Gas supplies to industry will be at risk if a new interconnector with Scotland is not sanctioned, Bord Gais has warned.
The State-owned company is thought to have told the Department of Public Enterprise that power stations and Irish Fertiliser Industries could face interruptions in the winter of 2002 if supply runs short of demand.
It is understood a letter to the Department from the company said: "It may need to be shut down at the onset of cold weather and switched off until springtime."
Bord Gais's proposed expenditure of £200 million (€254 million) is thought to have been on the agenda at a Cabinet meeting last week, although a Government spokeswoman said it was not discussed.
The Department of Public Enterprise is believed to have advised the Government to go ahead with the pipeline. A recent Economic and Social Research Institute report said rising demand and the depletion of the Kinsale field could lead to a potential gas shortage in winter 2002 if no new supply was available. However, IBEC's gas users' group has alleged some of the report's projections are very optimistic.
While there are alternative plans to bring gas into the State, none will be ready next year.
Enterprise Oil, which is developing the Corrib field, will not produce gas until 2003. An Anglo-American group, Premier Transmission, wants to build a Belfast-Dublin link although it has suspended preliminary engineering work on its project.
It is thought the Department of Public Enterprise informed other Departments of its advice, but they required more time to assess the plan.
A factor here may be that certain Ministers are eager to see the North-South link built, because this would foster cross-Border economic co-operation.
The electricity regulator, Mr Tom Reeves, will assume responsibility for gas later this year. For the moment, however, the business is regulated by officials working for the Minister for Public Enterprise, Ms O'Rourke, who is Bord Gais's sole shareholder.
In a letter to the Department earlier this month, Bord Gais is thought to have acknowledged "there may well be excess capacity for a relatively short period" if Corrib gas came on stream in 2003 after the interconnector was constructed.
However, Bord Gais expressed uncertainty about the timetable for the delivery of Corrib gas by Enterprise Oil, and its partners Statoil and Marathon Petroleum. Those groups are understood to be confident of delivering "first gas" by mid-2003 with full production by the end of that year.
Citing its statutory responsibility to ensure stability of supply into the system, Bord Gais's letter said "load-shedding" would have to be contemplated if no new supply was available by 2002.
About 10 per cent of gas supplies for new Dublin power generation stations planned by an ESB-Statoil joint venture and by Northern Ireland firm Viridian would be "interrupted" for 10 days, it said. If there was still a deficit after these measures, the Bord Gais said supplies to Irish Fertiliser Industries, which has plants at Cork and Arklow would be interrupted.
Bord Gais stressed, however, that it had no power to force its customers to surrender their existing contractual rights.
The company is assessing options for its future ownership. Securing supply aside, one analysis suggests the second interconnector would enhance its value if the company was floated on the stock exchange.
