SHELL’s environmental record on the Russian island of Sakhalin has come under attack ahead of a crucial decision by the European Bank for Reconstruction and Development (EBRD) on funding for the oil company’s $20 billion (£11.2 billion) project on the island.

The oil giant’s subsidiary Sakhalin Energy has applied for a loan of hundreds of millions of dollars from the EBRD as part of a $6 billion package of financing for the second phase of its Sakhalin II project.

When complete, the offshore oil and gas project will deliver 9.6m tonnes of liquefied natural gas a year. It is central to Shell’s plan to recover from the reserves scandal in 2004.

The EBRD’s involvement would give credibility to the project, which infringes on the feeding grounds of the endangered western gray whale.

But the WWF, the former World Wildlife Fund, said Shell was starting work on new pipelines in two months’ time without knowing the full effect on the whale population. The WWF’s James Leaton said: “We want the suspension of the laying of the offshore pipelines this summer, otherwise it’s the end of the whales.”

The EBRD’s consultation on whether to grant the loan closes this week. Shell said: “We are confident in meeting the expectations of the EBRD’s board and believe the project is being built to world class standards. We have made significant progress on the key issues.”

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