Bord Gais says three initiatives will help replace any revenue lost when a significant portion of the gas market is liberalised next year.

The chairman, Dr Michael Conlon, told The Irish Times that a telecommunications joint venture with Norwegian company Telnor, a power generation plant with Canadian Utilities and more than 150 combined heat and power plants (CHPs) around the Republic would give Bord Gais "new sources of revenue".

He said talks with Telnor and Canadian Utilities were continuing, although he did not say whether a site was selected for the power plant which is likely to cost £250 million (€317.43 million).

The company unveiled a CHP project at the Guinness brewery in St James's Gate last week which it said was a model for the kind of contracts it could secure with other big players.

CHPs use heat and steam to produce electricity and are suitable for large industrial plants. The ESB and Northern Ireland Electricity (NIE) are other companies competing in this area against Bord Gais.

While Dr Conlon welcomed these developments and hinted that the company was on the trail of commercial opportunities abroad, there was another major issue facing the company - where to get a gas supply.

The Kinsale field, which supplies a large amount of gas for the company, is expected to run dry in about 2004 or 2005.

The solution to the problem may be buried beneath the cold waters of the Atlantic Ocean, some 34 miles off the coast of Achill Island.

In a deep valley known as the Slyne Trough lies a gas discovery known as the Corrib, owned by the British company Enterprise Oil, which Bord Gais hopes is the key to its future existence.

Dr Conlon and chief executive Mr Philip Cronin confirmed that "intensive" negotiations have taken place with Enterprise Oil about the Corrib discovery. "We are very interested, but we still have to get a better idea of what's down there," said Dr Conlon.

This will happen in the summer when Enterprise carries out its final appraisal testing on what could be the largest gas discovery in the history of the State.

While Enterprise Oil and its two partners - Statoil and Sage Petroleum - will be keen to see the Corrib field produce results, in many ways it will be even more crucial for Bord Gais.

"We need a major gas supply and if there is one to be accessed locally, even better," said Dr Conlon.

He added that if the Corrib discovery failed to impress, the company had a fall-back option - to import gas through a new interconnector (pipeline) with Britain which it would build. Dr Conlon, who has held posts in companies as diverse as the Irish Pigs and Bacon Commission and Cork Savings Bank, said the supply of gas was not the only element of the company's business.

"A significant part of our value as a company comes from our network, distribution system and customer database," he said.

The announcement last week by the private company Canatxx, that it intends to build a £300 million pipeline between Scotland and Ireland, has not changed the company's plans "one iota", said Dr Conlon.

"We are looking closely at what Enterprise come up with and if that is not viable we will look at building an interconnector, this latest announcement does not change a thing," he said.

A significant number of sources in the energy sector have poured cold water on Canatxx's plant, pointing out that Canatxx has not disclosed any financial details about its plan or what power generators it hopes to supply.

If Canatxx does build its pipeline it will be in direct competition with the current interconnector operated by Bord Gais. But Dr Conlon is confident the company will not suffer adversely from this.

While the search for new gas supplies preoccupies the company, other issues on the agenda have created a strained atmosphere.

Management has undergone a significant reorganisation - it caused a one-day stoppage by employees in November who were angry about not being consulted.

The company has been split into four business units, involving a change in the personnel dealing with industrial relations at the company.

An overall restructuring of the company is also taking place with the staff levels expected to be reduced from 750 to 600 people, pending "an acceptable redundancy package", according to the company's main union, SIPTU.

There are also protracted discussions taking place between SIPTU and officials at the Department of Finance and the Department of Public Enterprise about terms for an employee share option plan (ESOP).

SIPTU wants workers to get a 5 per cent stake in the company - a suggestion which has generated little enthusiasm from officials who are more in favour of 1.25 per cent.

Dr Conlon is quick to emphasise that wrangling over an ESOP is a matter for the Government, not the company. He makes the same point when asked if he would be in favour of Bord Gais being privatised or floated.

From 2000 any large user of gas can bring in its own supply and two of Bord Gais's biggest customers - ESB and IFI - are planning to do so.

Dr Conlon said he was confident the company's prices and services would help it retain its main customers. He said the company added 14,000 new gas customers every year and with plans to extend its network into the west was confident of maintaining this, if not improving on it. "While we have 310,000 customers at present, our network is located beside a potential customer base of 550,000 customers and that has to be our aim," he said.