Friday, 29 April 2011

Shell invests extra €60m to complete Corrib gas project

SHELL IRELAND has received a further cash injection of €60 million from its parent company to complete the Corrib gas project.

This brings to €190 million what Shell E&P Ireland Ltd has received in additional cash in recent months as it prepares to complete the final phase of the project that includes the construction of a 5km subterranean tunnel to bring gas ashore from the Corrib Gas field.

Documents recently filed with the Companies Office show the fresh cash injection has brought Shell Ireland’s share capital to €614 million.

The field has one trillion cubic feet of gas and the final spend on developing the field is expected to top €2.5 billion – more than three times the original estimate of €800 million.

A spokeswoman for Shell Ireland said the costs of the tunnel phase would “represent capital investment of several hundred million euro”.

All the necessary permissions and licences to proceed with the construction of the tunnel have been secured.

This follows An Bord Pleanála, the Department of the Environment and the Department of Energy and Natural Resources providing the necessary consents for the tunnel project to proceed.

The Shell spokeswoman said “the €60 million is to support the company’s ongoing activities on the Corrib project”.

“Now that all the necessary consents and permits are in place, Shell E&P Ireland Limited plans to commence construction in the coming months,” the spokeswoman added.

The numbers to be employed in the final phase are not as yet confirmed, but it is expected that several hundred jobs will be created during the construction of the onshore pipeline.

An Taisce and two local residents have instituted legal action in the Commercial Court against An Bord Pleanála’s decision to give the pipeline the go-ahead.

The case has been adjourned to October and does not impact on Shell Ireland’s ability to proceed with the work, as no court injunction has been sought or granted.

The spokeswoman said “it is anticipated that first gas will flow in 2013 at the earliest”.

Construction work on the tunnel will take approximately 22 months to complete.

The tunnel proposal to bring the gas ashore only emerged after An Bord Pleanála ruled out half a previous pipeline proposal on safety grounds in 2009.

Last year, it emerged that two of Shell’s partners, Marathon Oil and Statoil, had written off €399 million arising from delays with the project and due to falling gas prices.

Canadian company Vermilion Energy bought Marathon’s 18.5 per cent share in the Corrib field in 2009.

Irish Times

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