Plans for gas pipeline from Sakhalin to Japan

May 22, 1999 02:00 AM

Exxon Japan Pipeline Ltd is said to help conduct a feasibility study for a gas pipeline from Sakhalin Island to Japan.
Exxon plans to work with Japan Sakhalin FSC Ltd, a new company set up and wholly owned by Japan Petroleum Exploration Co Ltd (JAPEX), on the study and has already signed an agreement on setting up a consortium with the Japanese firm.
The consortium will be split 25% to Exxon and 75% to the Japanese partner.
No word was available on the expected completion date for the feasibility study, which will involve consideration of various routes as well as design, environmental and regulatory standards.

Rex Tillerson, president of the Exxon subsidiary, said that construction of the pipeline would prove a significant asset for the group developing the Sakhalin-I offshore concession -- of which Exxon is a member. "Successful development of the Sakhalin fields and the export line will provide a competitive new source of energy for Japan and provide many benefits to the people of Sakhalin and Russia," the press release quoted him as saying.
Exxon noted that the Sakhalin-I consortium has already conducted a 3D seismic survey and drilled five wells at Chaivo, the offshore field that would be the primary source of gas pumped through the pipeline. (Chaivo is believed to contain 10 trillion cubic feet, or more than 280 billion cubic meters, of natural gas.) Gas extracted from Arkutun-Dagi and Odoptu, also part of the Sakhalin-I concession, could also be exported through the pipeline to Japan.

Equity in the Sakhalin-I project is split between Exxon (30%), Japan's SODECO (30%), the Russian Rosneft (17%) and Rosneft subsidiary Sakhalinmorneftegaz (23%). The group's three offshore fields are believed to contain about 310 million tons of crude oil and 335 billion cubic meters of natural gas. Development of the fields may require $ 13 billion over the 42-year life of the project.

Source: NewsBase
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