Oleg Mitvol, who is currently on the island of Sakhalin leading the Sakhalin II probe, said inspectors from the Federal Service for the Oversight of Natural Resources must present their conclusions on the results of the probe by October 20.
"At the same time we will make a decision on the ecological assessment of the [Sakhalin II] project," Mitvol said.
The Ministry of Natural Resources last Monday annulled the Sakhalin Environmental Expert Review (SEER), passed in 2003, over an alleged failure to fulfill official recommendations to protect the environment. Project operator Sakhalin Energy said prior to the revocation that accusations about environmental performance were "deeply misleading" and were "based on a procedural argument relating to the internal workings and mandate of component agencies making up the Ministry of Natural Resources."
A spokesman for the ministry said earlier that the hypothetical damages could total $50 billion, but said it would take a long time to make detailed calculations.
The overall damage assessment includes the existing damage to the environment and future expenses on environmental remediation, Rinat Gizatulin said.
He said the width of paths for each oil and gas pipeline under the project, which have a total length of 750 kilometers (about 470 miles), exceeded the norm by 120 meters (about 490 feet).
"Every tree on this territory has its price, and we must calculate it, plus we need to add damages to the soil and to 1,103 bodies of water crossed by pipelines, a fine for the absence of utilities and damage to Aniva Bay," Gizatulin said.
The Sakhalin II project, which is run by the Sakhalin Energy Investment Company and operated by Royal Dutch Shell, comprises an oil field with associated gas, a natural gas field with associated condensate production, a pipeline, a liquefied natural gas plant and an LNG export terminal. The two fields hold reserves totaling 150 million metric tons of oil, and 500 billion cubic meters of natural gas.
Environmental experts arrived Thursday at the port of Korsakov in southern Sakhalin to inspect the area where excavation works were earlier conducted by Sakhalin Energy under Sakhalin II.
Mass deaths of fish and crab have been reported in the area and the inspectors earlier established that a Sakhalin Energy vessel had dumped a mixture of methylene dichloride and lube oil into the bay.
"Methylene dichloride is a very toxic substance and we will check whether it caused the deaths of fish and crab last week," Mitvol said.
He also said the inspection was facing attempts to put obstacles in the way of the investigation, without specifying the sources but hinting at representatives of Sakhalin Energy's possible involvement.
"They are also trying to interfere with our helicopter flights over the area," the official said. "We attempted to lease helicopters here, on Sakhalin, but we were told that all of them had already been taken by Sakhalin Energy."
Some analysts have interpreted the environmental watchdog's probe decision to be a form of pressure on the British-Dutch group to conclude a deal with Gazprom. The Russian energy giant had been pursuing a 25+1% share in the Sakhalin project in return for a 50% stake in the massive West Siberian Zapolyarnoye-Neocomian project. But with costs at Sakhalin II spiraling Gazprom sought more advantageous terms and pulled out of negotiations.
The possible suspension of the project means Sakhalin Energy will be unable to execute plans to develop a crucial LNG plant, which will put in jeopardy contracts with Japan, South Korea and the United States on deliveries of liquefied natural gas, due to start in 2008. Royal Dutch Shell has already suspended work on several stretches covering seven kilometers (four miles) overall on the 800 kilometer (500 miles) line.
Sakhalin Energy also said September 20, "Nullification of the SEER will be very damaging for the project and for Russia. The consequences of this revocation could be suspension of the operation that would lead to significant delay of the Project, extra costs and irreparable damage to the reputation of this venture, the Sakhalin Oblast [Region] and the Russian Federation as a whole for failure to deliver gas to buyers. In addition, profit sharing with the Russian Party would be delayed."
Sakhalin Energy comprises Shell Sakhalin Holding (55%), Mitsui Sakhalin Development (25%) and Mitsubishi-controlled Diamond Gas Sakhalin (20%).
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