be completed at the end of 2014 so that the construction work could start in following in 2015.

For this initial phase of the FEED, CB&I and Foster Wheeler Energy will signed separate contracts to perform their preliminary studies.

 The scope of work allocated to CB&I and Foster Wheeler Energy applies to:

ExxonMobil_Rosneft_sakhalin-1_LNG-Project – Conceptual study

 – Environment impact Assessment (EIA)

 – Completion of the site details to host a LNG plant

 – Selection of the liquefaction technology

 – Key requirements of the long lead items

 – Design of the feedstock pipeline

 – Construction concept and method to match with Sakhalin environment

In that respect Rosneft and ExxonMobil are considering different locations either on the Sakhalin Island, either on Russia main land close to De Kastri in the Khaborovsk Region in front of the Sakhalin Island.

The Sakhalin LNG project should have a capacity of 5 million tonnes per year (t/y) LNG, but Rosneft and ExxonMobil are considering further expansions with additional LNG trains.

In this context,CB&I and Foster Wheeler Energy are expect to return their conclusion by the year end or early 2014 so that Rosneft and ExxonMobil could award the FEED contract in following and thus, ensure the Sakhalin LNG project to load first shipments in 2018.

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