The state could have faced liabilities of many millions of euros if there had been an accident at the Corrib gas field at any time in the past 16 years, it has emerged.

An oversight meant there was no power to make Royal Dutch Shell, the project’s largest shareholder, pay compensation.

Correspondence obtained by The Sunday Times reveals that while reviewing Shell’s proposal to sell its 45% stake in the Mayo gas project for €830m last January, the government discovered that Royal Dutch Shell, the ultimate parent company of Shell Ireland, was not registered as a guarantor, as required under its lease.

A parent company guarantee (PCG) is required to give an unlimited assurance that any costs arising from a problem at the gas field and processing terminal, such as an environmental disaster, would be covered.

‘Deficiencies’ led to non-odourised gas emergency plan being put in place as a result

An investigation by the State’s energy regulator into the release of non-odourised gas from the Corrib gas refinery in north Mayo last year says it was caused by the upgrading of an information technology (IT) system.

“Deficiencies” in Shell E&P Ireland’s (SEPIL) operating procedures led to the incident last September, but there were no safety consequences for staff at the Corrib gas refinery or members of the public “in the immediate vicinity”, the Commission for Regulation of Utilities (CRU) has found.

However, the risks to consumers from gas which had no safety odour prompted Gas Networks Ireland (GNI) to activate the natural gas emergency plan. Some 10,000 customers in the Galway-Mayo region were told to shut off their supplies.

The energy regulator says it took “enforcement” actions against Shell and GNI, the national gas networks operator, as a result of its investigation.

No fines were imposed on Shell or on GNI, under a series of enforcement options which the State energy regulator says are “progressive in nature”.