€1bn expansion of national gas grid embraces midlands and west

Elements of Bord Gáis connection strategy seen as politically sensitive ahead of general election, writes Arthur Beesley

Bord Gáis is spending up to €1 billion in the biggest expansion of the gas grid since the discovery of the Kinsale field in the 1970s. It is a massive investment, one which is likely to see thousands of homes and businesses connected to the network in 11 towns in the midlands and west. In addition, Bord Gáis is to develop pipelines north of the Border.

But with the general election campaign imminent, elements of the plan are also politically sensitive. Senior Government members are based in three of the towns likely to be first connected to a new pipeline linking Dublin, Galway and Limerick. Such connections are good news for residents, although people living in towns near the pipelines - but without gas connections - might well feel unhappy.

In the first phase of the project, towns believed likely to be connected to the Dublin-Galway-Limerick line are: Enfield, Co Meath; Mullingar and Athlone, Co Westmeath; Tullamore and Clara, Co Offaly; Ballinasloe and Galway, Co Galway; and Ennis, Co Clare.

The Minister for Foreign Affairs, Mr Cowen, is based in Tullamore. The Minister for Public Enterprise, Ms O'Rourke, is based in Athlone and the Minister for Arts, Heritage, Gaeltacht and Islands, Ms De Valera, is based in Ennis. The Minister for the Marine and Natural Resources, Mr Fahey, is based in Co Galway. Still, sources familiar with Bord Gáis's strategy said the towns were selected because of their proximity to the pipeline and their scale in terms of housing and industry.

Three factors lie behind the State company's expansion of the network, which will also involve the construction of a separate link between the Mayo coast and Galway.

These are: the discovery of Corrib gas off the Co Mayo coast; the depletion of the Kinsale field, and a political drive to develop an all-island energy infrastructure. The Corrib field is large enough to be exploited commercially, but the gas is useless without a connection to the national grid. This underlines the selection of Galway as the focal point of the grid's westward expansion from Dublin.

Corrib gas will be brought ashore at Pollatomish, Co Mayo, and transported via a new pipeline to Galway. There it will connect with the Dublin-Galway-Limerick link, completing a southern loop on the grid which already extends to Limerick from Dublin, via Cork.

The Corrib project is led by Enterprise Oil, a British company which rejected an unsolicited takeover bid yesterday. Its partners are the Norwegian firm, Statoil, and Marathon Petroleum, the US group which developed the Kinsale field.

The development of the Pollatomish-Galway line is subject to the construction of a reception plant to prepare the gas for transmission in the national system. That plan has been appealed to An Bord Pleanála, and a decision is expected in April.

About 600 jobs will be created in the construction process on both pipelines, which will cost almost €470 million. The Dublin-Galway-Limerick project was costed at €254 million, but wage inflation has added €63.5 million to projections.The second line, from Pollatomish, was costed at €152.4 million. Company sources say that projection has not increased as it is more recent.

Few observers seem to doubt that the development will go ahead, and Bord Gáis sources expect construction of the pipeline to commence in March.

The Kinsale field has been in decline since the early 1990s and it is all but empty. Since 1993, Bord Gáis has taken up the slack by using a sub-sea interconnector between Moffat in Scotland and north Dublin. That interconnector is now operating near capacity. To prevent a projected shortfall in supply next winter, the Government sanctioned the construction of a new interconnector, parallel to the existing link. The project is under way and scheduled for completion by October.

With Corrib gas soon to become available, certain observers argued that the investment was a step too far. Yet delays encountered by Enterprise meant that the gas would not be available in time to meet the shortfall projected this year. Projections were deemed bullish by most observers.

In the North, Bord Gáis has been licensed to build a pipeline linking Belfast and Derry, and another linking Belfast and Dublin.