Sakhalin Energy Moves Offshore Pipelines to Protect Whales

Sakhalin Energy will reroute offshore pipelines in its oil and gas development in the Russian Far East to help protect the endangered western gray whale.

The pipelines - linking two production platforms in the Piltun-Astokhskoye field off Sakhalin Island to the shore - will be moved 20 kilometers south of the original location, away from the key feeding area of the critically endangered whales. Russian government agencies will be asked to approve the change.

In April 2004, Sakhalin Energy halted offshore pipe laying activities at Piltun for two seasons to allow time for additional studies after the company’s own research suggested that acoustic impacts on the whales might be greater than originally anticipated.

In an unprecedented step, Sakhalin Energy then asked the World Conservation Union (IUCN) to convene an independent scientific review panel (ISRP) to evaluate the science underlying the assessment of potential impacts on the whale and the effectiveness of the company’s planned mitigation measures. The ISRP’s Report, which was published last month, called for a conservative risk management approach, and today’s announcement by Sakhalin Energy reflects this.

“Whilst both of the southern route options offer an acceptable solution, we have selected the most precautionary alternative,” emphasized Ian Craig, CEO of Sakhalin Energy. “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.

“Managing the environmental and socio-economic issues around the onshore section of the pipeline route is another key issue. 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.”

Sakhalin Energy has confirmed 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.

“We must minimize sub-surface and blow-out risks, and this steers us to the location we have chosen,” says Craig. “The platform is 7km 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.”

The ISRP Report identified a number of further measures to minimize impacts on the whales and Sakhalin Energy has already included many of these in revised mitigation plans for its offshore activities. As a follow-up to the Panel’s report, 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,” noted 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.”

Sakhalin Energy continues to target delivery of its first LNG cargo in late 2007.