"The observer council has approved the changes in estimated cost account for the second stage of the Sakhalin II project, and set capital expenditures at $19.4 billion until 2014," the ministry said.
The observer council also approved a mechanism for enhancing the project's efficiency and protecting the government's interests as part of the project.
The vast oil and gas project off Russia's Pacific Coast, formerly led by Shell, was subjected to months of intense pressure last year from Russian authorities over environmental damage accusations and demands by foreign investors to double spending.
In December 2006, Gazprom acquired 50% plus one share in Sakhalin II for $7.45 billion.
Sakhalin II comprises an oil field with associated gas, a natural gas field with associated condensate, a pipeline, a liquefied natural gas plant (LNG), and an LNG export terminal. Most of the LNG from the project will be exported to Japan, which is seeking to diversify its energy imports.
The project's two fields have estimated reserves of 150 million metric tons (1.1 billion barrels) of oil and 500 billion cubic meters of natural gas.