ExxonMobil parks Far East LNG project as part of Russian draw-down
ExxonMobil has suspended the development of its Far East LNG Project in Russia as part of its phased withdrawal in response to Moscow's actions in Ukraine.
The suspension casts further doubt on the 6.2mn metric tons/yr facility's future, after ExxonMobil said on March 2 it would divest its Russian assets and stop investing in the country.
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Far East LNG was set to be constructed as part of Sakhalin-1 investment project, which ExxonMobil operates in partnership with Russian oil giant Rosneft. The project was Rosneft's only active LNG development and comes as it seeks to expand the natural gas share of its portfolio.
Russian president Vladimir Putin instructed his government to help Rosneft export 10bn m3 of gas to European markets, and the company had established a potential export alliance with its 20% shareholder BP. Now that BP is offloading its shareholding in response to Ukraine, it is unclear whether the alliance can be sustained, undermining an MoU for strategic gas cooperation that the two companies had signed in 2017.
Sakhalin-1 produced around 230,000 barrels/day of oil last year as well as more than 12bn m3 of gas, according to Russia's energy ministry. The Far East LNG appendage would have given the first Sakhalin field its own export liquefaction plant in line with Gazprom's Sakhalin-2 project on the same island, which launched its first LNG batch in 2009.
But the progress toward Far East LNG's envisaged 2027 launch date has been slow. Few updates have been provided since ExxonMobil awarded a front-end engineering and design contract to TechnipFMC and Japan's JGC in 2020. Exxon's FEED design would have also involved running gas pipelines to expand output at Sakhalin-2's LNG facility, broadening the latter's access to gas for export.