Limerick Leader-May 21st 2011:

 
THERE are major fears over the future of a €600m gas - line project which could provide more than 450 jobs in Tarbert.

Although the Commission for Energy Regulation could rule on Shannon LNG’s plans for a liquefied natural gas terminal on the Shannon Estuary as early as September, a requirement to pay for gas Interconnectors the firm may not even use could see the company quitting the area. Sources close to Shannon LNG’s parent company Hess have indicated they may cut their losses here, and proceed with similar projects in the United Kingdom, if more problems are thrown in their way. The company wants to import frozen natural gas, mainly from the Middle East, and then process it in West Limerick/North Kerry. The pioneering technology could see the company supply 45 per cent of Ireland’s gas needs, with the pipe connected to the national grid. But since plans for the facility were unveiled in 2006, the project has been beset with delays - and in that time Shannon LNG has invested€50m in planning and preparation with no return.

Now, the company is believed to be considering cutting its losses here, with Arts Minister and Local TD Jimmy Deenihan set to hold crunch talks next week with the Commission for Energy Regulation. Taoiseach Enda Kenny is also acutely aware of the importance of this project, and will meet company representatives next month

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The scheme is currently before the Commission for Energy Regulation. One of the major sticking points is whether Shannon LNG has to help fund two interconnnectors linking the estuary to Scotland.

The€50m annual cost of the pipeline’s operation is currently footed by its users Bord Gais, and Airtricity. Hess LNG does not believe it should have to pay towards Interconnectors it will not even be using.

Representatives of the firm have already met the regulator to state their case, and are in the process of preparing an official submission.

This could prove to be the one thing which could see the massive investment lost.

Minister Deenihan says if Tarbert misses out on the investment - which will create 400 jobs over an 18 month construction phase and then another 100 permanent jobs - the way the planning process in this country is going to require examining. To get to a stage where it can begin operation, Shannon LNG will have had to go through three planning processes: basic planning permission, a foreshore licence, and the approval of the energy regulator.

“If we lose this project, there will be a major issue over the role of the regulator and how it was established. You cannot lose a project with this kind of investment, in an area which has not seen investment for years. It just does not make sense. This is the only real tangible project I have seen for the Shannon Estuary since I came into politics nearly eight years ago No other company has spent €50m advancing their project and having a whole team working on it for the last five years,” Minister Deenihan told the Leader.

Asked if he thinks Shannon LNG should pay for Interconnectors which it will not even be using, he said: “I don’t think they should.” County Limerick TD Patrick O’Donovan said he thinks it is “unfair” the issue over whether Hess partly pays for the Interconnectors has been brought up now.

He called on the government to resist any instruction by the regulator to insist LNG pays for the Interconnectors. However, the regulator has to be seen to operate independently from political influence.

“I don’t think it is fair issues have been brought to the table that were not there while this project was being designed. It is unfair on the basis of the money which has been spent on the project so far and the commitment given by the company. If the agencies of the state are prepared to move the goalposts, I think it would be very unfair, and its something the government has to resist, ” Deputy O’ Donovan said.

He said the Shannon LNG project is the biggest development in the West since the advent of Aughinish Alumina over 30 years ago: “We are a small peripheral country at the end of a pipe which can be turned off at the drop of a hat. It is far too important to be tinkered around at the edges with. It needs to be delivered, and delivered in as short a time frame as possible.”

Deputy Dan Neville added: “It’s amazing the way our system works. The common good seems to take second place to procedures and bureaucracy. I can feel this frustration myself. Having thought things were going to plan, it’s now very frustrating to see this is not the case.”

A spokesperson for the Commission for Energy Regulation insisted they welcomed the LNG project, and stressed a final decision is due in September. “CER will seek to balance the interests of gas customers while at the same time, keeping Ireland as an attractive location for gas producers. It has to be considered whether these companies [LNG] will use the Interconnectors in the future or if the other suppliers will incur extra costs by paying for the Interconnectors, ” the spokesperson said.