WITH SIGNIFICANT NEW DEVELOPMENTS IN THE WORLD OF NATURAL GAS IN THE OFFING, WILL THE POSITION OF NATURAL GAS BE FURTHER CONSOLIDATED IN THE REPUBLIC OF IRELAND AND NORTHERN IRELAND?
Gas in the Republic of Ireland
The introduction of natural gas in the Republic can be traced back to the 1970s following the discovery of gas off the Head of Kinsale. Initially delivered by pipeline to Cork city, the Cork-Dublin pipeline was built in the 1980s to deliver gas to Dublin, Limerick, Waterford, Kilkenny and Dundalk. The network has since been further extended to incorporate a pipeline to Galway and Mayo along with two pipelines taking gas to Northern Ireland completed in 2006.
To accommodate growing demand, a first subsea interconnector was built in the 1990s to import supplies from the UK with a second completed in the early 2000s – the country currently imports circa 95% of its gas requirements. Its only storage facilities being depleted reservoirs in the Kinsale fields which cover about 17 days supply.
Ervia, formerly Bord Gais Eireann, a commercial semi-state company, owns and manages the 8,500 mile gas grid infrastructure through its Gas Networks Ireland subsidiary. The grid comprises a 1,500 mile pipeline transmission network and 7,000 miles of distribution networks.
Gas demand in the Irish Republic has grown rapidly over the past 25 years – 1.17 billion M3 in 1990 v 3.16bn M3 in 2000. Having reached a peak of 5.5bn M3 in 2010, in 2013 the effects of severe recession reduced demand to 4.68bn M3.
As a source of primary energy the gas share has risen from 15% in 1990 to 29%. Gas has around 670,000 users of which 550,000 are households – around 35% of homes v 45% which use oil. Electricity generation is the largest single user of gas representing around 60% of total demand.
In July 2007 the market was opened up to companies other than Bord Gais, with Airtricity, Energia, Electric Ireland, Flogas Natural gas and Vayu now supplying the sector.
Expecting a game changer in the Republic
A very significant game changer will shortly impact the gas supply position – before the end of 2015 the Corrib field off the coast of Mayo is expected to come on stream. Discovered almost 20 years ago, the field, which has a projected life of between 15 and 20 years, is operated by Shell which has a 45% stake. In its first few years of production the forecast is that it will supply an average 42% of the country’s indigenous requirements – with a potential to meet up to 60% at its peak – substantially enhancing the country’s self sufficiency.
The onshore processing plant will have a capacity to handle 10mn M3 per day with the purified gas fed into the Gas Networks grid. Additions to the existing grid are planned to make gas available to the towns of Wexford and Nenagh.
Gas in Northern Ireland
Gas came here in 1996 with the completion of the Scotland-Northern Ireland pipeline which enabled the import of natural gas from the UK National Transmission System via Scotland, landing at Islandmagee. It is then delivered to Belfast via the Belfast Gas Transmission pipeline, both this pipeline and, that from Scotland, being owned by Mutual Energy. This is the supply source for users in Greater Belfast and Larne where the distribution network is owned and operated by Phoenix Natural Gas. In 2007 the market was opened to competition from other suppliers.
New market opportunities were opened up in Londonderry, Limavady, Coleraine, Ballymoney, Ballymena, Antrim, Craigavon, Banbridge, Newry and Armagh on completion of the North West pipeline. Owned and operated by Gas Networks (UK), this pipeline links Carrickfergus to Coolkeragh power station near Londonderry whilst the South-North pipeline from the Irish Republic links to the former at Ballyalbanagh in County Antrim.
Firmus Energy owns and operates the distribution network within this licence area. The area’s large industrial and commercial market was opened to other suppliers in October 2012; smaller industrial, commercial and domestic markets opened in April 2015.
Gas consumption in Northern Ireland increased from just under 900 million M3 in 2000 to a peak of 1.72bn M3 in 2007- back to 1.2bn M3 in 2013 as a result of reduced power generation usage which accounts for circa 55% of the total. Usage by domestic, commercial and industrial customers has continued to grow from 300mn M3 in 2007 to 500mn in 2013. There are about 195,000 households and 12,500 business users of gas with just under 90% are in Greater Belfast..
Apart from Phoenix Natural Gas and Firmus Energy other suppliers are Airtricity, Calor Gas, Bord Gais and British Gas.
40,000 new gas customers
In March this year the Utility Regulator granted the partnership of Mutual Energy and Scotia Gas Networks conveyance licences to extend the natural gas grid to the west with the distribution network being owned and operated by the latter.
By bringing gas to Strabane, Omagh, Enniskillen, Derrylin, Dungannon, Coalisland, Cookstown and Magherafelt, up to 40,000 new domestic customers and businesses are projected.
Connections to the existing grid will be from the North West pipeline at Londonderry, for Strabane and from the South-North pipeline at Portadown for the other towns. Project completion is expected in 2017.
Islandmagee Storage has planning permission to develop an underground gas storage facility in 7 salt caverns beneath Larne Lough with a total capacity of about 500m M3 which is due for completion in 2018/19.