Sakhalin Energy Will Relocate Pipelines to Avoid Rare Whales

YUZHNO-SAKHALINSK, Russia, March 31, 2005 (ENS) - Sakhalin Energy has decided to reroute offshore pipelines in its oil and gas development in the Russian Far East to help protect the last population of critically endangered Western gray whales. Only 100 whales of this species remain.

The pipelines off Sakhalin Island in the Sea of Okhotsk link two production platforms in the Piltun-Astokhskoye gas field to the shore. The company said Wednesday it is willing to move the pipelines 20 kilometers (12 miles) south of their original location, away from the whales' key feeding area. Russian government agencies will be asked to approve the change.

Western gray whales migrate to the Sakhalin region and feed offshore Piltun in northern Sakhalin during the summer months. A near shore feeding ground and a recently discovered offshore feeding area are currently the only confirmed feeding locations of these whales.

An endangered Western gray whale dives in the Sea of Okhotsk. In the background, a Sakhalin Energy drilling platform can be seen. (Photo courtesy Pacific Environment)

In an unprecedented move, Sakhalin Energy then asked the IUCN-World Conservation Union to convene an independent scientific review panel (ISRP) to evaluate the science underlying the assessment of potential impacts on the whales and the effectiveness of the company’s mitigation plans.

The ISRP’s Report, published in February, called for a conservative risk management approach. Sakhalin Energy says its decision to relocate the pipelines reflects this approach.

Sakhalin Energy CEO Ian Craig said, “The independent review helped us find a balance between meeting regional energy needs, contributing to Russia’s economic development and protecting these wonderful creatures. We have listened to the scientists’ advice, as well as taken into consideration the views of various concerned stakeholders and have selected a route that maximizes the distance between our activities and the whales."

Three possible pipeline routes were assessed in the ISRP's report:

• The original route, which crosses the southern part of the Piltun feeding ground and represented the shortest route – Base Case
• A route 20 km south of the Base Case, the longest route, that takes the pipeline the greatest distance from the feeding ground – Alternative 1
• A second route, about 11 km south of the Base Case and (6km) outside the whale feeding ground – Alternative 2

The company selected Alternative 1, Craig said, because it is "the most precautionary alternative."

Sakhalin Energy (SEIC) says that, following a review of its original site selection, the location of the second platform in the Piltun-Astokhskoye field – the PA-B platform - will not be changed.

While the international environmental group International Fund for Animal Welfare (IFAW) is pleased with the pipeline decision, the group says the platform is still too close to the whales' habitat.

Maria Vorontsova, director of IFAW Russia, said, "We are satisfied that Sakhalin Energy showed its willingness to cooperate with international NGOs and to re-route the pipeline, but we believe further steps have to be undertaken by SEIC to secure the future of the endangered Western Gray Whales. We are calling the Sakhalin Energy to move the platform further away from the whales' feeding grounds."

IFAW and other environmental groups insist that the next SEIC oil platform should be stationed at least 12 nautical miles off the Sakhalin shore.

“We must minimize sub-surface and blow-out risks, and this steers us to the location we have chosen,” says Craig. “The platform is seven kilometers (four miles) away from the edge of the feeding area and we are confident our mitigation measures can offset the potential impacts. There has been no discernable change of behavior in or impact on the western gray whales from our operations at the existing Piltun platform, which has been producing oil since 1999.”

A young western gray whale, Eschrichtius robustus, off the coast of Sakhalin Island, Russia ((Photo by D. Weller courtesy NOAA)

Sakhalin II is the first PSA signed in Russia and the first to go into production. The company's first crude oil in 1999 was the first offshore oil production in Russia.

At about US$10 billion, the Sakhalin II development represents the largest single foreign direct investment project in Russia.

Shell Sakhalin Holdings B.V. (Shell) has a 55 percent share in the project, Mitsui Sakhalin Holdings B.V. (Mitsui) which have a 25 percent share and Diamond Gas Sakhalin, a Mitsubishi company, with a 20 percent share.

Sakhalin Energy continues to target delivery of its first liquid natural gas cargo in late 2007.

The ISRP Report identified a number of further measures to minimize impacts on the whales, and Sakhalin Energy says it has included many of these in revised mitigation plans for its offshore activities.

As a follow-up to the panel’s report, the IUCN has agreed to invite members of the ISRP to review these plans for mitigating risks to the whales associated with the development.

“We are pleased that we can continue to engage with IUCN and that members of the ISRP have expressed an interest in following up the panel’s report to ensure that our activities are effective in addressing the potential impacts on the whales,” said Craig.

“We also hope to establish longer-term arrangements with IUCN, panel members and other stakeholders so we can continue receiving independent advice on the whales - and on other areas of environmental and social concern - during the construction and operation of the project.”

“Managing the environmental and socio-economic issues around the onshore section of the pipeline route is another key issue," said Craig. "Consulting indigenous reindeer herders was an important input into selecting the best route onshore. The selected route respects their preferences to limit impact on their pastures. Other onshore environmental risks will be mitigated by doing as much of the sensitive onshore work as we can during the winter season.”

The selected pipeline route provides an acceptable way forward, said the company, which views the new route as striking a balance between protecting the critically endangered Western gray whales and delivering the economic and social benefits of the Sakhalin II project to Sakhalin Island and Russia as a whole.