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April 5, 2022

ExxonMobil stops LNG project in Russia’s Far East

The project is said to have an annual production capacity of more than six million tonnes.

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US-based ExxonMobil has stopped its Russian Far East LNG project, reported news agency Interfax, citing a Russian governor.

Khabarovsk region Governor Mikhail Degtyaryov was quoted by the news agency as saying, on radio station Komsomolskaya Pravda: “The project that the Americans, Exxon, announced in the port of De-Kastri, with a pipeline from Sakhalin, it’s been frozen until a further decision by them.

“There is gas, there’s a coast, there are labour resources and investment, but they’re freezing the project for political reasons.”

The latest move comes a month after the US-based energy firm announced its plans to exit its oil and gas operations, estimated to be worth more than $4bn, and halt new investment in Russia.

The decision to exit Russian operations follows Western sanctions on the country, in the wake of Moscow’s military action against Ukraine.

As part of the Sakhalin-1 consortium, led by Russian energy giant Rosneft, Exxon had planned to build the Far East Liquefied Natural Gas (LNG) project.

The project is designed to have an annual capacity of more than six million tonnes.

ExxonMobil owns a 30% stake in the Sakhalin-1 consortium while Japan’s SODECO holds a 30%, interest. India’s ONGC has a 20% stake and Rosneft holds a 20% interest.

As per the estimates, the project’s fields have reserves of 307 million tonnes of oil and 485 billion cubic metres of natural gas.

ExxonMobil has made a final investment decision for the $10bn Yellowtail development project in the Stabroek block, offshore Guyana, following government and regulatory approval.

The project will include six drill centres, as well as up to 26 production and 25 injection wells.

Starting in 2025, the project is expected to produce approximately 250,000 barrels of oil per day.

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