Shell divests interest in Corrib gas venture in Ireland

Shell divests interest in Corrib gas venture in Ireland

The Hague-based LNG giant Shell agreed to sell its 45 percent stake in the Corrib gas venture in Ireland to CPP Investment Board Europe for $1.23 billion. 

The transaction reached between Shell Overseas Holdings Limited and the unit of Canada Pension Plan Investment Board, includes an initial consideration of $947 million and additional payments of up to $285 million between 2018-2025, subject to gas price and production.

Commenting on the transaction, Shell’s upstream director, Andy Brown said it is consistent with the company’s three-year $30 billion divestment program, that followed Shell’s acquisition of BG Group.

He added that, at the half-way point, the company agreed deals valued at over $20 billion.

Shell expects to close the transaction, which represents the company’s exit from the upstream business in Ireland, in the second quarter of 2018.

The Shell share of the Corrib gas venture’s production represented approximately 27,000 barrels of oil equivalent/day in 2016.

Shell Energy Europe has signed an offtake agreement for some 40 percent of the Corrib gas venture’s production for up to three years following completion.

CPPIB will be the new Corrib Gas JV partner and Vermilion will become the new operator of the Corrib Gas Venture.

Shell also noted in its statement that the transaction will in an impairment charge of around $350 million, which will be taken in the second quarter of 2017.

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