Sakhalin 2 project finance pdf

Representing clients in a variety of industries, from construction and real estate, to energy generation and natural resource management, and telecommunications, our lawyers develop comprehensive, tailored solutions for clients across the globe and in some of the most challenging financial markets. This is a huge project that is set to blight a whole island. Steptoe has a welldeveloped international and domestic project finance and infrastructure practice. Sakhalin energy for its onshore processing facility opf on sakhalin island. Northern economics was the prime contractor on a study conducted for the sakhalin regional administration russia, several consortia of companies led by exxon, marathon, and mobil, and the u. Sakhalin2 phase 2 lenders independent environmental. A general view shows the sakhalin2 projects liquefaction gas plant in prigorodnoye in this october, 2006 file photo. The project comprises a lumpsum engineering, procurement and offshore fabrication component, as well as a reimbursable element for construction and site services. Sakhalin ii phase 2 oil and gas project the project, now under. Stay up to date with the latest news releases from exxon neftegas limited. The kremlin has, for a long time, been eager to unravel the. Sakhalin ii phase 2 oil and gas project the project, now under construction on sakhalin island in russias far east. Structured and project finance xport bank at exim bank s.

Indigenous peoples in sakhalin, russia, campaign against. In december, prosecutors found over 100 violations of russian legislation by the sakhalin project. The lack of experience in subarctic conditions gives cause for concern in this sensitive environment. Environmental impacts western grey whales, pipelines, rivers and aniva bay 2. A project finance transaction structure provides a governance framework that determines the scope of a projects. Shell agreed in principle to cede control of sakhalin2 to. The project is being led by shell, as the major shareholder 55% and operator of the sakhalin energy investment company, seic. Sakhalin 2 is one of the most challenging engineering feats ever achieved. Sakhalin energy investment company limited on behalf of sakhalin2 phase 2 project finance parties date february 2016 project number uk2217081 sakhalin 2 phase 2 lender s independent environmental consultant monitoring report october 2015.

Shell offers control of sakhalin2 to gazprom reuters. Industry insiders say exxon is now banking on getting greater support from the state for its lng project, after the company reported improved economics for the plant. Often bandied about in trade journals and industry conferences as a new financing technique, project finance is actually a. The project finance will be allocated to the construction and the plant commissioning cost of the project. Reputational and financial risk implications for ecgd support of.

Definition of project finance the term project finance is used loosely by academics, bankers and journalists to describe a range of financing arrangements. Given its scale and complexity, sakhalin ii is a poor investment and. Home project examples sakhalin island infrastructure development plan. Sakhalin energy is delivering a groundbreaking oil and gas project the sakhalin2 project. Sakhalin 2 project finance parties sakhalin 2 pab platform environmental audit uk2217081 issue.

Sakhalin2 is one of the most challenging engineering feats ever achieved. This video features the sakhalin2 project in its full scale. Environ uk is the independent environmental consultant iec acting on behalf of the senior lenders to the sakhalin2 phase 2 project the project. Sakhalin ii is creating infrastructure that can be used by other offshore sakhalin oil and gas projects in the future. Watch this video to see the world class technologies applied at the projects main facilities. The project is managed and operated by sakhalin energy investment company ltd. In return for a controlling stake of over 50% in sakhalin2, gazprom will swap oilfield assets and possibly make cash. The council of representatives of sakhalin indigenous minorities, the government, and sakhalin energy investment have as an objective of the tripartite agreement to prevent or mitigate, in accordance with environmental requirements, of any potential adverse impacts produced by the oil and gas project on the native habitat, traditional ways of. Gazprom approved shell sakhalin2 lng expansion roadmap. But the psa also included a stipulation that any disputes over cost overruns be settled by arbitration. Russian ministry for natural resources revoked the environmental approvals for phase 2 of the sakhalin ii project.

Sakhalin2 is a very important project in shells portfolio. What you will learn here what cases does the structured finance division handle. These criteria apply to all new and existing project finance issue credit ratings. Ebrd finances a project widely known to violate its policies, the bank will cheapen itself and squander the public interest that it is entrusted to protect. Sakhalin2 phase 2 project environmental audit of platform. Piltunastokhskoye mostly oil and lunskoye mostly gas fields of the northeastern coast of sakhalin. Sakhalin 1s chayvo, odoptu, and arkutun dagi fields, located off the northeastern coast of sakhalin island in the russian far east, are being developed using a phased approach. Take a look inside some of our major projects to see how human ingenuity pushes technical boundaries to safely and efficiently deliver energy, helping to meet rising global demand.

Foreign investment in the russian oil and gas industry. Sakhalin ii monitoring and transparency of information pdf. Sakhalin ii phase 2 environmental impact assessment and project. This project involves the development of two offshore fields. Petrofac has been awarded a contract by sakhalin energy investment company ltd. The sakhalin2 project is unlikely to start delivering gas on time, according to sakhalin energys vicepresident. The sakhalin ii licence area accounts for only 10% of the abundant hydrocarbon base of the sakhalin shelf. The companys principal activities are the production and export of crude oil since 1999 and liquefied natural gas from 2009. In response, the wind sector has developed multiple financing structures to attract various investors to projects, manage project risk, and allocate tax benefits to entities that can use the. It is one of the largest integrated exportoriented oil and gas projects in the world and a project of many firsts the first project in russia to develop offshore oil and gas fields, the first lng project in russia, the first project in russia under production sharing agreement. Under the terms of reference of our engagement, ramboll undertakes.

Consultant iec acting on behalf of the senior lenders to the sakhalin 2 phase 2 project the project. Sakhalin 2 phase 2 project finance parties date march 2019 project number 1700001012 sakhalin 2 phase 2 lenders independent environmental consultant. The sakhalin ii project in the russian far east is said by project sponsors to be the largest. What is the difference between project and structured finance. In this context, gazprom, shell and their japanese partners mitsui and mitsubishi, are preparing the call for tender for the front end engineering and design feed work of this sakhalin ii third lng train so that the sakhalin2 expansion project could start first shipment by 2019. Interested candidates who meet all requirements may send a resume to exxon neftegas limited, details can be found here. The sakhalin 1 project yields significant benefits to russia including billions of dollars in.

Watch this video to see the world class technologies applied at the project s main facilities. This signing of project financing for sakhalin ii project is extremely meaningful for the project execution, and we are grateful of this occasion as a shareholder of sakhalin energy. Sakhalin2 is one of the worlds largest integrated, exportoriented oil and gas projects, as well as russias first offshore gas project. Sakhalin1 and 2 oil and gas development projects, russia. Sakhalin ii crude oil and liquified natural gas, sakhalin. The wharton school project finance teaching note 2 i.

Any anthropogenic activity that could potentially disturb gray whales, or. Structure of report section 1 of the report sets out the background to the project and summarises the concerns raised to date over its environmental, social. The contract area on the sakhalin shelf comprises two separate blocks, each enclosing a major field. Shareholders and finance in 1997, the project sponsor, sakhalin energy investment company, ltd. Sakhalin ii oil and natural gas development project phase2 development. Now some comments on project financing in sakhalin energy. Vitaly sokolov, yuzhnosakhalinsk, and nadezhda sladkova, moscow. Sakhalin2 phase 2 project environmental audit of lng plant. A good practice handbook for companies doing business in emerging markets. The warning comes as gazprom continues talks with shell to take a controlling stake in the worlds largest liquefied gas project. Scf group expands fleet to support sakhalin1 and sakhalin2 projects scf group acquires six aframax shuttletankers from oao primorsk shipping company prisco corporation and expands its participation in servicing the sakhalin1 and sakhalin2 projects. The sakhalin 2 project is the first onstream lng project in russia and one of only three developments operated under psc terms. Sakhalin energy is a consortium for developing the sakhalin2 oil and gas project with corporate head office in yuzhnosakhalinsk.

Its sister project, the sakhalin2 project, also includes three offshore oil and gas platforms, 15 kilometres off the russian island of sakhalin, in the north pacific ocean, located just north of. Sakhalin 2 project environmental audit of platform pab. Sakhalin2 phase 2 lenders independent environmental consultant uk2217081 iii executive summary ramboll environ uk limited ramboll environ is the independent environmental consultant iec acting on behalf of the senior lenders to the sakhalin2 phase 2 project the project. Now that sakhalin2 is developing the second phase of its project and sakhalin1 is. The sakhalin ii psa a production nonsharing agreement wwf.

It includes development of the piltunastokhskoye oil field and the lunskoye natural gas field offshore sakhalin island in the okhotsk sea, and associated infrastructure onshore. In doing so, we have drawn on ifcs own learning and experiences of the past nine years, as well as the current thinking and practices of our client companies and other institutions. Its sister project, the sakhalin2 project, also includes three offshore oil and gas platforms, 15 kilometres off the russian island of sakhalin, in the north pacific ocean, located just north of japan, off the east coast of russia. The consortium leading the sakhalin2 project sakhalin energy had no russian partner until gazprom took over the role of operator from shell in 2007. Sakhalin energy project financing lessons learned onepetro. Environ uk ltd environ is the independent environmental consultant iec acting on behalf of the lenders to the sakhalin 2 phase 2 project the project. Sakhalin energy, an operator of the sakhalin2 project, was founded in 1994. In may 2019, shell started production at appomattox, a deepwater oil and gas development that is shells largest floating platform in the gulf of mexico. Sakhalin2 phase 2 project finance parties independent environmental consultant paa environmental audit uk2217081 issue. Structured and project finance at exim bank a quick introduction. Sakhalin 2 phase 2 project finance parties sakhalin 2 phase 2 lng plant environmental audit uk2217081 issue. The project should not receive funding from any bank claiming to apply the equator principles or equivalent standards. Environ uk ltd environ is the independent environmental consultant iec acting on. Sakhalin 2 is one of the worlds largest integrated, exportoriented oil and gas projects, as well as russias first offshore gas project.

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