Kommersant: Moscow district court refuses to consider lawsuit

The Presnensky District Court in Moscow has refused to consider a lawsuit filed by the Federal Service for the Oversight of Natural Resources against the Natural Resources Ministry to enforce the annulment of a 2003 environmental review for the Sakhalin II project.

The Natural Resources Ministry, which has promised to decide the project’s future October 25, is therefore firmly in control.

Dmitry Kolosov, head of the service’s legal department, said the court has turned down the lawsuit because it believes the agency had no right to file it.

Lawyers from the Natural Resources Ministry insist the environmental watchdog is an inappropriate claimant.

If the court upholds the demands of the environmental watchdog, all activities under the Sakhalin II project will be suspended. It means that construction of new pipelines and a liquefied natural gas plant will be delayed.

Initial gas deliveries are to begin in mid-2008. However, new deadlines will have to be set, because it will take at least a year to coordinate the new documents. Sakhalin Energy, which operates the project, estimates possible losses at $10 billion.

The Natural Resources Ministry, which insists that the court turn down the lawsuit, did not use the opportunity to decline responsibility for suspending the environmental review.

Officials apparently fear that the court will uphold the claimant’s lawsuit and refuse to declare the environmental review unlawful. The Natural Resources Ministry would then have faced a difficult situation.

“This looks like blackmail, because the review can still be annulled at any time,” Dmitry Tsaregorodtsev, an analyst with FIM Securities, told the paper.

Ministerial officials said Minister Yuri Trutnev promised the decision to annul the environmental review will be made after the results of a check of Sakhalin Energy’s performance are summed up October 25, when it becomes clear whether all violations can be eliminated.

“I believed a month ago that the environmental review would be annulled, but now I think it will not happen,” said Denis Borisov, an analyst at Solid brokerage.

Many experts linked a possible amicable settlement with talks between energy giant Gazprom and oil major Royal Dutch Shell, which owns a 55% stake in Sakhalin Energy, on involving the Russian side in the project.

Shell representatives have repeatedly said their talks with Gazprom will succeed in the next few months.

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