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Corrib will cost €3.4 billion when completed

*”Over-Promise and Under-delivery”: TWELVE years behind its original completion schedule, the Corrib gas project’s costs have spiralled with €2.68 billion spent by December 2012.

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Aine Ryan: Tuesday, 31 December 2013 13:30

TWELVE years behind its original completion schedule, the Corrib gas project’s costs have spiralled with €2.68 billion spent by December 2012.

Reports in a number of national newspapers confirm that the bill for the project, which has been delayed due to a sustained community based campaign leading to a number of oral hearings and clashes with gardaí, will culminate in a €3.4 billion cost when completed by the end of next year.  That is four times the original projected cost.

As work continues on the sub-sea tunnel under Sruwaddacon Bay, which will link the raw gas pipeline to the Bellananaboy refinery, the company has confirmed that €380m was spent on the project this year and a projected €300m next year.

Interestingly, the massive costs to deliver the project mean it has involved the largest commercial investment by private investors in one single project in the history of the State.

The Corrib Gas Partners – Shell E&P Ireland (45 per cent), Statoil (36.5 per cent) and Vermilion (18.5 per cent) — had hoped to bring the gas ashore by 2011 but there was yet another delay after An Bord Pleanála ruled that part of a revised route must be diverted under the bay, which meant Shell had to go back to the drawing board and develop complex plans for the 4.9 kilometre sub-sea tunnel.

The tragic death in September of Lars Wagner, who worked on the tunnel’s specially commissioned Tunnel Boring Machine (TBM), caused yet another day for the project. The massive €680m spend in 2013 and 2014 coincides with this major logisitical phase of the project.

The Companies Office shows Shell recorded a pretax loss of €23.7 million last year. A tax credit of €6.4 million helped reduce the loss to €17.2 million and last year’s tax credit brings to €114.4 million the amount Shell has received in tax credits since the project’s inception.

Meanwhile, remuneration for the company’s three directors last year topped €1.4 million with staff costs dipping from €18.89 million to €18.3 million.

A Shell spokesman said that 2012 ‘was a busy and productive year. The Corrib gas project moved into its final phase with construction work continuing at the Bellanaboy bridge gas terminal’.

SOURCE

*Shell: A continuing story of Over-promise and Under-delivery: 4 December 2013

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