- Sputnik International
World
Get the latest news from around the world, live coverage, off-beat stories, features and analysis.

Russian watchdog to complete eco-damage assessment on Sakhalin II - 1

Subscribe
(adds paragraphs 2-10)

ST. PETERSBURG, February 14 (RIA Novosti) - Assessment of damage caused by the Sakhalin II oil and gas project in Russia's Far East can be completed by late summer 2007, a deputy head of Russia's environmental watchdog said Wednesday.

The ambitious project, formerly led by Shell, was subjected to months of intense pressure last year from Russian authorities, who accused it of causing serious environmental damage to Sakhalin Island, including deforestation, toxic waste dumping and soil erosion.

"We promised to conduct work [to calculate damage], which is rather complicated, until the end of summer," Oleg Mitvol said.

He said the results of the assessment will depend on how exhaustive the operator company's proposals to remedy the situation will be.

"If the company does not want to do anything, the damage will be calculated in full," the official said.

Earlier, Russia's Audit Chamber assessed the environmental damage inflicted by the project, off Russia's Pacific Coast, at $5 billion.

In December 2006, Russian energy giant Gazprom [RTS: GAZP] acquired a 50% plus one share in the Sakhalin II liquefied natural gas project for $7.45 billion.

Anglo-Dutch oil major Shell previously held a 55% stake, while Japan's Mitsui and Mitsubishi owned 25% and 20%, respectively. The operator's raising of its project cost estimate to $22 billion infuriated Russian authorities, since under the production-sharing agreement behind the project signed in the 1990s, Russia will only receive a profit once the operator has recouped all its costs.

Sakhalin II comprises an oil field with associated gas, a natural gas field with associated condensate, a pipeline, a liquefied natural gas plant, and an LNG export terminal. Most of the LNG from the project will be exported to Japan, which is seeking to diversify its energy imports.

The project's two fields have estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas.

Newsfeed
0
To participate in the discussion
log in or register
loader
Chats
Заголовок открываемого материала