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Royal Dutch Shell Plc .com: Sakhalin Energy sells future LNG stocks

From Lloyds List
Published: Jul 13, 2006

SHELL-led Sakhalin Energy has sold more than 80% of its future liquefied natural gas cargoes after Japan’s Chubu Electric Power agreed to take 7.5m tonnes over a 15 year period, writes Martyn Wingrove .

Japan’s third largest utility wants to buy 500,000 tonnes per year of LNG from the Sakhalin Energy consortium with deliveries to commence in April 2011.

Shell is pushing to develop two Russian oil and gas fields off Sakhalin Island and start producing LNG by mid-2008.

It has sold 80% of the expected cargoes to mostly Japanese and Korean companies.

Sakhalin Energy expects peak production from two LNG trains on the southern tip of the island will be around 9.6m tonnes per year and it has sold around 7.8m tpa of this on 20 year to 24 year contracts.

Around a fifth of the LNG cargoes from the Sakhalin II project will be heading across the Pacific Ocean to a Sempra Energy-owned terminal in Baja, Mexico and the rest will be heading for Japan and South Korea. Tokyo Gas, Korea Gas and Tokyo Electric will be buying more than half of the LNG produced by the Shell-led project.

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