Bord Gais has welcomed the Enterprise announcement that it will conduct a feasibility study on the Corrib field, saying it will be assessing its impact on the State company's own plans. Apart from that, Bord Gais is unwilling to comment, pointing out that the Corrib field is Enterprise's story. But earlier this month at the Bord Gais announcement of a strategic review of its gas supply options, senior executives admitted they were "very excited about the prospects of Corrib".
Even if a major gas find is detected it will not resolve all Bord Gais's problems. The company has forecast that future demand for gas will increase greatly - both from domestic and industrial users. It reckons that a further 270,000 domestic users could come on-stream by 2025.
The Kinsale gas head, combined with the gas interconnector to Scotland, will only provide enough gas to satisfy demand until 2004. Corrib could provide up to 50 per cent of the gas requirements for at least 10 years. Currently up to 50 per cent of gas supplies are imported from suppliers in the North Sea, through the interconnector.
Demand for gas is set to soar as the company plans to extend the network to all major towns and cities in the Republic. As both Enterprise and Bord Gais point out, gas demand is also being driven by the need to increase generating capacity in the electricity sector and to fuel existing capacity to reduce carbon dioxide emissions.
Bord Gais has various options at its disposal. It can build a second gas interconnector from Soctland direct to Dublin, build a pipeline between Belfast and Dublin or access additional indigenous gas discoveries. Whatever way, over time, a second interconnector from Dublin to Scotland would still be needed. However, if the Corrib find was very big, the construction of a second interconnector could be postponed for many years. It is estimated that extending the gas network, plus the infrastructure needed to pipe gas from Corrib and a second interconnector to Scotland could cost around £648 million (€823 million).
The Kinsale field is currently in its final stage of depletion and will probably be exhausted around 2006. The ratio of Kinsale gas to imported gas will rise to 40:60 this year. This figure will increase to 30:70 thereafter.
Bord Gais is currently awaiting the results from Corrib before it pursues other options. Either way it will need to make a decision by early next year. By then Enterprise should know if the Corrib field is viable.
Bord Gais will have to make considerable investment in the infrastructure needed to pipe the fuel to domestic and business consumers.
Some EU monies could be available but it is likely that Bord Gais would have to fund the majority of the infrastructure investment itself. An opportunity would also exist for the private sector to become involved through public-private project (PPPs) initiatives - an approach which is favoured by both the Government and Bord Gais.
However, yesterday's announcement by Enterprise can only be positive. "Each time Enterprise announces a positive result, it encourages others to prospect for gas off the west coast," said one source.
