A three level consultation is underway between Shell and Irish authorities over the future of Ireland's offshore Corrib gas project after a related onshore gas terminal was refused planning permission by An Bord Pleanála - the Irish planning board.

"We are having a detailed discussion with the Irish authorities, with the Irish government, the relevant planning authorities and, from that, we are looking to clarify the position to understand how best to move forward," Rosemary Steen, spokeswoman for Shell's subsidiary Enterprise Energy Ireland (EEI) told E&P.
Discussions are also underway with field development partners Marathon and Statoil over the future of the 882 Bcf (25 Bcm) gas project originally due onstream in 2005. It was stopped dead after An Bord Pleanála refused planning permission for the gas terminal at Ballinaboy Bridge near Belmullet in County Mayo supporting the offshore gas development. The Irish planning board cited concerns about the destruction of peat at the site, 5 miles (8 km) inland from the landfall of the planned offshore pipeline, in its decision to refuse permission for the gas terminal. Effectively, the decision has forced Shell to reconsider the whole development. It was unlikely a decision will be known before the end of the summer.
Previously, in July 2002, the planning board had asked EEI for detailed comparison and costs for an alternative development scenario using a shallow-water wellhead platform to treat Corrib gas.

Also, major field development contracts with several companies are suspended while issues surrounding development are examined.

ABB Inc. was contracted to supply subsea equipment for the five-well offshore project. Allseas was contracted to lay the offshore pipeline, from the field location to shore, and Amec won an overall management contract for engineering, procurement and commissioning for the gas terminal, which was to be built by two Irish firms, SIAC and IIF.

Ireland's planning board declined to permit the onshore gas terminal saying it would damage peat at the location of the planned terminal.

One of the inspectors that had looked at EEI's gas terminal application discussed possible solutions for the peat issue, Steen said. Those have to be closely examined and worked through, costed and new timetables developed for the work program involved, she said. Both Statoil and Marathon also have to re-examine the schedules and re-budget for further examination of the technical issues.
Realistically, EEI said it cannot yet indicate whether or not it will appeal the planning refusal or abandon the project altogether.

In mid April the Irish planning board had deferred an expected decision on the gas terminal. The same week Marine Minister Frank Fahy had approved the new 43-mile (70-km) gas pipeline linking Corrib to the gas terminal.

Then, at the end of the month, the Irish planning board made its unanimous decision, arguing that the removal of nearly 23 million cf (650,000 cu m) of peat from the intended site for the gas terminal site was unacceptable.

In its decision, the board said, "The proposed development involves the excavation of approximately 650,000 cu m of peat and other unsuitable materials from the site of the gas processing terminal and the removal of the peat and other materials to adjoining repositories and overlaying them on an existing blanket bog of variable thickness on a sloping site."

Because of the contours of the proposed peat repositories, the amount of rainfall in the area, the characteristics of the peat rendered the proposed methods for moving it and re-depositing it insufficient. The board argued that the peat repositories were likely to fail, risking pollution of three nearby salmon fish waters. They added that the proposed drainage system at the site "would be ineffective" in ensuring integrity of the peat repositories. "The Board considers that both of [the] proposed repositories have a high probability of failure and that the proposed development would constitute an unacceptable risk to the health and safety of the local community and of the general public on the public road in the vicinity of the site."

It said EEI's plans would "seriously injure" amenities of property in the vicinity, and that the proposed development would therefore, "be contrary to the proper planning and development of the area."
Commenting on the application, the board noted a lack of landscaping around the terminal and said it was for Ireland's Department of Marine and Natural Resources to decide on national strategic issues such as the timing of gas infrastructure developments.

Immediately after the decision was known, there was a raft of comments.

Andy Pyle, managing director of Enterprise Energy Ireland, stated he was "naturally disappointed" at the outcome and promised a full review of the project and its future. Originally Corrib was due onstream in the second half of 2005.

More optimistically, Dermot Ahern, Ireland's minister for communications, marine and natural resources, said the board's decision may not be the end of the road for Corrib, which is seen as crucial to Ireland's future energy needs. Ahern said the gas field has "significant potential and importance for our energy supply and economic development both in the west and nationally."

Ahern continued, "While I fully respect the decision ... of An Bord Pleanála, it is to be hoped that the ruling does not end efforts to tap into this rich vein of energy off our coast and the jobs, investment and infrastructure which it has the potential to deliver."

Fergus Cahill, chairman of the Irish Offshore Operators Association, also slammed the board's decision, describing it as, "A serious blow to the development of Ireland's energy resources and infrastructure." Cahill stated, "This sends a signal to companies considering serious investment in Ireland that planning presents a very difficult hurdle. Ireland is importing 85% of its natural gas at present and demand for this clean and efficient fuel is increasing. The Enterprise Energy development would have provided 1 trillion cf of gas to the Northwest, benefiting the entire region," he said.

"I am concerned that some member companies, who have remained committed to Ireland despite the low success rate and who are investing $1.15 million in offshore activity this season, may reconsider their involvement here," he concluded.

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