InfraStrata Raises NI Storage Stake to 90%
UK-based InfraStrata has acquired an extra 25% equity stake in Islandmagee Storage, the developer of a planned gas storage facility in Northern Ireland, from local publicly-owned firm Mutual Energy.
Mutual, which joined the project in May 2008, runs Northern Ireland’s gas and power network. InfraStrata now owns 90% of the Islandmagee storage venture, with Mutual 10%. The deal means that Moyle is no longer required to advance its share of outstanding funding to date to InfraStrata of some £2mn ($2.7mn) plus interest when final investment decision is taken. Instead going forward, Moyle must only advance 10% of any future shareholder loans going forward.
InfraStrata said it is envisaged that the Islandmagee gas storage facility will play an important role in future gas supply to Northern Ireland, Republic of Ireland and Great Britain, adding that its fast-acting salt cavern project there would provide fast supply of gas to meet short-term demand surges. The facility will have working gas storage capacity of 500mn m³.
Islandmagee salt core rig (Photo credit: InfraStrata)
The project has already received €1.6mn ($1.8mn) from the EU as the initial 40% advance of the €4.024mn grant made by Brussels, in order to start a front-end engineering design and sales process by end-2016, in order to proceed to a FID for the £300mn project in late 2017.
InfraStrata CEO Andrew Hindle argued that operational problems this year with the ageing Rough storage facility offshore eastern England meant “there has not been a better rationale for investing in gas storage for a number of years and the importance of new modern facilities.”
Mutual CEO Paddy Larkin said the reduced stake “is better aligned with our long-term interests and capability." Islandmagee hopes for further EU grants during construction, but these are no longer guaranteed following the June 22 UK vote to leave the EU, as Northern Ireland is part of the UK.