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Ireland: Corrib gas in progress again

Natural gas: Ireland: Corrib gas in progress again

EVIDENTLY STILL bruised by the hostility shown to its Corrib plans by locals in northwest Ireland, Royal Dutch Shell will still not give a date for first gas from the offshore field. But with the selection, in April, of a new route for the onshore part of the pipeline there are forecasts that completion of the development could be achieved towards the end of next year. The firm said offshore work resumed last month and describes its onshore terminal as the largest construction site in the country, with 650 workers engaged.

The new route for the pipeline, from the offshore section’s landfall at Glengad in Broadhaven Bay, County Mayo, to the terminal at Bellanaboy, takes the line 140 metres from the nearest occupied house – twice the distance of the original. Shell has also agreed to limit the pressure in the line to 144 bar, half the original design pressure.

The route change followed an 11-month consultation and a long mediation process. Local protests over the development – which was originally due for start-up in 2003 – had escalated, despite planning approvals; and, in June 2005, five people were sent to prison for preventing pipeline-construction operations on their land. Locals have argued that the processing facility should be offshore, or relocated to a more remote area. But with the Bellanaboy terminal 30% complete, according to Shell in April, calls for substantial changes to the project do not appear to be realistic.

Instead, Shell has launched a hearts-and-minds campaign with “a firm focus on delivering benefits to the local community”. Local investments and community initiatives involving expenditures of €0.5bn ($0.78bn) were launched last year. The firm says over 55% of the construction workers at Bellanaboy are from County Mayo and that there will be 130 permanent jobs at the terminal.

The wider aspect is that Ireland needs Corrib gas to make up for rapidly declining output from the country’s only existing fields – the Marathon-operated Kinsale Head and its satellites, off the south coast. Indigenous production has fallen to about 0.5bn cubic metres (cm) a year, but consumption – stimulated by considerable economic progress in recent years – rose to about 4.5bn cm/y last year.

Consequently, nearly 90% of gas demand is now being met by imports from or through the UK. There are two pipelines crossing the Irish Sea from Moffat in Scotland to just north of Dublin, and a third from Moffat to Belfast in Northern Ireland. Transfers between Northern Ireland and Ireland can be made through the South-North onshore pipeline, which opened in October 2006.

Shell does not give a figure for Corrib’s output, but forecasts that, at peak flow, the field will cover about 60% of the country’s gas demand. According to Dublin’s Goodbody Economic Consultants, in a report commissioned by Shell, Corrib could flow a peak of about 3bn cm/y in 2011. Shell describes the field as medium-sized and smaller than Kinsale Head, with reserves of about 28bn cm and an expected life of 15-20 years.

Corrib, 83 km offshore in water 350 metres deep, is being developed as a subsea-to-beach scheme with no surface facilities. Last month, Transocean’s Sedco 711 semi-submersible was due to start completing the five appraisal wells, drilled previously and suspended. The 20-inch pipeline is due for laying, by Allseas, next spring. From the Bellanaboy terminal, for which an Amec venture has the engineering, procurement and construction contract, the gas will flow into the Bord Gáis distribution system through a pipeline already laid.

Corrib was discovered in 1996 by Enterprise, which became part of Shell in 2002. Shell holds 45.0%, partnered by StatoilHydro with 36.5% and Marathon with 18.5%.

When Corrib production eventually starts, the partners will be hoping for some of the fortune Marathon had with Kinsale Head. When brought on stream, in 1978, the field was viewed as relatively small – production of about 1.4bn cm/y was sold for electricity generation and fertiliser manufacture and it was forecast to be depleted inside 20 years. But Kinsale Head has proved large enough to support the construction of a distribution system in the country and for many years its gas covered over 20% of Ireland’s total primary energy needs. It continues in production at low rates.

Marathon developed the field, about 60 km south of Cork, with two platforms, which now also handle gas from two subsea satellites – Ballycotton, connected in 1991, and Southwest Kinsale, connected in 1999. Since June 2006, Southwest Kinsale has been used as a third-party seasonal storage facility, with gas injected in the summer and released in the winter. Marathon holds 100% of Kinsale Head, Ballycotton and Southwest Kinsale.

Also connected to the Kinsale Head complex is the troubled Seven Heads gasfield, to the southwest. Seven Heads was developed by the UK’s Ramco, which brought it on stream at the end of 2003 with the expectation of flowing 0.62bn cm/y from the five wells. However, the expected flow was only achieved for 45 days before the pressure declined drastically, forcing Ramco to buy gas from the UK to meet its sale commitments.

In early 2006, Marathon acquired Ramco’s 86.5% interest in Seven Heads (with Island Oil & Gas retaining its 12.5% and Sunningdale retaining 1.0%) and took over as operator. Marathon says Seven Heads flowed only 255,000 cm/d net in the first half of last year, while the other Kinsale Head area fields flowed 0.99m cm/d – or 455m cm/y.

Although decades of drilling work in Irish waters has produced only the two substantial discoveries, the country continues to attract exploration interest. About 25 wells have been drilled over the past 15 years and heavyweight companies – notably ExxonMobil – are active.

On the basis of seismic work, the Porcupine basin – a remote and deep-water area off the southwest coast – is rated highly and was the sole subject of the government’s 2007 licensing round, which saw the offer of 232 blocks and part-blocks of Porcupine territory.

The result, in March, was the award of four frontier licences. ExxonMobil (80%), Providence (16%) and Sosina (4%) took two areas in the central part of the basin, at water-depths of 2,000-3,000 metres. Providence (72%), Sosina (18%) and Challenger (10%) took an area in the north of the basin where the depth is about 500 metres. Island Oil & Gas (50%) and Supernova (50%) took an area in the south, adjacent to the Goban Spur, where the depth is 1,000-2,000 metres.

The ExxonMobil-headed group holds other Porcupine basin licences, including one covering the promising Dunquin gas prospect. Providence, as operator for a group including Challenger, Dyas, Atlantic, Forest Gate and Sosina, has the shallow-water Hook Head oil discovery in the Celtic Sea, which is due for further appraisal this year.

In April, the government said the next licensing round, scheduled for 2009, will cover the Rockall basin – a large area of frontier territory to the west and northwest of the country. The round will be launched in the fourth quarter, with applications to be submitted in the second quarter of 2009.

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