Sakhalin-1 launches oil pipeline construction

The international consortium led by US-based Exxon Mobil as operator, launched on Tuesday the construction of giant Sakhalin-1 project oil pipeline on the Sakhalin island. The consortium, which includes, besides Exxon Mobil, Japan’s SODECO, Russia’s Rosneft and India’s ONGC Videsh Ltd (OVL), expects to start commercial production in 2006.

The 221-km-long pipeline will transport hydrocarbon fuel produced at Chaivo oil field from island’s north to the port of De-Kastri in Khabarovsk territory. The pipeline is expected to ship 12 million tonnes of oil to De-Kastri annually.

The consortium, in which OVL owns a 20 pc stake, aims to supply the crude oil mainly to refineries in Japan, South Korea and China. The investment by OVL worth $1.7 bn is expected to yield about 2 to 4 million metric tonnes of oil per year and 5 to 8 million cubic metres of gas per day.