Joint venture proposed to counter 2002 gas shortage

A US-controlled consortium has asked Bord Gais to enter a joint venture to build a gas pipeline from Manchester to Dublin.

Celtic Energy's project manager, Mr Tom McMahon, said it made the proposal at a meeting last January with the State company.

Celtic is controlled by US group El Paso Energy. Mr McMahon claimed its project could deliver gas to counter a looming shortage in winter 2002, although delays in the project meant that was "becoming touch and go".

Others with knowledge of the gas industry have said a Bord Gais plan to construct a second sub-sea pipeline parallel with its existing link between Moffat, Scotland, and Dublin, was the only one capable of delivering gas in 2002.

The Cabinet is understood to have postponed a decision on Bord Gais's application to build that line at its meeting yesterday.

That was the third such postponement in the past three weeks. Alternatives to the plan include gas storage by Marathon Petroleum at the Kinsale gas field before winter 2002 and load-shedding of significant customers in the event of a shortage. The latter has been described as a "third world" solution by informed sources.

Mr McMahon is a minority shareholder in Celtic Energy. He said his partners were awaiting clarification on the use-of-system tariffs to be charged by Bord Gais before deciding whether to proceed with the project.

It also wanted clarification on the public service obligation charge, designed to guarantee uniform tariffs throughout the State.

"It's been promised every two to three months for the last two years," he said.