"If Gazprom joins other participants in the [Sakhalin-II] project, then it will have to follow all the obligations of the [production-sharing] agreement, including the requirements of environment protection legislation, just like all other investors" Viktor Khristenko said.
He added that there was no connection between Gazprom's talks on joining Sakhalin-II and the project's increased cost estimate.
Earlier, Khristenko said that Russia will not agree to doubling the estimated cost of the project to $22 billion. Under the production-sharing agreement behind the project, Russia will only receive profits after the operator, Shell-controlled Sakhalin Energy, has recouped all costs.
But Sakhalin Energy's move to double its cost estimate puts off the date by which the government will receive revenue from the project.
"We cannot agree to this," Viktor Khristenko said.
The minister said the doubled estimated cost of the project would mean for Russia a delay of two to three years of revenue inflow, during which time the country would lose several billion dollars.
"Consequences that could be tied to the implementation of the full-scale proposal from the operator would mean a shift of two or three years before Russia could receive any profit, depending on various oil price scenarios," Khristenko said.
The minister said he hoped a decision on the cost estimate would be adopted in the first quarter of 2007.
"If we manage it earlier, that would be laudable," Khristenko said, adding that he met with the head of Shell Friday to discuss the issue.
"We are looking for a solution that would keep the project going and would involve no risks in its implementation, on the one hand, while maintaining Russia's interests on the other," Khristenko said.
He also said that Russia will not take commercial risks under the project, as the current situation and the situation in 1994, when the PSA was signed "are like two different eras."
The minister said he believes it is the project's operator responsibility to take commercial risks, while Russia, for its part, should provide stable legislation and working conditions for the project's implementation.
"That is why we want to fairly divide the risks in the newly developed situation, and not compensate them at Russia's expense," he said.
The project operator has been under scrutiny since September, when the Natural Resources Ministry canceled its 2003 approval of Sakhalin-II.
Sakhalin Energy is accused of causing serious damage to Sakhalin Island's ecology, including deforestation, toxic waste dumping and soil erosion.
Russia's environmental watchdog said Tuesday that court proceedings on compensation for environmental damage would most likely begin in March 2007.
Following months of intense pressure on Shell from Russian authorities, it appears as if Gazprom is set to gain a large stake in Sakhalin-II, after brokering a deal with Royal Dutch Shell.
A spokesman for the Russian energy giant said Monday that Gazprom CEO Alexei Miller had a working meeting with Shell CEO Jeroen van der Veer Friday, at which the Shell chief put forward proposals on Gazprom's participation in the project.
The spokesman declined to give details, but said the company was studying the offer.
Shell's doubling of its cost estimate infuriated Russian authorities and scuttled a previous agreement on an asset swap, which would have given Gazprom a 25% stake in Sakhalin-II. Some analysts now expect the Russian energy giant to gain a controlling stake in the project.
Shell holds 55% in Sakhalin Energy, Japan's Mitsui controls 25%, and Mitsubishi 20%. Much of the liquefied natural gas from the project will be exported to Japan, which is seeking to diversify its energy imports.
Japan's minister of economy, trade and industry said Tuesday his country wants guarantees that it will receive oil and gas from the Sakhalin-II project on schedule, in view of Gazprom's possible involvement.
Sakhalin-II comprises an oil field with associated gas, a natural gas field with associated condensate production, a pipeline, a liquefied natural gas plant, and an LNG export terminal.
