Corrib pipeline work to end in 2014

ONE of Shell’s partners in the €2.5 billion Corrib Gas project has conceded that gas will not now be brought ashore until 2014.

Previously, the lead partner in the project, Shell E&P Ireland, had stated that the gas would flow from the Corrib Gas field in 2013 at the earliest.

However, in a statement attached to its earnings for the second quarter of 2011, the Canadian-based Vermilion Energy revealed that work on the onshore pipeline will not be completed until 2014.

Vermilion purchased its 18.5% share of the field from Marathon Oil in 2009. Delays in bringing the gas ashore resulted in Marathon writing down its investment by €203 million.

The writedown is recorded in Vermilion Energy Ireland’s accounts for 2009. The publication of the accounts followed the third partner in the project, Statoil, confirming a writedown of €196m in its quarterly results for 2010.

The Corrib gas partners are now eight years behind the initial target to start generating revenues from the field.

They had hoped gas would be brought ashore this year. However, this was before Bord Pleanála ruled that half of the proposed overground pipeline would be unsafe, resulting in the application for the tunnel.

Enabling work on the subterranean 4.9km tunnel under Sruwaddacon estuary, a special area of conservation, commenced last month.

The work involves building a construction compound from where the tunnel-boring machine will be launched.

The construction of the tunnel involves the securing of the site, the removal of about 65,000 tonnes of peat and the installation of a number of measures to protect the environment.

The tunnelling will commence next year.

Energy Minister Pat Rabbitte last month said building the tunnel will cost €400m.

However, Shell &Ireland declined to comment on that figure, but has said in the past that the cost will run to hundreds of millions.

The company recently received cash injections of €190m as it prepares for the final phase of the project.

The field has one trillion cubic feet of gas and the final spend on developing it is expected to top €2.5bn — over three times the original estimate of €800m.

An Taisce has instituted High Court judicial review proceedings over Bord Pleanála’s decision to give the onshore pipeline the go-ahead.

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

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