Wednesday 19 June 2019

Long delayed €500m gas terminal on Shannon Estuary back on after deal struck

Project expected to support 400 jobs at peak construction and 100 jobs once operational

Shannon Estuary
Shannon Estuary

Donal O’Donovan

A long delayed €500m gas terminal on the Shannon Estuary is back on after US based New Fortress Energy struck a deal to buy the business with full permission.

New Fortress has agreed to buy the Shannon LNG project at Ballylongford, close to Tarbert in Kerry. 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 project is expected to support 400 jobs at peak construction and 100 jobs once it is operational.

The scheme ran aground three 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.

However, since then a European Union push to slash reliance on gas piped from Russia, and fears about the long term implication of Brexit, mean such fees are now seen as less likely to put in place.

The Shannon LNG scheme will see gas landed via the Shannon Estuary by ship from suppliers in the US and the Middle East would bypass the UK pipes.

Hesse sold Shannon LNG to Sambolo Resources, a private Irish company controlled by Paddy Power and John Power, in November 2015, and the new owners have been seeking a buyer of backer to take on the project. Developing the terminal 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.

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.

About €70m had been invested in the project by Hesse.

Commenting on the announcement An Taoiseach Leo Varadkar said: “As a commitment in the Programme for Partnership Government the proposal by New Fortress Energy to progress the Shannon LNG project is very welcome.

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