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Board approves plan to increase capacity of Sakhalin 2 pipeline

Russia's state expert review board Glavgosexpertiza has approved a plan by Sakhalin Energy, operator of the Sakhalin 2 oil and gas project near Sakhalin Island, to upgrade an existing pipeline that carries gas from the north to the south of the island, writes Vladimir Afanasiev.

The board said that design decisions and construction blueprints presented to it are in compliance with existing Russian technical and safety rules, and thus can be executed by the operator.

The plan calls for the upgrade of an existing compression station, and the construction of two additional booster compression stations at the 123-kilometre and 444-kilometre points on the 800-kilometre pipeline.

The upgrade will allow the operator to increase its throughput capacity by at least 7 billion cubic metres per annum of gas to support a long-discussed plan by Sakhalin 2's key shareholders, Russian gas giant Gazprom and Anglo-Dutch supermajor Shell, to build a third train at their liquefied natural gas plant at the port of Prigorodnoye in the south of the island.

The pipeline currently pumps gas from the Lunskoye offshore field in the northeast of Sakhalin Island. Last year, the field produced more than 17 billion cubic metres of gas.

The pipeline upgrade is not expected to start until Sakhalin 2's shareholders approve a final investment decision on the third train expansion plan, which is now expected next year.

In addition to the pipeline upgrade, Sakhalin Energy has to determine sources of additional gas supply in the northeast of the island. It is unable to ramp up gas production at the Lunskoye field because it does not have sufficient reserves.

Earlier in September, Russian government officials indicated that Sakhalin Energy may source some gas from the ExxonMobil-led Sakhalin 1 project, with more gas to come once Gazprom brings online gas deposits at its Kirinsky offshore block near the island.