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Ireland advises against all LNG project developments during energy review

Highlights

Not 'appropriate' to proceed with any terminals: ministry

US' New Fortress eyeing progress at Shannon LNG plant

UK's Predator hoping to develop Irish LNG FSRU

Ireland does not consider it "appropriate" for any new LNG import terminal project to proceed pending the outcome of a review of the country's energy supply security.

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Ireland has no LNG import infrastructure at present, but two projects are still under development -- US company New Fortress Energy's Shannon LNG terminal and a floating import terminal project being developed by UK-listed Predator Oil and Gas.

The Irish coalition government formed in June last year made it a policy pledge not to allow the import of LNG produced from shale gas, with legislation expected to be published in the near future.

In the meantime, a review of the country's energy supply security is being carried out, and DECC said no LNG import projects should proceed until the outcome of the review is known.

"The Department is carrying out a review of the security of energy supply of Ireland's electricity and natural gas systems which is focusing on the period to 2030 in the context of ensuring a sustainable pathway to 2050," a DECC spokesperson said.

"Pending the outcome of this review, it is the Minister [Eamon Ryan]'s position that it would not be appropriate for the development of any LNG terminals in Ireland to be permitted or proceeded with," the spokesperson said.

"The Department has made, and will continue to make, this position clear to developers of potential LNG projects that contact the Department and in response to any consultations with the Department that are required as part of planning and permitting processes."

'Fracked' gas

Opposition to LNG sourced from shale gas -- or "fracked" gas as Dublin calls it -- was first cemented in the coalition's Programme for Government last year.

"The Programme sets out that as Ireland moves towards carbon neutrality, it does not make sense to develop LNG projects importing fracked gas," the DECC spokesperson said.

"The Department is in the process of developing a policy statement, which includes the consideration of any necessary legal and regulatory provisions," the spokesperson said.

"The policy statement will be brought to government for approval very shortly and will be published once approved."

In January, the government stance prompted one of three LNG import project developers -- the US' NextDecade -- to suspend its plans for a 4 Bcm/year FSRU in southern Ireland that would have imported LNG from its planned Rio Grande export facility.

But two other project developers are soldiering on.

The first is the country's longest-standing planned project, the 5 Bcm/year Shannon LNG terminal in western Ireland.

It suffered a setback in November last year when the High Court in Ireland ruled to quash all development consents for the project.

However, in a call with analysts on April 16, New Fortress CEO Wes Edens said the company was preparing to submit new planning applications and that he was confident of receiving approval.

Edens said the terminal could come online in the second half of 2022. "From an Irish national security perspective, I think it's something which is needed," he said.

Ireland is reliant on its only major producing field Corrib and UK gas imports to meet its demand requirements of around 5 Bcm/year.

Edens said Shannon LNG would be a "big plus" to Ireland as it would represent an additional source of supply.

"They do need something when the wind doesn't blow, and so we think that gas into their network in this form is something which is both needed and is wanted there," he said.

UK-listed Predator, meanwhile, is also moving forward with plans to pursue a floating LNG import terminal, saying the project would help mitigate Ireland's energy supply security issues.

Predator first said in May last year it wanted to develop an FSRU in Ireland and has specifically said its terminal would not use LNG sourced from "fracked" gas.

In March, CEO Paul Griffiths said the project was being "accelerated" as the regulatory process becomes clearer and more focused on the public interest element of the project, driven by increasing concern over supply security.

Neither New Fortress nor Predator responded to questions from S&P Global Platts about the latest government guidance.

EU funding

DECC also said Ireland would not support applications for EU funding for an LNG import terminal project.

"The Minister has previously confirmed that if an LNG project, such as Shannon LNG, were to apply for inclusion on the 2021 list of EU Projects of Common Interest, Ireland would not provide the required member state approval and accordingly such a project would not be included on the list," the DECC spokesperson said.

"It should be noted that no LNG projects in Ireland have applied for inclusion on the 2021 list," the spokesperson added.

"Furthermore, the European Commission has proposed an update to the relevant regulation, which Ireland has supported, that will ensure no LNG projects would be eligible to be Projects of Common Interest in future."