26 Oct 2017 17:27

Rosneft, Exxon LNG plant in Far East estimated to cost $15.3 bln

MOSCOW. Oct 26 (Interfax) - A natural gas liquefaction plant in the Far East that Rosneft and ExxonMobil are building to export gas from the Sakhalin-1 project will cost an estimated $15.3 billion, according to a government report on the operation of Russian production-sharing agreements viewed by Interfax.

The project was initially estimated to cost $20.1 billion, but Rosneft and ExxonMobil optimized costs. "In the period from the end of 2015 through the end of 2016, the cost of the Far Eastern LNG project was reduced by $4.8 billion, to $15.3 billion, by current optimization work, manufacture of modules in reduced timeframes and reserving funds for unforeseen expenses commensurate with the level of certainty of work volumes," the report says.

Construction of the Far Eastern LNG plant remains the priority option for selling Sakhalin-1 gas, the report says. However, the Sakhalin-1 operator continues talks with the operator of the neighboring Sakhalin-2 production-sharing project, Sakhalin Energy, on the possibility of selling gas to a third line of the existing LNG plant.