Government called on to save €500m gas project

The Taoiseach and the Government were yesterday called on to intervene to save a €500m gas project earmarked for Tarbert, on the Shannon Estuary.

New tariffs, announced by the Commissioner for Energy Regulation on Friday, met with shock in north Kerry where the Shannon LNG (liquid natural gas) project has widespread support.

The tariffs would cost Shannon LNG €56m a year that it had not anticipated, and were now jeopardising the project, a Kerry County Council meeting heard.

Separately, Tom Fox, spokesman for Tarbert Development Association, which is strongly supporting the project, said the proposal was now in serious difficulty. “The Government needs to take control of the situation and needs to intervene. We desperately need someone [to act] on our behalf. Otherwise, the project will be lost.”

Mr Fox also appealed to Jimmy Deenihan, the arts minister and also TD for Kerry North/West Limerick, to use his influence at cabinet level.

Around 650 jobs would be created during construction, in Tarbert, and 100 jobs when the terminal was in operation, according to the company.

Making a presentation to the council on the current situation facing Shannon LNG, the company’s managing director, Paddy Power, said there will be an additional cost on gas suppliers to make up for an expected reduction in the usage of Bord Gáis’s interconnectors with Britain.

Mr Power said no grant aid was being sought by the US-owned Hess Corporation, of which Shannon LNG is a subsidiary, for the regassification terminal and all planning hurdles, including the pipeline link to the national gas network near Foynes, had been cleared in the six-year-old project.

But there was now a fundamental change in Government policy, “like turning up for a football match only to be told you were playing hurling”.

“In 2001, the Government put the rules in place. Now they are changing the rules. This is no way to do business,” Mr Power said.

Hess had spent some €49m on the project to date, he told the meeting.

Shannon Development regional manager Denis Moran said it would be an “absolute tragedy for north Kerry” if the project did not does not go ahead. “It has the potential to revolutionise the whole area.”

However, Safety Before LNG, which is objecting to the project, welcomed the new tariffs which, it maintained, would protect consumers and outlaw anti-competitive behaviour by new gas suppliers.

“The CER decided that all gas consumers, including those of Shell and Shannon LNG, will contribute to the cost of running the interconnector, thereby removing the windfall gains that would accrue to any new entrants to the gas market in Ireland and increasing competition,” the objector said.

Safety Before LNG also said the Shannon LNG admission that the new tariffs would cost it €75m annually showed that the pricing monopoly business model, on which the proposed terminal was based, would have been worth almost €1bn over 13 years to the Hess corporation.

Most of the gains would come from the company’s anti-competitive monopoly position, Safety Before LNG claimed.

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