New Delay Warning Over Shell Gas Project

By Evening Standard, London

Feb. 13–Royal Dutch Shell’s $20 billion (£11.5 billion) Russian natural gas project, Sakhalin 2, may face further delays, according to a top executive.

“I’m hoping we can meet the target but there’s always a risk for further delay,” said Ian Craig, chief executive of the Sakhalin Energy consortium.

Shell said last July that it had delayed the first liquefied natural gas shipment from the project from the initial target of the end of 2007 because the Russian authorities had repeatedly postponed approval of annual capital expenditure plans.

Craig did not say where the risk of delays come from, although the project has angered environmentalists who say it threatens the habitat of many marine mammals.

However, he said the Sakhalin 2 project expects to secure financing of between $200 million and $300 million from the European Bank for Reconstruction and Development and added that Shell was also seeking financing from Britain’s Export Credits Guarantee Department, the Japan Bank for International Co-operation and the ExIm bank of the US.

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