Equinor, the Norwegian LNG production plant owner and pipeline natural gas supplier to the European Union and the UK, has entered into an agreement with Canada’s Vermilion Energy to sell its non-operated stake in the Corrib natural gas project in Ireland.
The Corrib field started production in 2015 and is located 83 kilometres (51 miles) off Ireland’s northwest coast in water depths of almost 350 metres.
The equity gas volumes to Equinor for 2021 are estimated at 58 million standard cubic feet per day.
Equinor and Vermilion have agreed a consideration of US$434 million, before closing adjustment, with an effective date set at 1 January 2022.
The transaction is organised through a share sale of Equinor’s 36.5 percent of the Corrib project, alongside Vermilion, the operator with 20 percent, and Dublin-based Nephin Energy with 43.5 percent.
Hedging
As part of the transaction, Equinor and Vermilion have agreed to hedge approximately 70 percent of the production for 2022 and 2023, and have also agreed a contingent payment that will be paid on a portion of the revenue if European gas prices exceed a given floor level.
“The Corrib field has been an important non-operated project for Equinor for several years,” said Arne Gürtner, Equinor senior vice president responsible for the United Kingdom and Ireland.
“We have taken the decision to sell the asset to focus our portfolio, in line with our strategy, to capture value from the current strong market and to free up capital that we can re-invest elsewhere,” added Gürtner.
The deal is subject to approval by partners, the Irish government and regulatory bodies.
The sale of Corrib means that Equinor will no longer have active business presence in Ireland, after also deciding to withdraw from an early phase offshore wind project in the country.
Equinor’s Hammerfest LNG plant on Melkoya island in northern Norway is currently closed after a fire occurred on September 28 last year.
The facility, which supplies European LNG terminals, is expected to re-open after repairs in the first quarter of 2022.
