Some 26,000 new customers drove Bord Gais's turnover up 8 per cent last year, but underlying profits were static because of rising costs. The State-owned company said it would continue the freeze on the price of gas to domestic users for at least another four years.
Bord Gais said that with the supply from Kinsale now dwindling, the company was focused on securing new sources of gas to meet existing and future demand. Separately, Bord Gais chairman Dr Michael Conlon said talks continued with Telenor, the Norwegian firm, about a telecommunications joint venture.
Dr Conlon said the price of natural gas to consumers had not risen in 15 years, and said there would not be an increase until at least 2003. In real terms, he added, such a price freeze represented a 50 per cent reduction, and had been achieved despite a jump in the cost of procuring gas.
The figures showed that profit before tax and exceptional items last year was £80 million, down just £1 million from the previous year. Once-off exceptional items, including restructuring and site remedial costs, were £14 million, reducing overall pre-tax profit by 16 per cent to £66 million.
According to Dr Conlon: "This is a remarkably good result considering that the average cost of gas to Bord Gais rose by 13 per cent, about £17 million, in 1998."
The company said the rise in the cost of gas was due to the need to import more from abroad - through the interconnector with Scotland - to replace gas from the Kinsale field. In 1998, 50 per cent of gas was imported, compared to 31 per cent in 1997.
Sales of gas to domestic users increased by 18 per cent, and to industrial users by 11 per cent, the company said, with demand spurred by an additional 25,000 new central heating customers and 1,100 new industrial and commercial buyers.
Bord Gais's chief executive, Mr Philip Cronin, said investment in transmission pipeline capacity would be very significant in the next five years. The company believes it has adequate capacity to meet forecast gas demand until 2004, but would then require additional infrastructure. The company is considering building a second interconnector between Dublin and Scotland, or a North-South pipeline.
"Confirmation of a commercial gas discovery in the Corrib Field off Mayo would provide additional indigenous gas supplies and may impact, depending on recoverable reserves, on the timing of new import pipeline capacity," Mr Cronin said.
Bord Gais said it would also concentrate on new businesses, such as Combined Heat and Power (CHP) plants, power generation, and telecommunications.
While the use of Bord Gais pipes and customer base for telecommunications represented a valuable new business, discussions with Telenor, ongoing since September 1998, were still at a "preliminary" stage, Dr Conlon said.
"It is a question of getting the whole business plan together," he added.
Dr Conlon said he expected legislation to convert Bord Gais into a plc to come before the Oireachtas next year, but stressed that the possible privatisation of the company was a matter for the Government.
The company has discussed a series of changes with its trade unions, but an overall deal has not been signed because the Government and the unions have not yet agreed what stake in the company should be owned by its employees. While the unions want 5 per cent, the Government appears to be offering less. Management has set a deadline of December 31st for the completion of the deal.
