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Russia's Gazprom Gains 50 Percent Share in Sakhalin 2 Project

A Western consortium that developed a $22 billion energy project in Russia's Far East has agreed to sell a 50 percent share of the venture to the Russian state-run natural gas firm Gazprom.

Consortium manager Royal Dutch Shell, in a statement, says the $7.5 billion deal was signed Thursday in Moscow, at a meeting between Russian President Vladimir Putin and key shareholders in the project.

This follows months of Kremlin pressure, during which Russian environmental regulators threatened Dutch Shell with multi billion-dollar lawsuits for what they called environmental infractions.

Analysts inside and outside of Russia say Moscow used the lawsuit threats as a pretext to gain the controlling share in the project.

Early reports say Dutch Shell's stake will shrink from 55 percent to 27.5 percent.

The massive Sakhalin 2 venture was the only completely foreign-owned energy project in Russia.

The Japanese conglomerates Mitsubishi and Mitsui will be reduced to 12.5 percent and 10 percent shares respectively, to accommodate the Russians.

Earlier this month, Russian regulators suspended 12 crucial Sakhalin licenses, and gave a key sub-contractor, Starstroi two months to correct a list of what they called environmental infractions. Days later, a Dutch Shell site vice president complained that Kremlin pressure had delayed the start of drilling at the Pacific island.

Some information for this report was provided AFP, AP and Bloomberg.