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About 100 construction and engineering jobs are being created on the controversial Corrib gas project.
A contractor has been appointed for the 4.9km tunnel to onshore pipeline works, which is the final phase of the scheme to be completed.
Shell Ireland appointed BAM Contractors Ltd to tunnel under Sruwaddacon Bay in north Mayo to the Bellanaboy Gas Processing Terminal.
Theo Cullinane, chief executive of BAM Contractors, said the firm was delighted to be involved in one of the most significant energy infrastructure projects in the history of the State.
“During the construction phase 100 full-time jobs will be created including project management, engineering and tunnelling specialist roles,” he said.
“BAM is heavily involved in sustainable Irish infrastructure and building projects, particularly in the engineering, healthcare, educational, transport, water and waste sectors.
“We are an innovative company with the proven ability to drive efficiency through the construction process and a strong financial standing based on a strong balance sheet with no bank borrowings.”
The controversial Corrib gas field lies about 80 kilometres off the north-west coast.
BAM has already started work on site, with preparations for the installation of the tunnel drive shaft currently under way.
A tunnel boring machine (TBM) with an internal diameter of 3.5m will be used for the work and this is expected to arrive on site during the summer.
Tunnelling is planned to start towards the end of the year and is expected to take around 15 months to complete.
When the tunnel has been constructed and the TBM removed, the 20in gas pipeline will be installed in the tunnel.
The project is expected to be completed in late 2014.