Sakhalin-2 project - recent key milestones

Sakhalin-2 is the world’s biggest integrated oil and gas project. It is being built from scratch in the harsh subartic environment of Sakhalin Island in the Russian Far East. Phase 1 involved first oil production from an offshore platform Molkpaq installed at the Piltun-Astokhskoye field in 1999. Phase 2 included the installation of two further platforms, 300 km of offshore pipelines connecting all three platforms to shore, more than 800 km of onshore oil and gas pipelines, an onshore processing facility, an oil export terminal and the construction of Russia’s first liquefied natural gas plant.

	On 18 February 2009 Dmitry Medvedev, Russian President opened Russia’s first liquefied natural gas (LNG) plant built by Sakhalin Energy as part of Sakhalin-2 infrastructure. The strategic importance of the Sakhalin-2 project for the region was reflected in the distinguished guests at the ceremony, which included Taro Aso, the Prime Minister of Japan, Prince Andrew, Duke of York, Maria van der Hoeven, the Minister of Economic Affairs of the Netherlands, other high-ranking officials and guests from Russia and countries that are co-partners in the project (the UK, the Netherlands and Japan).
	On 4 March 2009 Sakhalin Energy signed a sale and purchase agreement (SPA) for liquefied natural gas (LNG) supply to the Japanese company Osaka Gas. The deal called for the supply of approximately 0.2 million tonnes per annum (mtpa) of LNG for a period of more than 20 years. With the conclusion of this deal, Sakhalin Energy finalised the long-term sale and purchase agreements for trains 1 and 2 volumes.
	On 29 March 2009 the first scheduled Russian LNG cargo has been successfully loaded from the Sakhalin-2 LNG plant onto the LNG carrier Energy Frontier. The first Russian LNG was delivered to the two of the Company’s foundation customers - Tokyo Gas and Tokyo Electric.
	On 24 April 2009, Sakhalin Energy announced its decision to postpone 4D seismic survey. The announcement was made at the 6th meeting of the Western Gray Whale Advisory Panel.
	As always safety and reliability remain the main priorities for Sakhalin Energy during construction, start-up and operation of Sakhalin-2.
	On 31st May 2009 the Train 2 facilities at Lunskoye-A (LUN-A) platform, onshore processing facility, and LNG plant have been brought on stream. This achievement represents a doubling of Sakhalin energy's LNG production capacity.
	On 22 July 2009 Sakhalin Energy exported its 200th oil cargo. The Sakhalin Island, a PRISCO-owned tanker on long-term charter to the company, delivered some 100,000 tonnes of oil was delivered from the Company’s offshore facilities in the Sea of Okhotsk to a refinery in South Korea.
	In March 2009 all Sakhalin Energy operations and facilities were certified as being compliant with the International Standards Organisation Environmental Management Systems standard ISO 14001:2004. The accreditation process was launched over six years ago by Phase 1 Operations. To do this across a unique and challenging integrated upstream and downstream operation is a very commendable achievement by all those involved, at all locations throughout Sakhalin Energy.