The ExxonMobil-led venture’s first flows to mainland Russia began in October last year but it will begin sending crude to Japan in mid-August, according to a recent Reuters report.
The project, north of Japan, will allow the country to reduce the amount of oil it buys from the Middle East, where threats of supply disruption have pushed prices higher.
Currently, the Middle East accounts for about 90% of Japan’s oil imports and Dubai and Oman crude oil are used to set prices in North Asia.
This year, Sakhalin-1, which has recoverable reserves totalling 2.3 billion barrels, will raise production fivefold to 250,000 bbl a day.
Expectations that Sakhalin oil will become Asia’s home-grown benchmark are increasing because it is a North Asian grade that could compete against oil dominantly shipped from the Middle East into Asia, Nippon Oil chairman Fumiaki Watari told Bloomberg.
