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Corrib gas project spend to top €3.6bn as Shell await Government approval

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Screen Shot 2015-11-18 at 23.10.02The costs of the Corrib gas project are set to top €3.6bn by the end of this year, more than four times the original estimate of €800m.

Gordon Deegan: Wednesday, November 18, 2015

Yesterday, operator Shell E&P Ltd confirmed that the 2015 spend by the Corrib partners on the field will be €260m.

Some €320m was spent last year, as total costs approach €3.6bn by the end of 2015.

A spokesman for Shell Ireland said: “As construction of the Corrib development is essentially completed, the capital investment in the project will reduce significantly from 2016 onwards.

“The Corrib facilities have been technically ready to start up since September 1 last.

“After what has been a protracted development phase, Shell is understandably eager to start producing gas as soon as possible.

“We look forward to receiving the final regulatory approval from the Department of Communications, Energy, and Natural Resources shortly so that we can deliver the many long-term benefits that will flow from the Corrib field.”

A spokesperson for the department could not put a date as to when a decision will be made.

The department revealed that Shell had lodged the application in August, which was followed by a public consultation that concluded on September 25.

The spokesperson said: “It is too early to say as to when the evaluation process will conclude.”

The costs of the Corrib gas project are set to top €3.6bn by the end of this year, more than four times the original estimate of €800m.

The Shell Ireland spokesman said: “There are approximately 400 people currently working on the project.

“Long term, the Corrib gas field will sustain 175 high-quality jobs for the next 15-20 years.”

New accounts filed by Shell E&P Ireland Ltd show that the firm recorded losses of €98.59m last year. That included an €84m actuarial loss on its pension scheme.

The firm recorded a pre-tax loss of €18.84m, with interest costs and other finance costs resulting in a post-tax loss of €26.6m.

The Corrib development is Ireland’s largest ever energy investment.

More than 6,000 people will have worked on bringing Corrib gas to market, with the project maintaining 1,250 full-time jobs in Mayo, Donegal, and Dublin since 2004.

Staff costs last year increased by 15%, from €21.59m to €24.59m.

Pay for Shell E&P’s three directors last year decreased from €2.16m to €1.62m.

Its shareholder funds last year topped €1.5bn after the firm received a further cash injection of €207m during the year.

Shell has a 45% share in the Corrib gas field with its two partners, Statoil having a 36.5% share and Canadian-owned Vermilion owning the remaining 18.5% share.

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