Longford Allocation Agreement: An Overview

The Longford Allocation Agreement is a contract entered into by the government of Ireland and the oil and gas companies that operate in the Kinsale and Ballycotton gas fields located off the coast of County Cork.

The agreement, which was first signed in 1978, sets out the terms and conditions under which the gas produced from these fields is allocated between the government and the operators. The gas is processed at the Kinsale gas processing plant before being supplied to customers in Ireland and the UK.

The agreement is often referred to as a “joint venture” between the government and the operators. This is because the government has a 50% stake in the gas fields and receives a share of the profits generated by the sale of gas. The operators (currently PSE Kinsale Energy Ltd and Seven Heads Gas Production Ltd) own the other 50% and are responsible for the day-to-day operations of the gas fields.

The Longford Allocation Agreement is a complex document that covers a range of issues, including how the gas is measured, how the profits are divided, and how disputes between the government and the operators are resolved.

One of the key provisions of the agreement is the “take-or-pay” clause. This requires the gas customers to take a certain amount of gas each year or pay a fee for the unused gas. This provision helps to ensure a stable revenue stream for the operators and the government.

The Longford Allocation Agreement has been amended several times since it was first signed to reflect changes in the gas industry and to address issues that have arisen over the years. The most recent amendment was signed in 2013 and extended the life of the agreement until 2020.

In conclusion, the Longford Allocation Agreement is an important legal document that governs the allocation of gas produced from the Kinsale and Ballycotton gas fields. It provides a framework for cooperation between the government and the operators and helps to ensure a stable supply of gas to customers in Ireland and the UK. While it can be difficult to understand for those not familiar with the gas industry, it is an essential component of the complex web of regulations that governs the energy sector.