The new government should ensure the proposed liquefied natural gas (LNG) plant proposed for the Shannon estuary does not proceed in light of financial difficulties being experienced by the US company behind the project, New Fortress Energy, according to Friends of the Earth Ireland.
Its subsidiary, Shannon LNG, has sought permission for a power plant, battery energy storage system and a regasification unit on a 630-acre site in north Kerry between Tarbert and Ballylongford.
“The financial failings of New Fortress Energy are another red flag and provide further grounds for the new government to reject Shannon LNG, and LNG more widely. It would be highly reckless on both climate and economic grounds for the project to be approved in light of the latest information,” said Friends of the Earth head of policy Jerry MacEvilly.
He added: “We are also calling on relevant public authorities responsible for considering Shannon LNG’s development plans and permits to undertake a review of their financial dealings. The company’s financial failures only further heighten the risk of stranded assets and increased costs for Irish consumers.”
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New Fortress Energy is reported to be encountering major financial difficulties and restructuring large debts to avoid bankruptcy. Its share price has fallen and its credit ratings have been downgraded. Shareholders have also been filing class-action suits due to project delays.
In November the Institute for Energy Economics and Financial Analysis noted “the implications of this potential bankruptcy for the oversupply in global natural gas may be the tip of the iceberg”.
This month, the institute said shareholders of New Fortress Energy have filed notice of at least nine class-action lawsuits against the company, alleging it misled investors with respect to its “fast LNG” project in Altamira, Mexico.
A key pillar of its growth strategy has been its innovative fast LNG (FLNG) technology, which transforms LNG infrastructure with modular floating liquefaction facilities that are faster and cheaper to deploy than traditional onshore systems.
New Fortress Energy was asked to comment on its financial position and to indicate if it still intended to proceed with the Shannon LNG project but it has not responded to The Irish Times.
[ High Court overturns refusal of permission for Shannon LNG terminal in Co KerryOpens in new window ]
A High Court judge in September overturned a refusal of permission for the proposed LNG terminal. Mr Justice Richard Humphreys quashed An Bord Pleanála’s decision and said he proposed to order the board to reconsider the planning application in line with his findings. An Bord Pleanála has indicated since it intends to apply for a certificate to appeal against the judgment.
Opponents of Shannon LNG have highlighted the gas would be extracted by hydraulic fracturing or fracking, a method banned in Ireland on public health and environmental grounds. They also claimed developing a storage and regasification facility would prolong dependence on fossil fuel when the country is supposed to be moving away from polluting sources of energy.
Mr Justice Humphreys stressed he would not wish to be taken as commenting for or against the merits of the LNG project, which is designated by the European Union as a strategic infrastructure development. It appeared to be common ground between the parties that Government policy did not amount to “a moratorium”, he said.
Responding to the decision, Minister for Energy Eamon Ryan said it might make more sense to invest further in solar, interconnection and battery storage of electricity than to put the money into LNG. Analysis on this issue and on energy security options for Ireland would be completed in coming months, he said.
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