Shannon LNG plant needed to ensure security of gas supply
A NETWORK of liquefied natural gas plants, including one proposed in Co Kerry, are key to reducing dependence on Russia for our energy needs.
European Energy Commissioner Arias Canete told the Irish Independent that security of supply was a major issue for the bloc, and that the union had to diversify and source gas from the US, Qatar Nigeria, Algeria, Canada and, at some point in the future, possibly Iran.
His comments came amid increasing concern about Europe's reliance on imported gas, particularly from Russia.
Natural gas currently provides 30pc of Irish energy needs, and is used to produce 60pc of all electricity. Imported supplies across the EU are expected to increase to 75pc of all consumption across the bloc by 2030.
Mr Canete said the European Commission would produce a comprehensive strategy for liquefied natural gas (LNG) by early next year, which could also focus on the infrastructure needed to link facilities with the internal market.
This was to overcome the bloc's security of supply problem, he said.
"We have to diversify routes of supply and suppliers and have to develop a real internal energy market because our prices are higher - 50pc over the US," he said.
"We have a real problem of a market in which there are no free-flows of energy and not enough competition."
"In the past, Russia was a regular supplier but in 2015 we saw signals that things could happen in terms of security of supply, in terms of the illegal annexation of the Ukraine. We have seen the European economy cannot rely on Russia for security of supply, and we are highly dependent."
Widespread use of fracking in the US, where water and chemicals are pumped at high pressure into the ground to release shale gas, has reduced gas prices, and excess supply could be shipped to the EU for use.
One company, Shannon LNG, has planning permission to build a €600m LNG import terminal on a 287-acre site at Ballylongford in Kerry, which would import cheap gas from the US before distributing it through the network and on to other markets.
Mr Canete said the Commission would publish a LNG strategy early next year, which would set out the number of plants needed to facilitate imports, and the interconnectors necessary to ship it across the EU.
"This will be of enormous importance in relation to the US," he said. " If we have access to the American gas, at the same price as the internal market, there will be opportunities.
"There are missing plants - for example Shannon in Ireland. We must make sure we have a network of well-established plants with good interconnection to internal markets to ensure there is free flow of gas. We will need more in the northern and southern areas."
LNG is liquefied natural gas which forms when natural gas is cooled to minus 162C, which shrinks the volume of the gas 600 times, making it easier to store and ship. It is returned to gas at a regasification facility.
Separately, Mr Canete said the European Commission would prioritise so-called Projects of Common Interest which were deemed to benefit the entire EU, such as development of an electricity interconnector between Ireland and France. This would provide Ireland with additional sources of supply, which would help improve energy security.
While the bulk of the necessary investment would be sourced from the private sector, he said, some funding would be made available from the EU in the form of grants.