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RIA Novosti: Sakhalin-II off agenda as Putin meets natural resources minister

17:50 | 27/ 09/ 2006 

SOCHI, September 27 (RIA Novosti) — A meeting between Russia’s president and the natural resources minister made no mentioning of the massive Sakhalin-II energy project, which has been suspended over environmental concerns.

Minister Yury Trutnev warned Tuesday that the Royal Dutch Shell-led Sakhalin-II would be halted if no environmental guarantees were provided over the pipeline being laid as part of the massive energy project.

“We did not discuss Sakhalin-II,” Trutnev said after the meeting with Vladimir Putin.

He said environmental experts were working at the site of the project on the energy-rich Sakhalin Island off Russia’s Pacific coast, and their conclusions were expected in late October.

“We have made it [the work] totally transparent, and … representatives of environmental organizations and journalists are taking part in the effort,” Trutnev said.

Putin has had little to say about the future of the $20-billion integrated oil and gas project, but other Kremlin officials have pointed out the importance of the unprecedented project for the Russian economy.

“Russia considers the Sakhalin II project as one of its most serious projects,” presidential aide Igor Shuvalov said earlier this month.

Trutnev said concerns over the project fell into two groups: damage to the environment and the threat of landslides destroying the pipeline.

“If the ground moves, we will see a serious environmental disaster on Sakhalin,” the minister said.

Experts from the Federal Service for the Oversight of Natural Resources previously said project operator Sakhalin Energy had failed to build anti-erosion facilities near the pipeline.

The project’s suspension has put in jeopardy the company’s contracts with Japan, South Korea and the United States on supplies of liquefied natural gas, due to go into effect in 2008.

The minister said his meeting with Putin highlighted an inventory of oil wells, which, he said, total 248,000 in Russia, including 64,000 probe wells.

The effort has made it possible to expose license agreements that some companies are failing to honor in full, the minister said, before going on to single out a British-Russian joint venture.

“I would not like to bang on about the same companies again and again but TNK-BP’s record is so far the worst,” Trutnev said.

On Monday, Russian prosecutors issued a warning that TNK-BP, which operates the Kovykta project, could have its operating license for the East Siberia deposit, one of the largest in the region, revoked if it failed to address environmental protection and other problems.

Kovykta, with 1.9 trillion cubic meters of proven reserves, is highly important to the Russian government, which is pursuing an ambitious project to build a gas pipeline network to meet Asian nations’ energy needs and to diversify its export destinations.

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