€38m revenue hit for Corrib partners after gas problems
Corrib Gas Partners lost out on estimated natural gas revenues of around €38m in the third quarter of this year as a result of odourless gas getting into the network and a scheduled downtime.
Production ceased at the Bellanaboy gas terminal in Co Mayo on September 9th for a scheduled downtime and a total of 31 days of production were lost.
This was as a result of odourless gas being pumped into the gas network in the west of Ireland after the plant was restarted temporarily.
As a result, natural gas customers in Galway and Mayo were urged to switch off their supplies until the matter was rectified within days.
Now, some of the financial cost to the Corrib Gas Partners, Shell Ireland, Statoil and Vermilion Energy from the odourless gas being pumped into the network can be revealed.
New quarterly results for Canadian firm Vermilion Energy showed its revenues from Corrib Gas were down by 23pc compared to the preceding quarter.
Production resumed at the terminal on October 11 and the partners lost out on 21 days of production in the third quarter and 10 days in the fourth quarter. Vermilion's revenues for the third quarter from the Corrib Gas field total C$26m compared to C$36.67m in the second quarter of this year.
Based on Vermilion's 18.5pc share of the field, total estimated revenues declined by C$57.4m (€38m) from C$198.2m (€132m) in the second quarter to C$140.8m (€93.77m) between July and September.
While the production of gas from the field did show a sharp quarter-on-quarter drop, production from Corrib Gas increased by 26pc to the end of September compared to the corresponding nine months in 2016 when the flow of gas was in its early startup phase.
In its report, Vermilion state that "given the significant level of investment in Corrib and the resulting tax pools, we do not expect to pay any cash taxes for the foreseeable future".
The release of the odourless gas has resulted in two separate inquiries launched by the Commission for Regulation of Utilities (CU) and the Environmental Protection Agency (EPA).
As a result of Shell Ireland confirming earlier this year that it is selling off its share in the Corrib Gas field, Vermilion is to increase its stake to 20pc and become the operator of the project from next year.