This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview

Oil and gas exploration activity began offshore in Ireland in the early 1970s.  To date, success has been limited to four commercial natural gas discoveries; namely the Kinsale Head, Ballycotton and Seven Heads gas fields off the coast of Cork and the Corrib gas field off the coast of Mayo.   Marathon Petroleum successfully operated the three Cork gas fields between 1970 and 2007.  As output declined, it exited in 2007 by selling to Malaysia-based Petronas.  The Corrib gas field was operated since 2002 by Netherlands-based Shell until it sold its 45% stake to a company owned by the Canada Pension Plan Investment Board (CPP) in late 2018.  There have been no commercial discoveries of oil to date.  Ireland is regarded as a high-risk location in terms of exploration activity and the absence of commercial discoveries in recent years does impact the sector which would benefit greatly from a commercial discovery.

Natural gas plays a critical role in Ireland’s energy mix and economy, providing around 30% of Ireland’s total primary energy requirement and generating about 50% of Ireland’s electricity.   Many indigenous and multinational companies in Ireland rely on gas and around 650,000 households use natural gas for home heating.  Ireland currently has two main sources of gas supply – Corrib and imports from the UK via two gas interconnector pipelines.   Corrib supplies around 60% of Ireland’s annual demand with 35% imported from the UK and the remaining 5% coming from the Kinsale gas field (due to cease by 2021).   Gas production from Corrib is forecast to decline over the next decade, accounting for less than 20% of demand by 2025 with supply ceasing around 2030.

In the absence of new gas fields, Ireland would then be totally dependent on the UK for its gas supply.  However, by 2030, the UK will likely need to import 75% of its gas supplies because of a decline in North Sea production.  These gas imports would likely come from Norway, Russia, Qatar and various countries outside Europe.  Thus, the gas supply route to Ireland would be longer and add a greater risk of supply disruption and price volatility.
Furthermore, Ireland’s dependence on gas will increase when the use of coal and peat for electricity generation ends around 2025/2030.

Leading Sub-Sectors

Security of supply is a key tenet of Irish energy policy.  Relying on imported gas from/through the UK for all of Ireland’s gas supply beyond 2030 does not equate with this policy.   Identifying alternative sources of supply and supply routes is being addressed by the Irish Government and its energy agencies.   Developing a Liquefied Natural Gas (LNG) import terminal in Ireland is one proposed solution that would enhance Ireland’s security of gas supply and provide access to the increasingly competitive global LNG market.  Development of a gas storage facility is another solution being considered.  Ireland is the only country in the EU without gas storage.  Exploration activity for gas offshore will continue to be promoted alongside an appropriate licensing regime and regulatory framework.  A combination of indigenous offshore gas and LNG imports would offer a competitive supply scenario and address Ireland’s security of supply concerns.

Opportunities

According to a PWC 2018 survey, Ireland’s oil and gas sector is showing signs of recovery after a difficult number of years. Investment levels in Irish exploration are predicted to reach €500 million by 2020.  This positive outlook is based upon planned drilling programs in Irish waters during this period.

The potential for the development of an LNG infrastructure is actively being explored by the Irish government and its energy agencies as well as the private sector.  Two major LNG projects are under active consideration locally and both involve U.S. LNG companies as co-promoters.  The PWC report states that the ports of Cork and Foynes are the ones most likely to benefit from Irish exploration investment and/or a petroleum discovery.  Both ports are also the proposed sites for the LNG terminal projects.  The U.S. Commercial Service in Dublin is actively monitoring developments on these two LNG projects to ensure the U.S. backers achieve project success.

Web Resources

Department of Communications, Climate Action & Environment (DCCAE):  http://www.dccae.gov.ie
Commission for Regulation of Utilities (CRU): https://www.cru.ie
Sustainable Energy Authority of Ireland (SEAI): http://www.seai.ie
Ervia: http://www.ervia.ie/
Gas Networks Ireland: https://www.gasnetworks.ie
Public Procurement Portal (eTenders): http://www.etenders.gov.ie

Irish Government’s Long Term Gas Resilience Study 2018: https://dccae.gov.ie/en-ie/energy/publications/Pages/Long-Term-Resilience-Study.aspx

 

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