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Sakhalin Energy to build 3rd stage of LNG plant in Sakhalin

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YUZHNO-SAKHALINSK, October 18 (RIA Novosti) - Russia's sole liquefied natural gas plant being built as part of the Far East Sakhalin II will increase annual capacity by 7 million metric tons, the regional governor said Thursday.

"The working group of Sakhalin Energy [the project operator] has started to draft a plan to build the plant's third stage," Alexander Khoroshavin said.

The Sakhalin II project, with an estimated cost of $20 billion, is designed to produce LNG at two fields in southern Sakhalin. After Russian energy giant Gazprom bought a 50% stake plus one share in the project for $7.45 billion in late 2006, Royal Dutch/Shell, Mitsui and Mitsubishi now own 27.5%, 12.5% and 10%, respectively.

The LNG plant currently has two units with total capacity of 9.6 million metric tons per year and is expected to be commissioned in 2008 after start-up operations are over.

The bulk of the gas under the Sakhalin II project has already been bought out for 25 years in advance by Japanese, U.S. and South Korean companies.

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