InfraStrata Strikes Deal to Develop 1st UK FSRU
London-listed InfraStrata said on May 28 it had agreed terms to acquire the UK's first floating LNG import project.
The infrastructure developer said it had reached a terms sheet deal with Cayman Islands-registered West Face Long Term Opportunities Global Master to acquire the project's operator, Meridian Holdings. Under the acquisition, which is conditional on a final investment decision on the scheme being taken, InfraStrata will pay £8mn ($9.9mn) in cash and shares.
The floating storage and regasification unit (FSRU) is to be positioned off Barrow-in-Furness in Cumbria, northern England. According to InfraStrata, the project will be capable of importing 5-6mn mt/yr of LNG and will cost £350-450mn to build, but will generate £80-100mn in annual revenues over its 25-30 life. Barrow is already home to a major beach terminal that receives gas from Centrica's Morecambe Bay fields, among others.
The terms sheet deal builds on an exclusivity agreement InfraStrata signed with Meridian last year. In a statement, InfraStrata CEO John Wood said that a formal sale and purchase agreement on the purchase would be reached within the next couple of months.
The project will be "strategic and crucial to the UK's future natural gas supplies," Wood said.
"As we move towards a more decarbonised economy, natural gas will be the transitional fuel of choice, with LNG playing the all-important role of balancing natural gas and power markets by acting as baseload feedstock for power generation, on the one hand, and providing peak shaving capabilities on the other," he explained.
"The intermittency of power generation from wind and solar means natural gas will continue to be the fuel of choice for at least the next few decades. We, therefore, continue to remain focussed on energy infrastructure projects like the FSRU project which have a long life, robust economics and provide security of energy supply to the UK whilst casting our eye on future scenarios involving the likes of hydrogen and other new technologies."