Bord Gais has been given the go-ahead for a £200 million extension to its network with a loop line around the State, connecting Dublin with Galway and Limerick and going on to Cork. The Galway link will carry gas from the newly-discovered Corrib gas field off Co Mayo.
The Minister of State for Public Enterprise, Mr Joe Jacob, has given "approval in principle" to the project, according to a Department spokeswoman.
She said preparatory work had begun and plans were being drawn up. It was due to be completed by October 2002.
Meanwhile, the Minister for the Marine and Natural Re sources, Mr Fahey, has said he is going to seek the construction of a £200 million, gas-fired electricity generating station in the west, using fuel from the Corrib field. He said the plant was a "top priority" which he wanted to see included in the National Development Plan.
"I would hope for a decision on this sooner rather than later and that it would be up and running by the time gas comes ashore from the Corrib gas field in 2003. Up to now, very big industrial projects could not be considered for the west because of inadequate ESB supply, but this would change all that."
A crucial aspect of the project has been how the Corrib gas would be linked to Dublin.
The gas will be brought ashore at Pullathomas, Broadhaven, Co Mayo. Enterprise Oil had been considering two options.
The first was to link with the proposed Bord Gais loop line from Dublin to Galway, but there was no certainty it would be given the go-ahead. The alternative was to link with its network through a direct pipe to Dublin. Mr Jacob had said that he would decide on the Bord Gais proposal when the plan became clearer.
Tests on a new well in the Corrib gas field in mid-June confirmed that it had the potential to produce gas commercially, according to Enterprise Oil, in joint venture with Statoil and Marathon Petroleum. A further well is to be drilled this summer, although the consortium is not expected to proceed with full-scale commercial development of the field until late this year. Preliminary indications are that the field will have a life of 17 years.
Last week, Mr Jacob, publishing the Brattle report on natural gas pipeline authorisations and transmission tariffs, said the upgrading of the gas network would "bring gas to significant parts of the country not already served and will ensure there is sufficient capacity to the south of the country as the Kinsale field depletes".
Enterprise will pay for the construction and operation of a pipeline as far as Broadhaven. However, it has not yet been decided whether the company or Bord Gais will build the £100 million pipeline connecting to Galway.
Negotiations between Enterprise, Bord Gais and the Department of Public Enterprise are continuing on issues surrounding the project, but will not now meet the deadline set for next week. It is expected that they will conclude in the coming weeks.