Millions roll in for Corrib Gas as production set to ramp up
The millions in revenue have finally begun to roll in for the partners of the Corrib Gas field with one of the partners, Vermilion Energy, confirming sales of $17m (€14.89m) from the field for the first quarter of 2016.
The Canadian firm owns an 18.5pc share in the €3.6bn project.
Based on Vermilion's Corrib sales between January and March of this year, the total sales from the field for the three partners would be over $91.89m.
Production finally started on the field on December 30 last after a series of delays that have had the partners spend €3.6bn on the scheme - more than four times the original estimate of €800m.
Vermilion's results for the first quarter published yesterday provide the first detailed insight into the earning power of the Corrib Gas field off the Co Mayo coast.
The quarterly report states that since gas flowed, "Corrib has produced strongly".
The report states that the firm's 'fund flow from operations' at Corrib total $10.55m for the first three months after transportation costs of $1.6m, operating costs of $3.6m and general costs of $1.19m are taken into account.
The revenues and cash flow from the project are expected to increase sharply as production is expected to ramp up.
According to Vermilion's report, production for the first quarter was the equivalent of 30,540 barrels of oil per day.
However, the firm states that following the completion of previously planned recertification activities associated with the third party gas distribution pipeline network, production volumes at Corrib are expected to rise to an estimated peak rate of the equivalent of 52,432 barrels of oil per day.
Vermilion said that five of the six wells are capable of production with the remaining well to be brought online in the third quarter of 2016 following conclusion of the partners' offshore work programme. According to the report, Vermilion states that it has "experienced robust well deliverability and minimal downtime".
Sounding bullish about the prospects of Corrib for the firm, the report states that "Corrib remains one of the drivers of our 2016 and 2017 production growth, and is expected to be an important contributor to free cash flow in this and coming years".
During the three-month period, Vermilion incurred a further $3m in capital expenditure.
The Corrib Natural Gas project was officially launched in January and the field is expected to have a lifespan of between 15 and 20 years.
More than 6,000 people have worked on bringing Corrib gas to market, with the development to sustain 175 jobs over the next 15 to 20 years.
Six wells have been drilled at the Corrib field with gas transported to the Bellanaboy Bridge Gas Terminal through a 20-inch pipeline.
The Corrib project is a joint venture between Shell E&P Ireland Ltd (45pc), Statoil Exploration Ireland Ltd (36.5pc) and Vermilion Energy Ireland Ltd (18.5pc).