Michael Moynihan
Question:625. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources the position regarding the Shannon LNG project; and if he will make a statement on the matter. [13928/14]
View answerTuesday, 25 March 2014
Questions (625, 626, 627)
Michael Moynihan
Question:626. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources the reason the Shannon LNG project would be subject to a levy for pipelines it would not use; and if he will make a statement on the matter. [13929/14]
View answerMichael Moynihan
Question:627. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources if he has had any discussions with those involved in the Shannon LNG project; and if he will make a statement on the matter. [13930/14]
View answerWritten answers
I propose to take Questions Nos. 625 to 627, inclusive, together.
Since 2002, the regulation of the gas market has been the responsibility of the Commission for Energy Regulation (CER), which is independent in the performance of its functions. I have no direct statutory function in relation to liquefied natural gas (LNG) projects, including the Shannon LNG project.
Decisions on the regulatory treatment of the gas interconnectors and tariffing are statutorily matters for the CER under the Gas (Interim) (Regulation) Act 2002. The CER as the independent energy regulator has a remit to protect energy consumers, ensure security of supply and support competitiveness. The CER 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 and Government colleagues have consistently been supportive of the proposal by Shannon LNG to construct a LNG terminal near Ballylongford, County Kerry. The LNG facility would bring connectivity for the first time to the global LNG market. The prospect of such a facility is therefore a potentially positive step for the island of Ireland. While neither I nor my Department have any direct role in regard to the project, I have met with principals of the companies proposing to develop the project.
Tariff reform is being driven by the entry of Corrib gas into the system. The rationale for the CER’s high level decision of 29 June 2012 as regards pricing and treatment of the interconnectors is that if the current regime were to persist, and with new sources of gas such as Corrib gas and Shannon LNG, the price of gas would rise significantly for all Irish consumers, regardless of the source of the supply. Given our high dependence on gas for electricity generation this would also give rise to electricity price increases and would negatively impact on Ireland’s competitiveness. Full details of the CER’s rationale for its decision are to be found in the CER Decision Paper of 29 June 2012 (CER/12/087) available from the CER website at www.cer.ie.
The CER decision subsequently became the subject of a Judicial Review taken by Shannon LNG. On 11 December 2013, the High Court upheld the CER decision of 29 June 2012 on reform of the gas tariffing regime. I understand that Shannon LNG has appealed the High Court decision to the Supreme Court.
The CER for its part is currently progressing the detail of tariff settlement as envisaged in the June 2012 decision and has recently notified stakeholders of the establishment of a Networks Tariff Liaison Group, which will include a representative from Shannon LNG. It has also advised stakeholders as regards the consultation process and its intention to finalise a Decision over the summer months. Therefore, it is in the interests of all stakeholders, including consumers, that clarity in regard to tariffing arrangements is provided as soon as possible and I would urge all concerned to engage with the CER on this regulatory issue.