Exxon Neftegas Ltd cuts Far East LNG capex estimate to $9.8 bln

MOSCOW, Oct 23 (PRIME) -- Exxon Neftegas Limited, the operator of the Sakhalin-1 project, has reduced planned capital expenditures on a liquefied natural gas (LNG) project Far East LNG to U.S. $9.8 billion from $15.3 billion, the government said on Tuesday in a report on implementation of production sharing agreements in the country.

The projected annual production capacity of the plant, located near the village of De Kastri in the Far East, may reach 6.2 million tonnes of LNG. The operator plans to invest $6.9 billion in construction of the LNG plant, $1.6 billion in upstream, and $1.3 billion in construction of pipelines, the report read.

Exxon Neftegas still sees construction of the LNG plant as the major option for monetization of natural gas produced by the Sakhalin-1 in spite of negotiations to sell gas to the Sakhalin-2 project.

Sakhalin-1 develops the Chaivo, Odoptu and Arkutun-Dagi fields on the Sakhalin Island’s shelf with total estimated resources standing at 307 million tonnes of oil and 485 billion cubic meters of gas. U.S. ExxonMobil and Japan’s Sodeco own 30% in the project each, while Russian oil major Rosneft and India’ ONGC own 20% each.

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