VECO and its Russian partners, Eastern Construction Co. and SMNM (SakhalinMorNefteMontazh), are nearing completion of a major civil support contract for the Exxon Mobil-led Sakhalin 1 project.

The joint-venture has now landed a major maintenance contract for Sakhalin 1 that will keep the partners busy looking after the oil and gas production platform, onshore facilities and pipelines for the Sakhalin 1 consortium.

VECO also recently landed a major contract with Rosneft, one of Russia's major oil and gas companies, to provide construction support services for Rosneft's Vankor project in western Siberia, a new oil field somewhat comparable to the Kuparuk River field on the North Slope.

VECO Corp. is an oil and gas services and construction contractor headquartered in Anchorage. The company specializes in cold-weather and remote petroleum support services and has extensive experience on the Alaska North Slope, which has a climate somewhat similar to northern Sakhalin.

Dave Hopkinson, vice president of VECO Sakhalin and the project manager, is proud of work done on the project by the U.S. company and its Russian partners. "Our achievements have contributed significantly to Exxon Mobil bringing first oil production online one month ahead of schedule," Hopkinson said.

Sakhalin is an island north of Japan that is off Russia's Pacific coast. Western oil and gas companies like Exxon Mobil, Shell and BP are engaged in multi-billion-dollar exploration and development projects. Because of the cold climate of the region, the major oil companies have contracted with many Alaska contractors like VECO because of their Arctic expertise.

Hopkinson said completion of the civil support for Sakhalin 1 is about one month away. The project has been underway for about two and a half years, and involved the installation of 3,270 piles to support major process modules and the movement and the placing of 21,200 cubic meters of concrete.

Installation of well sites and the supporting flowlines were also done by VECO. Some of this required welding of 3-inch-thick wall pipe, which was challenging. ECCV also employed automatic welding machines on the project, the first use of the technology on Sakhalin.

At the peak of VECO's project, about 1,000 were employed in construction. Ninety percent of the employees on the project were of Russian nationality, Hopkinson said.

ECCV's contract included the support and maintenance for approximately 750 units of mobile construction equipment that were involved in the construction effort. The company also coordinated the purchase and import of much of the equipment in a transaction worth more than $30 million.

ECCV constructed a fast-track 17-kilometer, 24-inch gas pipeline and metering station that has allowed the first gas sales from Sakhalin 1 and is also providing support for a 600-kilometer, 24-inch crude oil pipeline that will carry oil from offshore platforms across Sakhalin Island to an export port on the Russian mainland.

A steel fabrication plant owned and operated by the joint-venture partners provided important support during the Sakhalin 1 project construction. About 2,300 tons of structural steel frames were fabricated in the facility and moved to the project site.

Hopkinson said he is particularly proud of its safety record on the project, which involved 3.9 million man-hours of work without a day lost to injury. This earned the company Exxon Mobil's Contractor of the Year Safety Award for 2006. The award covers all of Exxon Mobil's worldwide operations.

The operations maintenance and support contract for Sakhalin 1 awarded to ECCV was effective Aug. 1 and includes support for one offshore platform, onshore process facilities, pipelines and a marine terminal. The work will require a permanent staff of approximately 200, but that number will increase periodically as major maintenance projects are done on facilities.

VECO and its Russian partners are confident of the industry's future there, Hopkinson said. ECCV is now bidding on other oil and gas projects in the Sakhalin region.

VECO is now building a seven-story, 7,000-square-meter office building in Yuzhno, Sakhalin, which it will partially occupy, making other space available for lease. "In addition, we are in the planning stages of constructing an operations base in Yuzhno, which will include offices, tools and equipment storage, maintenance facilities and a fabrication shop," Hopkinson said.

Tim Bradner can be reached at