Bord Gais warning over profits as Kinsale field begins to dry up

Bord Gais yesterday announced operating profits of £84.7 million for 1997 but warned that increased importation of gas supplies will result in considerably lower profits in future.

This is because supplies at the Kinsale Head gas field are running out and gas will have to be bought from abroad. Kinsale is expected to be completely depleted by 2002. However, Ireland is now an integral part of the European natural gas industry. Full access to substantial reserves of natural gas in Europe ensures security of supply for customers in the future and the price of gas will not be going up.

Bord Gais chief executive Mr Philip Cronin said yesterday that at the moment there is access to North Sea gas and the Norwegian gas supplies. From October the interconnector between Britain and Zeebruge on the Continent will become operational. This will mean that Ireland will be able to buy gas from as far afield as Siberia or the Middle East. He warned that the increasing need to import gas will mean considerably lower profits for the company in 1998, even though sales this year are projected to be at the same level as in 1997.

The chairman, Mr Michael Conlon, described 1997 as "an exceptionally successful year" when he launched the annual report yesterday. Turnover was up by 7 per cent to £290 million, operating profits rose from £84.2 million to £84.7 million and an additional 40,000 new homes gained access to the natural gas network.

As well as paying a dividend of £26 million to the Exchequer, Bord Gais reduced its borrowings by £17 million to £132 million at year-end. An investment of £66 million brought 12 towns into the network and achieved an increase of 8 per cent in the residential customer base. This development was financed from internal resources.

Bord Gais will consider other investment opportunities, especially within the energy business, and will continue to look for innovative and commercially attractive development options.