Bord Gais warned today that gas prices are likely to rise further due to higher prices on international markets as it reported a 9 per cent fall in profits to €108 million in 2005.
Turnover rose 13 per cent to €857 million for 2005, with sales in electricity rising by 30 per cent to €161 million. As a result of its diversification in to other energy markets Bord Gais's market share of the electricity supply market is around 8 per cent.
But in its core gas market, the company acknowledged that the price rises have also resulted in significant increases in retail price levels and that it is a "challenging" time for energy pricing.
"Regrettably, but unavoidably, 2005 saw wholesale gas price increases filter through to the retail customer," said chief executive Gerry Walsh.
"Although, in the short term, we are likely to experience further wholesale price increases and therefore further retail increases, new pipeline routes and the construction of LNG plants in Europe will increase the volume and diversity of gas supplies and this should have a stabilising impact on price in the medium to long term," he added.
Bord Gáis intends to strengthen its hold on the electricity market by building a power generation station Whitegate in Cork, at a cost of €300 million.
While native gas supplies from the Kinsale gas field, accounted for 13 per cent of total demand during 2005, Bord Gais said this proportion could be significantly increased if gas from the controversial Corrib Field come onshore, supplying up to 60 per cent of Ireland's annual demand at peak production.
On the issue of gas supply, Mr Walsh said "We are very comfortable on the issue of security of supply of natural gas. Bord Gáis currently sources the majority of its gas supplies from wholesalers of UK North Sea gas fields.
"Going forward, we want to secure part of the new indigenous supplies from the Corrib gas field for our portfolio, as well as continuing to source gas from suppliers to the UK market".