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Lloyds List: New Sakhalin row looms

Published: Sep 21, 2006

SHELL affiliate Sakhalin Energy is facing more action from the Russian government and may be charged for forest destruction, writes Martyn Wingrove.

The natural resources ministry is chasing the Anglo-Dutch oil major and partners Mitsubishi and Mitsui with a criminal case after it suspended permits on the Sakhalin II project.

The ministry’s deputy head Oleg Mitvol claims Sakhalin Energy caused more than $400,000 worth of damage by laying pipelines through a forest. He also said his department might look at other environmental issues.

‘Shell received permission to extract oil and gas, not to kill the environment,’ said Mr Mitvol.

Sahkalin Energy faces the cancellation of its project permits.

This has caused outrage in Japan as it is the prime customer for 9.6m tonnes of liquefied natural gas generated a year from the project once on stream.

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