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. Last Updated: 07/27/2016

Shell Suffers a Setback in Sakhalin

LONDON -- A Royal Dutch/Shell Group-led venture that plans to sell liquefied natural gas, or LNG, to Asia suffered a setback when a Russian court canceled environmental approval for part of the project, which is in the Far East, local ecologists said Wednesday.

The Yuzhno-Sakhalinsk court ruled against approvals for a temporary jetty being built by Sakhalin Energy Investment Co., said Sakhalin Environmental Watch, a local group.

The temporary pier is being built to import equipment to build an LNG plant, said Ivan Chernyakhovsky, a spokesman for the Shell-led project. He declined to comment on the court ruling.

Sakhalin Energy, of which Shell owns 55 percent, plans to invest at least $12 billion to tap the Sakhalin-2 offshore oil and gas fields in the Pacific. The planned LNG plant, Russia's first, will have a capacity of 9.6 million tons per year.

"The court decision has yet to come into force but Sakhalin Energy faces the prospect of remedying the jetty construction in line with Russian legislation and undergoing a further environmental assessment," Sakhalin Environmental Watch said by e-mail.

The court canceled the environmental assessment used by Sakhalin Energy to gain approval for the jetty, the group said.

The local fishing industry is already being affected by the dumping of soil in Aniva Bay carried out during construction of the jetty, Sakhalin Environmental Watch said in a statement.