Dáil Éireann debate -
Tuesday, 7 Mar 1995

Vol. 450 No. 2

Written Answers. - Whitegate Oil Refinery.

Martin Cullen

Question:

140 Mr. Cullen asked the Minister for Transport, Energy and Communications if his Department has received any proposals to upgrade the oil refinery at Whitegate, County Cork, which involve a joint venture partnership with a private sector company interested in investing in modernisation of the facility, including catalytic cracking technology; if so, whether he considers these proposals could secure the long term future viability of the refinery; whether he has obtained independent evaluation as to whether these proposals offer good value; whether he intends to have any studies carried out to validate the proposals' capital costs and project economics; if not, the reason therefor; and if he will make a statement on the matter. [5199/95]

Peter Barry

Question:

142 Mr. Barry asked the Minister for Transport, Energy and Communications the present position in relation to the upgrading of the Whitegate refinery; if a joint partnership is still possible; and if he will make a statement on the matter. [4850/95]

Minister for Transport, Energy and Communications (Mr. Lowry)

I propose to take Questions Nos. 140 and 142 together. In response to the conclusions of the Culliton and Moriarty reports, it has been accepted that the mandatory off-take of petroleum products from the Whitegate refinery will terminate by the end of 1996.

In order to enable the refinery to trade on a fully competitive basis, Irish National Petroleum Corporation Limited is implementing a three-year programme of investment which will continue up to 1996. The results of this programme, allied to a number of marketing initiatives, are expected by the company to enable the refinery to operate on a commercial basis to open market prices when the mandatory regime ends.

Joint venture proposals for a further upgrading of the refinery continue to be explored and a number of inquiries have been made by third parties in connection with possible participation in the Whitegate oil refinery. The current investment programme is compatible with any further upgrading which might emerge from a joint venture.

A specific proposal for a joint venture major upgrading was received from a private company. Extensive negotiations with that company failed to reach a commercial agreement. Consequently, the question of carrying out detailed studies of that particular proposal did not proceed. Independent studies of the general issue of different types of upgrading have been made which have indicated that such ventures have high capital costs and while the return would probably secure the long term viability of the refinery it is not particularly attractive in relation to the costs. For this reason the company is at present pursuing its lower cost investment programme as offering the most cost effective means yet identified of achieving commercial viability.

I do not propose to comment in detail on any specific proposal for reasons of commercial confidentiality and in order to safeguard the State's position in any negotiations.