Wednesday 23 August 2017

Sales of €1.2m a day now flowing through Corrib gas pipeline

Ronan Deasy, MD of SEPI
Ronan Deasy, MD of SEPI

Gordon Deegan

THE Corrib Partners are generating sales of more than €1.2m a day from the gas flowing from the Corrib gas field off the Co Mayo coast.

Production started on the field at the end of last year and for the first nine months of this year the Corrib Partners, including Shell Ireland, recorded estimated revenues of $360m (€335m) from the production of gas from the field.

This follows a new report by one of the Corrib partners, Canadian-based Vermilion showing that it has generated sales of $66.42m (€61.5m) for the first nine months of production.

Vermilion owns 18.5pc of the field and based on Vermilion's Corrib sales between January and September of this year, the total sales from the field for the three partners would be $360m (€335m).

The Vermilion report states that production volumes on the project reached full capacity at the end of second quarter of this year.

The report states that production for the third quarter was 25pc higher than the second quarter.

The firm recorded sales of $26m (€24m) for the third quarter compared to $23.3m for the April to June period.

"Production results continued to benefit from better than expected well deliverability and minimal downtime," Vermilion stated. The company said all six wells are now available for production.

Vermilion state that general and administrative expenses for the first nine months are higher versus the comparable 2015 period due to increased corporate support provided for production operations now underway.

Publication of the quarterly Vermilion report coincides with the main operator of the project, Shell E&P Ltd (SEPL) confirming that it recorded a €179.5m pre-tax loss last year.

New accounts from Shell's main Irish firm show that this arose primarily from a €141m write-down in its asset last year.

The Corrib Partners spent an additional €197m on the project last year, and will spend another €38m this year, and €6m in 2017.

A spokeswoman for Shell E&P Ltd said yesterday: "Since December 2015, the Corrib gas development has established itself as an integral piece of Ireland's energy infrastructure and supplies up to 60pc of the national gas requirement. We look forward to contributing to Ireland's energy security over the next fifteen to twenty years."

"The Bellanaboy Bridge Gas Terminal reached its target capacity in June this year and production has stayed at this level," she said.

Shell's operations in Ireland are currently sustaining 190 jobs. The gas terminal commenced operations on December 30th last and Shell E&P Ltd recorded revenues of €184,000 for the year. A tax credit of €59.97m helped reduce the loss to €119m and last year's tax credit brings to €186m SEPI has received in tax credits since the project's inception.

Staff costs at SEPI last year increased marginally to €24.96m. Pay to directors last year totalled €1.783m, including €168,000 in pension payments. An additional €364,000 was paid out for redundancies.

Four directors served last year. Ronan Deasy replaced Michael Crothers as MD on February 1st 2015 with Mr Crothers resigning from the board on that date.

Corrib Partners invested more than €3.6bn in the project - four times the original budget.

Irish Independent

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