SHELL OIL'S Sakhalin II development will deliver 150,000brl/d of oil and 9.6m tons of LNG a year when fully operational. The LNG represents 7.5% of current global demand. The company, and its minority partners in Sakhalin Energy – Japan's Mitsui and Mitsubishi – have rights to 4bn barrels of the island's 45bn barrels of oil-equivalent oil and gas reserves in the block known as Sakhalin II: it is Shell's biggest single project, and its largest direct foreign investment in Russia. Shell is laying two 800-km pipelines, one to carry oil and the other gas, from its offshore fields north of the island to a new LNG terminal being built in the south, where ships are not hindered by sea ice. Teams of contractors have to be extremely careful when they lay the pipelines across the island's 1,000 rivers, streams, and watercourses. Each crossing involves a considerable team of contractors and observers, along with the necessary plant; during the current winter season, each crossing is planned to be completed in six to ten hours, following which topsoil is restored on the banks and gravel relaid on the river beds so that salmon will be able to spawn. Shell is currently negotiating an asset swap with Gazprom under which the Russian company will acquire 25% of Sakhalin II, in return for which Shell will get cash and a 50% interest in the Zapolyarnoye gas field in West Siberia. The asset swap is expected to be finalized this year. The $1-bn pipelines are due for completion in 2007, and the export facility should be operational by the middle of 2008. While this is still according to the planned schedule, Shell is reported to have underestimated some of the challenges: scouring on the seabed from giant ice floes penetrated much deeper than it anticipated, so subsea pipelines from the platforms had to be laid more deeply than originally thought.