Rosneft and ExxonMobil are progressing with a proposed liquefied natural gas (LNG) project on Sakhalin Island in the Russian Far East with the start of the contractor selection process for design and engineering work.

For the remainder of this year and 2014, the two firms plan to complete design work, including selection of a liquefaction technology and identification of major equipment requirements, according to Rosneft.

During the same timeframe, the companies plan to perform engineering surveys and develop front-end engineering and design (FEED) and Russian Proyekt documentation for the LNG plant, as well as hydro-technical marine facilities and a source gas pipeline.

Initial capacity of the LNG project on Sakhalin Island is expected to be 5 million tons per year, subject to further expansion. The liquefaction plant, the launch of which is scheduled for 2018, will receive natural gas from Rosneft’s reserves in the Russian Far East and other Sakhalin gas reserves.

Commenting on the recent progress, Rosneft President Igor Sechin said: “Rosneft’s offshore-license areas hold massive hydrocarbon-resource potential, most of which is natural gas. Given the fact that offshore fields are difficult to reach and are not connected to the national-gas supply system, the most efficient way to monetize these resources is to liquefy the natural gas and sell the LNG in export markets.”

Rosneft said special attention during the design phase will focus on minimizing environmental impact to the unique ecosystem of the Sakhalin Island and encouraging development of local infrastructure.

A joint team of experts from Rosneft and ExxonMobil will apply best practices from both companies to complete the project in the shortest possible time period, according to the announcement.

“We are optimistic about prospects for LNG export liberalization in Russia in the near term and are pleased to announce that we have entered an important stage of the LNG project jointly with our strategic partner ExxonMobil,” Sechin said. “I would also point out that construction of the LNG plant and essential infrastructure will rely on the full resources of the Russian manufacturing and construction industries (primarily those based in the Far East) applying international best practices.”