Shannon LNG Terminal, County Kerry

closed

As the world begins to recognise the convenience and cleanliness of LNG as a domestic fuel the number of LNG regasification terminals under construction is rising. One of the latest to stake a claim in the LNG market and begin the construction of a terminal is Shannon LNG, an Irish company which is a subsidiary of Hess LNG, itself owned by Hess Corporation and Poten & Partners in a 50/50 joint venture. Ireland currently imports 85% of its gas from the UK and being at the end of the pipeline chain is subject to higher wholesale prices. With the establishment of its own LNG terminal, gas can be sourced at more competitive prices. Shannon LNG was first established in 2003 by Paddy Power, an Irish oil executive who is now the managing director of the company. The project has been under serious development since 2006 when financial support was obtained and detailed planning, surveying and environmental assessment began. In 2006 a Shannon LNG office was established in Shannon Development’s offices in Listowel, County Kerry. Planning applications were made to the An Bord Pleanala in Dublin in late 2007 and a hearing began in January 2008. In February 2009 An Bord Pleanala granted planning permission to Shannon LNG for the pipeline project. In 2007 a planning application was also lodged with Kerry County Council and the positioning of the pipeline and tie in to the national gas grid was discussed with the Commission for Energy Regulation (CER) and Bord Gáis Éireann (BGE). The project was approved by the An Bord Pleanala in February 2009 and by the CER in December 2009. The project was expected to be ready to accept first shipments of gas by 2011-2012, but construction has not yet started due to regulatory issues. In January 2011, the CER announced the start of a consultation process to determine the regulatory procedure required for BGE Interconnectors linking the Britain and Ireland natural gas networks. In June 2012, the CER along with the European Commission proposed that all gas suppliers will be required to pay for use of interconnecters irrespective of whether they utilise them or not. The proposal may result in subsiding UK-based industries supplying fuel to Ireland. The CER was expected to take a decision on this proposal in May 2012 but the consultation process is not expected to be completed until October 2014. The delay may lead to scrapping of the project. The site proposed for the facility is on the 600-acre land bank owned by Shannon Development (the regional development agency) between the communities of Tarbert and Ballylongford (a 281-acre site). The site was chosen on the basis of the requirement for a sheltered berthing area with water depths greater than 13m at low tide. Shannon LNG has an ‘option to purchase’ agreement on the site, which was agreed with Shannon Development in 2006. The LNG terminal will consist of up to four double-skinned insulated LNG storage tanks with a capacity of 200,000m³ each and a network of jetties for unloading ships varying in volume between 70,000m³ to 265,000m³. A single regasification train capable of supplying up to 40% of Ireland’s gas requirements is also part of the project. It will have a capacity of three million tonnes per annum, or about 400 million cubic feet a day for electricity generation and domestic supply. The development will also include a 26km 762mm diameter gas pipeline to connect the facility to the Irish national gas grid. The pipeline’s capacity will be nearly one billion cubic feet per day. In May 2007 Shannon LNG, Arup Consulting Engineers and a series of other contractors including National Maritime College of Ireland, Cork Institute of Technology, Irish Naval Service, Focus Education, Murphy’s Surveys (land surveys), BKS (aerial photography), Irish Hydrodata (underwater surveys) and Irish Geotechnical Services (onshore geotechnical investigations) carried out onshore and offshore site investigations to assess the stability of the land. These included ecological, geophysical, aerial and hydrographic surveys. Shannon LNG has also been granted a foreshore licence for offshore site Investigation by the ROI Department of Marine allowing a number of offshore activities. In addition a jack-up drilling rig for offshore site was assembled in Shannon Foynes Port for offshore coring investigations by Seacore.

High