Final bill for Corrib gas field project to hit €2.5bn €200m
Published 08/11/2010 | 05:00
By how much Statoil has written down value of gas field
THE final cost in developing the controversial Corrib gas field off the Co Mayo coast is now expected to near €2.5bn.
The revised cost estimate emerged yesterday as new documents just filed with the Companies Office by Shell Irish subsidiary, Shell E&P Ireland (SEPIL), show that the capital outlay on the project to the end of December reached €1.918bn.
The accounts just filed by SEPIL show the company last year recorded a €20.4m pre-tax loss on the scheme.
However, the company's after-tax loss was reduced to €1.9m after availing of a tax credit of €18.5m from the Irish exchequer.
Figures show that the total tax credits received by SEPIL to date amount to €87m.
Partners in the project -- Shell, Statoil and Canadian-owned Vermillion -- spent an additional €424m on the project last year and it is understood the spend on the project in 2010 will be around €300m.
SEPIL had anticipated that gas would be produced from the field at the end of this year or early 2011.
The field has one trillion cubic feet of gas and is expected to meet 75pc of Ireland's peak winter gas needs for up to a decade.
However, gas may not flow for another three years due to An Bord Pleanala last year ruling that up to half of a proposed pipeline to bring the gas ashore was unacceptable on safety grounds, resulting in SEPIL seeking planning permission for a 4.9km tunnel to bring the gas up the Sruwaddacon estuary.
An Bord Pleanala is expected to rule on the application before the end of the year and if planning is granted, work on the tunnel -- which is expected to cost around €120m -- will begin next year and take two years to construct.
Earlier this week, Statoil wrote down the value of the Corrib Gas field by €200m due to project delays and changes in market conditions.
SEPIL, which has a 45pc share in the gas field, has spent a total of €707m since the project began to the end of December last, made up of €548m in capital costs and €159m in operating costs.
It has been eight years since the Corrib gas project plan was approved by the Government.
However, since then, the proposal has become mired in controversy, including the jailing of the 'Rossport Five' in 2005.
There were also a number of confrontations between gardai and protesters at the site of the Bellanaboy terminal in north Mayo.
There were 850 people employed at the terminal at Bellanaboy last year, and the project is 95pc complete.