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UpstreamOnline: Ministry hits out at Sakhalin pipes (“Ministry has lambasted the Shell-led Sakhalin 2 project”)

Preliminary report slams pipeline construction by project operator

By Upstream staff

Russia’s Natural Resources Ministry has lambasted the Shell-led Sakhalin 2 project after releasing a preliminary report from an investigation into the project.

Deputy Minister Oleg Mitvol said last week that the ministry is planning to file a court appeal in a bid to revoke the 2003 governmental approval of the project, which aims to develop the Lunskoye and Piltun-Astokhskoye fields near Sakhalin island off Russia’s far east.

The project proposes piping gas from Lunskoye, in the north of the island, 800 kilometres to the world’s largest liquefied natural gas plant, which is being built at Prigorodnoye, in the south of the island, with a capacity of 9.6 million tonnes per annum of LNG.

Oil from Piltun-Astokhskoye in the Okhotsk Sea will also be piped to an export terminal at Prigorodnoye to enable year-round production from the field, which is currently restricted to the May-December ice-free period.

However, Mitvol has criticised the building of the pipelines, and quoted scientists from the far eastern branch of Russia’s Academy of Sciences who claim that the threat from potential mudslides is so great that the pipelines may only be able to work for less than a year at a time without having to be shut for repairs.

The pipelines have already been targeted by local and international environmentalist groups that claim Russian contractors, hired by project operator Sakhalin Energy, have damaged fish breeding grounds and polluted more than 1000 small rivers and springs on the pipeline route.

A Sakhalin Energy spokesman in Moscow said the ministry’s investigation will not be complete until 20 August and so the company has not received any official documents detailing the ministry’s criticism and objections.

The ministry has placed a note on its website reporting that, on 3 August, Mitvol ordered the ministry’s supervising department Rospridornadzor to start checking whether Sakhalin 2 pipelines comply with Russia’s construction and environmental regulations.

The website also displayed 15 pictures that the ministry claims illustrate “dangerous sections of the completed Sakhalin 2 pipelines”.

According to some observers in Moscow, the ministry’s decision to make public its concerns over Sakhalin 2 before the investigation closes may be part of Natural Resources Minister Yuri Trutnev’s efforts to promote a positive image of the ministry caring for Russian state interests.

At the end of last month, Trutnev threatened to withdraw field licences from Russian-UK joint venture TNK-BP because of a “large number of idle wells”.

There have also been suggestions in Moscow that Russian President Vladimir Putin is considering dismissing Trutnev and revamping the ministry.

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