Dublin Gas Company supply negotiations
Reynolds said negotiations with the Dublin Gas Company were advanced and linked arrangements to the company’s restructuring and performance, denying that development plans or supply were delayed. He and O’Leary also discussed expanding gas offtake and the Dublin–Belfast pipeline, with Reynolds saying there had been no construction delay and that discussions with Northern Ireland were continuing.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 21 and 22 together.
Negotiations on a supply of natural gas are at an advanced stage between BGE and the Dublin Gas Company and I am hopeful that they will be concluded shortly. I am encouraged by management changes in the company and by the operation of a comprehensive works agreement with employees. Reforms in the operation of the company will continue to be monitored and I envisage that any arrangements with the company will be tied to its performance in achieving planned market performance.
Consistent with the long-term requirements of premium markets, such as Cork, Dublin and other populated centres, and with a prudent depletion policy for the Kinsale Head field, it is envisaged that significant quantities of gas can be made available for electricity generation in Cork and Dublin over the period mentioned.
At current quantities and contract price the supply terms arranged between BGE and the ESB have the effect that the price of electricity to the consumer is of the order of 10 per cent less than if imported heavy fuel oil were being used. I would emphasise that the level of electricity prices is influenced by factors other than fuel costs and that the benefit of natural gas use at any particular point is affected by factors such as the level of offtake of gas and the prices of other fuels.
Comment on this
In relation to Question No. 21, is it not a fact that the delay in agreeing a price with the Dublin Gas Company is detrimental to their development plans and that if the price is not agreed in the very near future there may be a delay in connecting the gas supply to domestic and industrial consumers in the Dublin region?
Comment on this
Would the Minister not agree that there have been long negotiations between BGE and the Dublin Gas Company regarding supply and the price of the gas and that there has been an undue delay in finalising the price of the gas and the rebate system?
Comment on this
These negotiations have been of long duration but I am sure the Deputy is fully aware from his experience in this. Department that there were reasons for it and that the arrangements with the company were to be tied with performance in achieving certain restructuring within the company and a planned market performance. I assure the Deputy that the development plans are not being held up.
Comment on this
Would the Minister agree that the correct strategy in the long-term must be to increase domestic and industrial offtake since this is the best means of making this natural product most cost-competitive? Would he agree that the speed with which we complete the pipeline arrangements between Dublin and Belfast have a bearing on this? Could he throw any light on delays which may be occurring in this matter?
Comment on this
I agree that this is the correct strategy and it is one which I am pursuing. There has been no delay in the construction of the gas pipeline from Cork to Dublin. As the House is aware, I recently met the Northern Ireland Minister, Mr. Adam Butler, and there was broad agreement on many issues. Officials from both sides are carrying out an immediate examination of other areas and I expect to have another meeting with Mr. Butler within a matter of weeks.