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Alaska Journal of Commerce: Veco expands its reach in Russia

Sakhalin II module

(Oil process modules are unloaded recently at the Chayvo oil field in Sakhalin, in Russia’s Far East. Veco Corp. coordinated the module support project for an Exxon Mobil Corp. consortium. Veco has worked on several large-scale projects in the region. PHOTO Courtesy of Veco Corp.)


By Tim Bradner  
SAKHALIN, Russia – Veco Corp. has landed another major contract in Sakhalin, in Russia’s Far East. Sakhalin Energy Investment Co., the consortium led by Royal Dutch Shell that is building the $20 billion Sakhalin 2 project, has awarded Veco and a Russian partner contracts for operations maintenance and support for three new offshore platforms.

The Alaska-based oil services company is already providing maintenance for SEIC on the Molikpaq platform, which is producing oil on a seasonal basis but will soon produce year-around.

SEIC made announcements of the new contract awards Sept. 25. The Sakhalin 2 project involves oil and gas production from offshore platforms off the northeast coast of Sakhalin Island, the transport of both oil and gas through two new pipelines being built to a new liquefied natural gas plant and a crude oil export terminal at a port in the southern part of the island.

The project is now about 80 percent complete and is scheduled to go into operation in 2008, SEIC president Ian Craig said Sept. 27 at an oil and gas conference on Sakhalin.

The project has been in the news recently because of concerns voiced by the Ministry of Natural Resources of the Russian Federation over land erosion problems near pipeline stream crossings. According to Craig, the problems are being investigated, but he said the project overall remains on schedule.

Veco was also recently awarded a contract by Exxon Mobil Corp. for maintenance and support on offshore platforms, onshore facilities and pipelines for the $12 billion Sakhalin 1 project being developed by Exxon Mobil and several partners.

Veco’s Russian partner in both the Sakhalin 1 and Sakhalin 2 contracts is Eastern Construction Co. and SMNM (SakhalinMorNefteMontazh). The joint-venture also provided support to Sakhalin 1 during construction of the onshore oil and gas processing facilities and pipelines.

The consortium also announced a second contract for operations maintenance and support of a new liquefied natural gas plant and crude oil export terminal to a consortium including Fluor, the U.S. engineering company; Dietsmann, a Dutch energy services company; and a Sakhalin-based Russian partner, Dalelectromontazh.

Veco also recently landed a major contract with Rosneft, one of Russia’s major oil and gas companies, to provide construction support services for Rosneft’s Vankor project in western Siberia, a new oil field somewhat comparable to the Kuparuk River field on the North Slope.

Rosneft plans to begin production at Vankor in 2008 and to reach full production by 2012, the company said in its June 2006 company magazine.

Veco is an oil and gas services and construction contractor headquartered in Anchorage. The company specializes in cold weather and remote petroleum support services and has extensive experience on the Alaska North Slope, which has a climate somewhat similar to northern Sakhalin.

Sakhalin is an island north of Japan that is off Russia’s Pacific coast. Western oil and gas companies like Exxon Mobil, Shell and BP are engaged in multi-billion-dollar exploration and development projects. Because of the cold climate of the region, the major oil companies have contracted with many Alaska contractors like Veco because of their arctic expertise.

Veco is also building a seven-story, 7,000-square-meter office building in Yuzhno, the major city on Sakhalin, which it will partially occupy while making other space available for lease. “In addition, we are in the planning stages of constructing a operations base in Yuzhno, which will include offices, tools and equipment storage, maintenance facilities and a fabrication shop,” according to Dave Hopkinson, Veco’s manager for its Sakhalin projects.

Tim Bradner can be reached at [email protected]. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

1 Comment on “Alaska Journal of Commerce: Veco expands its reach in Russia”

  1. #1 sostenes g macha
    on Dec 29th, 2006 at 05:39


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