Fuelling the future with natural gas

It can be difficult to imagine that just over 20 years ago, the idea of natural gas as a main heating source in Northern Ireland was little more than a pipedream. Fast-forward to today and natural gas has not only transformed how we heat our homes and become an integral part of our lifestyle, but it is firmly established as the fuel of choice in Northern Ireland.

In the early 90s, British Gas built the ‘SNIP’, a subsea gas transmission pipeline from Scotland to Northern Ireland. This heralded the introduction of natural gas to the downstream market in 1996, when Phoenix Natural Gas was granted a licence to transmit and distribute in the main economic centre of Greater Belfast and north to Larne.

In the years following, the natural gas industry has expanded to encompass three interconnectors with the UK, following interconnection of the gas networks across the island of Ireland in 2006. There are now five natural gas companies operating in Northern Ireland; two transmission companies, Mutual Energy Limited and Gas Networks Ireland and three gas distribution companies, Phoenix Natural Gas, firmus and SGN, as well as six natural gas suppliers including SSE Airtricity, firmus, Go Power, Vayu, FloGas and Electric Ireland.

Having invested £500 million pounds in laying some 3,500km of pipework to date, Phoenix Natural Gas is the largest natural gas distribution and gas services business in Northern Ireland. The company has achieved a penetration rate of over 60 per cent, connecting over 200,000 customers and making natural gas available to 330,000 properties in the licence area, accounting for 44 per cent of the total population of Northern Ireland.

Drivers to growth

Phoenix Natural Gas is unique in its offering and position as the developer of the natural gas distribution market in a greenfield environment. Indeed, the private investment by the company to continually develop the natural gas industry in Northern Ireland is testament to the company’s commitment and success, having already invested over £500 million to date.

Reflecting on the company’s success, Chief Executive Officer Michael McKinstry acknowledges the key drivers to growth: “Following the economic downturn, we have seen resurgence in new build housing which, coupled with steady population growth and an increasing trend towards single occupier homes, has had a positive effect on connection rates.

“Phoenix Natural Gas is incredibly proud of its environmental credentials and the positive efficiency benefits enjoyed by natural gas users, with new ‘A’ rated natural gas boilers operating at over 90 per cent efficiency compared to an older boiler over 15 years old.

“In addition, the inherent cost and lifestyle benefits associated with natural gas compared to other fuels continue to be the main reason homeowners make the switch to natural gas and recommend it to friends and family.

“This organic growth and our recent network extension project to extend the natural gas pipeline to thirteen new towns in county Down will see us continue to connect at a rate of 8,000 to 9,000 new customers each year.”

Extending the benefits of natural gas to county Down

The £60 million private investment by the company will see 350km of network constructed over the next few years in the towns of Annahilt, Ballygowan, Ballynahinch, Castlewellan, Crossgar, Downpatrick, Dromore, Drumaness, Dundrum, Hillsborough, Newcastle, Saintfield and Spa.

Construction of the network began last year in a project which will see an additional 28,000 properties connected to the natural gas network by 2022. As the project is rolled out, Phoenix Natural Gas is engaging with communities and local representatives to ensure a smooth programme of works to local areas during the construction phase whilst integrating the well-known Phoenix Natural Gas brand into these areas, helping to realise the long-term opportunities natural gas has to offer.

In addition, Phoenix Natural Gas actively engages in a corporate social responsibility programme to add deeper value to the communities that it serves.

The future

Michael McKinstry explains: “With the network extension to county Down underway, the project continues to be a key focus for the company over the next few years. Working with our contractors, our goal is to complete the project as efficiently as possible and meet set regulatory targets in terms of gas availability in these new areas.

“We also plan to continue maximising connection rates which steadily sit at around 8,000 per annum, the majority of which are to existing domestic homes. At the same time, we now have assets in the ground that are 20 years old and the company is evolving its maintenance-focused part of the business, given its large customer base serving over 200,000 properties.

“In addition, we are working with the Utility Regulator to examine the feasibility of extending the network to other new areas and expand the availability of natural gas as the fuel of the future in Northern Ireland.”

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