A proposal from the Minister for Public Enterprise to bring natural gas from Northern Ireland to homes and businesses in Co Donegal was backed yesterday by the Cabinet, The Irish Times has learned.
The Cabinet memorandum from Minister for Public Enterprise Mrs O'Rourke is highly sensitive because the Northern Ireland Executive has yet to decide on whether it is prepared to fund the construction of a pipeline between Belfast and Derry.
A final decision by the Executive could be taken tomorrow, although it may have to be postponed because of increasing political uncertainty in Stormont.
Under the plan, a new £300 million gas-fired power station will be built at Coolkeeragh outside Derry by a consortium including ESB International and British Gas. From there, a pipeline financed by the Government will bring natural gas across the Border to Letterkenny and some other population pockets in Co Donegal.
The private consortium, which includes Coolkeeragh employees, must commit £5 million towards the project by the end of this month as a down-payment to the manufacturer of the gas power station, if the proposal is to go ahead.
The Department of Public Enterprise, it is understood, believes a cross-Border pipeline is the cheapest way to improve power supplies to Co Donegal, which is currently badly served.