Petrofac to Upgrade Sakhalin
For the second day running, UK contractor Petrofac has announced a significant gas-related contract from Gazprom, this time to revamp the gas process plant at the Sakhalin LNG complex.
Petrofac said September 6 the $700mn contract, awarded by Gazprom-controlled Sakhalin Energy, entails work on its onshore processing facility (OPF) on Russia’s Sakhalin Island in the Pacific.
The project comprises a lump-sum engineering, procurement and offshore fabrication component, as well as a reimbursable element for construction and site services. Scope of work includes inlet separation and feed gas compression facilities, a new flare system, utilities, substations and associated buildings, a temporary beach landing facility, refurbishment of the existing camp, temporary site facilities for Sakhalin Energy and Petrofac, as well as brownfield tie-ins to the existing OPF.
With early engineering work already underway, Sakhalin Energy said the project is expected to be completed in 2022 and will support Sakhalin Energy in maintaining its sustainable LNG capacity.
At the signing ceremony, Sakhalin Energy CEO Roman Dashkov remarked: “We chose to sign a contract with Petrofac, one of the world’s industry leaders, which has vast experience in design and construction of oil and gas infrastructure.” His remark suggests that the consortium is not being affected by existing or US-planned sanctions against Russia, when it comes to awarding work to extend the operating life of the existing LNG venture.
Sunder Kalyanam, group managing director for Petrofac’s Engineering & Construction Growth business said: “We have been executing projects in Russia since the 1990s and this marks our tenth in the country. Sakhalin Island is a very familiar location for Petrofac as our Sakhalin Technical Training Centre, established in 2008, has been helping meet increased local demand for competent personnel specialising in the oil and gas industry.”
Sakhalin Energy shareholders are Gazprom (50% plus one share), Shell (27.5% minus one share), plus Japan’s Mitsui (12.5%) and Mitsubishi (10%). It operates what remains Russia’s only LNG export plant, which in 2016 produced more than 10.9mn mt, exceeding the nameplate capacity of the two-train facility by more than 1.3mn mt. Much of its production is exported to the nearby Japanese market.
Shell indicated this June that the front-end engineering (Feed) stage of project preparation for a third LNG train there was “nearly completed” but no financial commitment has yet been given.
Petrofac announced September 5 it had secured a contract worth €340mn ($404mn) from Gazprom to build an onshore gas receiving terminal for its TurkStream gas pipeline project.
Mark Smedley