PwC tapped to find funder for Shannon LNG's €500m project
Shelved plans for a €500m gas terminal on the Shannon have been revived as a result of Brexit, with PwC mandated to find a buyer to fund the huge Shannon LNG project at Balylongford, close to Tarbert.
The site has planning in place for a deep-water jetty, storage facilities for liquefied natural gas (LNG) and connections to the Irish national gas network.
The scheme ran aground two years ago when the original owner, US investor Hesse, pulled out in part because regulators here insisted they'd have to contribute as much as €50m a year to support infrastructure including the cost of interconnectors linking the Irish gas network to supplies from the UK.
That was despite the fact that gas landed via the Shannon Estuary by ship from suppliers in the US and the Middle East would bypass the UK pipes.
The Irish Independent has learned that Hesse sold Shannon LNG to Sambolo Resources, a private Irish company, in November 2015.
Accounts for Shannon LNG filed with the Companies Office state that Sambolo Resources is controlled by its directors, who separate accounts for Sambolo list as Paddy Power and John Power, both of Monkstown in Dublin. It is understood that PwC is now advising Sambolo on fresh efforts to secure a financial sponsor to develop the Kerry site, which have gained traction as a result of Brexit.
The project is expected to cost at least €500m, but investors are likely to be able to tap matching funds from public sources.
EU authorities have designated the Ballylongford scheme as a European Project of Common Interest, meaning it could access funding from the Ireland Strategic Investment Fund and the European Investment Bank.
Ministers are thought to be keen to see the site developed fearing that a post-Brexit trade regime could lead to tariffs being imposed on gas piped into Ireland from Britain.
Shannon LNG is designed to import gas through a 3m tonne a year (mta) terminal, with four LNG storage tanks, each with capacity for 200,000m, and a jetty big enough to handle massive 266,000m Q-max LNG carriers - named because they are the biggest ships that can dock at Qatar's gas terminal. Shannon LNG also has planning permission to build an associated 500MW combined heat and power (CHP) plant.
Reuters Project Finance International, a highly regarded trade publication, has reported that the requirement that operators of the planned terminal contribute to the UK gas interconnector has been dropped as a result of a European draft directive granting special arrangements to LNG terminals connecting, allowing the project to proceed once a sponsor is found.
About €70m has been invested in the project to date, largely by Hesse.
Meanwhile, 600 acres of neighbouring land that is zoned for industrial development is on the market.
The parcel is owned by Shannon Commercial Properties, part of the same State company that operates Shannon Airport and owns an extensive portfolio of industrial property in the Midwest region. (Additional reporting Reuters)