State-owned FSRU cannot be exempted from Third Party Access

‘Safety Before LNG’ is calling for the Department of Climate, Energy and the Environment to urgently confirm with the European Commission, prior to enacting any legislation for a State-owned LNG terminal, that it could exempt commercial third-party access to a State-led LNG terminal. This request follows the revelation that the Department deeming its proposed LNG project in County Clare would not be a new entry point for gas in Ireland and would not be used commercially is entirely illegal under EU law.

EU law clearly indicates that the proposed State-owned LNG terminal is an Entry point [note 1] for gas into Ireland and makes it illegal to exempt commercial third-party access to LNG terminals built and operated by the Transmission Systems Operator (TSO) in Member States. Gas Networks Ireland, which the Department proposes will own and run an LNG terminal in Cahiracon, Kildysart, County Clare, is the gas network TSO for Ireland.

The entire basis for building a State-owned LNG terminal is that it would not be used commercially after the government recognised that the only way for fracked gas to come into the country in large quantities would be via LNG [note 2].

Exemptions to access rules

Operators of storage or LNG facilities are required under EU rules to grant energy companies non-discriminatory access to their infrastructure. They must offer the same service to different users under identical contractual conditions. If the State-led LNG terminal proposed by the Department supplies 13% of the country’s current gas needs with up to six LNG tanker deliveries per year, then this would indicate that private commercial companies would be entitled to the same level of access. In certain circumstances however, major new infrastructure may be exempt from so-called third-party access rules. One of the criteria for gas infrastructure exemptions is that the infrastructure must be owned by a legally separate firm from the TSO in whose system it will operate, which in Ireland’s case is Gas Networks Ireland, the proposed owner of the State-led LNG terminal.

We propose that the Joint Committee on Climate, Environment and Energy, as part of its pre-legislative scrutiny on the proposed Strategic Gas Emergency Reserve Bill 2025, and in the interest of transparency and good governance, should request that the Department obtain confirmation from the European Commission that it could exempt third party access to a State-owned LNG terminal supplying up to 13% of the country’s current gas consumption prior to the Bill being enacted.

Note:
1. Article 2, points 57-64 of Directive (EU) 2024/1788 defines an "entry point" as a point subject to booking procedures by network users providing access to an entry-exit system", where "entry-exit system" is defined as "an access model for natural gas or hydrogen where system users book capacity rights independently on entry and exit points, that includes the transmission system and may include the whole or part of the distribution system, or hydrogen networks". In this case Gas Networks Ireland is the system user booking capacity rights on the gas transmission network for up to 6 LNG tankers per year - or 13% of the current gas consumption in Ireland.

2. The Policy statement on the Importation of Fracked gas published in May 2021 confirmed that “the Government does not support the importation of fracked gas”. It recognised that “fracked gas can have significantly higher greenhouse gas emissions than conventional natural gas, both nationally and globally, and the widespread use of fracked gas would not be consistent with Ireland’s 2030 and 2050 climate objectives nor globally with the Paris Agreement;” It also declared that "Ireland imports much of its natural gas via the two interconnector pipelines from Moffat in Scotland, which provide the majority of natural gas currently used in Ireland. Given the level of fracked gas in the imports from Scotland is considered very low, the highest risk of fracked gas being imported into Ireland on a large-scale would be via liquefied natural gas (LNG) terminals, if any were to be constructed".