Gas conveyance and supply licence application for areas outside Belfast

13 June 2003

Ofreg announced today that it had invited Bord Gais Eireann (BGE) to enter into preferred bidder status for a licence to deliver gas to Northern Ireland’s district towns.

Dermot MacCann Deputy Chief Executive of Ofreg said:

“We have had applications from Phoenix and Bord Gais both of which have an impressive record in building gas businesses and the competence and skills necessary to bring gas to the towns of Northern Ireland. We are grateful to both for their participation in this process of awarding gas licences. Ofreg will now enter into intensive discussions with BGE about the detailed costs and timing of the implementation of their proposals. If these discussions lead to a satisfactory outcome for both the company and Ofreg, BGE will be awarded a licence. If they are not satisfactory Ofreg will invite Phoenix to re-enter into discussions.”

Notes

In February 2002 the Director General, of Gas for Northern Ireland (and since 1 April 2003, the Chairman of the Northern Ireland Authority for Energy Regulation) with the consent of DETI, issued a licence to Bord Gáis Éireann (BGE) for the conveyance of gas through the following proposed pipelines:

A transmission pipeline to be constructed by BGE running between a connection point on the current Phoenix pipeline and an off-take at the proposed new CCGT Coolkeeragh Power Station. The proposed pipe is known as the North West Pipeline and is scheduled to be built in 2004.

A transmission pipeline to be constructed by BGE running between the Republic of Ireland network at Gormanstown and the North West Pipeline. The proposed pipe is known as the South North Pipeline and is scheduled to be built in 2006.

The award of the licence for these two pipelines early last year opened up the possibility of the supply of gas to the District towns along the routes of the new pipes. Consequently, in April 2002 the Director General, at the request of the DETI Minister, sought expressions of interests from parties regarding natural gas distribution and supply opportunities outside the current licence area of Phoenix.

Following discussions with those who expressed an interest, the Director General and DETI in early December 2002 invited formal licence applications from those who had already expressed an interest, or any other company with appropriate expertise and resources, for gas distribution and/or supply activities for these potential new areas.

Proposals were received from two companies - Phoenix and BGE. Since receipt of the formal proposals in early February 2003, Ofreg and DETI have been engaged with the two companies in clarifying some of the detail of the proposals and in assessing relevant engineering and commercial aspects.

For further information, please contact
Dermot MacCann on 028 9031 1575 or Nick Carson on 07711 482807