Irish Storage Seeks Investors as Atlantic Margin Opens Up
UK developer InfraStrata has appointed two advisers to help seek new investors for its Islandmagee gas storage project near Larne in Northern Ireland.
To date over £11mn has been invested in the project, to acquire 3D seismic data, drill a well to acquire salt cores, undertake engineering design work, acquire rights on the full land assembly, and obtain planning permission and other consents required to construct the project, according to a statement from Infrastrata on March 2. Project partners InfraStrata (65%) and Northern Ireland-based Mutual Energy (35%) “are now seeking a company or companies able to take the strategically important project through the final stage of Front End Engineering & Design (FEED) and into full construction,” the statement said.
In January 2016, the project was provisionally granted up to 50% of its costs, under the EU’s Connecting Europe Facility, of 50% of the FEED costs up to €4mn. InfraStrata did not say if an outright sale of the project by it and Mutual Energy was among the options being considered.
If fully developed, the facility would have seven caverns with a total working gas capacity of 500mn m3, overall injection capability of 12mn m3/d and withdrawal capability of 22mn m3/d. Total project costs were estimated at £400mn in 2013 but in November 2015 InfraStrata said it was updating costs estimates.
Storage in Northern Ireland
The Irish Republic has gas storage facilities in the southwest but there is none currently in Northern Ireland – part of the UK – and a growing need.
Ireland's gas production ended with the depletion of the Kinsale Head gas fields, leaving it wholly reliant on gas imports from or via the UK. But Ireland resumed production in late December 2015 when first gas was produced from the offshore Corrib gas field in the northwest. Corrib production is expected to peak at around 260mn ft3/d (45,000 boe/d); it is jointly licensed to Shell 45% (operator), Statoil 36.5% and Canada's Vermilion 18.5%.
On February 11, the Irish government awarded 14 new offshore licensing options in the Atlantic Margin: four to Chinese CNOOC-owned Nexen, four to Statoil with ExxonMobil as partner, two to Exxon with Statoil as partner, one to Eni with BP as partner, and one each to Europa Oil & Gas, Scotia, and Woodside. It received 43 applications, the largest number of any Irish licensing round. The second and final phase of awards is planned for mid-May.
Mark Smedley