The extension of the network is expected to cost £200 million and will connect 34,000 domestic and business customers in main towns in the west of Northern Ireland, including Dungannon, Omagh, and Derrylin.
The Utility Regulator welcomed the announcement. It will begin consulting on licensing issues early this year and plans to award the gas licences towards the end of 2013. This will allow a company to seek planning approval, with the aim of starting construction work on the new network in 2015. The initiative requires EU state aid clearance.
Energy minister Arlene Foster said the extended network would help reduce the level of fuel poverty and provide much-needed construction and engineering jobs.
Phoenix Gas Natural Gas, which operates Northern Ireland’s existing gas network in the Greater Belfast area, had been lobbying for an extension westwards. A spokesman stressed that potential investors would need assurance from the administration that the extension would enjoy “a predictable, transparent and supportive regulatory environment”.