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€1bn Energy Project on the Rocks in Kerry

  • 24-02-2012 3:22pm
    Banned (with Prison Access) Posts: 25,234 ✭✭✭✭
    SHANNON LNG will walk away from its planned €1bn investment in the Ballylongford landbank unless the Commission for Energy Regulation (CER) agrees to cut tarriffs that could cost the gas company €75 million a year.
    The long-running saga of the LNG plant entered its darkest hour this week after the CER announced on Friday its proposal for swingeing tarriffs on gas suppliers.
    The liquified natural gas terminal would create up to 400 jobs for the four-year duration of its build and turn the landbank into the thriving hub of industry locals have been hoping to see for decades.
    Anger is becoming even more acute in Ballylongford and Tarbert this week, however, following the CER announcement. The tarriffs are principally being introduced to pay for the upkeep of the existing gas pipeline between Ireland. and Scotland. However, Shannon LNG has no plans to use this pipeline.
    Based on its own calculations on foot of the CER document on Friday, Shannon LNG believes it would face €75 million per year in tarriffs on gas imports through the landbank. This led Shannon LNG CEO Paddy Power to make the ominous pronouncement on Monday that 'Ireland is closed for business to the energy sector'.
    His statement is being taken as the darkest note yet for the future of the plan.
    While Shannon LNG would not make a more detailed statement to the media on the matter, The Kerryman understands the company now believes it cannot invest in north Kerry unless the CER drastically changes its planned tarriffs.
    The matter is also being compounded by the consultative nature of the CER process. Friday's announcement is a draft decision and open to debate into the future, further delaying the already long-drawn out process that has stymied progress on the LNG project for years.
    The CER told The Kerryman that it would not comment on Mr Power's figure of €75 million per year saying it was a ' calculation for Shannon LNG to make'. But it said a final decision on the gas tarriff process would be made by the end of April. THE head of Shannon LNG, Paddy Power, has accused the Commission for Energy Regulation (CER) of putting obstacle after obstacle in the way of the conpany's plans to construct a billion-dollar gas plant in north Kerry that could essentially save the area from being devastated by recession.
    Mr Power said the company is frustrated and utterly bewildered at the CER'S decision to suddenly change government and regulatory policy on gas pipelines tariffs, which he claims will now cost Shannon LNG up to €75m per year in tariffs.
    At a meeting of Kerry County Council on Monday — three days after the CER published its draft paper on gas tariffs — Mr Power said he was at a loss to understand why the CER is putting 'block after block' in the way of a ddevelopment that will offer a capital investment of €1bn and secure 600 jobs over the next four or five years.
    He explained that initial tariff arrangements were put in place back in 2011 to encourage other suppliers to come and invest in the country, whereby each supplier paid their own costs. Now he says, the CER is asking companies such as Shannon LNG to pay tariffs to subsidise their competition, which he said, have 'absolutely flummoxed' the company.
    "We were all set to start in 2014, after years and years of delays, and now we are being told that we have to pay €75 million per year to subsidise competitors," he said. "We have ticked all the boxes and have already invested €62 million in the project, and we find it frustrating, to say the least, that the rules are now being changed at the 11th hour.


  • Closed Accounts Posts: 624 ✭✭✭Aidan1

    The long-running saga of the LNG plant entered its darkest hour this week

    BS. It entered its darkest hour when Japan turned off it's nukes, driving global LNG prices up relative to NG.

  • Registered Users Posts: 6,343 ✭✭✭Pete_Cavan

    Interesting article related to this here by Richard Tol (read his earlier blog, which is linked in the first line, first).

  • Registered Users Posts: 1,265 ✭✭✭ciarriaithuaidh ....more here.

    Typical passing the buck bullsh*t going on it seems.

    By the way Pete that link isn't working for me.

  • Banned (with Prison Access) Posts: 25,234 ✭✭✭✭Sponge Bob

    Working link now. There is a side story that the NPWS has declared some Special Protection snail or slug type zone which will require more eco bollix and reports before the project can go ahead ( if the CER is not the issue) I don't have all the details on that at present.

  • Closed Accounts Posts: 4,725 ✭✭✭charlemont

    Nothing surprises me with these projects in Ireland. Its a wonder we ever got anything done.

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  • Banned (with Prison Access) Posts: 25,234 ✭✭✭✭Sponge Bob

    It seems the problem is an SPA ( Protected Area for Birds)
    Wednesday January 11 2012

    JUST as the Ballylongford landbank is on the cusp of finally becoming a centre of industry plans are afoot to introduce special laws protecting wild birds there that could strangle any hopes of future development, locals fear.

    Concern has been mounting over the introduction of a Special Protected Area (SPA) for the Shannon estuary that is currently at consultation phase. The designation was revealed in July by Minister for Arts, Heritage and Gaeltacht Affair Jimmy Deenihan and is expected to be introduced in the coming years in response to an EU Natural Habitats directive. The State will face swingeing fines from Europe if the estuary is not designated a SPA.

    At present both Tarbert and Ballylongford are waiting with bated breath to see if the longplanned Shannon LNG plant will finally begin building this year.

    If commenced it will transform the economy of north Kerry overnight, locals predict. One of the greatest causes for hope attending the plant, however, will be a knock-on affect in attracting other industries many believe. Now, however, locals are extremely concerned the SPA might hinder future industrial development.

    Minister Deenihan is to meet with the heads of Kerry, Limerick and Clare County Councils on the matter on Monday.

    "It appears to us that Minister Deenihan's department is going to do a blanket SPA from the Limerick docks all the way to Loop Head on both sides of the industry and we have a grave concern that the effect of this will be to make it much more difficult for any industry or any kind of economic development into the future," Tarbert Development Association's John Fox said.

    "We are calling on the Minister now to exempt certain areas from the SPA, particularly the landbank area from Tarbert to Saleen. We are all for wildlife and its protection, but we believe that consideration has to be given to the livelihoods of the human beings of north Kerry. Otherwise this place will simply become a tourist destination for people who want to see how humans lived 50 to 60 years ago."

    Ballylongford is equally concerned. "It would seem that this would prove a major obstacle to development," Ballylongford Enterprise Company Chairman Noel Lynch said. "We have heard that if this had been in place before Shannon LNG went for planning they would simply have been advised to try elsewhere, so it's of huge concern to us. Parts of the estuary, like the landbank, must be exempted as happened in Cork Harbour."

    Minister Deenihan, however, told The Kerryman in July that he did not foresee any obstacle to development on the estuary posed by the SPA status.v

  • Registered Users Posts: 1,265 ✭✭✭ciarriaithuaidh

    *Posted this in the ShannonLNG thread on Kerry forum also

    Much as I feared a long time ago, this project is doomed never to happen. This truth is down to the unwillingness of what one economic analyst called "the quadrumvirate" (Irish Govt, CER, ESB and Bord Gais) to allow any semblance or even possibility of a free market in the energy/power sector in Ireland.

    They are now (in announcing that a "final" decision will be made by the CER in 2014) hoping that Shannon LNG will just give up the ghost and bugger off and they can say "oh they were never fully committed to the project anyway" and "they wanted to exploit us but we told them where to go" etc. etc, when the reality is, they will let Shannon LNG into the country alright, but only if they pay an exorbitant sum to balance the books for Bord Gais networks just in case they have to cancel a few of the company golf trips in the next few years or something, you know..I'm sure the Irish taxpayer understands.....

    Meanwhile every taxpayer in the country "enjoys" the hikes in Electricity and Gas prices (average of 12 % increase this year I think?) aswell as funding the (virtual) monopoly's that are Electric Ireland and Bord Gais..and included in that enormous and ever increasing cost to the Irish taxpayer is trivial expenditure of €200k per annum on the pension of poor ol Padraig MacManus, who retired last year (at the age of 60..nice)..he needed it badly the poor ol craythur, he only received €800k as a retirement package in December 2011 (linky) and he was on a lowly sum of around €500k per annum for the 9 years in the a company which operates in a monopolised market and is supposedly semi-state...i.e: partly owned by us, the taxpayers.
    His succesor had to accept the frivolous salary of €313k due to our Government (i.e: Angela Merkel) putting their foot down..this was despite protestations from the aforementioned Pádraig, that we would struggle to get anyone to run the ESB show for less than €250k per annum. (I sh*t you not)

    I've never been the anarchist type, but some of this stuff makes me understand how they feel sometimes. If Jimmy Deenihan (who to be fair is the only T.D in the constituency I respect) is not getting his ears burnt off about this, given he is a member of the Government, then he should be..but to be quite honest, anytime I have been back home in the area this project is supposed to benefit enormously, there has been hardly a word about it.

    And we wonder why the nation is in the mess it is eh?

  • Banned (with Prison Access) Posts: 25,234 ✭✭✭✭Sponge Bob

    The regulator has told these guys that they must pay annually for interconnectors on the Irish Sea that they will never use. So yes It is dead. Killed by the CER and the NPWS.