Tariff ‘threat’ to €600m Kerry gas plan
The losses are confirmed in accounts recently filed with the Companies Office by Shannon LNG Ltd and a spokesman for the company confirmed yesterday that the losses form part of the firm’s €40m-plus investment in the project to date.
However, the spokesman warned yesterday that changes in the tariff structure proposed by the Commission for Energy Regulation (CER) for importing gas through Bord Gáis-owned interconnectors from Britain “threatens the commercial viability of the development”.
The project for a 257-acre site at Ballylongford in Co Kerry was first announced in 2006 and planning permission was obtained in 2008.
All regulatory approvals are in place for building work to commence, where 500 workers will be employed over 4½ years with 100 permanent jobs when the facility is operational.
Under the tariff system in place since 2001, only the users of the interconnectors pay for the associated costs. According to the Shannon LNG spokesman “it is on that basis that the company has spent over €40m on planning and approvals to date”.
However, under the proposed new tariff structure, a portion of the interconnectors costs are to be levied on gas suppliers, such as Shannon LNG, who intend to bring gas to Ireland via alternative routes.
The spokesman said: “The company has made a detailed submission proposing an alternative solution which protects the Bord Gáis investment while also encouraging more competition in the market leading to lower gas and electricity prices for consumers.
He cautioned: “The company is not in a position to make an investment decision until this matter is clarified, once and for all, for the long-term.
“The company remains hopeful that the regulatory authorities will follow EU competition policy and law and allow Shannon LNG to compete on a level playing field in the wholesale gas market in Ireland.”
Shannon Foynes Port Company chairperson, Kay McGuinness, said: “We are greatly concerned about the prospect of the Shannon LNG project being lost due to a proposed change in the regulatory framework.”
She said the loss would be a huge blow as it is badly needed in the region and would deliver 500 jobs in the construction phase and 100-plus permanent jobs.
It would be “a significant setback to Ireland in terms of energy security as Shannon LNG plans to supply up to 45% of Ireland’s gas requirements to the national grid and, therefore, reduce our dependency on the UK for our gas supplies.”
A CER spokesman confirmed that it anticipates that a decision will be made on the new tariff structure by the end of October.
