Multi-million gas project in jeopardy

THE Commission for Energy Regulation (CER) is putting a project worth hundreds of millions of euro in jeopardy and preventing the creation of hundreds of jobs, a special meeting of West Clare councillors heard last Friday.
Executives from Shannon LNG, the company that has received planning permission for a €600 million LNG terminal and which is also looking at developing a €400m power plant (both at a site in Ballylongford), addressed the members.
They voiced their concern at CER proposals that all gas suppliers be required to pay tariffs for the interconnectors, which bring gas from Britain to Ireland. They claim they shouldn’t have to pay towards those interconnectors, as they will not use them.
At the meeting, former Kerry footballer and Shannon Development executive Óige Moran said there are plans for an LNG gas terminal on the Kerry side of the estuary and that during construction up to 650 jobs would be created, with 50 permanent direct jobs and 50 indirect jobs to be created afterwards. “The spin-off is far and wide,” he added.
Mr Moran said An Bord Pleanála had included a planning condition that €200,000 per year would be given to community spending in the region. There is also potential for a combined heat and power plant to follow.
He said there had been a lot of support from people in the area and that 74 landowners had been happy to facilitate planning permission.
Paddy Power, CEO of Shannon LNG, said he was disappointed with the lack of progress. “When we started, we thought by now we’d be heading to commission rather than immersed in issues with the energy regulator.”
He claimed the regulator had “changed the rules of engagement and decided to take and change Government policy”.
Mr Power claimed the company had spent $62m on planning permission and that at present, all gas in this country is coming from Britain, with very limited competition.
He claimed paying a tariff for the upkeep of the existing pipeline to the UK was unjust. He said not only would Shannon LNG not use it but it wasn’t entitled access to it.
“They want us to pay up to €85m a year for something that we want to compete against and they want to subsidise a British supplier of gas to Ireland.”
He said it amounted to a “strategic decision” that all gas in Ireland would have to be imported from the UK. “To me that is nuts,” he said.
Councillor Pat Keane asked if the Competition Authority had any role and Mr Power said the authority was not interested because a regulatory body was involved.
Fianna Fáil councillor PJ Kelly said the thought had crossed his mind while listening to the presentation that the foundation may be laid for a future tribunal.
Councillor Kelly said Shannon Development had favoured the Kerry side of the estuary by dezoning land on the Clare side. He claimed Clare councillors had been “outmanoeuvred and outwitted”.
Councillor Bill Chambers said that the buck has to stop with the government of the day. Councillors said that they would favour a meeting of all the local authority’s members to discuss the matter.
Following the meeting, the CER stood over the proposals discussed at the meeting.
“Under the CER’s proposals, the gas interconnectors between Ireland and the UK would continue to be regarded as an integral part of Ireland’s gas transmission system and to be underwritten by all gas customers. These interconnectors are vital to Ireland, providing direct access to natural gas from abroad and maintaining the country’s security of gas supply.
“The CER’s proposals were designed to achieve an acceptable balance between the need to contain upward pressure on end user gas tariffs while at the same time encouraging and rewarding efficient new sources of gas –be it from a gas field such as Corrib or from a new LNG facility – and keeping Ireland as an attractive location for new local gas producers.
“The CER has been assured by the European Commission that its proposals were in line with relevant European legislation and regulatory best practice.”
It also stated that a decision would be made in the near future. “The issue of the regulatory treatment of the BGÉ gas interconnectors to the UK has been the subject of a number of public consultations by the CER. The latest CER public consultation on the matter issued on February 17 and was followed by a public workshop on March 1 with interested stakeholders.
“The CER will consider all comments that it has received from stakeholders as part of this consultation process and expects to issue a final decision on the matter towards the end of May.”