Tuesday, 8 February 2005

Ceisteanna (35, 36)

Richard Bruton

Ceist:

77 Mr. Bruton asked the Minister for Communications, Marine and Natural Resources his plans to provide a supply of natural gas to the north west; and if he will make a statement on the matter. [3567/05]

Amharc ar fhreagra

Bernard J. Durkan

Ceist:

278 Mr. Durkan asked the Minister for Communications, Marine and Natural Resources his plans to provide a supply of natural gas to the north west; and if he will make a statement on the matter. [3923/05]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Communications, Marine and Natural Resources)

I propose to take Questions Nos. 77 and 278 together.

The regulation of the gas market is delegated to the Commission for Energy Regulation, CER, under the Gas (Interim) (Regulation) Act 2002. It is open to any intending supplier of gas to any town to apply to the CER for consent to lay the necessary pipe work and for a licence to supply natural gas. The CER must be satisfied that a proposal to extend the natural gas distribution network is an economic proposition before it will grant consent for it, as otherwise uneconomic projects will increase costs for all energy consumers. The 1976 Gas Act also requires Bord Gais Éireann, BGE, to demonstrate that any pipeline investment it proposes will be an economic business operation.

My Department is looking at the feasibility of bringing gas from Derry to Letterkenny. A study was completed in October 2004. The report concluded that the Derry to Letterkenny pipeline proposal is not economically viable and could require up to 100% subvention. In the circumstances, I have asked that a full cost-benefit analysis of the proposal be undertaken, including an assessment of the role of gas, if any, in facilitating regional development. The results of this further study are expected in March 2005.

There is also a long-standing Government commitment to examine the feasibility of bringing natural gas from Corrib to Sligo. Now that planning matters for the terminal are concluded, although I am aware there are two proceedings for judicial review before the High Court, I have asked my officials to commence this evaluation process, which will include a feasibility study and cost-benefit analysis of possible routes. It should be noted, however, that a preliminary evaluation in 2001 by BGE, having examined all possible routes for this project, found that none was commercially viable and even the least expensive option costs more than might be recovered over the lifetime of the pipeline. Work on preparing the specification for the further evaluation is under way and it is hoped to appoint consultants to do this work as soon as possible.