Shell Ireland receives €90m from parent firm to complete Corrib gas works

By Gordon Deegan

Saturday, November 07, 2009

SHELL Ireland has received a €90 million cash injection to complete its controversial works to allow gas be taken from the Corrib gas field.

The cash injection to Shell E&P Ireland Ltd from its parent company is confirmed in documents recently lodged with the Companies’ Office.

The €90m represents a 28% increase in the company’s share capital to €344m.

A spokesman for Shell E&P Ireland confirmed that the injection of equity “is towards the development costs of the final phases of the project”.

The Corrib field could produce enough gas to meet 75% of Ireland’s peak winter gas needs for up to a decade.

An Bord Pleanála found this week that up to half of Shell’s proposed route for its Corrib gas onshore pipeline in Co Mayo is “unacceptable” on safety grounds.

A subsidiary of Royal Dutch Shell, Shell E&P Ireland now has three months in which to provide An Bord Pleanála with revised proposals for an alternative pipeline route to bring the gas onshore.

A company spokesman said yesterday: “The current window for project completion is year-end 2010/early 2011. It is too early to say whether the recent correspondence from An Bord Pleanála will have an impact on this schedule.”

It is now seven years since the Corrib gas project plan was approved by Government.

However, since then the proposal — sparked by safety fears — has become mired in controversy, including the jailing of the “Rossport Five” in 2005 and a number of confrontations between gardaí and protesters at the site of the Bellanaboy gas processing terminal in north Mayo.

Over 850 people are employed by Shell on the construction of the terminal at Bellanaboy.

The Shell spokesman said: “The terminal is over 80% complete and a period of operational qualification of the terminal is expected to take place in 2010.”

Accounts for 2008 have yet to be filed by Shell E&P Ireland. However, in the company’s returns to the end of 2007, they show that accumulated losses were €121m, due largely to developing the Corrib gas field.

The filings show that the losses would have been much higher but for Shell E&P Ireland Ltd receiving tax credits from the exchequer totalling €28m in the four years to the end of 2007, paying no net tax during that period.

The spend associated with the project almost breached €100m at the end of 2007, while losses include €40m in exploration costs written off since 2004.

However, the accounts show that the company’s book value of the Corrib gas field under development has almost doubled in three years, going from €230m at the end of 2004 to €422m at the end of 2007.

Last June, one of the partners in the project, US oil company Marathon, sold its share of the Corrib gas field to Canadian rival Vermilion in a deal potentially worth $400m (€285m).

Discovered in 1996, the gas field contains 1 trillion cubic feet of gas and has an estimated field life of 15 to 20 years.

This story appeared in the printed version of the Irish Examiner Saturday, November 07, 2009

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