LUKoil Ordered to Halt Work on Vysotsk Oil Terminal

LUKoil North-West Oil Product has been sent an order to halt work on the construction of a distribution terminal for oil products in Vysotsk (Leningrad Region). The order was issued due to breaches of environmental legislation by the company. According to the press service of the Russian Ministry for Natural Resources, the order was issued by the ministry's Department for State Control and Long-Term Development in the Conservation and Environmental Sphere in the North-West Federal District.

The construction site previously belonged to Baltkhimexport and was designated for the construction of a liquid ammonia and methanol terminal. After LUKoil North-West Oil Product acquired a stake in Baltkhimexport, addition work was begun without authorization. After the Department for State Control issued the order to halt construction, work on the site continued, with production capacity being increased.

In order to resolve the situation, top officials from the State Conservation and Environmental Safety Agency were invited to a meeting with representatives of LUKoil. At the meeting, the breach of environmental legislation was confirmed, and a joint decision was taken to establish a State Conservation Agency post at the construction site. The two sides also agreed that it was necessary to assist public organisations in holding public hearings on the construction project.

A telegram containing the meeting's conclusions was sent to LUKoil president Vagit Alekperov. The telegram specifically stated that Baltkhimexport and LUKoil North-West Oil Product must halt work on construction of the distribution terminal on Vysotsk Island until they have received authorization to resume. The authorization must include a positive assessment from the State Environmental Expert Commission. Also, all current documentation permitting construction must be presented immediately to the Natural Resources Ministry's Department for State Control.

LUKoil's press service told Rosbalt's correspondent that the company 'has always met all requirements imposed by relevant ministries.' The company called the order 'a misunderstanding' and remains hopeful that the situation will soon be resolves.

According to previous announcements by LUKoil president Vagit Alekperov, LUKoil North-West Oil Product intends to open the first stage of the Vysotsk oil terminal by the end of 2003. Construction of the terminal for handling oil products began on June 28, 2002. Investment in the first stage of construction, which will have a capacity of 10 million tonnes, is estimated at around USD 150-200 million. The first stage of the project will consist of facilities for handling fuel oil and diesel fuel. The second stage - petrol and lubricants, the third stage - liquid ammonia and methanol. The terminal will be supplied by LUKoil's Ukhta, Nizhny Novgorod and Perm refineries.

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