27 September 20222
By Elaine Murphy
“Government must take a more pragmatic approach to decommissioning key energy infrastructure until all options for re-purposing have been properly presented” – says Mag Mell Energy Ireland
The age of the Kinsale Gas Pipeline should not be a determining factor for disregarding its potential reuse options including offshore importation of non-fracked Liquefied Natural Gas (LNG). That’s according to Mag Mell Energy Ireland who today called for a more pragmatic approach by Government to retaining key infrastructure which can support Ireland’s energy security needs.
Commenting CEO of Mag Mell Energy Ireland, Paul Griffiths said: “Last week the Department of Environment, Climate, and Communications (DECC) published its long awaited ‘review of the security of Ireland’s electricity and natural gas systems’. It was very encouraging to see floating storage and regasification units (FSRUs) included in the review and publicly recognised as a viable option for strengthening Ireland’s energy security. This is a significant step change by the Department and Minister Eamon Ryan, who amplified how floating LNG facilities could offer a gas storage solution for Ireland.
Importance of deferring decommissioning of key energy infrastructure
“Disappointingly however, following the publication of the review, Minister Ryan went on to make a series of negative remarks regarding the decommissioning of the Kinsale Gas Pipeline. We have actively advocated how the pipeline at the now depleted Kinsale Gas Field can be quickly repurposed for offshore importation of non-fracked LNG using FSRUs. Since we shared a detailed proposal with DECC in April 2020 on this unique opportunity to ease pressure on Ireland’s gas supply there has been no response or engagement.”
Last week, Minister Ryan responded to several questions put to him in the Dáil by Fine Gael TD, Deputy David Stanton regarding the reuse of existing Kinsale Gas Field infrastructure. When asked if he has considered using this infrastructure for FSRUs, Ryan stated he does not think that this infrastructure will be used due to the pipeline being “very old”.
Mr Griffiths continued: “The fact that Mag Mell’s proposal is now subject to Dáil debate must be welcomed and emphasises the strategic importance of the project in terms of supporting Ireland’s energy supply. However, key to the success of the proposal is the retention of the Kinsale Gas Pipeline. Citing “old age” as a reason for not exploring all potential reuse options for a key piece of national energy infrastructure simply isn’t plausible by the Minister. There are numerous examples of active oil and gas pipelines of a similar age in the North Sea which are safely and efficiently providing energy security for the UK. If we were to take the approach of decommissioning energy infrastructure based on age alone, it would for example leave the UK Ireland gas interconnector with a remaining lifespan of just a few years.
“A degree of pragmatism is badly needed here. Until the depletion of the Kinsale Gas Field in July 2020, the offshore pipeline safely delivered gas to Irish consumers. Furthermore, a study completed by Gas Networks Ireland for Kinsale Energy, the current owner of the infrastructure shows the onshore section of the pipeline is fit for purpose. This was built at the same time as the offshore pipeline. So, is the Minister implying that the onshore gas grid in the Kinsale-Cork area is now too old to be used and needs to be decommissioned? The Minister should also publicly state without ambiguity that there is no fracked gas coming through the gas interconnectors from the UK and provide the technical justification to support any such statement.”
Mr Griffiths added: “We know that the final decision to sign off on the decommissioning of the Kinsale Gas Pipeline rests with Minister Ryan and will have important consequences for the people of Ireland. A premature decision by the Minister to proceed with decommissioning will weaken Ireland’s already perilous position regarding security, diversity, and affordability of gas supply.
“It is solely within the gift of the Minister to demonstrate a pragmatic approach and defer the decommissioning of the Kinsale pipeline until all options for re-purposing have been properly presented without favour or ideological bias. If the decommissioning of the pipeline proceeds in the absence of any substantive engagement by DECC then there is a strong possibility that our call for a public inquiry into the decision-making processes of DECC will gather momentum.”
Global market availability and practical operation of LNG FSRUs
A technical analysis of the review of the security of energy supply identifies commercially operated floating LNG and a commercially operated gas storage facility as being potentially achievable by 2025. Mag Mell’s most recent review of the FSRU and LNG market indicates that it can execute a non-binding contract for LNG deliveries to its proposed FSRU site at the end of the Kinsale Gas Pipeline commencing in the last quarter of 2025. This also aligns with the potential availability of FSRU vessels that are fit-for-purpose for Celtic Sea weather conditions. If Mag Mell’s proposed FSRU project is to be operational by 2025, the regulatory approvals must be well-advanced by the second half of 2023.
“The concept of a wholly State-owned facility as proposed by Government for a market the size of Ireland simply demonstrates a naïve appreciation of FSRU LNG market dynamics,” said Mr Griffiths. “There is a need for better understanding of operating costs, forward product prices and the scale of the potential unlimited exposure for Irish taxpayers. The technical analysis also highlights how dependence of the electricity system on natural gas, particularly at times of low wind and the peak demand for natural gas are both expected to increase. How the Minister addresses the options to access gas at these times from storage or FSRU LNG will have a material impact on affordability of energy for years to come.”
The technical analysis concludes that green hydrogen, additional electricity connectors and electricity storage-pumped hydroelectric are not achievable by 2025. Furthermore, the analysis uses a baseline assumption that offshore wind capacity to meet the Programme for Government target of 5GW by 2030 is achievable. “Recent decisions by two world-renowned energy giants to withdraw from Irish offshore wind projects for reasons cited already makes this baseline assumption fundamentally unsound and creates additional pressure on long-term security of energy supply,” concluded Mr Griffiths.
About Mag Mell Energy Ireland
Mag Mell Energy Ireland Ltd is seeking to create an ambitious floating LNG storage and regasification project in the Celtic Sea close to the now depleted Kinsale Head Gas Field of the south coast of Ireland. The project is also designed to include strategic LNG gas storage capacity making use of existing offshore infrastructure at Ram Head.
The project is aimed at providing enhanced security of energy supply for Ireland’s energy network with less environmental impact than other proposed land-based energy infrastructure while supporting the transition to a green energy grid.
The proposed floating storage and regasification units would be located beyond the horizon and would not be visible from land. These storage facilities can in due course be converted for use as a green hydrogen reservoir and for carbon dioxide (CO2) sequestration.