Islandmagee Gas Storage Project - Offtake Update

RNS Number : 8223G

Infrastrata PLC

08 November 2018

 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

8 November 2018

InfraStrata plc

("InfraStrata" or the "Company")

Islandmagee Gas Storage Project - Offtake Update

InfraStrata plc (AIM: INFA), the UK quoted company focused on the development of natural gas storage capacity, is pleased to announce further progress on the Company's Islandmagee Gas Storage Project (the "Project") as it has received a letter of intent from a major (blue chip) gas trading company regarding potential utilisation of gas storage capacity (the "Offtaker"). 

The parties have been in discussions for several months and have now agreed a commercial structure for the utilisation of the storage capacity at InfraStrata's planned Islandmagee gas storage facility as it becomes available. 

The commercial framework for the Gas Storage Agreement ("GSA") is proposed to be 12-15 years as an initial term, with further options to extend this, and the capacity charge to be levied by InfraStrata will be made up of several pre-defined elements covering storage.  In addition, the costs of cycling the facility will be recharged directly to the Offtaker.

Further negotiations will take place over the coming months before a formal agreement can be entered into, which is targeted to occur before the final investment decision on the Project ("FID"), which is expected before the end of June 2019.  It therefore should be noted that this letter of intent is a non-binding agreement and there is no guarantee that discussions will ultimately lead to any contract being agreed with the Offtaker.

The Board of InfraStrata considers that an offtake agreement is a crucial part of the commercial agreements that need be finalised in order for FID to be reached.  Further details will be announced in relation to equity and debt funding for the Project, along with the EPC (engineering, procurement and construction) contractor, as they become available between now and the end of June 2019.    

John Wood, Chief Executive Officer, commented: "It's fantastic that we have reached a point where we have agreed a framework that we hope will lead to a formal Gas Storage Agreement and we look forward to working with the Offtaker to finalise the commercial agreement as soon as possible.  An offtake agreement clearly underpins the Project and is one of the essential elements required before construction can commence.  I would like to thank the teams who have been working hard to bring these discussions to a point where we can progress forward."

Due to binding non-disclosure agreements that exist between the parties we are unable to release further details of the Offtaker at this time.

For further information, please contact:

InfraStrata plc John Wood, Chief Executive	c/o Yellow Jersey [phone]
Allenby Capital Limited (AIM Nominated Adviser & Joint Broker) Jeremy Porter / Alex Brearley / Liz Kirchner	[phone]
SI Capital Limited (Joint Broker) Nick Emerson	[phone]
Yellow Jersey Tim Thomson	[phone]

-ENDS-

Notes to editors:

InfraStrata is an independent gas storage company focused on the UK and Ireland. Further information is available on the Company's website: www.infrastrataplc.com

Background on the Islandmagee Storage Project

The Islandmagee gas storage project is a proposed salt cavern gas storage facility located on Islandmagee in County Antrim, Northern Ireland. The Board of InfraStrata believes that the proposed 500 million cubic metres Natural Gas Cavern Storage facility will provide over 25% of the UK's Natural Gas Storage once constructed, and will be situated adjacent to the Scotland Northern Ireland (gas) Pipeline (SNIP) and the Moyle 500 Megawatt Electricity Interconnector. Work commenced in 2007 with the acquisition of 3D seismic data to image the Permian salt in the Larne Lough area. During 2012, planning permission was granted for the project and a gas storage licence was issued by the Utility Regulator. In 2015 a well was drilled to core the salt and confirm the technical feasibility of the project, supported in part by the European Commission. The Front End Engineering and Design (FEED) element of the Project is scheduled for completion by the end of 2018. To date approximately £11.5m has been invested in the project.

Further information is available on the company's website: www.infrastrataplc.com 

The Front End Engineering & Design (FEED) and Insitu Downhole Testing programme for the Islandmagee gas storage project is co-financed by the European Union's Connecting Europe Facility.

Disclaimer releasing the European Union from any liability in terms of the content of the dissemination materials:

"The sole responsibility of this publication lies with the author. The European Union is not responsible for any use that may be made of the information contained therein."

 

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