Russia may file criminal case against Shell Project

Russia may open a criminal case against Royal Dutch Shell Plc's Sakhalin-2 project because of „numerous” environmental violations, the country's Natural Resources Ministry said. Oleg Mitvol, the deputy head of Russia's environmental inspectorate, is ready to provide material from a recent inspection to the Prosecutor General's office, the ministry said in an e-mail yesterday. Charges may be brought in relation to illegal logging by subcontractors, the statement said. Earlier this week, Sakhalin Energy, the Sakhalin-2 operator, said it had halted some pipeline construction because of environmental concerns. Subcontractors ignored license conditions in a landslide area and prompted the halt, company spokesman Ivan Chernyakhovsky said on Aug. 28. The Natural Resources Ministry said it had ordered a halt to the construction on Aug. 10. Sakhalin-2, located off Russia's Pacific coast and operated by Sakhalin Energy, is 55% owned by Shell, 25% by Mitsui Co. and 20% by Mitsubishi Corp. Sakhalin Energy plans to start deliveries of liquefied natural gas from the project in the summer of 2008. „We've only just seen the statement and can't comment,” said Sarah Smallhorn, a London-based Shell spokeswoman. (Bloomberg)