Sakhalin Retrospective Reveals the Foundation of Russia’s Offshore Experience and LNG Strategy

By Pat Davis Szymczak, April 23, 2014

It has been 20 years since stakeholders signed the Sakhalin-2 PSA that kicked off development of the Piltun-Astokhskoye and Lunskoye oil and gas fields offshore in the Russian Far East.

Over two decades, Sakhalin-2 has been a pioneer that advanced the post-Soviet Russian oil and gas industry along many fronts: it saw Russia’s first foray into the offshore under subarctic conditions, Russia’s first LNG production and marketing of hydrocarbons to Asia-Pacific markets, firsts in project management; world class rigs and topsides, 4D seismic survey, drilling and completions etc. 

In this special offshore issue, Oil&Gas Eurasia interviews Roman Dashkov, CEO of Sakhalin Energy (Sakhalin Energy Investment Company Ltd.) which operates the Sakhalin-2 project on behalf of stakeholders Gazprom (50 percent plus 1 share), Shell (27.5 percent minus 1 share), Mitsui (12.5 percent) and Mitsubishi (10 percent).

In the 1990s, long before I had even thought of starting Oil&Gas Eurasia, I visited Sakhalin on a press trip. I toured the dry dock where Sakhalin Energy’s first platform, the Molikpaq, was being refitted before being towed out to sea. The image of the Molikpaq has become almost iconic as the image of Russia’s first offshore platform.

I also took a taxi during that trip to Prigorodnoye at the southern tip of Sakhalin Island, a point so close to Japan you can just about glimpse it on a really clear day. I was impressed by the green valley, the absolute quiet and the presence along the coast of one or two huts – shelters for fishermen. I saw only one human being that day, an elderly woman walking along the road swinging a bucketful of berries.

Things today are very very different, and Sakhalin Energy is about much, much more than just the Molikpaq, as its CEO Roman Dashkov explains in his interview. Just to cite a couple of examples, the project’s other two platforms, the concrete gravity based Piltun-Astokhskoye B, and the Lunskoye-A are the largest concrete structures ever built in Russia if not in the world. Sakhalin Energy’s Prigorodnoye LNG plant is said to be the most advanced in existence.

Russia’s ambitions to become a player in the global LNG market have been facilitated by the experience of Sakhalin Energy, which took the first steps in this direction. The agendas being set as new LNG projects are implemented in the Yamal Peninsula, and debated in the Barents Sea are rooted in the experience gained offshore Sakhalin.

I hope you enjoy our Sakhalin Energy retrospective. And that you also enjoy our other offshore report – an interview with Damir Valeyev, first deputy general manager for Strategic Development at Gazprom Burenie, Russia's major drilling contractor, which looks more towards the Arctic offshore to the north of European Russia.

I’ll be taking copies of this issue to the OTC 2014 in Houston in May where Oil&Gas Eurasia is assisting a group of Russian equipment companies and manufacturers representatives that are participating in a delegation organized by the U.S. Foreign Commercial Service. Among other things, OGE