Russian Diplomat Declares Ministry Committed To Energy Security
Moscow (RIA Novosti) Mar 26, 2007 The Russian Foreign Ministry is committed to energy security in the world, a senior diplomat said Monday. "Our task is to minimize the unhealthy politicization [of the energy sector] and to prevent Russia's image from suffering as a result," first Deputy Foreign Minister Andrei Denisov said in an interview with the magazine VIP-Premier, with reference to the Sakhalin II oil and gas project off Russia's Pacific Coast. The project, formerly led by the Anglo-Dutch oil major Shell, was subjected to months of intense pressure last year from Russian authorities, who accused it of causing serious environmental damage to Sakhalin Island, including deforestation, toxic waste dumping and soil erosion. In December 2006, Gazprom acquired a 50% plus one share in the Sakhalin II project for $7.45 billion. Shell previously held a 55% stake, while Japan's Mitsui and Mitsubishi owned 25% and 20%, respectively. The Natural Resources Ministry said a week ago that Sakhalin Energy, which operates the Sakhalin II project, has submitted a plan of measures to remedy the environmental damage caused by the project. Most of the measures will be implemented by the end of 2008, Sakhalin Energy said. Earlier, Russia's Audit Chamber assessed environmental damage inflicted by the project at $5 billion. Sakhalin II comprises an oil field with associated gas, a natural gas field with associated condensate, a pipeline, a liquefied natural gas plant (LNG), and an LNG export terminal. Most of the LNG from the project will be exported to Japan, which is seeking to diversify its energy imports. The project's two fields have estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas. Addressing the construction of the North European Gas Pipeline (NEGP), the diplomat said its completion would not lead to a stoppage of the old transportation network. The NEGP, or Nord Stream, pipeline, a $10.5-billion project that is expected to come online in 2010, will connect Russia's Portovaya Bay on the Gulf of Finland, near St. Petersburg, to Germany's Greifswald via the Baltic seabed. "The motivation of countries speaking against the NEGP is largely due to the fear of losing profit, because resources will partly be shifted from old to the new gas pipeline," Denisov said. "However, European gas consumers' demands are such that old pipelines will not be idled with the appearance of new ones," he said. He also said gas from new deposits will be pumped through the NEGP. The Russian energy giant Gazprom-led Nord Stream project includes two parallel legs measuring 750 miles each. The first leg of the pipeline, with an annual capacity of 27.5 billion cubic meters, is set to come online in 2010, and the second will double its capacity to 55 billion cubic meters. German companies BASF and E.ON are Gazprom's partners in the project to supply Western Europe with gas across the floor of the Baltic Sea.
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