Mitsui CEO to inspect Sakhalin-2 project

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YUZHNO-SAKHALINSK, July 18 (RIA Novosti) - A delegation from the Japanese company Mitsui, which holds a 25% stake in Sakhalin Energy, has signed on to follow the progress of the second stage of the Sakhalin-2 oil-and-gas project, the Sakhalin Department of Information announced Monday.

"The delegation came to the island to observe the project first hand, including the construction of pipelines from the north to the south of the island, and one of the world's largest natural gas liquefaction plants," said a Sakhalin Information Department spokesman.

The delegation, headed by CEO Shoei Utsuda, also met with regional Governor Ivan Malakhov.

The island has only about 600 km of oil and gas pipelines, compared to the required 1800 km.

"At the meeting, the importance of keeping to schedule was noted, as well as that of meeting obligations to buyers of the liquefied natural gas, who are largely Japanese energy companies."

Shell Sakhalin Holdings B.V., a Royal Dutch/Shell subsidiary, holds a 55% stake in Sakhalin Energy, which is managing the Sakhalin-2 project. Mitsui Sakhalin Holdings holds a 25% share and the Mitsubishi subsidiary Diamond Gas Sakhalin's stake is 20%.

The project includes the development of the Piltun-Astokhsk and the Lunsk oil and gas deposits on the northwest shelf of Sakhalin, which has a total reserve of around 150 million tons of oil and more than 500 billion cubic meters of natural gas. About 9.6 million tons of liquefied natural gas [LNG] will be processed annually through the project.

One of the largest LNG plants in the world will be built for the Sakhalin-2 project near the Korsakov port on the southernmost tip of the island. It is scheduled to begin operations in 2007.

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