Losses on the increase at Shannon LNG

Accumulated losses at the firm overseeing a stalled €1bn investment on the Shannon estuary last year increased to €51m.

New accounts show that accumulated losses at Shannon LNG Ltd last year climbed by almost €20m to €51m.

Permission was secured by Shannon LNG for a €600m liquidified gas terminal in 2008 while a €400m Combined Heat Power Plant to be built at the 287-acre site at Ballylongord, Co Kerry, is also planned in tandem with the gas terminal proposal.

However, an overhaul of the tariff for gas interconnectors by the Commission for Energy Regulation has placed the project in doubt. Shannon LNG has brought a High Court judicial review action against the tariff scheme.

The new accounts show that accumulated losses at the firm increased by €17.8m from €33.6m to €51.7m in the 12 months to the end of December last.

According to a note attached to the accounts, “the company has a limited amount of cash, has incurred losses and has accumulated a deficit during the development stage.

“The directors have obtained a letter of support from Hess LNG Ltd, in which it indicated a willingness to support the company for the foreseeable future.

“Since its acquisition in 2006, the project has been fully backed by Hess LNG Ltd, which has been fully involved in all aspects of the project development. At present, the company has an interest free loan agreement with Hess LNG Ltd.”

The directors state that the loan agreement provides for project funding up to €65m and the directors “believe that the funding through the loan agreement will be sufficient to allow the company to continue as a going concern.

The note adds: “Hess LNG Ltd has further indicated that additional funding, as required, will be forthcoming through amendments to the current loan agreement.”

The liquidified gas terminal project is due to be provide up to 650 jobs during the four year construction phase with 50 permanent operational jobs thereafter.

The initial target was to have the plant opened by 2013.

In the judicial review, Shannon LNG is contesting the Commission for Energy Regulation view that all gas providers must pay for the cost of two interconnectors, linking Britain and Ireland’s gas supplies, whether they use them or not.


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