British Gas (BG) wants to sell electricity it generates in Northern Ireland to industrial customers in the Republic.

But the company, which is investing £200 million sterling (€337.38 million) in a new power plant in Co Antrim, said key issues in the liberalisation of the market remained unresolved.

"We've spoken to a number of potential customers already," said Mr Colin Orr Burns, chief executive of BG's electricity subsidiary Premier Power.

"There is a very good market in the Republic. What we need for us to compete is a fair and equitable pricing system. It's not there yet, but it has moved a hell of a long way.

"There are issues in terms of pricing. For there to be real competition, we need new power stations, which is happening," he said.

Mr Orr Burns declined to say which groups Premier was speaking to.

But he confirmed that its strategy was to sell to wholesale suppliers only.

Such groups could include the ESB, although a senior figure within the State company denied it had discussed importing power from the North with BG.

It is thought BG supplies 55 megawatts (MW) to the ESB for supply to industrial customers in the North.

BG's new gas-fired power station, with capacity to produce 600 MW, will replace ageing, inefficient plant with similar capacity at its existing site at Ballylumford, Co Antrim.

It will use 220 MW of the remaining 400 MW capacity at its existing plant to supply the eligible market in the North - and, it hopes, in the Republic.

Its ability to break into the Republic's power market may be constrained by capacity on the current North-South inter connector, which is limited to 100 MW.

Mr Orr Burns was confident this would be increased as the market opened up.

A further element is that power produced at Ballylumford's existing plant is expensive - the new system will increase its efficiency by 60 per cent, Mr Orr Burns said.

This could affect the price BG charges in a market where it will ultimately face competition from newer, gas-fired plant planned by consortiums in the Republic.

The North's Department of Enterprise, Trade and Investment is contributing £10 million to the project, which will be completed in December 2002.

BG is likely to construct a £100 million gas pipeline from Belfast to Co Derry, where the ESB will control a consortium which plans a new generation plant worth £150 million at Coolkeeragh.

Yesterday's development signals a further effort by BG to enter the Republic's energy market. In a joint venture with US energy group KeySpan, it plans to build a gas pipeline linking Belfast and Dublin.

But the consortium has suspended preliminary engineering work on this project because of delays in the liberalisation of the Republic's electricity business.