Enterprise Oil has agreed to sell gas believed to be worth about £300 million sterling (€474 million) to Bord Gβis. In a statement, the company said it had agreed "key terms" to sell 60 per cent of the gas its produces at the Corrib Field off Co Mayo to Bord Gβis's supply division.
Given recent gas demand projections, the deal is said to cover about 8 per cent of the Irish market over 10 years.
Production of gas is not expected until 2003 but, at current prices, the deal is thought to be worth about £300 million sterling in the 10-year period. It is thought the duration and value could be even greater in the long term.
Bord Gβis's agreement with Enterprise comes despite the availability of alternative supplies from a new interconnector it is constructing. That €279 million (£220 million) pipeline, parallel to Bord Gβis's existing link with Scotland, will be commissioned by winter 2002.
Sources said the decision of the supply would have been guided by the price it secured.
The deal is very significant for Enterprise because only 40 per cent of its gas is unsold. The company said it was in talks to sell the remainder.
Enterprise owns 45 per cent of Corrib, which it is developing in a joint venture with the Norwegian firm Statoil and Marathon Petroleum of the US. The partners have received planning permission from Mayo County Council for a gas reception plant at Bellanaboy Bridge although objectors are expected to appeal to An Bord Pleanβla.
The managing director of Enterprise Energy Ireland, Mr Brian ╙ Cathβin, said it would continue to work with "all relevant stakeholders" to ensure a successful outcome to the project.
