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Reuters: Russian senator says Shell’s Sakhalin-2 to proceed

MOSCOW, Nov 24 (Reuters) – Royal Dutch Shell’s (RDSa.L: Quote, Profile, Research) giant Sakhalin-2 project will go ahead, a Russian senator said on Friday, reacting to attempts by the state environmental watchdog to revoke the venture’s licences on ecological grounds.

Nikolai Kosarev, deputy head of the natural resources and environment commission at the Federation Council, the upper house of parliament, said the situation should not be overdramatised and some ecological violations were “a working process”.

“This project has already given a lot both to Russia and Sakhalin. This is a unique project designed to be run for a long period,” Kosarev told reporters after a group of senators visited the project’s facilities in Sakhalin last week.

Russia’s natural resources ministry requested a federal agency last week to revoke 19 water-use licences issued to the oil and gas project’s operator Sakhalin Energy, citing cases of water pollution, erosion of coastlines and other violations.

A water-use licence is a permit needed for construction of many of the $22-billion project’s facilities.

Russian Natural Resources Minister Yuri Trutnev told Sakhalin Energy last month that he wanted criminal prosecutors to investigate the project’s environmental record on the Island of Sakhalin in Russia’s Far East.

Analysts suspect a Kremlin push for more control of the multi-billion dollar energy industry lies behind the moves.

Kosarev said assaults on the scheme were exaggerated.

“The Natural Resources Ministry’s charges are overblown,” he said. “The work is being continued … No one intends to stop the project. One must seek solutions and resolve these issues.” 

The row over Sakhalin-2 has political overtones as import-dependent Japan is looking to Sakhalin to meet much of its future energy needs.

Japan said in September a major delay could hurt diplomatic ties, while the European Commission said at the time that it too was taking the developments around the project very seriously.

Other Sakhalin-2 participants include Japan’s Mitsui & Co. (8031.T: Quote, NEWS, Research) and Mitsubishi Corp. (8058.T: Quote, NEWS, Research).

Both Trutnev and his deputy Oleg Mitvol recently took journalists to Sakhalin to show what they called vast ecological damage done by foreigners. Main Russian television channels ran video footage of dead fish in rivers.

“These Siberian salmon died naturally after spawning in local rivers,” Kosarev said. “The fishermen with whom we talked said that this year they in fact saw even more humpback salmon coming in for spawning … We did not see anything terrible.”

He said he expected that a possible fine imposed on Sakhalin Energy for ecological damage would be “a reasonable figure”.

“This project has not done irreparable harm to nature. It in fact is economically advantageous for the region.”

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