THE managing director of Shell E&P Ireland Limited (SEPIL) has spoken of the massive economic benefits of Corrib gas to Mayo and the country in general.

Michael Crothers told The Connaught Telegraph a sum of €800 million will have been invested by the company by the time the project is fully completed in 2014. Half of the investment relates solely to Mayo.

He made his comments following the publication by Goodbody Economic Consultants of its updated assessment of the economic impact the development will make during both its construction and operations phases.

According to Goodbody, work on the final phase of the project, which includes the building of a 4.9 km. tunnel under Sruwaddacon Bay in north Mayo, will require an average of 705 people to be employed between now and the end of construction.

An average of 382 of these jobs will be in Mayo. In addition, the equivalent of a further 760 full-time indirect jobs will be sustained through spin-off business generated by the project, 450 of these in the county.

The analysis by Goodbody’s outlined the significant contribution Corrib has already made in terms of employment and contribution to the Exchequer, with the equivalent of 1,250 full-time jobs sustained from 2004 to 2010 and €887 million added to Ireland’s GDP.

A total of 653 of these jobs were in Mayo and Donegal, while the project’s contribution to GDP locally was €503 million

The report also indicated that the operation of the project – for a period of 15 to 20 years – will add €4.4 billion to national GDP, while also meeting up to 60 per cent of Ireland’s gas needs at peak production.

Explained Mr. Crothers: “At a time when the economy is in a difficult place, the Corrib gas project is a beacon in terms of investment and job creation.

“Over the next three years, the Corrib Gas Partners will invest €400 million in Mayo, sustaining the equivalent of 382 full-time jobs and 450 indirect ones.

“As has been the case up to now, many of these positions will be available through local contractors and sub-contractors.

“We are delighted that so many of the contractors who have worked on Corrib are now in a better position to compete for similar work both in Ireland and abroad.

“In addition to these benefits, the importance of gas as a contributor to Ireland’s long-term energy security is also more critical than ever.

“Over 61 per cent of the country’s electricity needs are now being met by natural gas and Corrib will be Ireland’s main indigenous source of gas once the field is producing.” ·       Completion of the Corrib gas project involves laying the onshore pipeline, including the building of a 4.9 km. tunnel under Sruwaddacon Bay, finishing the terminal at Bellanaboy and some final offshore works.

Construction of the tunnel under Sruwaddacon Bay will start in the second half of 2012 and is expected to take two years to complete.

The majority of the onshore pipeline jobs will be created through two main contractors – Roadbridge, who will carry out all civil and earthworks associated with construction, and BAM Civil/Wayss & Freytag, an Irish-German joint venture company that will construct the tunnel.

Some of the tunnelling work will require the employment of specialist expertise from outside of Ireland. This also applies to the installation of the offshore umbilical and some of the wells work at the Corrib Field.

SEPIL estimates that some 73 people will be directly employed by the Corrib Gas

Partners during the life of the field. SEPIL has also provided details of its likely

purchases of goods and services from Irish suppliers over the life of the field.

The indirect employment effect of this spending will be to create the equivalent of 63

full-time jobs for the operating life of the field.

The spending by these direct and indirect employees will create induced employment equivalent to a further 39 fulltime jobs for the operating life of the field.

“When the Corrib construction work is completed and the field is producing gas,

the environment in which decisions are made to search for oil and gas around

Ireland should change for the better,” stated Mr. Crothers.

Already, a greater level of interest in offshore exploration is being seen. In the Atlantic Margin Licensing Round, in May 2011, there were a record 15 applications for exploration options in the Irish offshore.

A total of 13 licensing options were awarded to 12 different companies in this round,

the highest number ever awarded.

“It is not our intention to expand Corrib, but we will be taking stock of opportunities,” he said.

Mr. Crothers emphasised the Corrib project led to the gas grid being extended to the north-west. Consequently, existing large investors as Baxter and Allergan are already

benefitting from the availability of natural gas as a result of the Corrib project.

“The availability of natural gas increases the attractiveness of Mayo and surrounding

counties as a site for future industrial investment, and sustains balanced regional

development.

“This is very badly needed in view of the structural weaknesses in the regional economy and the changed economic prospects for the country as a whole.

“The availability of gas in the north-west will also allow the potential of wind energy to be realised in this area. Small efficient gas-powered generating capacity can now be installed to balance the intermittent output from wind turbines.”

On the issue of domestic use, he explained the gas pipeline from Mayo to Galway has been constructed by Bord Gáis to support the Corrib project.

The tariffs that the Corrib Gas Partners will pay for the use of the pipeline cover Bord Gáis’s investment and maintenance costs.

“Now that this pipeline is in place other investments in energy infrastructure, including the extension of natural gas supplies to the north-West, have become viable.

“Ten towns along the route of the pipeline already receive domestic natural gas. A further four towns will be connected once a sufficient number of residents commit to buy natural gas.

“There is also potential for the grid to be further extended in a northerly direction up to Co. Donegal.

“A recent report by the Western Development Commission which examined the benefits of extending the gas grid to a further eleven towns in the north-west, estimated that €20.6 million could be saved annually in fuel costs between commercial and domestic users if gas were available as an option in these towns,” he added.

In addition to the direct benefits that have been brought to the local area as a result of the Corrib project, Mr. Crothers outlined one of the main indirect benefits has been the existence of community investment initiatives.

Community investment is a voluntary contribution by the Corrib Gas Partners to the local community, via a number of different structured initiatives, all of which are community-led.

There are three such initiatives – the local grants programme, the third-level scholarships programme and the Corrib Natural Gas Erris Development Fund – all of which have brought benefits to community, voluntary, sporting and cultural organisations in the Erris area.

Since 2007 more than €5 million in funding has been allocated under the three programmes.

The local grants programme is designed to give small-scale financial support to local

voluntary and community sector organisations within Erris.

The programme allows organisations to apply for funding of up to €10,000 per annum. To date, over €1.3 million has been allocated to 136 different organisations under this programme.

The third-level scholarships programme provides ten scholarships per year to Leaving

Certificate students in four local secondary schools whom are going on to third level.

The value of the scholarships is €4,000 per annum per year of their undergraduate course. To date €600,000 has been allocated under the programme, which is currently in the second year of a three-year cycle. This is the second such cycle.

The Corrib Natural Gas Erris Development Fund was launched in January 2009 with an initial fund of €5 million.