Shell E&P Ireland confirmed that from a technical point of view, production of gas can now start — 19 years after gas was discovered off the coast of Mayo.
However, the Corrib gas partners cannot commence production until two separate permits are granted by the Environmental Protection Agency and the Department of Communications, Energy and Natural Resources.
The Shell partners had said earlier this year that gas would flow by mid-2015 and a spokesman for Shell E&P Ireland yesterday stated that it “expects that gas will flow before the end of 2015”.
Confirmation of the completion of works on the scheme coincides with one of Shell’s partners on the project, Statoil, revealing that its Irish exploration arm last year recorded pre-tax losses of €243.79m.
The loss at Statoil Exploration (Ireland) Ltd arises from an impairment charge of €226m. It comes against the background of repeated delays to the project.
Total losses at the Irish exploration arm of Statoil now total €843m. The firm’s shareholder funds stood at €286.39m.
The overall projected spend of €250m on the project this year will lead to overall costs to top €3.6bn — more than four times the original estimate of €800m. The project is 12 years behind the original completion schedule of 2003.
In order for gas to flow, Shell requires permission from the Department of Natural Resources to operate the 91km-long high pressure pipeline in north Mayo under section 40 of the Gas Acts and requires a final determination by the Environmental Protection Agency on a revised emissions licence for the project.
Commenting on the completion of the works, managing director of Shell Ireland Ronan Deasy, said that the “important milestone has been achieved through the hard work and dedication of very many people over an extended period. We are moving closer to the day when we will commence full field operations and Corrib gas will come on-stream”.
Mr Deasy said: “We await the necessary approvals from the regulatory authorities and look forward to delivering gas and the many long-term benefits that will flow from Corrib, both to the West and to Ireland in the years ahead.”
The Corrib gas field contains an estimated 1 trillion cubic feet of gas and will sustain 175 high-quality long-term jobs for the next 15-20 years.
The Corrib Gas Partners are Shell E&P Ireland Limited (45% and operators), Statoil Exploration Ireland Limited (36.5%) and Vermilion Energy Ireland Limited (18.5%).