Bord Gáis Networks yesterday warned of higher gas prices, totalling €40m per annum to consumers.
The company warned of the price hikes if changes proposed to charges for the use of natural gas pipelines are not implemented.
Last month, the Commission for Energy Regulation proposed that suppliers pay for Ireland’s interconnectors, which supply 95% of the country’s gas, irrespective of whether they use them.
This provoked an angry reaction from Shannon LNG, which is currently planning to build a €600m liquid natural gas facility at Ballylongford, Co Kerry.
The construction of the facility is expected to bring 800 jobs — Shannon LNG has already spent €40m to get the project to this stage and has secured planning permission and obtained a foreshore licence.
However, a question now lies over the project with Shannon LNG chief executive Paddy Power telling the February meeting of Kerry County Council that the Commission decision could force the firm to pay €75m per annum to the State.
In a document responding to the proposal, Bord Gais Networks (BGN) states that using the current tariff structure “means higher prices for Ireland’s gas users”.
Over 95% of Ireland’s gas comes from Britain via two pipelines, known as interconnector one and two, under the Irish sea.
BGN state that the Commission proposal “puts the interests of consumers ahead of all other stakeholders and identifies the requirements to address network charges in order to avoid customers paying more for their gas”.
BGN believes that the majority of the industry should be heard in the Commission process on tariffs, “not just the interests of a developer who has yet to commit to their investment”.
The BGN document states that “the structure of network charges must change to reduce risk of higher prices for all consumers and that windfall profits for producers cannot be allowed while consumer prices rise”.
BGN states that the determination of network charges must be addressed in order to avoid customers paying more for their gas when Corrib and Shannon LNG flow.
Shannon LNG, which is backed by US energy giant, Hess Corporation, has said it will not make a decision on proceeding with the project until the regulator clarifies the charges issue.
The Commission is due to make its decision before the end of this month.
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