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RIA Novosti (Moscow): Gazprom wants no more than 25% in Sakhalin II – dep. minister

20:35 | 06/ 09/ 2006 

ST. PETERSBURG, September 6 (RIA Novosti) – Russian energy giant Gazprom does not want more than a 25% stake in the Sakhalin II project in the Far East, a deputy economics minister said Wednesday.

Speaking to reporters from Japan on the sidelines of a Russian-Japanese investment forum, Kirill Androsov said: “We are not aware of Gazprom’s plans to raise [the negotiated] stake to more than 25%.”

Reporters had suggested Gazprom might seek to take over shares from Mitsui and Mitsubishi, the Japanese companies that hold 25% and 20% of shares respectively in the Sakhalin II project off Russia’s Pacific coast.

British-Dutch Shell owns another 55% stake in the project, and the three companies form Sakhalin Energy, which operates the project under the 1994 production-sharing agreement. The project comprises an oil field with associated gas, a natural gas field with associated condensate production, pipeline, a liquefied natural gas plant and an LNG export terminal.

The total reserves of the two fields are 150 million metric tons of oil and 500 billion cubic meters of natural gas.

Androsov confirmed that Gazprom was in talks with Shell over exchanging a 25% share block in Sakhalin II for assets in a massive West Siberian gas project.

Russia’s environmental protection agency, Posprirodnadzor, said Tuesday it was taking legal action to overturn the conclusions of a state ecological probe conducted in 2003. The agency also said Sakhalin Energy had failed to submit timely reports on all prospecting and geological work.

The court move is the latest problem for Sakhalin Energy Investment Company. Environmental concerns earlier in the year prompted the European Bank of Reconstruction and Development to withhold a loan for pipeline plans.

Shell suspended pipe-laying operations for a liquefied natural gas plant after the environmental agency complained about the landslide threat.

Some analysts have interpreted the environmental watchdog’s decision as a form of pressure on the British/Dutch company to conclude a deal with Gazprom.

If a court meets the agency’s demands, all activities under the Sakhalin II project will be prohibited until the state ecological probe issues new conclusions and all violations of environmental legislation are eliminated.

The difficulties put in jeopardy contracts with Japan, South Korea, and the United States on LNG supplies, which are due to be launched in 2008. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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