The gas networks in the Republic and Northern Ireland are to be linked for the first time by a new pipeline under proposals agreed by the Irish and British Governments. Emmet Oliver reports.

At a ceremony yesterday, the Minister for Communications, Mr Ahern, signed a framework agreement with the British Ambassador, Sir Stewart Eldon, for the pipeline, which is likely to cost about €140 million.

Finance for the project is being provided by Bord Gáis Northern Ireland and the Northern Ireland Office. The Irish Government is investing €12.7 million in the Northern Ireland market gas network generally, although it is not clear whether this will go directly into the pipeline.

The pipeline will stretch from a location near Belfast to Gormanston in Co Meath. It is expected to be constructed in 2006.

Speaking at the ceremony, Mr Ahern said: "It puts flesh on the bones or framework which both British and Irish governments have been working steadily on to bring about an all-island energy market. Along with increasing North/South electricity links, the fact that we will be linking the two separate gas networks provides even greater security of supply and will ultimately provide for larger joint markets for consumers," he said.

"Ironically, while energy was not one of the cross-border issues itemised in the Good Friday Agreement, there has been significant progress arising from regular meetings between ministers, regulators and officials in delivering on the aim of securing an all-island energy market," he added.

Various towns along the route of the pipeline will be supplied with natural gas, a spokesman for the Department of Communications explained.

The idea of an all-Ireland energy market has been raised in recent months by Viridian and the ESB. Both firms argue that competition would be boosted by combining the North and South energy markets. Viridian this week said that taking such a step would entice new entrants into the market.