The revised cost estimate emerged on Friday, as new documents filed with the Companies Office by Shell Irish subsidiary, Shell E&P Ireland Ltd (SEPIL), show that the total outlay on the project to the end of December last amounted to €2.16bn.
Partners in the project — Shell, Statoil and Canadian-owned Vermilion — spent an additional €200 million on the project last year to bring the investment to €2.1bn and it is understood that the spend on the project in 2011 will be around €250m.
This will bring the total spend on the project to €2.4bn, with construction work yet to begin on the tunnel, which according to Minister for Energy Pat Rabbitte, is going to cost an additional €400m. SEPIL declined to state how much the tunnel will cost, stating only that it will cost “several hundred million”.
The construction work on the tunnel is not going to commence until the middle of next year and is expected to take at least two years to complete.
One of Shell’s partners in the project, Vermilion confirmed in its most recent financial bulletin that it may not be until “late 2014” when gas is produced.
The Corrib gas partners are now eight years behind target to start generating revenues from the field.
The partners had hoped that gas would be brought ashore this year — however, this was before An Bord Pleanála ruled that half of the proposed overground pipeline would be unsafe, necessitating the application for the tunnel.
The accounts just filed by the company driving the project, SEPIL, show that the company’s losses more than doubled last year to €50m, as work on the project continued.
However, the company’s losses were reduced by €12.7m as a result of a tax credit from the exchequer, bringing to €100m the amount the company has received in tax credits since the project commenced.
It is now nine years since the Corrib gas project plan was approved by Government. The field has one trillion cubic feet of gas and is expected to meet 75% of Ireland’s peak winter gas needs for up to a decade.
According to a Shell spokeswoman: “2011 was a very positive year for the Corrib gas project. All consents for the onshore pipeline were granted in the first quarter of the year and, in July, work finally began on this final section of the project.”
“The Corrib Gas Partners are strongly committed to completing this strategically important project and delivering gas from the Corrib field to Ireland,” she added.