Bord Gais to extend its network to all major population centres

Bord Gais is to extend its network to all major population centres in the Republic as part of an investment plan costing up to £1 billion to cater for demand until 2025. A sizeable proportion of the spend will be allocated to building a new pipeline from Scotland to take gas supplies from the North Sea.

Bord Gais chairman Dr Michael Conlon said yesterday that demand for gas would continue to increase, driven by the growth in the economy and by new electricity generating stations which would be gas powered.

He was speaking yesterday at the launch of a new study on gas capacity requirements until 2025. Gas supplies from the Kinsale Gas Head would run out over the next few years, he said. In addition, the existing inter-connector from Scotland will be fully utilised.

Bord Gais chief executive Mr Phil Cronin said the company was forecasting greatly increased growth in demand from industrial and domestic users. A further 270,000 domestic users could come on-stream by 2025, he said.

Dr Conlon said that it could cost £648 million to build a gas interconnect to Scotland and install the necessary infrastructure to extend gas supplies to other areas in the Republic. At present gas supplies are available to people living in Dublin, Cork, Waterford, Drogheda and Limerick.

Dr Conlon said the investment would be self-financed, although it was possible some monies might be available from the EU. The State had never put money in Bord Gais which had returned £400 million to the Exchequer. He said Bord Gais would examine Public Private Partnerships (PPPs) as a method of financing some of the investment. The Minister of State at the Department of Public Enterprise, Mr Joe Jacob, said the scale of gas infrastructure investment "inevitably raises the question of whether there is a role for Public Private Partnership in this sector and this aspect will have to be examined fully".

The study, commissioned by Bord Gais and the Department of Public Enterprise, examined three possible scenarios: a second gas inter-connector from Scotland direct to Dublin, a pipeline between Belfast and Dublin and Scotland, and accessing additional indigenous gas discoveries.

At present one company (Enterprise) is examining the feasibility of a gas find known as the Corrib field, off the Co Mayo coast. Although stressing that it was not privy to all the data, Bord Gais described the possibility of Corrib being commercially feasible as very exciting. It would help increase gas supplies, but Dr Conlon said it was "not the answer to the problem".

Bord Gais will be appointing consultants shortly to help advise on how best to position itself for the future, as the market liberalises. Mr Cronin said the company had already carried out considerable work in this regard.

Under an EU directive, 75 per cent of the market has been opened to competition, since 1998. The company is at the final stages of agreeing a framework with its 10 largest customers (who account for around 75 per cent of the market) which would allow them to buy gas from another supplier and transport it to their premises using Bord Gais pipelines for an agreed fee.

It is understood that the ESB's Poolbeg Station will be the first to take advantage of this aspect of liberalisation, probably within the next few weeks.