Written answers

Wednesday, 12 March 2014

Department of Communications, Energy and Natural Resources

Energy Resources

Photo of Noel HarringtonNoel Harrington (Cork South West, Fine Gael)
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111. To ask the Minister for Communications, Energy and Natural Resources the implications here in terms of energy security, employment and other factors regarding the possible sale by a company (details supplied) of the strategic energy assets of the crude oil and refined products storage terminal based on Whiddy Island, Bantry Bay, and the oil refinery based at Whitegate. [12316/14]

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Phillips 66, the current owners of the infrastructure referred to, confirmed in mid-2013 that they had commenced a process to market their Irish business with the process expected to last for several months, during which time the company would operate on a business as usual basis. This entirely commercial transaction is underway and neither I nor officials at my Department are involved in it. State owned Irish National Petroleum Corporation (INPC) sold the Whitegate refinery and Whiddy Island oil storage facilities to a private firm called Tosco Corporation in 2001. A key element in the transaction was Tosco Corporation’s undertaking to operate the two facilities (the Whitegate refinery and Bantry (Whiddy Island) storage terminal) for at least 15 years (until mid-2016) on a commercial basis. This condition also applies to any subsequent purchasers of the assets during the period. The ownership of the facilities has changed a number of times since 2001 without impacting operations.

Last July, I published a study commissioned by my Department into the strategic case for oil refining requirements on the island of Ireland. The study found that the existing oil import facilities on the island of Ireland taken as a whole offer a robust infrastructure that could provide comfortable alternatives in the event of a serious disruption at any of the six principal oil ports. They could supply the total oil demand, regardless of any future decisions on the operation of Whitegate as either a refinery or terminal. The development of the Irish motorway network has been significant in improving oil security of supply in recent years, facilitating the transport of oil from key ports throughout the island of Ireland. Work with counterparts in Northern Ireland is ongoing with a view to enhancing contingency planning on the island.

I outlined last July that the Government’s primary conclusion on the strategic case for oil refining is that the presence of an operational refinery on the island of Ireland provides flexibility, enhancing the options available to the State in the event of an oil supply disruption, by providing an alternative source of product thus mitigating a complete reliance on product imports.

Despite energy efficiency advances and an increase in the penetration of renewable energy, Ireland is expected to remain dependent on oil into the medium term, particularly for transport. As such, the continued operation of the Whitegate refinery on a commercial basis is highly desirable from an oil and energy security of supply perspective. The study concludes and the Government also acknowledges and recognises that an operating refinery also adds value to the Irish economy and provides significant employment.

I further outlined that in light of our primary conclusion, the Government had agreed that my Department should liaise with the Irish oil industry and appropriate public bodies to determine available policy options that might facilitate the commercial future of refining in Ireland. The consideration of available policy options to support the commercial future of refining in Ireland is ongoing and is equally valid irrespective of any possible change in asset ownership.

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