US firm plans €400m Kerry gas facility

US corporation Hess LNG is proposing to build a €400 million liquified natural gas (LNG) receiving terminal in Co Kerry. The terminal will have the capacity to provide more than 40 per cent of the State's gas requirements.

It is estimated that, subject to planning permission, construction could begin in two years and the facility could become operational in 2011 at the earliest.

Shannon Development has entered into an 'option to purchase' agreement with Shannon LNG, a subsidiary of US corporation Hess LNG, in relation to 281 acres of land at its 620-acre landbank between Tarbert and Ballylongford, Co Kerry.

The site is designated for deep-water projects and is approximately 25km from the national gas pipeline grid. The LNG would be delivered in tankers and sourced from around the globe.

The price at which the land may be sold was not disclosed yesterday. The option allows time for the design and appraisal of the proposed project.

Shannon LNG is a subsidiary of Hess LNG, which is a 50/50 joint venture of US energy businesses the Hess Corporation and Poten & Partners. Shannon LNG was established in 2003 by the former chief executive of the Irish National Petroleum Corporation, Paddy Power, to pursue and develop the project. Mr Power is chief executive of the company.

"Ireland needs secure, diverse, competitively priced and environmentally friendly supplies of energy," said Mr Power. "A Shannon-based LNG terminal will provide this and it will give rise to increased competition in the local gas market, leading to downward pressure on prices.

"The terminal will provide about 50 long-term permanent jobs, along with additional support jobs and around 350 construction jobs at its peak."

Mr Power said his company was committed to communication and consultation with the local community and all interested parties. The site is approximately five miles from Tarbert. The 620-acre Shannon Development site is uninhabited.

Minister for Enterprise, Trade and Employment, Micheál Martin, said the development could make a difference to energy costs as well as delivering environmental and employment benefits.

The chief executive of Shannon Development, Kevin Thompstone, said securing the project could allow the further development of the north Kerry site. The proposed development would involve a ship-unloading jetty, two or more LNG storage tanks, and related buildings and facilities. A new pipeline of 25 km- 30 km would transport gas to the national pipeline system.

Labour Party spokesman on energy, Tommy Broughan, welcomed the announcement of the proposed terminal "provided all safety and environmental conditions are met before the project is allowed to proceed".

Shannon LNG said LNG had been transported by sea for 40 years, without any serious incident. It cannot explode or burn. LNG vapours are flammable in air but only if in a gas to air concentration of 5-15 per cent.