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Shell has sold its stake in the controversial Corrib gas project for €1bn

A Canadian pension fund snapped up the energy giant’s share.

Image: Matt Crossick/Matt Crossick/Empics Entertainment

SHELL HAS SOLD its stake in the controversial Corrib gas project in a deal potentially worth more than €1 billion.

The Dutch oil and gas giant announced that it has stuck up a deal with a subsidiary of the Canada Pension Plan Investment Board (CPPIB) to offload its shares in Shell E&P Ireland Limited, which owns a 45% stake in the County Mayo gas field.

The transaction consists of an initial consideration of €830 million with additional payments of up to €250 million between 2018 and 2025, depending on gas prices and production.

The sale is subject to regulatory approval and is expected to be completed by the end of June 2018.

Shell said it would record a $350 million (€308 million) loss in its accounts for the write-down in the value of its asset, however the Irish Times reported the company’s total loss on the Corrib project was expected to be around €1 billion.

As part of the deal, CPPIB will be the new joint venture partner while Canadian gas company Vermilion – which owns an 18.5% in the Corrib project – will operate the pipeline.

Shell will no longer be involved in the gas field but will still have a presence in Ireland through its aviation fuel joint venture, Shell and Topaz Aviation Ireland Limited.

Commenting on the sale, Shell’s Ireland country chair, Ronan Deasy, said the company “is very proud to have led the development of the Corrib gas field”.

The field has been forecast to supply up to 60% of Ireland’s gas at peak output. Earlier this year, Vermilion reported the project’s performance was exceeding expectations with sales worth around €160 million for the first quarter of 2017.

Controversy

However it was reported in recent months that oil and gas giant Shell was looking to offload its stake in the gas field as part of a restructuring programme launched in March 2016 after Shell acquired UK rival BG for £40 billion.

The Sunday Business Post last month reported that a number of potential buyers were interested in the Corrib gas field, including Australian investment bank Macquarie and Vermilion.

Protest outside Shell terminal Corrib gas protests Source: Niall Carson/PA Archive/PA Images

The Corrib project faced fierce opposition, with persistent protests against the development for close to a decade. Locals and activists were concerned about the safety of the project.

The controversy surrounding the gas field was the subject of two documentary films, Pipe Down and The Pipe, which both picked up accolades at the Waterford Film Festival.

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Written by Conor McMahon and posted on Fora.ie

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