Dáil debates

Wednesday, 22 February 2012

4:00 pm

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)

I thank the four Deputies for again giving me the opportunity to address Members of the House on this important issue. I have consistently welcomed the proposal by Shannon LNG to construct a liquefied natural gas, LNG, terminal near Ballylongford, County Kerry. Such a facility, together with the bringing onshore of Corrib gas, would provide important additional security in providing a gas supply for Ireland. I met the promoters of the project soon after taking office last year and both my Department and the Commission for Energy Regulation are in regular contact with Shannon LNG. Most recently, the Taoiseach, the Minister for Arts, Heritage and Gaeltacht Affairs, Deputy Deenihan, Deputy Spring and I met its representatives on 21 December. The meeting offered a timely opportunity to review the state of play on the project and underline the Government's positive interest in the potential investment.

The meeting also discussed the central concern of Shannon LNG, to obtain regulatory certainty at the earliest opportunity on future pricing and the treatment of Ireland's two gas interconnectors. Together with all players and potential players in Ireland's gas market, Shannon LNG has a key commercial interest in the outcome of the regulator's ultimate decision on this highly complex regulatory question and given the complexities involved, there are many perspectives on what the decision should be. The regulator has been engaged in an extensive consultation process on the matter for the last few months and has had considerable interaction with Shannon LNG, as well as with all key stakeholders.

In line with the stated need for all interested parties, including Shannon LNG, to have clarity and certainty on the future regulatory regime as soon as possible, the regulator originally had signalled it would come to a decision last autumn. Unfortunately, the process was delayed by Shannon LNG's own decision to lodge a number of complaints with the European Commission.

This further delay in the process was discussed with Shannon LNG at the meeting on 21 December, as was Shannon LNG's own particular perspective on the regulatory issues for decision by CER.

Decisions on the regulatory treatment of the gas interconnectors and tariffing are statutorily a matter for the CER under the Gas (Interim) (Regulation) Act 2002. I have no function in the matter. As the independent energy regulator, the CER has a remit to protect energy consumers, to ensure security of supply and to support competitiveness. It also has a duty to ensure that new sources of gas for the Irish market do not result in unwarranted increases in the price of gas to business and domestic consumers.

I understand that on 17 February, the CER published a proposed decision paper - its normal way of going about something like this - on the regulatory treatment of the gas interconnectors. The regulator has announced that it intends to hold one further public forum for stakeholders on 1 March. Given the multiplicity of perspectives on the matter, I am sure all stakeholders, including Shannon LNG, will welcome such a forum. In tandem, stakeholders have the opportunity to respond to the regulator by 16 March on the matters raised in the proposed decision paper. At the end of this period, the regulator will assess all comments received and publish a final decision. I understand the regulator expects a final decision to be available by end April. I would hope the regulator will improve on that date. The regulator's final decision will bring the regulatory certainty which Shannon LNG has repeatedly sought.

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