Osaka Gas of Japan has signed a binding heads of agreement with Sakhalin Energy Investment Co. (SEIC) covering the delivery of 200,000tns of LNG per annum from the Sakhalin 2 project export terminal in the Russian Far East. Under the agreement the LNG will be supplied from the two-train Sakhalin 2 plant on Sakhalin Island for a period of 23 years commencing in 2008. The deal with Osaka Gas represents the latest and last agreement for term sales of LNG from Sakhalin 2, which will be Russia’s first LNG plant to go into operation when it is commissioned in 2008. Sales of 98% of the output of the two 4.8 million tonnes per annum trains have now been formalised, effectively selling out the entire capacity of the foundation project. Nine Japanese utilities have signed up for 60% of the Sakhalin 2 output, while the remainder will be shipped to Korea and the new Costa Azul terminal being built on Mexico’s Pacific Coast near the US border. Construction work on the Sakhalin 2 LNG plant is now 95% complete and the first cargo is due to be loaded in the third quarter of 2008. The project partners are now investigating the possibility of developing the second phase of Sakhalin 2 with further trains to enhance the role of Russia as a provider of LNG to Asia and the Pacific Basin areas.
