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Russia Threatens To Abort Shell's Sakhalin Project

The pipeline being built as part of the Sakhalin-II project runs through the Zubrovy nature reserve on Sakhalin (ITAR-TASS) October 20, 2006 -- Russian Natural Resources Minister Yury Trutnev today reiterated that Royal Dutch Shell's $20 billion Sakhalin-II gas project could be halted unless the company complies with environmental laws.

British oil giant Shell and Japanese firms Mitsui and Mitsubishi currently face allegations that they violated environmental laws.

Trutnev also said Sakhalin Energy, a Shell subsidiary, has "admitted" that it has broken the law in its work, but indicated that a compromise might be reached.

Environmental groups back the claims, but critics accuse Moscow of using the allegations to help state gas company Gazprom muscle in on the deal.

The Sakhalin-II project includes the construction of an 800-kilometer gas pipeline, a liquefied natural gas plant, two oil platforms, and an oil terminal.

(AFP, dpa, Interfax)