Sligo County Council is to examine the feasibility of a 22 kilometre local gas network in Sligo town.
The council in conjunction with the HSE, Sligo Chamber of Commerce and the IDA is seeking funding of €500,000 to carry out a feasibility study.
This would see the gas being transferred in by tanker to create a network that would supply significant energy users such as the hospital and the IT.
This is being applied for under the Urban Regeneration Development Fund.
Director of Services Tom Kilfeather estimates the network would have the potential to reduce the energy cost to major users by €1 million a year or CO2 emissions by 1,500 tonnes per annum.
He explained to Ocean FM News about the proposed study