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Last Updated: Thursday, 28 July, 2005, 15:53 GMT 16:53 UK
Plans for gas drilling off coast
Aerial view of Milford Haven
The gas drilling operation will take place of Milford Haven
An oil company has said it plans to drill for gas off the Pembrokeshire coast - the first commercial drilling off Wales for 11 years.

Marathon Oil plans to invest 12m drilling 21 miles off Milford Haven.

The company said the gas reserves - which were not commercially viable in 1994 - are now more valuable due to increases in energy prices.

A drilling rig is due to be moved into position in the Irish Sea to begin the operation in early October.

Increased prices

Marathon Oil, which has interests in the North Sea , Norway and the Kinsale Oil field off Ireland, first explored the Dragon Field, off Milford Haven in 1994, but drilled just one well before deciding the venture was not commercially viable.

But a spokesman for the company said on Thursday that the gas reserves are now more attractive because of increases in energy prices.

The company added that plans to develop Milford Haven as a UK energy industry hub had encouraged them to take a new look at the area.

Model of the LNG project at Milford Haven
The are plans to construct LNG terminals at Milford Haven

Drilling will take place at a point 21 miles off St David's Head - on the median line between Wales and Ireland.

Marathon's project manager for the Dragon Field, Mike O'Neill, said developments in Milford Haven in the energy industry gave the company access to potential markets.

He added: "There is great potential that Milford Haven will become one of the major liquefied natural gas hubs for the UK.

"The fact that the LNG plants are being built there means that the national grid will be extended from it's point outside Swansea to Milford Haven which gives us potentially direct access into the market place.

"There is potential that gas-fired power stations will be also built in that area which gives us access to a local market."

'Renewable energy'

Environmental pressure group Friends of the Earth Cymru said it was important the project would not have an impact on wildlife in the Irish Sea, but added it believed gas was cleaner than some other forms of energy.

Spokesperson Gordon James said: "Although priority must be given to renewable energy systems, such as wind, water and solar power, there is a role for gas as it is cleaner than oil and coal.

"It is also imperative that no harm is caused to wildlife like dolphins and porpoise in the Irish Sea by the extraction of gas 20 miles off the Pembrokeshire coast."

The gas drilling proposals follow plans by Malaysian company Petronas to ship LNG - gas cooled down to liquid form to make it easier to transport - from all over the world to two new terminals in Milford Haven.

The proposed development would turn Milford Haven into a major centre for importing LNG.

The increase in traffic could also see Milford Haven become one of the UK's busiest ports.

Gas deal boost for Pembrokeshire
11 Aug 04 |  South West Wales

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