When Bord Gais Eireann was searching for a new chief executive it was widely rumoured that the then Irish National Petroleum Corporation chief executive Mr Paddy Power was the front runner for the job. Instead, an insider, Mr Gerry Walsh, got the nod last August. If he was the second choice for the position, he doesn't give any indication today.

"I always felt I was a contender for the post," he says. "The feedback I get from the board is that they are happy with their choice."

Mr Walsh became chief executive at a crucial time for the company. Among the issues facing him were the long-term ownership of the State-owned gas firm; competition from other gas suppliers that will transmit gas through its system to industrial customers; a Government decision on its plans to build a second gas interconnector with Scotland; and an extension of its existing network to include a link from Dublin to Galway, onwards to Limerick and then to Cork, plus a link from Galway to the Corrib field off the west coast.

In terms of future ownership, floating the entire share capital of the company on the stock exchange has emerged as the choice of management. But for the most part, Mr Walsh keeps a diplomatic distance from the debate and refuses to be drawn into what is essentially political territory.

"At the end of the day, the decision regarding the future ownership of Bord Gais Eireann is going to be taken by the Minister and that is the overarching decision-making process."

Nevertheless, he says access to capital is what is driving the management's view. "We need capital going forward to take advantage of the opportunities as they come and that is the driver."

The Minister of State for Public Enterprise, Mr Jacob, has announced he was bringing forward legislation to make Bord Gais a public limited company, which needs to be in place before any change of ownership takes place.

"The legislation takes a while to put in place, so it would hardly be done this year," says Mr Walsh.

With a change in ownership some time away, management at Bord Gais has other, more pressing concerns - namely developing the gas infrastructure in the company. A major coup for the company - and for Mr Walsh in his first few months in charge - has been getting sanction from the Government to build a £220 million (€280 million) gas interconnector parallel to its existing link with Scotland.

The company had warned that if it had not been built there would have been a shortage of gas supplies next winter. "The delivering of the interconnector two in the face of a lot of opposition has been a success for the company and certainly I played a part in the process. We were very pleased because we put a lot into it and we were confident it was the right solution to deliver on this problem."

Mr Walsh argues that interconnector two will provide competition in the market, despite some competitors or potential market entrants claiming it would enhance the State company's position in a liberalising market. That argument failed to recognise the different elements of the gas business between infrastructure and supply, he says.

"It's just another investment and it doesn't give us any competitive advantage in supply. If anything it brings competition against us more freely in both gas and electricity. It's a competition pipeline in the sense that it provides for additional competition in gas."

By providing more diversity in supply, it also guarantees the economic security of the country. "It is absolutely essential. Gas underpins the whole energy sector in Ireland."

Bord Gais is also investing heavily in its infrastructure in the Republic. In fact, it is spending £1 billion over the next five years on infrastructure, which will be funded by earnings and borrowings. One criticism of the company as it builds its ringmain pipeline connecting Dublin, Galway, Limerick and Cork, plus the Galway-Mayo pipeline linking the Corrib gas field to the national network, is the absence of pipeline to the north-west.

"We've looked at it and we find we can't do it economically," says Mr Walsh.

It may seem like a glib answer from the chief executive of a state-owned company that has responsibility for national supply of gas but Mr Walsh is quick to defend his position.

"We're a commercial state company and our mandate is to do things on a commercial basis. We're precluded in our legislation from doing anything that doesn't give us a return. "So, we've said to the Government there isn't a viable project there on its own. The indications are that some funds will be found to make such a project fly."

Competition is a word Mr Walsh frequently uses. It is little wonder as the market is being opened up in advent of full competition in 2005. As competition increases, it is almost certain that Bord Gais will lose customers. To combat this, Mr Walsh says Bord Gais is transforming itself into a broader utility company as part of a five-point plan.

It intends to build a broadband cable network on the back of its gas system, a move he says is close to the company's core business. "If you can lay pipes in the ground, you can lay ducts and cables, so it is not actually a huge shift from one to the other," says Mr Walsh.

Could this involve Bord Gais becoming a player in the telecoms market? "If we got the right partner, we would," he says.

The electricity market, particularly combined heat and power (CHP), is one in which Mr Walsh is keen to play a bigger part. For some time, Bord Gais has been involved with Aughinish Alumina and Canadian company ATCO in an electricity-generating CHP venture.

"It takes a long time to develop these projects. The development phase can be a year or a year-and-a-half. We have bids in and it's down to number crunching now," he says.

He rejects suggestions that as a State company it is farcical for Bord Gais to become involved in a market that the Government is deregulating.

"We don't have any State funds in our balance sheet. If you look at it, it is retained earnings and borrowings. We're a competitive, stand-alone entity. The issue is we are already in the energy market. For us to grow going forward in the context of liberalising the gas market, we need access to other utility opportunities and electricity is one of those," he says.

The company is also taking advantage of its core competency of building and operating a gas infrastructure in the Republic to enter the Northern Irish and UK markets. A licence application to develop gas pipelines in Northern Ireland has been made to the Department of Enterprise, Trade and Investment there. This project, which is currently under review, would involve the construction of a pipeline from Belfast to Derry to provide gas to a proposed power plant for Coolkeeragh in Derry, and a pipeline connecting Dublin and Belfast.

It has also secured a UK public gas transporter (PGT) licence through its British subsidiary Utility Grid Installation and has been shortlisted to purchase a gas pipeline business in Britain owned by French multinational Total Fina Elf.

"There are 150,000 new customers who come on to the system in the UK every year, compared to around 25,000 who come on the system here. So, it's a much bigger pond and if we can get a reasonable share of that pond, then it's good business for us. It's core business which we know well," he says.

Even if Bord Gais does expand into Northern Ireland and Britain, it will still be a small player in the wider European market. But this is not something that worries Mr Walsh unduly.

"There is always this debate about whether you need to be big or whether you can be small, but the trick is to be good and I have every confidence that Bord Gais can compete with whomever's in the market place because we are a good, fit company, well-prepared for competition," he says.