Thursday 20 June 2019

Corrib Gas to deliver more gas than initial estimates

Gordon Deegan

There is more gas in the Corrib gas field off the west coast than originally estimated, new data shows.

Commercial gas is finally set to come onshore from the field off the Co Mayo coast in the middle of next year after a series of delays.

The partners in the project, Shell, Statoil and Vermilion are now expected to spend an additional €300m on the project this year to bring the total spend so far to €3.4bn by the end of this year.

Now, new accounts filed by one of the partners in the Corrib Gas project, Canadian-based firm, Vermilion Energy Ireland Ltd show that the volume of gas at peak production will be 8pc more than originally believed.

The directors' report reveals that successful subsea operations off the coast of Mayo were conducted during the third quarter of 2013 and as a result, Vermilion state that it is increasing its peak production estimate at Corrib from 9,000 barrels of oil equivalent per day to 9,700 barrels of oil equivalent per day net to Vermilion.

Vermilion has an 18.5pc share in the field and it states that the gas field is expected to constitute 95pc of Ireland's natural gas production and approximately 60pc to 65pc of Ireland's domestic gas consumption.

The results of the sub-sea survey is welcome news for the partners in the project, which has encountered a succession of delays and consequent budget over-runs since gas was found.

The project is likely to end up 12 years behind the original schedule and total outlay will be more than four times the initial estimate of €800m.

Work on a project to lay 72 separate pieces of pipe to create a 5km line to bring gas ashore to Bellanaboy gas processing terminal is ongoing.

The Irish unit of Vermilion recorded a pre-tax loss last year of €43m. However, a tax credit of €10.96m reduced the firm's losses to €32.1m.

The firm's accumulated losses totalled €235.6m.

Shareholder funds stood at €53.1m.

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