Planning delays on the Corrib gas initiative could jeopardise its plans for the multi-million euro project, Shell conceded yesterday.
The new owner of Enterprise Oil said it was fully committed to the project and would submit a new report on its plan for an onshore gas terminal to An Bord Pleanála in September. But the managing director of the Shell operation, Mr Andy Pyle, said a refusal to sanction the plan was likely to prompt reconsideration of the project.
He said: "If we believe we're going forward with the best proposal, we have some concerns as to whether other proposals would be any better." Failure to secure planning permission for the treatment plant would mean a return to "square one" for an alternative.
With up to 100 staff still working on the suspended project, he added: "The longer the period of uncertainty, inevitably it makes it more different to maintain that level of activity efficiently."
Mr Pyle said he had not put "any effort into considering" alternative strategies for the project. Neither had he received approaches from groups interested in purchasing Shell's share.
Shell is leading the Corrib project, which is a joint venture with the Norwegian group Statoil and the US-owned Marathon Petroleum. It became involved after acquiring Enterprise Oil for €5.7 billion in April.
Two months later An Bord Pleanála delivered a significant setback to the plan when it sought a large amount of additional information about the treatment plant project from Shell.
The plant is required to prepare gas for transmission into the national grid but individuals and groups appealed planning permission granted last by Mayo County Council on environmental grounds.
While certain individuals claim the project partners are spending millions of euros every month on the suspended project, sceptics question such figures.
However, it is thought overall expenditure to date exceeds £100 million sterling (€156 million). If An Bord Pleanála sanctions the plan, the gas would be delivered into the grid by the end of 2004.
The Swiss shipping group Allseas is seeking compensation of more than more than €31 million from the Corrib partners over the project's suspension.
Allseas was hired for the construction of the subsea pipeline to the Co Mayo landfall from the gas field but the project was suspended days before work was due to begin. Mr Pyle said he was working towards an "amicable" resolution with Allseas.
Of the broader project, he said: "I strongly believe we're doing this in the best and the right way. "
While gas from the field was originally expected to meet demand before the end of 2003, delays prompted the Government to sanction a second Bord Gáis interconnector with Scotland to avoid a gas shortage.
Last month the Minister for Energy and Communications, Mr Dermot Ahern, said: "It is now obvious that to have relied on the limited capacity of the original interconnector and to have also depended on an early supply of gas from Corrib would have been foolhardy in the extreme."
