RIA Novosti: Prosecutors find over 100 breaches in Sakhalin-II

14:49 | 06/ 12/ 2006 

VLADIVOSTOK, December 6 (RIA Novosti) – At least 100 violations of the environmental, migration and labor laws have been discovered in the Sakhalin-II energy project, local prosecutors said Wednesday.

Sakhalin-II run by British-Dutch Royal Dutch/Shell has been under scrutiny since Russia’s Natural Resources Ministry canceled its own 2003 approval of the project in mid-September.

“It has been established that builders of the gas pipeline in six districts of the Sakhalin Region have caused serious damage to rivers where Pacific salmon spawn,” the prosecutors said.

Added to illegal tree felling, these account for tens of million of rubles of damage to the environment, the source said, noting that a criminal case had been opened and more criminal proceedings might follow.

The Federal Service for the Oversight of Natural Resources has said it will present a final report on the Sakhalin-II project by mid-December, and added that its expert group identified a number of serious violations, some of which fall under the provisions of Russia’s Criminal Code.

The Natural Resources Ministry said earlier it was dissatisfied with the environmental measures taken so far by Sakhalin Energy, the project operator.

The multibillion-dollar project has been accused of inflicting large-scale ecological damage on Sakhalin Island, including deforestation, toxic waste dumping and soil erosion.

Checks have also uncovered the illegal routing of an oil pipeline through the territory of a national conservation area and environmental damage to the island’s Aniva Bay.

The Russian government and the Sakhalin administration signed a production-sharing agreement on Sakhalin-II in 1994.

Alongside the environmental impact, the production-sharing agreement behind Sakhalin-II, which allows Shell to comfortably recoup all of its expenses before sharing any of its profit with the state, is hugely unpopular with the Russian government.

Royal Dutch/Shell holds 55% in Sakhalin Energy, operator of the project, Japan’s Mitsui controls 25%, and Mitsubishi 20%.

Sakhalin-II comprises an oil field with associated gas, a natural gas field with associated condensate production, a pipeline, a liquefied natural gas plant and an LNG export terminal.

The two fields have estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas.

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