Russia Threatens To Halt Shell's Sakhalin Project

A liquefied gas plant under construction, part of the Sakhalin-2 project, 2005 (ITAR-TASS) September 26, 2006 -- Russian authorities have threatened to halt a giant oil and gas project off Russia's Pacific coast unless the Shell-led consortium that runs the project corrects what it says is environmental damage done to the site.

Natural Resources Minister Yury Trutnev said authorities will do everything not to stop the Sakhalin-2 project, but that Anglo-Dutch Shell must address environmental damages.

Last week, authorities withdrew a key environmental permit for Sakhalin-2, a decision which provoked protests in Europe and Japan. Analysts linked the decision to Shell's doubling of the cost of the project last year, which angered Russian authorities.

Trutnev said new inspections his ministry has ordered over the next month had only environmental motivations.

Shell owns a 55 percent stake in Sakhalin-2, Japanese companies Mistui and Mitsubishi hold the remainder.

(Interfax, AFP)