Sakhalin-2: most environmental, health and safety standards complied

Photo: Sakhalin-2: most environmental, health and safety standards complied

Mostly all environmental, health and safety standards are complied by a massive oil and gas project on the Pacific Russian island of Sakhalin, according to report released Tuesday.

The report by consultants AEA Technology is a key development for the Sakhalin II project, allowing a series of multibillion dollar loans to go forward. Major lenders include the Japan Bank for International Cooperation and the U.S. Export-Import Bank.

Sakhalin 2 was controlled by Royal Dutch Shell PLC until last year, when Russian state-run gas monopoly JSC Gazprom took a controlling stake following warnings and threats by Russian environmental regulators. Japanese giants Mitsui & Co. and Mitsubishi Corp. also have stakes in the US$22 billion (EUR16.2 billion) liquefied natural gas development.

The AEA report looked at a range of environmental and social effects of the project, including its impact on western gray whale habitats and Sakhalin's indigenous populations.

"As far as implementation of the plans are concerned there is a high level of compliance for most of the project's facilities/assets," said the report, which was posted on the Sakhalin-2 Web site.

Among the outstanding issues, the report said, were problems of erosion and damage to riverbanks caused by an onshore pipeline and potential harm to gray whales from oil spills.

Another international lender - the European Bank for Reconstruction and Development - pulled out of funding for the development in August following Gazprom's takeover.