LNG Plant Bids Accepted

An international consortium developing two oilfields off Russia's Sakhalin island invited three international groups to bid for a tender to build the world's largest liquefied natural gas plant. The Sakhalin energy consortium said in a statement the three were French Bouygues Offshore, French Technic with U.S. Foster Wheeler, and Japan's Chiyoda Corp. with Toyo Corp. The Sakhalin energy consortium is led by Royal Dutch Shell. The $1 billion-plus contract involves construction of a liquefied natural gas (LNG) plant -- Russia's first -- with annual capacity of 9.6 million tons by 2006, the statement said. In addition to the LNG plant the contractor will design and build a crude oil export terminal and related facilities on the Sakhalin's southern coast. The contract, to be awarded in the second quarter of 2002, is part of the second phase of development of the $8.9 billion Sakhalin-2 project. The money, which has yet to be raised, will be used to develop the two offshore fields, to build oil and gas pipelines to the south of the island, as well as the LNG plant, and oil and LNG export terminals. Output would be shipped to Japan, South Korea and Taiwan. The consortium is operated by Shell, which owns 55 percent, while Japan's Mitsui & Co. and Mitsubishi Corp. have 25 percent and 20 percent respectively. Sakhalin Energy has already invested $1.6 billion in the first stage of the project, which is currently producing about 35,000 barrels per day. The entire output is being shipped to Japan and South Korea. Sakhalin-2 reserves amount to about 140 million tons in oil and up to 400 billion cubic meters in natural gas. - (Reuters)