UPDATE 2: Exec: Gazprom to use Sakhalin-1 gas for Sakhalin-2 extension

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MOSCOW, Jun 14 (PRIME) -- Russian gas giant Gazprom will use its own deposits and gas of the Sakhalin-1 project to extend the capacity of liquefied natural gas (LNG) plant Sakhalin-2, Deputy CEO Alexander Medvedev said at a press conference on Tuesday.

“As regards the resource base of Sakhalin-2, unfortunately, there is not enough gas. Moreover, we will need to fill the resource base of Sakhalin-2 in a while in order to keep the output level at 10 million tonnes,” Medvedev said.

He said that Gazprom is mulling sending gas from the Kirinskoye and the Yuzhno-Kirinskoye deposits to Sakhalin-2. The company can build two more wells at the Kirinskoye deposit in 2016, Gazprom said in a presentation shown at the press conference.

Gazprom is also in negotiations on purchases with Exxon Neftegas, the operator of the Sakhalin-1 project.

Sakhalin-2 is Russia’s first and only LNG plant. Gazprom owns 50% plus one share in Sakhalin Energy, Shell holds a 27.5% stake minus one share, Mitsui & Co. Ltd owns 12.5% and Mitsubishi Corporation has a 10% interest.

The Sakhalin-1 project is a consortium producing hydrocarbons from the Chayvo, Odoptu, and Arkutun-Dagi fields. Exxon Neftegas, affiliated with ExxonMobil, owns a 30% in the project, Russian oil major Rosneft owns 20%, Japan’s Sodeco holds a 30% stake, and India’s ONGC owns 20%. Three fields’ reserves are estimated at about 307 million tonnes of oil and 485 billion cubic meters of gas.

Medvedev said: “The negotiations have been going on since long ago and in fact, either Rosneft, if it buys gas from Sakhalin-1, or Sakhalin-1 itself can become the potential supplier, where Exxon is in fact, the commercial operator. This is why Sakhalin Energy is in contact with Sakhalin-1, we have informal consultations with Rosneft.”

Gazprom and ExxonMobil were earlier unable to agree on the gas pricing because ExxonMobil wanted to start exports of gas from Sakhalin-1 and to sell it to Gazprom at exports prices. The Russian government has not allowed Sakhalin Exxon Neftegas to start exports.

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