Martin Ferris
Question:439 Deputy Martin Ferris asked the Minister for Communications, Energy and Natural Resources the position regarding the LNG project at Shannon. [36896/12]
View answerThursday, 19 July 2012
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Written answers
I and Government colleagues have consistently been supportive of the proposal by Shannon LNG to construct a 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 in future years. I have met the promoters of the project on a number of occasions and both my Department and the Commission for Energy Regulation (CER) are in regular contact with Shannon LNG.
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.
The CER, as the independent energy regulator is statutorily charged with a duty to protect energy consumers, ensure security of supply and support competitiveness. The CER 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.
The CER has engaged in an extensive consultation process on the future regulatory treatment of the gas interconnectors and has had considerable interaction with Shannon LNG and Shell Ireland as well as with all key stakeholders. The CER's Decision published on the 29th June concludes that without reform of the tariff system, the reduced flows of gas through the interconnectors due to new sources of gas coming on stream could lead to significant increases in the per unit interconnector tariff. In turn, this would increase prices for gas consumers in Ireland.
The Decision commits the CER to the setting of tariffs at each entry point. It proposes that tariffs would be set separately on the basis of forward looking Long Run Marginal Cost (LRMC) considerations. The CER expects the new tariff regime to come into effect in October 2014 following further consultation with stakeholders and a decision by CER on the methodology for setting the LRMC at each entry point. In that context I welcome CER's decision to establish Network Tariffs Liaison Group as part of the process.
The CER's decision has brought the regulatory certainty needed by stakeholders in the Irish gas market including those with investment decisions to make in the coming years, as well as gas consumers.