Shannon FSRU

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Shannon FSRU is a proposed LNG terminal with a floating storage and regasification unit (FSRU) 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: New Fortress Energy
• Location: Tarbert/Ballylongford, County Kerry, Munster Province, Ireland
• Coordinates: 52.58099, -9.44246 (exact)
• Capacity: 22.6 million cubic meters/d, 8.2 bcm/y, 6.1 mtpa
• Status: Proposed
• Cost: €650 million (US$770 million)
• Type: Import
• FID Status: Pre-FID
• Start Year: 2022 (delayed)
• Associated Infrastructure: Shannon Gas Pipeline, Mag Mell power station

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

Background

Shannon FSRU is a proposed liquefied natural gas (LNG) regasification terminal, using a floating storage and regasification unit (FSRU), in Munster Province, Ireland. The original project was owned by the U.S. firm Hess. Permits were granted for the project in 2008-10. 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.

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.

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. In May 2017, the Irish government backed the revived proposal. In August 2018, Sambolo Resources sold the project to the American energy company New Fortress Energy.

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.

The proposed terminal was notably not included in the 5th PCI list published by the European Commission in November 2021.

In March 2022, New Fortress Energy began promoting the Shannon terminal as a fast-track solution to gas shortages provoked by the Russia-Ukraine war. However, the project's fate remained on hold following an announcement by the government agency An Bord Pleanála that it would delay a decision on the terminal's planning permit until September 9, 2022.

The project was initially proposed in 3 phases. Phase 1 would have a capacity of 2.8 bcm/y and come online in 2022, Phase 2 would have a capacity of 2.1 bcm/y and come online in 2025, and Phase 3 would have a capacity of 3.3 bcm/y and come online in 2029. The revised proposal submitted in 2021 (more details below) described a FSRU-based project with a capacity of 8.2 bcm/y that would be developed in one phase, followed by the construction of the Mag Mell power station.

Opposition

In February 2019, protestors staged a die-in in protest of the terminal.

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. 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).

By November of 2019, the terminal had garnered international attention with American celebrities speaking out in opposition. Pope Francis also came out in support of activists opposing the terminal. 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.

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.

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.

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.

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”.

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. 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."

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 followed 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.

New planning application made by New Fortress Energy

In March 2021, it was reported that New Fortress Energy was planning to relaunch the planning process for Shannon LNG, and would be filing new planning documents "within weeks". In May 2021, and with no clarity yet emerging on the company's revised planning or the Irish government's proposed ban on fracked gas imports, New Fortress Energy's co-founder and chief executive predicted that Shannon LNG would be "online by the second half of next year".

Responding to increasing speculation that the project was once again proceeding, the Irish government insisted in May 2021 that it would be inappropriate for any new LNG import terminal project to proceed pending the outcome of a review of the country's energy supply security. A spokesperson at the Department of the Environment, Climate and Communications said: "The Department has made, and will continue to make, this position clear to developers of potential LNG projects that contact the Department and in response to any consultations with the Department that are required as part of planning and permitting processes." A policy statement to follow up from the coalition government's official Programme for Government, which stated in 2020 that it does not make sense for Ireland to develop LNG projects importing fracked gas, was being prepared for government approval "very shortly", according to the spokesperson.

In June 2021, The Irish Times reported that New Fortress Energy was set to submit new plans to An Bord Pleanála (Ireland's Planning Board) for an LNG terminal and an accompanying 600 megawatt gas power plant, with overall project costs now estimated to be €650 million, an increase from the original €500 million proposal. Friends of the Irish Environment said they did not understand how the planning board could allow an application to proceed in June when the Irish government's policy decision in May had made it clear that no such projects could 'proceed' until the review of the security of energy supply of Ireland’s electricity and natural gas systems was completed. New Fortress Energy said that the revised project would be privately funded, with no government or EU funding being sought.

The company also said that it planned to transition to hydrogen within ten years, which the terminal and power plant would be able to accommodate once the necessary technology was in place. The new project plans also comes with a commitment to site a data center campus at the terminal, which can make use of the massive amount of cooling created when LNG is evaporated before piping around the country. According to Data Center Dynamics: "LNG terminals have been proposed for data centers sites for some time, as they provide a very large source of natural cooling, when liquified natural gas at -160C is regasified. The idea has yet to be delivered in practice, although Singapore is furthest advanced in plans for data centers at LNG terminals. Among the possible objections are the fact that LNG terminals are sites of potential fire risk, and (because of that risk) are normally sited away from population centers."

Shannon LNG formally lodged its new planning application with Ireland's Planning Board in Dublin on August 27, 2021. The company is seeking 10-year planning permission for the project. The application provoked Ireland's Department of the Environment to say that it would oppose the proposal as it goes against the Government's Policy Statement on the Importation of Fracked Gas. A spokesperson for the Irish Green Party, a member of Ireland's coalition government, commented: "The Green Party does not support the importation of fracked gas and will not support any projects that import fracked gas. The policy statement announced by the Minister for Climate, Environment and Communications, Eamon Ryan and approved by Government in May of this year, also makes it crystal clear that it would not be appropriate to permit or proceed with the development of any LNG terminals in Ireland, including the Shannon LNG project, pending the review of the security of energy supply of Ireland’s electricity and natural gas systems." The energy review is scheduled to be published in July 2022.

In January 2022, Ireland's deputy prime minister Leo Varadkar said the Shannon FSRU would not be blocked by the government, and that if it can secure planning permission on its own terms then it will go ahead. Varadkar commented: "The government is not supporting that project because we believe the future is in renewable energy and hydrogen but we are not going to block it either. There is a planning process and if the company gets planning permission and can finance its project then it will be able to proceed." Sources within the Irish Green Party, part of the coalition government, remained sceptical that the planning regulator would give permission for the LNG project because it would be at odds with government policy on the development of LNG terminals in Ireland.

In March 2022, Ireland's Planning Board said that it was deferring a decision on planning permission for the project until September 2022 due to the complexity of the proposal. A proposed law to ban the construction of infrastructure for LNG in Ireland has been put forward by the Irish Green Party in a private members bill to the Irish parliament.

In February 2023, New Fortress reaffirmed its intention to proceed with developing Shannon FSRU. In a LinkedIn post, the directors of New Fortress said that “the company intends to begin construction of the terminal after consultation is completed and the planning permission is approved.”

In September 2023, An Bord Pleanála — the quasi-judicial Irish planning board tasked with making decisions on appeals of local planning decisions — refused permission to New Fortress. The decision noted it would "not be appropriate to permit or proceed with the development" of LNG terminals in Ireland without a review of the energy supply security of Ireland's energy and natural gas systems.

In November 2023, New Fortress's subsidiary Shannon LNG challenged the board's ruling, claiming that the board "misinterpreted and misapplied" the government’s fracked gas policy, and did not take into account the fact that the project could have exclusively imported gas that had not been fracked. Because New Fortress continues to pursue the project, the project is still considered to be proposed.

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. 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.

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."

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. It is in pre-FID status.