Pending the confirmation of commercial viability, the project, which includes the conversion of the company’s current off-shore storage site 40km south of Cork Harbour, and redeveloping its on-shore terminal at Inch in east Cork, could see an investment of between €400m and €500m.
The proposed facility would quadruple the company’s gas storage facilities, creating several hundred construction jobs, and up to 50 permanent positions during the operational phase.
It would also provide the country with the capability to store about 18% of average annual gas demand, significantly more than the current capacity of 4%.
Subject to both regulatory and planning consents, the commissioning of new facilities and the start of operations will take place in 2014, the company said yesterday.
PSE Kinsale Energy is part of the Petronas group. Since 1978, it has produced natural gas from a number of gas fields – Kinsale Head, Ballycotton, Southwest Kinsale and Seven Heads.
Until 1995, the company, previously operated by Marathon Oil, provided all of the natural gas consumed here through its two offshore gas production platforms in the Kinsale Head field, which are connected by pipeline to an onshore terminal at Inch.
In 2001, the company redeveloped the Southwest Kinsale field into Ireland’s first gas storage facility.
In 2006, it modified the Inch terminal to enable natural gas from the Bord Gáis system to be injected into the offshore reservoir.
Now, it is examining the conversion of the nearly depleted Ballycotton reservoir, located some 750 metres below the seabed about 40km south of Cork Harbour, to a gas storage site, and the redevelopment of the existing on-shore terminal at Inch.
Natural gas is typically produced from underground reservoirs at a near constant rate throughout the year.
However, more gas is consumed during the colder winter months than the summer months.
The porous sandstone reservoirs can be used to store gas at the end of their gas producing life.
The company briefed local public representatives on its plans yesterday and began consulting with local residents last night, with its representatives calling door-to-door to people living in the Inch area.
Over the course of 30 years of operation in Cork, Kinsale Energy has safely produced about 50 billion cubic metres (bcm) of natural gas.