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Final decision on Shell-led project to be made in late November

Russia's natural resources minister said Wednesday that a final decision on whether to allow a Shell-led consortium to continue working at a troubled oil and liquefied natural gas project on the Far Eastern island of Sakhalin would be made in the third week of November.

Last month, Yuri Trutnev threatened to revoke a key permit that would effectively halt work at the US$22 billion (?17.3 billion) project over environmental concerns.

Trutnev also said Wednesday that he had given the consortium's operator, Sakhalin Energy, an extra week to provide its plan for rectifying the ecological violations, which include illegal logging and silting rivers. "Out of courtesy we are prepared to wait another week," until next Thursday, he was quoted as saying by the ITAR-Tass news agency.

Trutnev made a fleeting tour to the island last week, during which he slammed the project's "gross violations" of environmental legislation.

Analysts have said that the checks are a form of pressure aimed at reshaping the deal in the Kremlin's favor and winning a role for state gas monopoly Gazprom in the project.

Shell enraged the government last year when it announced the cost of the project had doubled. That would massively delay the point at which Russia shares profits from the deal, which was signed back in the 1990s.

© The Associated Press

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