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AFX News: Russia wants to halt building Sakhalin pipeline due to landslid damage risk

MOSCOW (AFX) – Russia said it wants to halt construction of an oil and gas pipeline on Sakhalin Island in the far east of the country because of the risk of landslide damage.

The ministry has proposed that the project, to be run by Anglo-Dutch energy group Royal Dutch Shell, be stopped while environmental experts assess surrounding areas at risk from landslides.

‘The pipeline built from the Sakhalin-2 oilfield could at any moment be damaged by landslides,’ Russia’s natural resources ministry said in a statement.

Sakhalin-2, intended to open in summer 2008, would be the first site to produce liquefied natural gas in Russia.

Shell has a 50-pct stake in the consortium running the project, Sakhalin Energy, while the Japanese companies Mitsui and Mitsubishi hold 25 pct and 20 pct of it respectively.

The first phase of the Sakhalin-2 project is part-financed by the European Bank for Reconstruction and Development. The bank is hesitating to back later phases, which would see two offshore oil platforms built and more pipelines underwater. [email protected] afp/cml

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