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. Last Updated: 07/27/2016

Sakhalin-2 Faces Court Challenge

The Natural Resources Ministry said Friday that it would file a court challenge to the Shell-led Sakhalin-2 consortium's plans to develop oil and gas fields off Sakhalin Island, a day after it called for a halt in pipe-laying at the $20 billion project.

Analysts have said the ministry's probe into Sakhalin-2 is aimed at pressuring the Sakhalin Energy group to offer Gazprom better terms as it jostles to join what will be the world's biggest liquefied natural gas development.

The ministry said in a statement Friday that the deputy head of its environmental agency, Oleg Mitvol, was suing to revoke approval for a feasibility study that underpins the consortium's development plans. A day earlier, Mitvol had called for pipe-laying work on the island to be halted due to mudslide risks.

Galina Dubina, spokeswoman for Sakhalin Energy, said the company had no comment about Friday's statement.

Sakhalin-2 is due to begin operations in 2008.

Also Friday, government officials participating in a meeting at the Industry and Energy Ministry called for operators in production sharing agreements to issue quarterly reports on the status of the projects.

A statement on the ministry's web site also said the fact that operators departed from the original technical plans to develop fields was "problematic."