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Sakhalin Energy in meeting with MNR

Posted: 25 October 2006

In a meeting chaired by visiting Minister for Natural Resources (MNR) Yuri Trutnev, Sakhalin Energy was briefed on the findings of the most recent RPN inspection.

“As for the preliminary information presented at today’s meeting the Company will be seeking to clarify a number of matters, but once we receive the RPN report we aim to resolve all these issues as promptly as those arising out of the August inspection. Work on the project continues as planned,” said Mr Craig, Sakhalin Energy CEO.

“We will examine the findings of RPN and take the appropriate action in concert with all regulatory bodies. We reiterated our willingness to respond to any issues raised by RPN  – both publicly and directly to Mr Trutnev. There is no question of our commitment to correct any errors that we or our contractors may have made.”

“But any criticism of the project relating to detailed compliance and individual permitting should be set in the context that environmental impacts across the project are essentially short-term and reversible. Onshore and offshore construction schedules have largely been shaped by environmental considerations to ensure minimal impact. Such an approach is without precedent in Russia and while a project of this size will never be perfect in terms of detailed implementation, the degree of transparency and accountability demonstrated by Sakhalin II can be seen as a benchmark for future energy developments in Russia.”

Today’s meeting came at the end of a one-day visit to Sakhalin by Mr. Trutnev in which he made an aerial inspection over the Makarov area of Sakhalin Energy’s onshore pipeline Right of Way and made a landing adjacent to the LNG plant construction site.

Sakhalin Energy took the opportunity during today’s meetings to reiterate its desire to continue to work constructively with MNR and RPN and other Russian agencies to ensure that successful delivery of this strategic project for Russia goes hand in hand with preservation of the environment and that the Project is delivered in a way that Russia, the people of Sakhalin, Sakhalin Energy employees and shareholders can all be proud of.

Speaking after a personal meeting with Mr Trutnev, Ian Craig stated, “I am pleased that Minister Trutnev has taken the time to visit Sakhalin to see first hand the work in progress and to hear the results of the latest RPN inspection.

The Project undergoes literally hundreds of audits by Russian agencies - over 200 in the year to date - and whilst we aim to get it right first time every time, this is not always possible in this environment on a project of this scale and complexity. 

Where material issues have been identified, Sakhalin Energy has worked promptly with our contractors and the authorities to remedy the situation and to put measures in place to prevent recurrence.”

The remedial action report presented to Minister Trutnev by Sakhalin Energy highlighted that in response to recommendations of the Rosprirodnadzor inspection of 22nd-24th August 2006 in the Makarov region, over 98 per cent of the corrective work has already been completed and the remainder will be completed before the end of October.

Construction of the Sakhalin II Phase 2 project, which commenced in 2003, continues on schedule and is currently over 80 per cent complete.



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