According to Bloomberg :
Sept. 28 (Bloomberg) — Royal Dutch Shell Plc’s Sakhalin-2 joint venture has received more than 10 “expressions of interest” for liquefied natural gas supplies from a possible third production line.
Sakhalin-2 is studying an expansion to increase capacity to 16 million metric tons a year from the 9.6 million tons now under construction at two production lines, Ate Visser, commercial director for the Shell-led Sakhalin Energy Investment Co., told the Sakhalin Oil & Gas Conference. The potential buyers are seeking a total of as much as 14 million tons a year.
Japanese and South Korean utilities have signed contracts to take up almost all the output from the $22 billion Sakhalin-2 venture, which faces a Russian government probe over environmental breaches. Requests for additional supplies have come from companies in Japan, South Korea, Taiwan, the U.S., China and India, said Visser, without giving specific names.
“We could easily fill up the requests,” he said at the Sakhalin Oil & Gas Conference in Yuzhno-Sakhalinsk, seven time zones east of Moscow. “The project has substantial economies of scale to incorporate a third train.”
Most of the expansion would come for a third production line under consideration with a small amount available through streamlining operations at the first two lines, a process called debottlenecking, said Visser.
He declined to give a figure on the costs of a possible third production line.
West Coast
“I was called just this morning by someone from a company out of the U.S. west coast,” said Visser. “People are calling me regularly.”
The Shell-led venture faces a Russian probe over environmental violations amid calls by the government in Moscow to cede control of its fields to local companies. Russia’s Natural Resources Ministry yesterday gave Sakhalin Energy one month to propose changes or face losing the venture’s permit.
Sakhalin-2 will double crude oil production to 160,000 barrels a day by 2009, he said. The facility produces 80,000 barrels a day currently that is exported to Japan and China.
Sakhalin-2 only exports crude oil during the summer as ice blocks the mooring terminals for the tanker. The production figure is on an annualized basis for the period when it is possible to export, said Visser.
See also : Singapore hopes for Russian LNG Supplies
- Looks like Singapore is not listed in the article but maybe just one of the 10 “expressions of interest” for LNG. Singapore cannot sign any agreement yet since our LNG terminal is not even constructed compared to the rest of the 6 serious competitors namely Japan, South Korea, Taiwan, the U.S., China and India.
We need to build it quickly otherwise it will be inevitable that we do NOT get any of the natural gas contracts at all! The spot LNG prices that will come later possibly cost more then OIL prices does.
Reality check, if LNG costing more means higher electricity cost for all Singaporeans (80% Natural Gas for electricity generation) after Full Liberalizing of the electricity market. The worst is most of Singaporeans are still in the “Matrix” of unknown and does not prepare for a full black out of energy. I can only say, the day when there is higher bankruptcy and beggars on the streets or chaos and instability…the world will somehow survive but at what cost?
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