Sakhalin-2 LNG plant: history of creation, line of business

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-02 13:48

When the phrase "LNG plant on Sakhalin" catches the ear, more questions arise in the head than answers. What is this SPG? A picture from a superhero movie appears, where something very dangerous is being produced in a secret area. A brief educational program for those who equally perceive a textbook on physics in Russian and in Chinese, who are not able to distinguish the molar mass from the mass of a molar, but are still trying to figure it all out.

Where does natural gas come from?

Natural gas is a colorless and odorless substance, consisting of compounds of carbon and hydrogen atoms. The basis of natural gas is methane - CH₄, with some impurities - ethane С₂Н₆ , propane C₃H₈, butane C 4_Н10_{, as well as nitrogen, carbon dioxide and hydrogen sulfide.}

There are two theories about the appearance of naturalgas in the bowels of the earth. Supporters of one believe that oil and gas were originally incorporated into the structure of the planet, like other minerals. And according to the second, hydrocarbons are the remains of organisms that became extinct 250 million years ago in the Paleozoic era, which were influenced by bacteria, temperature and pressure.

Physics for dummies, or what is LNG?

For most substances in nature, with a change in temperature and pressure, a change in the distance between molecules and a transition from one state of aggregation to another: from gaseous to liquid, from liquid to solid and back.

LNG stands for Liquefied Natural Gas. Adding two plus two, we get that LNG is a substance transferred from a natural gaseous state to a liquid state by changing external factors: temperature and pressure. To put it very simply, this is how LNG is produced on Sakhalin.

Why liquefy gas?

Methane is produced on Sakhalin CH_{4, impurity content – 2%. Such a substance in the liquid state occupies a volume six hundred times less than in the gaseous state. Accordingly, it is much more convenient to use it both for transportation and for subsequent storage in countries whose geographical location does not allow the construction of gas pipelines.}

For example, the supply of LNG from Sakhalin to Japan is not a whim, but a necessity: the high seismic activity of the region forces gas to be shipped by sea and excludesthe possibility of building a gas pipeline branch.

Mine development and production sharing agreements

In the 1980s, the Russian Federation discovers thirty hydrocarbon deposits on the continental shelf off the northeastern shores of Sakhalin Island in the Far East. Since 1996, the state has been concluding several production sharing agreements within the framework of projects for the development of offshore fields, united under the common name Sakhalin. Exxon Neftegaz Limited becomes the operator of the Sakhalin-1 project, and Sakhalin Energy assumes the obligation to develop the Sakhalin-2 project. A total of nine projects were planned, but only the first two were developed.

A production sharing agreement is concluded between the state and the investor company, which undertakes, in exchange for the exclusive right to develop subsoil, to invest the necessary funds and independently develop deposits. The agreement also establishes a special regime of taxation, conditions for the exploration, development and processing of hydrocarbons. At the same time, the ownership of the resources remains with the state, the company pays 32% as income tax and 6% roy alties - monetary compensation for the use of natural resources.

Sakhalin-2 project and LNG plant

In 2009, Russia's first liquefied natural gas plant was opened as part of the Sakhalin-2 project. The Prigorodnoye production complex is located in the non-freezing part of the Sea of Okhotsk - onshore of the Aniva Bay and 15 kilometers from the city of Korsakov.

The plant has two production lines that are capable of producing up to 4.8 million tons of liquefied natural gas per year - each. LNG from Sakhalin is supplied to Japan, South Korea, North America.

For Russia, the opening of the plant was a real technological breakthrough, opened energy markets that were previously inaccessible. The production complex currently produces only 4.5% of all LNG in the world, but the gas is scheduled under contracts for the next twenty years. And the good news is that there is room to increase production capacity, there is demand. The problem is that there are not many hydrocarbons left on the Sakhalin-2 project. Enough to fulfill contracts, but not to make new ones.

LNG production technology

Natural gas is produced on special drilling production platforms of the Sakhalin-2 project, installed on the continental shelf in the Sea of Okhotsk.

From the Lunskaya-A field, oil, gas and condensate are delivered to the Onshore Processing Facility, located at the exit point of the offshore gas pipeline from the platform, in the northeast of Sakhalin. The OPF cleans natural gas, prepares it for transmission via an onshore gas pipeline to an LNG plant, as well as to an oil export terminal. At the LNG plant of the Sakhalin-2 projecttwo production lines were installed, where natural gas is post-treated, and then liquefied natural gas is produced using the double mixed refrigerant technology developed by Shell. The technology is specially developed taking into account the unstable and rather cold climate of Sakhalin Island.

LNG after liquefaction enters special storage tanks and awaits shipment to gas carriers. Shipment takes place through a specially built berth to receive LNG tankers with a capacity of up to 145,000 cubic meters.

Production expansion

The operator of the Sakhalin-2 project is 50% + 1 share owned by PJSC Gazprom. Therefore, Gazprom has big plans to expand LNG production, but first it is required to start developing fields as part of the Sakhalin-3 project. The operator of the Sakhalin-3 project is Gazprom Dobycha Shelf LLC, owned by PJSC Gazprom.

Processing gas produced from the Sakhalin-3 project into LNG is planned at an additional process line. The line and field development are currently in the planning and design phase. The expansion of production is necessary in order to increase the sales market and meet the growing needs of energy consumers. In addition, LNG production is environmentally friendly, liquid gas is easilycan be transported and stored, shipping by sea allows cooperation with hard-to-reach regions of the planet and provides an opportunity to compete with Qatar.

Despite the modest production volume, compared to the same Qatar, Sakhalin Energy's LNG plant was considered the most efficient LNG plant in the world until 2017.

Interesting facts

Sakhalin Energy employs a truly diverse and multinational team. But at the LNG plant on Sakhalin, vacancies do not fly like hot cakes, because only a true professional and the best in their field can apply for a position in such a high-tech production. There are very few specialists holding engineering positions from Russia - the problem is a lack of experience and a low level of English proficiency: most negotiations, meetings and correspondence between employees are conducted in English. Nevertheless, constant work is being done to train Russian personnel and improve their skills.

The Russian Federation has so many minerals and ways to sell products, got absolutely free of charge, that it will take a long time to get off the energy "needle". The LNG plant only increases dependence. Another thing is that, having a source of permanent income received literally from thin air, one should think for a long time about the issues of diversifying the economy and developing business, tourism and creating attractive investment conditions separately fromhydrocarbons. But in Russia, until the thunder breaks out, the peasant will not cross himself.