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AFX News Limited: Project costs on Shell’s Sakhalin-2 could rise to 28 bln usd – report

10.22.2006, 11:40 AM

LONDON (AFX) – Costs on the politically sensitive Royal Dutch Shell-led Sakhalin-2 gas project in Russia could rise to 28 bln usd, the Observer reported citing a leaked Russian government report.

The report by the mineral services division of the Russian Ministry of Natural Resources states that operational costs will rise from a predicted 15 bln usd in 2003 to 28 bln usd.

The Observer also reported, citing unnamed Russian sources, that a deal could be struck soon to give Russian state energy firm Gazprom a stake of about 25 pct in the Sakhalin project’s Liquefied Natural Gas (LNG) plant which intended to supply gas to eastern Asia and America.

This would mean that Shell’s majority share evaporates.

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