Investors Mull Islandmagee Gas Storage
AIM-listed Northern Ireland gas storage developer InfraStrata said December 5 that it has submitted the front end engineering design (Feed) report on its Islandmagee project to the EU, thus complying with conditions set for the bloc's part-funding of the Feed report. It said that three potential investors are considering the project on a non-binding basis.
It added: "Completing this final milestone allows the team to concentrate on completing the negotiations that are underway with three potential equity providers that have provided the company with term sheets for equity funding - at a project or subsidiary level. The term sheets are not binding and at this stage it is not guaranteed that InfraStrata will enter into a binding equity agreement. However, discussions are detailed and advanced and InfraStrata is still on track to provide a full update in 4Q 2018 as previously stated." It did not name the three firms and a spokesperson declined to name them when asked by NGW.
InfraStrata's CEO, John Wood, said: "We are working to ensure we hit the ground running in 2019 with many work streams in progress," but he gave no target date for a final investment decision. However, the company said that it expects to receive its final payment towards the cost of its Feed study from the EU in 2Q 2019.
Prospective investors will be aware that, because of Brexit, there is as yet no guarantee that Islandmagee would qualify for an EU grant towards its construction.
The FEED completed last month estimated that developing eight caverns totaling 0.45bn m3 of working gas storage capacity (56.25mn m3 each) would cost a total of £265mn ($340mn). To date, £13.5mn has been invested in the project.
InfraStrata said it has engaged Costain to undertake a concept development study to consider the technical implications of twinning the subsea 'SNIP' pipeline linking Scotland and Northern Ireland but added there are no guarantees this work will be undertaken by SNIP's owners. InfraStrata has also engaged Atkins to further investigate and provide a concept development study on developing additional caverns on Islandmagee, as previous advice received indicated that an additional 15 caverns could be possible on top of the eight already planned.
(The banner photo shows an artist's impression of how the Islandmagee storage facility would look, courtesy of InfraStrata)