Energy ruling a ‘huge setback’ to planned €500m gas project
The Commissioner for Energy Regulation (CER) has said all gas providers should pay a tariff on gas interconnectors between Ireland and Britain.
Shannon LNG, which plans to build a gas terminal on the Tarbert/Ballongford landbank, said it will not be using the interconnectors and should not have to pay for them.
Its managing director Paddy Power said his company would be in competition with gas suppliers from the UK who used the interconnectors, and that the decision was anti-competitive. He said it was contrary to EU law to expect Shannon LNG to subsidise its competitors.
“What is even more uncertain for the company is to find that the CER’s decision contains no specific detail on the full cost implications of their decision for suppliers like Shannon LNG.”
Locally-based Arts and Heritage Minister Jimmy Deenihan described the decision as a “huge setback” to the project and said he hoped to meet top management of the Hess Corporation, owners of Shannon LNG, in the hope of finding a resolution.
“North Kerry is badly affected by unemployment and this project would have given a great boost to the area,” he said.
Mr Deenihan said Shannon LNG did not foresee a tariff when the project was initiated.
He said the CER was independent of the Government, but he appealed to Shannon LNG to continue dialogue with the Government on the issue.
The project would create upwards of 350 jobs during a four-year construction phase and a further 50 jobs on completion.
Energy Minister Pat Rabbitte, who said he had not yet studied the report, said it was “very difficult, complex terrain”.
Gas prices could go up or down, and the idea behind the CER was that there should be no windfall or opportunistic profit at the expense of the customer, he told Radio Kerry.
Safety Before LNG, which opposed to the project, welcomed the ruling, saying it was a victory for open competition and price protection.
“Shannon LNG’s predatorial business plan was based on selling gas for slightly less than the benchmark interconnector price, which would have given it a dominant market position,” it said. “However, this would have caused an increase in consumer prices as decreasing numbers of interconnector customers would be forced to pay more to cover the €50m annual fixed cost of the pipeline.”
