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Meeting with Sakhalin Region Governor Valery Limarenko

February 27, 2023, Novo-Ogaryovo, Moscow Region

Vladimir Putin held a videoconference working meeting with Sakhalin Region Governor Valery Limarenko during which the Governor briefed the President on the region’s development.

First of all, the Governor spoke about how Sakhalin was supporting the families of the mobilised soldiers and described the kind of material and everyday assistance they have been receiving. In addition to this, the region has been helping the sponsored Shakhtersk district of the Donetsk People’s Republic, home to 70,000 people, restoring electricity and water supply, and drilling wells. A three-year sponsorship programme has been developed.

Next Valery Limarenko talked about the problems of the Sakhalin Region: dilapidated housing, the quality and availability of medicine, low level of gas supply and transport accessibility.

As for the dilapidated housing, the Governor said that it emerged because temporary housing was built for the development of oil fields. The region completed the first programme to solve this problem and launched a new one for the construction of 720,000 square metres. As for medicine, the number of patient appointments has been increased by 30 percent; a patient gets to see a general practitioner within two days, and a specialist, within seven days. The Governor monitors this via an information system. In the course of his work, 15 diagnostic centres have been opened, and the functioning of high-tech equipment such as CT and MRI scanners among other things has been effectively organised; and medicine is fully digitalised. Problems with clinical examination in remote areas have been solved with the help of 47 automobile high-tech medical complexes.

On the issue of gas supply provision, Mr Limarenko noted that Sakhalin was a capital of gas production. LNG is produced there, but all these pipes bypassed people, and access to gas infrastructure was less than 20 percent. Over three years, this figure has been raised to 55 percent, and work continues. There are agreements with Gazprom that gas supply should reach 100 percent by 2025. Together with Gazprom, small-tonnage LNG production is being created to supply the Kuril Islands.

The problem of affordable transport is also being addressed. Thanks to the Presidential instructions, Aurora has become the Far East Aviation Company, and subsidised flights are available. The number of flights to Moscow has increased by 30 percent. Sakhalin has become the most accessible territory: you can get there at any time, hold major events and so on. The Governor spoke about railway development and road construction. Sakhalin’s main road from south to north, to Okha, where oil and gas are produced, is now under federal ownership. The road will be fully asphalted between 2023 and 2024. But problems with local regional roads have yet to be solved. Only one-third of the roads are paved, while the rest are unpaved. This is a problem that has not yet been resolved.

Regarding maritime traffic, there are two new modern vessels on the Kuril route. Given the work of aviation, the Kurils have become totally accessible. The problem has been solved. Ferries connect them to the mainland. There are several ferries, and another large, serious ferry has recently been built. Valery Limarenko has asked the President to issue an instruction addressing the financing of operation of this ferry.

As for the regional economy as a whole, the Governor said that the number of people employed in the economy over the past three years has increased by 9,000, which is 3.5 percent. Unemployment has dropped from 0.6 percent to 0.4 percent, with just over 1,000 unemployed and just over 4,000 vacancies, which offer good pay and conditions. Moreover, high-tech sectors will add 15,000–20,000 jobs. The region has created a programme specifically for relocating people, which provides not only for jobs, but also for housing, benefits and so on.

But there's also a problem area, the Governor said. The gross regional product is 83 percent of the 2021 figure. This decline is due to the operation of Sakhalin-1. Sakhalin-2 has not only adjusted quickly to new conditions of work but is also exceeding its production target by 15 percent. They set up services to replace operations previously performed by foreign companies that left. A technopark is being built, where housing construction is underway for resident companies. In fact, it will be a new industrial area with new technologies. At Sakhalin-1, similar processes took place six months later. Oil production practically stopped in May and gas production in September. More than half of the annual plan was lost, and so the region lost 49 billion rubles.

According to the Governor, all other economic sectors are growing, in particular the processing industry and fishing by 20 percent, agriculture and construction, by 3 percent. The economy would be on the rise in general if not for the blow against Sakhalin.

Valery Limarenko connects the island’s prospects with the fact that Sakhalin-1 and Sakhalin-2 would begin operating as before, and Sakhalin-3 would be added for the Yuzhno-Kirinskoye field. Up to 10 billion cubic metres of gas will be produced.

The Governor considers the fact that Gazprom is looking into the possibility of processing gas condensate on Sakhalin a very important prospect; feasibility studies have already been completed, and the investment justification stage is beginning. Engineering could start by the middle of the year. This facility would provide jet fuel, and then the Far Eastern Aviation Company would get access to cheap fuel and gain a competitive advantage against Japan and China in terms of transportation. It would be possible to launch large, serious transport service at the Sakhalin airport, and there would emerge another sound business. In addition, there would be more motor fuel, which is a social factor.

According to the Governor, there are also several dozen investment projects to diversify the economy. A goal has been set to make half of the region’s economy directly independent from the primary industry by 2030.

Valery Limarenko asked the President about issues that require support from the head of state, such as funding for the construction of a runway. The runway should be put into operation by 2025. The next issue is the Port of Korsakov, which the Governor called the key to the development of Sakhalin. As soon as there is a deep-water harbour, it would be possible to start processing oil and gas produced there. And sales markets are only 30 kilometres away, in Japan. This would be a new direction for development, and then logistics businesses would become as important as oil and gas. In addition, it could become a key port on the Northern Sea Route.

According to the Governor, processing of fish, currently being transported to Busan, South Korea, can be organised at the Korsakov port; also, ships of the Sakhalin fleet, the largest in the Far East, undergo maintenance there. The companies Antey and Gidrostroy plan to invest in fish processing facilities at the Korsakov port. Deepening the port harbour and repairing its hydraulic installations are crucial tasks. A project is ready, and 6,5 billion rubles are needed in the next couple of years: the money is not big, but it solves a very important state goal. Valery Limarenko said this issue had already been discussed with the Prime Minister.

The energy sector of the Kuril Islands was the next issue. Mr Limarenko said the power sector requires modernisation due to the fish processing industry’s plans to build four new processing plants, with a large number of lots prepared for the extraction of mariculture. There also are companies that want to build hotel complexes. The modernisation programme is supported by the Ministry of Energy.

The Governor also raised the topic of education due to the fact that ongoing investment projects create new jobs and require personnel. A land lot has been selected, and a project to build a new campus is planned. The Governor made a specific proposal on this issue and asked for the President’s support. After discussing the details of this proposal, Vladimir Putin agreed to put his resolution on the document developed in the region.

Vladimir Putin also suggested that the Governor should discuss all his proposals regarding construction, transport system, and airport with his colleagues in the Government.

The President also pointed out the high level of oncological disease on the island, which is more than 30 percent higher than Russia’s average, and said that this problem must be addressed, meaning that there is a corresponding large-scale programme to help with this. Vladimir Putin recommended joining the federal programmes to combat cancer.

In general, the President noted that the situation in the region was developing in a positive way, although, of course, there are enough problems, like everywhere, but the pace of progress was good. He thanked the Governor and expressed hope that everything would continue to develop in the same vein.

Vladimir Putin stressed that Sakhalin has very good and even great potential for development, and that everything will be done to support the region.

February 27, 2023, Novo-Ogaryovo, Moscow Region