The Government has sanctioned Bord Gais to construct a gas pipeline linking Dublin, Galway, Limerick and Cork, the Minister for the Marine and Natural Resources has said.

Mr Fahy said the link, costing about £200 million, would be constructed by 2003.

The pipeline will mean gas from the Corrib field can be dispersed throughout the Bord Gais network. Bord Gais and Enterprise Oil, which is developing the field, have already reached agreement on the construction of a pipeline between Broadhaven, Co Mayo, where the gas will come ashore, and Galway.

This link, costing £100 million, will be co-funded by Bord Gais and Enterprise Oil. While the State company will own the pipeline, Enterprise will own the gas flowing through it.

Enterprise claims it has yet to secure "project sanction" to fully develop the field from its board, though few doubt it would have reached its agreement with Bord Gais if Corrib was not commercial.

The company has said it will seek a final go-ahead to exploit the field commercially at the end of the year.

Few observers expected that the Government would not sanction the Bord Gais loopline, which is seen as having two crucial advantages.

First, it links the west of the State with the existing network. Second, it gives Enterprise Oil a means of feeding gas into that system. Enterprise Oil's alternative plan was to build a pipeline from Mayo to Dublin.

The company co-owns the Corrib field with Marathon Petroleum and Statoil. It is the first significant energy resource development in the State since the Kinsale field. Corrib, which is three-quarters the size of Kinsale, will supply energy for 15 years.