Shannon LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Shannon LNG Terminal is a proposed LNG terminal in Munster Province, Ireland.

Location

The map below shows the location of the project, near Tarbert and Ballylongford, County Kerry.

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Project Details

  • Owner: Next Fortress Energy[1]
  • Location: Tarbert/Ballylongford, County Kerry, Munster Province, Ireland
  • Coordinates: 52.58099, -9.44246 (exact)
  • Capacity: 8.2 bcm/y: Phase I: 2.8 bcm/y; Phase II: 2.1 bcm/y; Phase III: 3.3 bcm/y[2]
  • Status: Proposed
  • Cost: US$815 million[3]
  • Type: Import
  • Start Year: Phase I: 2022; Phase II: 2025; Phase III: 2029[2]
  • Associated Infrastructure: Shannon Gas Pipeline

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day; bcm/y = billion cubic meters per year

Background

Shannon LNG Terminal is a proposed liquefied natural gas (LNG) regasification terminal in Munster Province, Ireland. The original project was owned by the U.S. firm Hess. Permits were granted for the project in 2008-10.[4] The project includes construction of an LNG regasification terminal (and an associated 500 MW High Efficiency CHP plant), with a capacity of 17 MCM/d at commissioning and 28.3 MCM/d (82.9 MMcf/day) at full build on the southern shore of the Shannon Estuary (County Kerry). The terminal has approval for up to 4 tanks of 200,000 m3 each and a jetty capable of receiving LNG ships of up to 266,000m3 cargo capacity. Construction will also include a 26 km gas pipeline, the Shannon Gas Pipeline, to export up to 26.8 MCM/d to the national grid at Foynes (County Limerick,Ireland) with an initial deliverability of 16.1 MCM/d.[5]

After years of problems, Hess sold the project to Irish firm Sambolo Resources in November 2015. Part of the problem was reportedly that regulators wanted to force Hess to pay for part of the cost of a gas pipeline between Ireland and the UK, which Hess refused to do. Hess also cited "plunging global prices for LNG" as part of their decision to abandon the project, despite having already invested $72 million on it.[6][7][8]

However, in early 2017, following Brexit, the project was revived — as the post-Brexit trade regime may result in tariffs being applied to gas imports from the UK. As of April 2017, PwC was advising Sambolo Resources in their bid to find a new buyer for the project.[8] In May 2017, the Irish government backed the revived proposal.[9] In August 2018, Sambolo Resources sold the project to the American energy company New Fortress Energy.[1]

Since then, the required applications for the project have been refiled, since the original ones expired. The Government has put the terminal forward for inclusion on a special EU energy list known as the Project of Common Interest (PCI) list. Projects on the list can gain access to funding and go through a fast-track planning process due to the public interest significance.[10]

Opposition

In February 2019, protestors stage a die-in in protest of the terminal.[11]

In October of 2018, an environmental group secured permission to bring a High Court challenge over the decision taken by An Bord Pleanála (Ireland's Planning Board) to extend planning permission to develop the Shannon Terminal. Friends of the Irish Environment (FIE) wanted orders quashing a five year extension of permission for development of the terminal, which includes four large tanks, jetties to receive ships, and associated works at Kilcolgan, near Tarbert in north Kerry. Permission for the facility, where gas will be shipped for use by consumers in Ireland and Europe, was granted in 2008. The facility has not yet been constructed and the developer, Shannon LNG Ltd, got an extension of the planning permission on July 13th last.

In its proceeding, FIE claims the Planning Board failed to take account of the possibility of significant effects of the proposed development on local wildlife and flora. It also claims the Board failed to take into account the Climate Action and Low Carbon Development Act 2015, intended to drive Ireland’s transition to a low carbon state in line with its commitments under the Paris Agreement. FIE wants orders quashing the extension decision and a declaration the Board failed to exclude the possibility that the development would have significant effects on bottlenosed dolphins in the Lower River Shannon Special Area of Conservation. FIE claims the Board erred in law by allegedly failing to take account of up to date and relevant information available to it in the course of its screening for appropriate assessment under the EU Habitats Directive.[12] In February 2019 the High Court ordered the developers of the project not to proceed with construction and referred the case to the Court of Justice of the European Union (ECJ).[13]

By November of 2019, the terminal had garnered international attention with American celebrities speaking out in opposition.[14] Pope Francis also came out in support of activists opposing the terminal.[15] It's also been a focus of the climate activist group, Extinction Rebellion. The controversy is in part due to the planned use of fracked gas, which is among the dirtiest natural gas sources. If the project goes through, the fracked gas will be imported from America, despite Ireland having banned fracking within its own borders.[16]

In February 2020, Justice Denis McDonald granted leave to FIE to bring the case, meaning he believes the FIE has proven sufficient cause to bring the suit. Justice McDonald stated that he wants the lawsuit to progress rapidly because inclusion of the ECJ may be necessary. The case centers on the decision-making process that led to the inclusion of the project in the fourth EU Projects of Common Interest (PCI) list, which was approved in February 2020 by the European Parliament. The case is against the Minister for Communications, Climate Action and the Environment, Ireland and the Attorney General. It also claims that the commission failed to meet its obligations under European regulations to conduct sustainability assessments for any of the PCI projects.[17]

In April 2020, a High Court judge refused the State's request to adjourn the late June 2020 hearing until October 2020. The defendants cited the implications of the COVID-19 pandemic, claiming that relevant public officials were working remotely and did not have access to all of the files necessary to provide lawyers with full instructions.[18]

On April 30, 2020, the ECJ found that Shannon LNG will have to make a new application from scratch with an Environmental Impact Assessment to comply with the European Union's Habitats Directive. This requirement is expected to cause significant delays in the project.[19]

In September 2020, the ECJ further ruled that planning permission for the Shannon LNG terminal should not have been extended by the Irish Planning Board without the project being subject to a fresh environmental assessment. The ECJ advised the Irish High Court that a new environmental assessment under the EU Habitats Directive must take place. It will now be for the Irish High Court to decide on the case following this referral to the ECJ to seek clarification of EU law. Campaigners against the terminal believe this latest ECJ ruling puts the project's future into even further doubt following the new Irish government's Programme for Government stance against the project (see below). According to FIE, “the judgment is a welcome development of the European Court’s previous jurisprudence and has far reaching implications for other major projects across Europe which will ensure greater protection for the environment”.[20]

In November 2020, the Irish High Court formally quashed planning permission for the proposed Shannon LNG terminal, confirming the ruling it had earlier received from the ECJ. New Fortress Energy, the company behind the terminal project, is said to be preparing a new planning application.[21] Irish campaigners, reacting to the High Court judgment that sees Shannon LNG losing all acquired rights to import fracked gas into Ireland, said that the decision opened up a window of opportunity for Ireland to ban the importation of fracked gas, in line with the Programme for Government stance agreed in June 2020: "We believe that a ban on fracked gas imports proposed as an amendment to the Climate Bill currently undergoing pre-legislative scrutiny, will provide the government with the perfect opportunity to be the first country in the world to ban the importation of fracked gas."[22]

Also in November 2020, the court issued an order to environmentalist group Friends of the Irish Environment (FIE) that quashed an extension awarded by planning authority An Bord Pleanala in 2018 of a 10-year planning approval first given in 2008. According to FIE, the court order means Shannon LNG and its US backer New Fortress Energy would now have to re-apply for planning approval for the project. FIE argued that the extension triggered the need for a new environmental assessment. This setback for Shannon LNG follows a decision by France's Engie earlier in the month to halt talks over a potential long-term supply agreement with US LNG developer NextDecade, with the French company having come under pressure not to import LNG produced from shale gas.[23]

Proposed Ban on Importing Fracked Gas

On June 14, 2020 Ireland's three major political parties--Fianna Fái, Fine Gael, and the Green Party--endorsed a draft five-year political programme that would ban imports of fracked gas.[24] If approved the ban would effectively cancel the Shannon LNG Terminal.

As Ireland moves towards carbon neutrality, we do not believe that it makes sense to develop LNG gas import terminals importing fracked gas, accordingly we shall withdraw the Shannon LNG terminal from the EU Projects of Common Interest list in 2021 . . . We do not support the importation of fracked gas and shall develop a policy statement to establish that approach.[25]

On June 27, 2020, Fianna Fái, Fine Gael, and the Green Party officially formed Ireland's new coalition government. The political programme, including the intention to ban imports of fracked gas and to remove the Shannon LNG terminal from the EU's PCI list, was approved by the coalition partners. The new prime minister Micheál Martin commented: "The program we have agreed puts action on climate change into the work of every part of government. We must not just overcome this challenge but we must turn it into a new opportunity."[26]

Expansion Projects

In the Ten Year Development Plan 2020 by gas industry group ENTSOG, and released in November 2019, this proposed terminal was listed as having three planned expansions by 2029, adding 8.2 bcm/y of capacity.[2]

Articles and resources

References

  1. 1.0 1.1 Former Shannon LNG owners to pick up €23.7m bonus The Times, 25 Aug 2019
  2. 2.0 2.1 2.2 TYNDP 2020 - Annex A - Projects Tables ENTSOG, 5 Nov 2019
  3. Hess LNG (Shannon) IJGlobal, accessed Nov 22, 2020
  4. Shannon LNG website, Shannon LNG, accessed July 2017.
  5. Shannon LNG Terminal and connecting pipeline, European Commission, accessed December 2, 2019
  6. Ireland, Food and Water Europe, accessed December 5, 2019
  7. US oil giant Hess sells troubled Irish gas terminal Shannon LNG, Independent, 7 Feb. 2016.
  8. 8.0 8.1 PwC tapped to find funder for Shannon LNG's €500m project, Independent, 14 Apr. 2017.
  9. Ireland backs revival of Shannon LNG facility on Brexit concerns, Platts, 5 May 2017.
  10. Concerns over proposed Shannon Estuary gas terminal, RTE, October 9, 2019
  11. Protesters stage ‘die-in’ against proposed gas terminal, Green News, February 11, 2019
  12. Environmental group challenges extended permission for LNG terminal in north Kerry, The Irish Times, 19 October 2018.
  13. Developers of Shannon gas processing terminal ordered not to begin construction, Irish Times, Feb. 15, 2019
  14. What is the Shannon LNG terminal and why have Cher and Mark Ruffalo called on Leo Varadkar not to back it?, TheJournal.ie, November 4, 2019
  15. Caroline O'Doherty, Pope backs Shannon fracking critics but Taoiseach keeps project on table, Independant.ie, November 1, 2019
  16. What is the Shannon LNG terminal and why have Cher and Mark Ruffalo called on Leo Varadkar not to back it?, TheJournal.ie, November 4, 2019
  17. Mary Carolan, Legal challenge to Shannon LNG project has EU implications, The Irish Times, February 27, 2020
  18. Aodhan O'Faolain and Ray Managh, Court refuses to adjourn hearing of challenge against Shannon LNG terminal, Breaking News, April 6, 2020
  19. OPINION OF ADVOCATE GENERAL, European Union, April 30, 2020
  20. Kevin O'Sullivan, "EU court delivers blow to plan for Shannon ‘fracked gas’ terminal", The Irish Times, Sep. 10, 2020
  21. Caroline O'Doherty, "Permission for natural gas terminal in Shannon quashed by High Court after EU ruling", The Independent, Nov. 9, 2020
  22. "Shannon LNG has all permissions to build its fracked gas import terminal quashed in the Irish High Court after 13-year battle", Safety Before LNG press release, Nov. 9, 2020
  23. New blow for US LNG in Europe as Irish court quashes Shannon LNG consents, S&P Global November 10, 2020
  24. Programme for government: Binding targets under ‘Green new deal’, The Irish Times, Jun. 15, 2020
  25. One Step Away from Full Victory: Draft Programme for Next Irish Government Rejects Fracked Gas Terminals, Food and Water Watch, Jun. 15, 2020
  26. Stuart Elliott 'New Irish government policy pledges deal significant blow to gas', S&P Global, Jun. 30, 2020

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