An artists impression of the energy bank.

Energy bank to be built in Northern Ireland

A £400m natural gas storage site is to be built deep beneath a lough in Northern Ireland.

The energy bank at Larne Lough, north-east of Belfast, will hold 60 days supply and guard against steep price rises caused by international market volatility.

Around 500 million cubic metres of gas will be contained in salt caverns a mile under the seabed, Stormont environment minister Alex Attwood said, and could allow Northern Ireland to export some of its stores if prices were favourable. The minister gave planning approval for the development today.

"This security of supply of energy will be a significant step forward in the way we manage our energy sector," Attwood said. "North Sea gas supplies are declining steeply and this facility will make a significant contribution to the security of gas supplies for the whole island of Ireland and indeed for Britain."

Environmentalists expressed concern the dumping of salt to build the caves into the sea could harm marine biodiversity. Many gas sources are found in unsettled parts of the world and can be affected by civil strife or market reactions to broader economic shocks. Attwood said gas could be purchased for storage when prices were low for use or sale when they were higher, helping Northern Ireland's future economic development.

The nationalist SDLP MLA promised construction jobs for the area but said he was also conscious of environmental concerns. "We have demonstrated that energy, environmental and economic needs can be reconciled successfully," he said. "SeaGen, the birthplace of modern tidal energy sitting in the Narrows in the mouth of Strangford Lough proves this point. This approval can do the same."

Large parts of Northern Ireland are relatively dependant on fossil fuels like oil for home heating but the natural gas network has been rolling out steadily from Belfast, with more development planned.

The region's two main suppliers are Phoenix and Firmus.

The storage site is on land south-west and north-east of Ballylumford pressure reduction station in Co Antrim, with extending underground pipelines. It will be developed by Islandmagee Storage Ltd.

A planning application was submitted in March 2010 and includes the gas storage plant and other equipment to accommodate drilling.

Friends of the Earth director in Northern Ireland James Orr said Northern Ireland should be investing in renewable energy instead.

"The main issue is that the dumping of hypersaline salt solution will cause harm to local marine biodiversity and have negative impacts on sustainable fisheries," he said. "Hypersaline will kill or be seriously detrimental to the development of larval stages of fish and crustaceans. There is a fishery in this area and long-term sustainable jobs are likely to be ruined.

"The hypersaline would be dispersed off the coast of Islandmagee over four years at up to 1,000 cubic meters per hour. This is 10 times the normal salt content of seawater and will not have the same chemical/mineral composition as seawater."

He said the area affected had been underestimated.

Alliance Party MLA Stewart Dickson said residents were also worried about heavy traffic during construction. "I am surprised that Alex Attwood has given the go-ahead for this proposal without more information considering the fact that the SDLP often make a great deal of noise about their green credentials," he said.

Chief executive of the Utility Regulator Shane Lynch said the announcement was a vote of confidence in the industry. "Not only will the proposed facility provide greater security of supply for Northern Ireland, it would also provide another tool for suppliers in managing energy costs," he said.

"In addition, the ability to bring gas quickly onto the system from storage can also complement wind-powered generation at times when wind levels are low."

IMSL spokesman Paddy Larkin said: "This facility will make a significant contribution to security of energy supplies as well as helping to meet the greater short-term demands placed on the gas network to support increased intermittent renewable generation."

Energy Minister Arlene Foster said the decision was an important milestone. "Infrastructure investment of this nature is very welcome and the project will provide a significant benefit to the local economy by providing jobs related to the construction stages of the project and in the longer term as the facility commences operation," she said.

Site preparation work on the first borehole is due to begin in late 2012, with drilling planned for the first half of 2013, developers Islandmagee Storage Ltd said.

Construction is expected to involve the creation of seven caverns in the Permian salt layer at a depth of 1,500m and is projected to take around seven years to complete.

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