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Oil and gas multinational Shell has injected €90 million
into its Irish subsidiary to deal with the spiralling costs
of the Corrib gas field project.
Documents filed with the Companies’ Registration Office show
that the global group has pumped the extra money into Shell
Ireland.
The Irish company confirmed last week that the 5km onshore
gas pipeline to bring gas from the offshore Corrib field to
the market will not be complete until the second half of 2014.
The Corrib gas partners, Shell, Statoil and Canadian-owned
Vermillion are now nine years behind the initial target to
start generating revenues from the field. The original estimate
for developing the field was €800 million and the final bill
for completing the project is now expected to be almost €3
billion.
The documents confirming the cash injection show that the
Shell EP Ireland’s Ltd’s capital is now more than €704 million.
A spokeswoman for Shell said - “The €90 million is to support
our ongoing activities on Corrib.”
The partners had hoped that gas would be brought ashore last
year - however, this was before An Bord Pleanála ruled that
half of the proposed overground pipeline would be unsafe.
This meant that the developers had to apply for permission
to place it in a tunnel.
Shell, Statoil and Vermillion are expected to spend a further
€378 million on the development this year. They spent €250
million on the project last year. The total spend for the
project at December last was an estimated €2.35 billion.
The 2012 spend estimate arises from Vermillion confirming
that it is to spend €70 million on developing the field this
year. It owns 18.5 per cent of the field.
Vermillion’s 2012 Capital Programme confirms this and also
states that it will cost $135 million to complete the purchase
of its stake from the original owner - US group, Marathon
Oil.
In a written Dáil response on the progress of the field,
Minister for Energy Pat Rabbitte, said it is estimated that
construction on the onshore section of the pipeline will take
in the region of three years. He said - “First gas cannot,
therefore, reasonably be anticipated before 2014.”
A spokeswoman for Shell said - “Work on the onshore pipeline,
the final phase of the project to be constructed, is progressing
well. Preparatory work at the tunnelling site is still underway
and tunnelling under Sruwaddacon Bay is expected to start
in the second half of 2012. Completion of the tunnel and the
laying of the onshore pipeline is estimated to take at least
two years to complete.”
About 400 people are working on the project, 350 of whom
are based in Mayo.
Shell has 45 per cent of the field and Statoil has 36.5 per
cent. The field has one trillion cubic feet of gas and is
expected to meet 75 per cent of Ireland’s peak winter gas
needs for up to a decade.
It is now 10 years since the Government approved the Corrib
gas project plan. However, since then, the proposal has become
mired in controversy, including the jailing of the 'Rossport
Five' in 2005 and a number of confrontations between the
Garda and protesters at the site of the Bellanaboy terminal
in north Mayo.
Separate judicial review proceedings on the onshore pipeline
consents were settled in the High Court last year.
Source - The Irish Times
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