LNG storage for Ireland seems sensible, deputy PM says

Irish deputy premier Leo Varadkar has waded into the controversial anti-LNG policy of his climate and environment minister, Eamon Ryan, to state that building an LNG storage bank in Ireland seems sensible. But it should only be used in the event that the Irish interconnector to the UK suffers an outage, the Irish Independent reported September 9.

Ryan backed Varadkar's comments in an interview to local broadcaster RTE's Morning Ireland. But Varadkar's intervention will nevertheless be some cause for embarrassment, as Ryan has found the national energy debate shifting as the fallout from Europe's energy crunch has become clear.

The climate minister is a member of the Green Party, which is in government under a coalition with Varadkar's Fine Gael Party, as well as the Fianna Fail party of Irish prime minister Michael Martin. Ryan's Greens have staunchly opposed moves to build LNG terminals near Shannon, County Clare and at Predator Oil & Gas's proposed development site in County Cork.

Ireland receives the majority of its gas through an interconnector to the UK, as well as limited domestic gas supply mainly from the Corrib gas field off its Atlantic Ocean shoreline. Varadkar said he believed the UK option was sufficient for energy security in the majority of cases, but said an LNG storage hub would "make sense" as a fall back position.

Ireland possesses no gas storage facilities currently, leaving it exposed to emergencies in the winter heating season, though its relatively small population of 5mn means it is relatively well served by the UK interconnector, barring a severe souring in ties with its neighbour. But the UK also has negligible storage capacity.

"To me it makes sense that we should have LNG energy storage," Varadkar said, "How you do that is a matter for debate, but Minister Ryan will be bringing forward proposals in the next couple of weeks as to how we can achieve that.

"[That would] at least give us that additional assurance that if something went wrong from the interconnectors to the UK, we would have our own way from bringing gas from the sea and have some way to store it."

Ryan's remarks suggested the government is unhappy with the quality of the two LNG terminal and storage bids put forward at present. He stressed a positive sanction would only be awarded to projects that put the "Irish people's interest" before that of the developer.

"We are part of a different gas market to the rest of Europe, because we are connected to the UK-Norway (grid,) not to the continent. I believe we do and will have storage, but I think we do it in a way that gives us real security, not just for something that is in the interests of any one developer."

The national market regulator Electric Ireland said on September 1 that average electricity bills would rise 26.7% and gas bills 37.5% from October 1.  Its executive director Pat Fenlon said Electric Ireland was left with little choice given a 700% surge in wholesale gas prices yr/yr.

"It is with considerable reluctance that we are increasing electricity and gas prices again for our customers, which is necessary given the continuing increases in wholesale energy prices, particularly gas."