Pat Rabbitte (Dublin South West, Labour)

I thank Senator Ned O'Sullivan for raising the matter. It is important for his part of the kingdom but also for the country as a whole. I have consistently welcomed the proposal from the Shannon LNG to construct an LNG terminal near Ballylongford, County Kerry. Such a facility, together with the bringing onshore of Corrib gas, would provide important security of gas supply for Ireland. I met the promoters of the project soon after taking office last year and my Department and the Commission for Energy Regulation, CER, are in regular contact with Shannon LNG. Last December, the Taoiseach, the Minister for Arts, Heritage and the Gaeltacht, Deputy Deenihan, Deputy Spring and I met Shannon LNG. The meeting provided the opportunity to review the state of play on the project and to underline the Government's positive interest in the potential investment.

The meeting also discussed the central concern of Shannon LNG, which is to obtain regulatory certainty at the earliest opportunity on future pricing and 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 regulator's ultimate decision on this complex regulatory question. Given the complexities, there are many differing perspectives on the decision. At that meeting, the Taoiseach asked the company to withdraw the complaint lodged in Brussels in order to facilitate regulator getting on with his decision. I understood that the company assented to that request but I am certain it did not dissent.

The decision on the regulatory treatment of the gas interconnectors is statutorily a matter for CER under the Gas (Interim) (Regulation) Act 2002. I have no function in the matter. As the independent energy regulator, CER has a remit to protect energy consumers, ensure security of supply and 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.

Over the past number of months CER has been engaged in an extensive consultation process on the matter and has had considerable interaction with Shannon LNG and all key stakeholders. The CER had originally signalled that it would come to a decision last autumn. The process has been delayed, regrettably, by Shannon LNG's 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 perspective on the regulatory issues for decision by CER. At the meeting, the request was made for Shannon LNG to suspend the legal complaint to Directorate General for Competition. It emerged that the complaint has not been suspended and, to my surprise, a further submission has recently been made by Shannon LNG to the Directorate General for Competition outlining the company's serious concerns about the CER's recent proposed decision in terms of compliance with state aid. This further submission, which I became aware of today, will require my Department and CER to once again devote scarce resources to addressing issues in the submission that are likely to cause further delays to the process.

Following the publication by the CER on 17 February of a proposed decision paper for consultation and a public forum on 1 March, all stakeholders including Shannon LNG, were provided with an opportunity to present their views on the CER's proposed decision paper. The consultation period closed on 16 March. The regulator is currently examining all submissions and comments received in response to the consultation. I understand that the regulator has met several individual stakeholders - including Shannon LNG - since then.

I understand that the regulator had expected a final decision to be available by the end of May although as I have already outlined, the letter now received by my Department from DG Competition, is likely to result in further delays in the regulator's decision.

Prior to this latest action by the company, we could have hoped that a decision would bring the regulatory certainty which Shannon LNG has repeatedly sought. Now the company's own persistence in this action - which it is perfectly entitled to do - will at a minimum cause further delays. Like Senator Ned O' Sullivan, I regret this because it would be the Government's wish that we could get on with this project which is so important for adding another dimension of energy security in this country and apart entirely from this, it would also result in some very badly needed jobs in north Kerry.