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Troubled Sakhalin Energy Project Faces New Environmental Surveys

While the energy companies concerned have expressed dismay at the action on Sakhalin by Russian authorities, international environmental groups including Greenpeace and the Worldwide Fund for Nature have applauded the moves.
by Staff Writers
Moscow (AFP) Sep 25, 2006
Russia's natural resources ministry said Monday it had ordered a new round of environmental inspections at a giant Shell-led energy project that has already had its environmental permit revoked. The inspections will take place at worksites for Sakhalin-2, a 20-billion-dollar (15.8-billion-euro) oil and gas project off Russia's Pacific coast that has come under pressure from Russian authorities for alleged environmental violations and cost overruns.

A number of ministries, including the natural resources and emergency situations ministries, will conduct the inspections from September 25 to October 20, the natural resources ministry said in a statement.

"We're not talking about revoking licenses as a result of this inspection," Natural Resources Minister Yury Trutnev was quoted in the statement as saying.

Last week, the ministry withdrew a key environmental permit for Sakhalin-2, the world's largest private energy project, signalling that work should be halted.

The decision provoked protest from European and Japanese authorities and was widely interpreted by analysts to be linked to Shell's doubling of the project's cost projection last year, which brought bitter complaint from Russian authorities.

Trutnev said, however, that the new inspections had only environmental motivations.

"We don't have the goal of influencing the project's economic terms," Trutnev said. "We are worried about information from international and Russian environmental organizations ... about environmental problems that have appeared in the course of Sakhalin-2's development."

While the energy companies concerned have expressed dismay at the action on Sakhalin by Russian authorities, international environmental groups including Greenpeace and the Worldwide Fund for Nature have applauded the moves.

Shell owns a 55-percent stake in Sakhalin-2, and Japanese firms Mitsui and Co and Mitsubishi Corp hold the remainder.

Source: Agence France-Presse

related report

Sakhalin II To Undergo Environmental Inspection
Moscow (RIA Novosti) Sep 25 - Russia's environmental watchdog has ordered an inspection on the island of Sakhalin off Russia's Pacific coast in the region of the massive Sakhalin II energy project, the Ministry of Natural Resources said Monday. According to the World Wildlife Fund Russia, dead crabs and fish appeared September 21-22 on a strip of 10 kilometers (6 miles) along the coast of the Sea of Okhotsk, where Shell-led Sakhalin Energy is building facilities for Sakhalin II.

A ministry news release cited Minister Yury Trutnev as saying after a meeting with Sergei Sai, head of the Federal Service for the Oversight of Natural Resources, that the second stage of the project would only be checked for compliance with environmental laws and that the inspection would not involve economic issues.

"The issue of revoking the license is not under consideration," the minister said.

The $20-billion Sakhalin-II project comprises an oil field with associated gas, a natural gas field with associated condensate production, a pipeline, a liquefied natural gas plant and an LNG export terminal. The two fields hold reserves totaling 150 million metric tons of oil and 500 billion cubic meters of natural gas.

Environmentalists have consistently raised concerns over Sakhalin II, and the Ministry of Natural Resources annulled its approval of a 2003 environmental study of the project last Monday after prosecutors protested the original endorsement. The move put in jeopardy contracts with Japan, South Korea and the United States on supplies of LNG, due to go into effect in 2008.

The federal agency said the inspection, to be held from September 25 until October 20, would cover forest reserves, water facilities adjacent with a pipeline, and the construction of a terminal in Aniva Bay. Particular attention will be paid to recommendations in the state environmental study of the Piltun-Astokhsky and Lunsky license areas, it said.

Sakhalin Energy comprises Shell Sakhalin Holding (55%), Mitsui Sakhalin Development (25%) and Mitsubishi-controlled Diamond Gas Sakhalin (20%).

Source: RIA Novosti

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