The Sakhalin II project is the second consortium to extract gas and oil reserves from the far eastern Russian island.
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Location |
Russia
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Funding |
Phase 1: US$116 million
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Status |
Phase 1 completed, Phase 2 passed final review but was rejected by the EBRD
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The Sakhalin II project follows Sakhalin I, as a consortium to locate and produce oil and gas on the northeastern part of Sakhalin Island and immediately offshore, in the Sea of Okhotsk, from two fields: Piltun-Astokhskoye (an oil field) and Lunskoye. Piltun-Astokhskoye (a gas field). The project marks Russia’s first ever Production Sharing Agreement (PSA), signed in 1994 with Sakhalin Energy Investment Company Ltd. (SEIC). Sakhalin Energy is a joint venture between Gazprom (50%), Shell (27.5%), Mitsui (12.5%), and Mitsubishi (10%).
In January 2007, EBRD decided against financing the second phase of Sakhalin II. However, in June 2008, Sakhalin Energy entered into agreements for up to $5.3 billion in loans - $3.7 billion from the Japan Bank for International Cooperation (JBIC) and $1.6 billion from a consortium of international banks. The funds will be used to construct a marine platform, oil and gas pipelines, and a Liquefied Natural Gas (LNG) plant.
Bank Information Center closely monitors progress in this project and offers support to partner organizations like Pacific Environment and CEE Bankwatch who take an active role in the development project.