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The Sakhalin Times: Sakhalin II ecology problems to clear in 2008

Ecological problems of the Sakhalin II oil and gas project will be resolved next year, company management told Russian resources officials on October 27.

The two sides met after the (Gazprom-led) [project operator, Sakhalin Energy, came under fire from the Russian government for continued ecological violations.

“I am pleased with your timetable to clear the problems next year and I think it’s positive Gazprom plays such a central role in your management,” Resources Minister Yuri Trutnev told Sakhalin Energy’s CEO Ian Craig at a meeting in Moscow.

Royal Dutch Shell and its Japanese partners ceded control of 50 percent plus one share in the US$ 22 billion project last year to Russian gas export monopoly Gazprom after breaking a significant number of environmental regulations.

While Mr Craig admitted such violations were continuing, such as dumping soil in rivers and illegally clearing forests, he said a clean green record would be achieved next year, and not in 2010, as the Resources Ministry and Russia’s environmental agency RosPrirodNadzor, which were also present at the meeting, predicted.

Analysts have previously said the Sakhalin II project — which is meant to launch a liquefied natural gas (LNG) plant in the third quarter of 2008 — could get delayed.

Last month the group said it would delay year-round exports of crude to next year from the end of 2007, but insisted liquefied natural gas deliveries would launch on time.

“We are on track for the project to go on stream next year,” Mr Craig told Reuters, but declined to give a date.

Sakhalin II has estimated reserves of around one billion barrels of oil and 500 billion cubic metres of gas, making it one of the world’s largest combined oil and gas projects.

International consultants ruled in early October that the Sakhalin II project is in line with national and international environmental laws.

AEA Technology, an independent consultant to potential lenders in the Sakhalin II project, produced a final report on the commitments of project operator Sakhalin Energy.

Russia’s environmental watchdog said that it would conduct checks of about 1,000 oil, gas and mining companies in the first quarter of 2008.

Oleg Mitvol, deputy head of the agency, said all companies suspected of environmental violations would be inspected.

http://www.thesakhalintimes.com/news/14/1713.html

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