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UpstreamOnline: Sakhalin Energy suspends work on pipelines

By Upstream staff

Shell-led Sakhalin Energy Investments, operator ot the Sakhalin 2 oil and gas development near Sakhalin Island in Russia´s far east, has confirmed that it asked its sub-contractors to suspend construction work at several pipelines, writes Vladimir Afanasiev.

According to the company, its own“rigorous monitoring and inspection”had“detected some isolated examples of sub-contractors not implementing detailed design solutions”.

The company sent a letter on 15 August to sub-contractors with a request to halt any ongoing work on sections of oil and gas pipelines that together total about seven kilometres, a spokesman said in Moscow.

The spokesman has been unable to specify for how long the suspension will stay in force but said the measure is not“expected to impact on the construction schedule”.

Moscow business daily Kommersant said that the suspension relates to potentially dangerous parts of theMakarov mountain ridge on the island that are prone to mudslides.

The pipelines, due for completion in 2007, run from the north of the Sakhalin Island to its south, a length of about 800 kilometres.

Sakhalin Energy is laying both oil and gas pipelines in one corridor as they will carry hydrocarbons from the company´s offshore Lunskoye gas and Piltun-Astokhskoye oil fields to oil and LNG export terminals in the port of Prigorodnoye in the south.

Earlier in August, the Natural Resources Ministry backed criticism from Sakhalin-based and international environmental groups.

A ministry official said that Sakhalin Energy´s onshore pipelines“could be easily damaged by potential mudslides and will not work for more than one year without an accident”.

The operator said this week that it had informed Rozprirodnadzor, a supervising branch of the ministry, about the suspension of pipeline construction.

Sakhalin Energy awarded the $1.2 billion onshore pipeline contract in 2003 to a consortium comprising Russian companies Starstroi and Lukoil-Neftegazstroi together with Saipem and AMEC Spie Capag.

Pipeline contractors later sub-contracted the job to dozens of smaller local Russian companies to speed up construction that has fallen behind the original schedule.

Sakhalin Energy is due to start all-year oil exports from Prigorodnoye by the end of next year, with the first LNG shipments scheduled for end-2008.

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