A new report on gas demand will determine the fate of Bord Gais Eireann's plan for a new interconnector with Scotland.
If the findings of the bullish study by the Economic and Social Research Institute are accepted by the Department of Public Enterprise, The Irish Times understands the £300 million (€381 million) Bord Gais pipeline will be sanctioned next month.
This is because Prof John FitzGerald's projections indicate a likely shortfall of gas by winter 2002 - before any alternative supply becomes available.
It would be crucial, in that scenario, to build additional infrastructure before then.
Yet Prof FitzGerald's findings are seen as very optimistic by certain industry figures.
His unpublished report - Energy demand to 2015 - predicted annual average growth in demand for gas in 2000-2005 at 6.9 per cent.
The existing gas system is already near full capacity and insiders accept such growth would prompt a supply deficit by the end of 2002.
However, they question whether the projected rise in demand from the electricity generation sector, as cited by Prof FitzGerald, will come about soon.
His report said: "The rapid growth in gas demand in 20002010 is due to the assumption of fuel switching in the electricity sector. These assumptions would mean 71 per cent of electricity generated in 2010 would come from gas." It is understood there is concern that construction of the second interconnector might lead to over-capacity after 2002. This is because an alternative gas supply, from the Corrib field, will come on stream by mid-2003.
So the crucial decision to be made by Department officials is whether a supply shortage will arise in 2002.
Faced with the rapid depletion of the Kinsale field, Bord Gais has pushed hard to secure permission for the second interconnector.
However, there are alternative private sector proposals to meet rising demand for energy.
This means the Department is faced with regulating an industry in which a State-owned company is dominant, but one which has a number of potential new private sector entrants.
In addition to Enterprise Oil, which is developing the Corrib field with Statoil and Marathon Petroleum, groups such as British Gas and US firm El Paso have proposed building supply pipelines into the Republic.
Yet British Gas and the US group KeySpan, its 50:50 partner, have delayed work on a proposed Belfast-Dublin link because they object to a Government levy guaranteeing uniform tariffs throughout the State. Still, there is considerable political backing for the North-South pipeline because it would be seen as putting flesh on aspirations for cross-Border co-operation.
