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UpstreamOnline: Sakhalin 2 under renewed pressure

Ministry releases results of latest government check-up on project

8 September 2006

RUSSIA’S Natural Resources Ministry has increased public pressure on Shell-led Sakhalin Energy Investments, operator of the Sakhalin 2 oil and gas development, by releasing the results of its August check-up on the project.

At the same time, the ministry’s supervisory branch, Rosprirodnadzor, said that it has filed an appeal in the Presnensky regional court in Moscow, asking it to revoke the 2003 government approval of the project’s environmental review.

The ministry’s check-up was completed on 21 August. However, it only released a statement on its website at the end of last week, surprising observers who thought recent criticism of Sakhalin 2 would gradually fade away.

The ministry reiterated its earlier accusations that Sakhalin Energy exceeded Russian pollution levels last year over the amount of waste water dumped into the sea from the company’s Molikpaq offshore platform.

The ministry also said that Rosprirodnadzor inspectors found problems in the construction of part of Sakhalin 2’s onshore oil and gas pipelines.

A local sub-contractor allegedly caused a mudslide and failed to install anti-erosion and soil pro¬tection facilities while laying the pipeline.

If the Presnensky court revokes the 2003 approval, Sakhalin Energy will have to halt construction activities under the second phase of the project, which is 75% complete.
During this phase, Sakhalin Energy is set to install two more offshore platforms, build offshore and onshore oil and gas pipelines, as well as finish its large liquefied natural gas plant and two export terminals.

One of the terminals is for oil and the other is for LNG, with shipments scheduled to begin in 2007 and 2008 respectively.

Sakhalin Energy said in a statement that it has seen Rosprirod-nadzor’s press release but that it does not yet have any information “as to whom may be named as the defendant of this case”.

The company has also been “surprised by the fact that minor deviations on this large scale integrated oil and gas project are now being portrayed as a basis for challenging the approval of the environmental review”. “The documents received by the company as a result of a num¬ber of recent Rosprirodnadzor audits make it clear that none of these deviations can serve as credible grounds for invalidation of the approval of Sakhalin 2 phase two,” it said.

Meanwhile, the ministry said it will carry out a thorough check of Sakhalin Energy’s operations in September and October by sending a special team of inspectors from Moscow. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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