Shell has exited the upstream sector in Ireland with the sale of its interest in the Corrib gas project to Nephin Energy for US$1.3 billion.
The Corrib natural gas field is located approximately 83km off the northwest coast of Ireland, 3,000 meters under the seabed and in water depths of 350 meters. Initial field development started on December 30, 2015 comprising six subsea wells. Gas is transported via an 83 km pipeline to an onshore gas processing terminal and then exported via the Bord Gais Eireann link line to the Irish gas grid.
Shell said it had completed the previously announced sale of its shares in Shell E&P Ireland Limited, which holds a 45% interest in the Corrib gas venture, for up to $1.3 billion to Nephin Energy Holdings Limited (NEHL), a wholly-owned subsidiary of Canada Pension Plan Investment Board.
The transaction’s effective date is January 1, 2017 and includes an initial consideration of US$958 million, an interest of US$54 million and additional payments of up to US$285 million between 2018- 2025.
Shell’s share of the Corrib gas project was approximately 27,000 boed in 2016.
Shell said the sale would contribute to its $30 billion divestment target for 2016-2018.
The transfer means Vermilion will hold a 20% operated interest in Corrib, NEHL a 43.5% non-operated interest and Equinor a 36.5% non-operated interest.