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2006 December 13   13:48

Water management agency mulls Sakhalin II license withdrawal

Russia's water management watchdog said Wednesday the issue of withdrawing water use licenses issued to the operator of the Sakhalin II oil and gas project in the country's Far East could be raised February 1, RIA Novosti reports.

"If they fail to rectify the violations that have been exposed, the licenses will be withdrawn. The date for the next consideration is February 1, 2007," the head of the Federal Agency for Water Resources, Rustem Khamitov, said.

Project operator Sakhalin Energy is accused of causing serious damage to Sakhalin Island's ecology, including deforestation, toxic waste dumping and soil erosion. In September the Russian Natural Resources Ministry canceled its 2003 approval of Sakhalin II.

Russia's environmental watchdog said Tuesday that court proceedings on compensation for environmental damage would most likely begin in March 2007.

Checks have uncovered the illegal routing of an oil pipeline through the territory of a national conservation area and environmental damage to the island's Aniva Bay.

Khamitov said that on December 6 a decision was made to suspend 12 water use licenses of Starstroi, a contractor working on the Sakhalin II project. He said the company must fix violations, in particular its laying of pipelines across rivers, within two months, or it could have its licenses removed.

The official said the water tax rate had been raised fivefold for Starstroi as of December 5. "This measure is a sanction for violations," he said.

The environment watchdog said earlier it will present a final report on Sakhalin II by mid-December, adding that its expert group had identified several serious violations, some of which fall under the provisions of Russia's Criminal Code.

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