Reporting Live from Sakhalin: Big Oil’s New Frontier

Over the next few days, Oil Change will be bringing you an exclusive blog by Rich Cookson, a British journalist who is visiting the oil and gas developments at Sakhalin Island off Russia’s east coast (see map).
Rich writes: “In the sea off Sakhalin Island in the far east of Russia, the giant legs of a new gas and oil platform have just been painstakingly manoevered into place. Further south, some of the largest ships in the world are laying hundreds of kilometers of pipelines – part of a USD20bn project to exploit vast energy reserves under the Sea of Okhotsk.
Sakhalin is described as a “world-class oil and gas province” by Sakhalin Energy (SE), a consortium which the British oil giant Shell has a 55 per cent stake in, alongside the Japanese firms Mitsubishi (25 per cent) and Mitsui (20 per cent). SE is exploiting the fields in a profit-sharing agreement with the Russian Government.
SE’s building programme, already three-quarters complete, includes a new drilling platform, new processing plants (including the largest liquefied natural gas (LNG) plant in the world) and laying some 1,800km of on- and off-shore pipelines to take the gas and oil to a new export terminal in the south. When it reaches full production, the terminal will load an LNG tanker every two days and an oil tanker every four days, earning the Russian Government up to USD2bn every year. The project director describes it as “the mother of all projects”.
Russian’s first offshore platform, called PA-A, pumped ‘first oil’ in 1995 and under best conditions is capable of extracting 90,000 barrels per day of liquid and 74m cubic feet per day of gas – but is only able to operate for half the year because the sea freezes in winter.
Sea ice is not the only difficulty SE faces here: Sakhalin is a high risk area for seismic activity – in 1994, a major earthquake totally destroyed a town in the north of the island, killing 2,500 people; the last major quake was in the south about five years ago -ice shears and wind and wave action related to typhoons and tsunamis.
The oil and gas also lies under the only known feeding ground of the critically endangered Western North Pacific Gray Whale, which has lead 60 local and international NGOs to launch a major campaign against the project. Their main fear is that the noise from drilling, pipe-laying and construction will distress the western grays, driving them away from their feeding area. As seasonal feeders, the whales feed here for four or five months and survive for the rest of the year largely on their blubber reserves – so anything that stops them feeding poses an immediate threat to their survival.
Last year, scientists reported sighting 14 ‘skinny’ whales – a considerably larger number than in any year since 2001 – and while the cause of their emaciation is still unknown, and cannot be scientifically linked to the oil projects, environmentalists are deeply concerned. They have chartered a Russian ship to monitor noise levels around the feeding grounds for the next two months. The Nadezhda is due to arrive here tonight”.
For more from Rich visit the site tomorrow..