Corrib, Irish offshore gas field, began producing on Wednesday

Corrib offshore project a joint venture between Shell, Statoil, Vermilion Energy

At peak production, Corrib will provide Ireland with up to 60 per cent of the country’s gas needs.  Shell photo.

CALGARY _ Vermilion Energy (TSX:VET) of Calgary says the Corrib offshore natural gas in Ireland began producing for the first time on Wednesday.

“First gas marks an important milestone for Vermilion” said Lorenzo Donadeo, CEO of Vermilion.

The Calgary-based company expects output to rise over six months and Vermilion’s share will peak at 58 million cubic feet per day, the equivalent of 9,700 barrels per day of oil.

Vermillion has an 18.5 per cent interest in the Corrib project, which is a joint venture with Shell E&P Ireland Ltd. (45 per cent) and Statoil Exploration Ireland Ltd. (36.5 per cent).

“We are very pleased to see production start at Corrib. The output from Corrib will be an important addition to Statoil’s international production portfolio,” says Tove Stuhr Sjøblom, Senior Vice President for Statoil’s development and production activities in the UK and Ireland.

The field, located 83 kilometres off the northwest coast of Ireland and at a depth of 350 metres, has the potential to meet up to 60 per cent of Ireland’s gas needs at peak production.

“Today’s announcement is a positive step for our gas portfolio,” said Andy Brown, Shell’s Upstream International Director.

The gas will be priced against a U.K. benchmark and add to Vermilion’s European production, which will account for 30 per cent of the company’s total volumes in 2016.

“Corrib will be a significant contributor to both our 2016 and 2017 production growth and generate meaningful free cash flow for the company,” said Donadeo in a statement.

With files from The Canadian Press