The market is tight right now and the head of Exxon's Sakhalin project Neil Duffin has suggested he does not believe the market will be there by 2008.
said the group did not plan to switch from its initial idea to build a gas pipeline to Japan to the idea of liquefied natural gas supplies, despite its rival's success.
Japan is the world's largest LNG importer and the pipeline project would become the first of its kind to supply gas directly rather than LNG in tankers."There are some parts of Japan, where there is no LNG market and if we work well we can secure consumers to have the pipeline built," said Duffin
Sakhalin-1 project, which also includes Japanese group SODECO, India's ONGC and Russia's state-owned oil firm Rosneft, contains 2.3 billion barrels of oil and 17 trillion cubic feet of gas.
The oil segment of the $12-billion project, which is being developed under a rare production sharing agreement with Russia, is more advanced than the gas segment with the first oil due to be produced by early 2006.Duffin
also said the group aimed to produce 250,000 barrels per day after it launched the fields and export the bulk of output from Russia's Far Eastern terminal of DeKastri to Japan, Korea and other far-eastern markets.