Ireland to miss out on US plan to supply EU with gas because we don’t have a terminal

An EU-US deal to secure gas supplies to the continent in the event of a Russia-Ukraine conflict will not directly benefit Ireland, but could help keep a lid on energy prices.

Washington and Brussels agreed on Friday to source liquefied natural gas (LNG) supplies via ship in case Russia reduces or cuts off natural gas supplies to Europe as a result of tensions in Ukraine.

“The United States and the EU are working jointly towards continued, sufficient, and timely supply of natural gas to the EU from diverse sources across the globe to avoid supply shocks, including those that could result from a further Russian invasion of Ukraine,” US President Joe Biden and European Commission president Ursula von der Leyen said in a joint statement.

“We commit to intensifying our strategic energy cooperation for security of supply and will work together to make available reliable, and affordable energy supplies to citizens and businesses in the EU and its neighbourhood.”

The EU gets 40pc of its gas supplies from Russia, an EU official said, and around 39pc from Norway.

The balance is liquefied natural gas (LNG) imports, with the bulk coming from the US, as well as Qatar and Russia. Nigeria and Algeria are also important suppliers.

Ireland imports more than half of its natural gas from the UK, via pipeline from Scotland, but that is expected to rise to 80-90pc by the mid-2020s, when the Corrib gas field is depleted.

There is no facility here to land the LNG supplies being prepared by Washington and Brussels.

Europe’s LNG imports hit a record high in January, an EU official said.

LNG is natural gas that has been cooled to a liquid state, making it easier to ship and store, including to areas without pipelines.

In the US it is often extracted via the controversial practice of fracking.

Environment Minister Eamon Ryan said last year that Ireland will freeze any new LNG terminals and ban fracked gas imports pending an energy supply review. But US investors in a controversial LNG terminal on the Shannon Estuary last year renewed their interest in the project.

Gas meets more than a third of Ireland’s total energy needs – up to twice that for electricity – but rose to 70pc at times in December, according to Gas Networks Ireland.

Writing in the Irish Independent this week, Tom O’Brien, managing director of Nephin Energy - an investor in the Corrib gas field - said that Ireland is “more exposed” than our European peers to a shortage of gas supplies because of its reliance on the UK.

However, any increase in gas supplies to the EU could have a potential knock-on benefit in Ireland, analysts say, as it will keep prices from rising even further. Consumers’ electricity bills have risen by hundreds of euros in recent months after wholesale gas prices spiked six-fold last year.

Brussels is looking to the US, Qatar and Asian countries to boost its LNG supplies, officials said on Friday.

The EU fears that Russia could turn off gas supplies in retaliation for EU (and US) support for Ukraine following the amassing of more than 100,000 Russian forces on the country’s borders.

It has war-gamed a partial cut-off of gas supplies all the way up to “total disruption”, officials said.

EU diplomats are readying an economic sanctions package in collaboration with the US in case Russia decides to invade Ukraine.

“As we are preparing for sanctions, we are also preparing for counter sanctions,” a senior EU official said on Friday. “And our perception is that the energy field is one to look very carefully at.”