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UpstreamOnline: Japan warns against Sakhalin delay

By Upstream staff

Japanese Chief Cabinet Secretary Shinzo Abe has warned that diplomatic relations with Russia could be hurt by Russia’s revocation of environmental approvals for Shell’s Sakhalin 2 project.

He spoke after Russia stripped the development of its environmental approval.

“I am concerned that major delays might have a negative influence on overall Japan-Russian relations,” he told Reuters.

The cancellation follows weeks of wrangling between the Russia’s Resources Ministry and Shell over ecological compliance and the ministry promised last week to sue Shell in courts to withdraw all permissions.

Shell operates Sakhalin 2 with a 55% stake. The other shareholders are Japan’s Mitsui & Co (25%) and Mitsubishi Corporation (290%).

Sakhalin 2 has been producing more than 70,000 barrels of oil per day for the past six months as part of its first phase. This will more than double once all the development’s platforms and pipelines are fully up and running.

Phase two also involves building of the world’s biggest liquefied natural gas plant with capacity of 9.6 million tonnes per year.

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