Performance of Corrib gas field 'exceeding expectations'
The performance of the Corrib gas field is exceeding expectations, with its promoters recording sales of (Canadian) $241.34m (€160m) in the first quarter of this year.
That is according to a new report by one of the Corrib partners, Canadian-based Vermilion, which recorded that between January and March this year the project exceeded expectations for "well deliverability and downtime".
As a result of the strong performance, Vermilion has adjusted its field and well performance estimates "and now expects to maintain peak production through Q1 2018 and potentially into Q2 2018".
Vermilion state: "Corrib is a highly efficient generator of free cash flow as a result of its highly-valued European gas product, absence of royalties, low operating expense, and low maintenance capital requirements."
The report states that production in the first quarter of this year increased 3pc on the final quarter of last year due to reduced downtime and increased 91pc year-over-year, compared to the first quarter of last year.
The report explains that production volumes in the first quarter of 2016 were restricted during the commissioning period that occurred in the first half of 2016.
Vermilion recorded sales of $44.92m in the first quarter. Vermilion owns 18.5pc of the field and based on Vermilion's Corrib sales between January and the end of March of this year, the total sales from the field for the three partners would be $241m (€160m).
The €160m equates to daily sales of €1.7m daily from the Corrib gas field.
The sales for the first quarter follow sales of $589m from the first year of production last year.
Vermilion has stated previously that its investment in the field will be a significant source of fund flows for Vermilion "stemming from its relatively high-priced gas product".
Vermilion state: "Production results continued to benefit from better-than-expected well deliverability and minimal downtime."
Shell is the operating partner in the production of gas at the field and is sustaining 190 jobs. The gas terminal commenced operations on December 30, 2015.
Shell E&P Ireland Ltd has received €186m in tax credits since the project's inception.
Shell has a 45pc share in the field with its two partners - Statoil having a 36.5pc share and Vermilion owning the remaining 18.5pc share.
The Corrib Partners have invested more than €3.6bn in the project - more than four times the original estimate of €800m.
Gas was originally expected to flow from the field in 2003.