Planning Permission Granted

RNS Number : 6627U

Portland Gas plc

16 May 2008

 



For Immediate Release

16 May 2008

Portland Gas PLC

Planning Permission Granted for Portland Project

The Directors of Portland Gas plc (AIM: PTG) ('the Company' or 'Portland Gas') are pleased to announce that today's planning committee meeting of Dorset County Council ('DCC') resolved to grant planning permission to Portland Gas' wholly owned subsidiary, Portland Gas Storage Limited, to build a deep underground salt cavern gas storage facility at Portland, Dorset. 

Portland Gas submitted a total of seven applications, one to the Department for Business, Enterprise and Regulatory Reform (BERR, formerly the DTI) for the necessary pipeline and a further six to DCC for the permanent facilities and the temporary storage areas for the pipeline during construction. These six applications all received individual approval at the meeting of the planning committee of DCC and a separate application for Hazardous Substances Consent was also granted. BERR is expected to announce its decision in the near future. 

The estimated cost of construction of the project is £500 million. The Company's financial advisers, NM Rothschild & Sons, will now commence a formal process with potential joint venture partners who have already expressed interest in participating in the project. This process will be targeted at introducing one or more partners as shareholders of up to 50% of the project in consideration for funding the construction costs.

Portland expects this process to complete by late summer 2008. In the meantime some long-lead design work will be undertaken to keep the project timing on track for completion in 2015.

Commenting on the planning approval, Andrew Hindle, the CEO of Portland Gas, said: 

'We're naturally very happy with this decision, especially as it was made in Dorset by local representatives who know and care for this special part of the world.

'The decision is good news for Dorset, and for the nation as a whole today. In national terms, the need for gas storage is urgent and our Portland project will be very important in safeguarding our energy security in the future. Construction will commence this summer and when completed in 2015 will provide a facility to store 1 billion cubic metres of natural gas, approximately 1% of UK annual demand.

'In local terms, the scheme brings many benefits, including the £2 million plus investment in community projects over the next two years including the creation of the Old Engine Shed visitor centre on Portland, for which there was also a resolution to grant permission.' 

For further information please contact:

Portland Gas plc

Portland Gas plc

Andrew Hindle, Chief Executive Officer Craig Gouws, Chief Financial Officer	020 8332 1200
PR – Watershed Sara Hudston	01308 420785
Investor Relations - Buchanan Communications Ben Willey	020 7466 5000
Nominated Advisor and Broker - Seymour Pierce Jonathan Wright Sarah Jacobs Richard Redmayne	020 7107 8000

Notes to Editors:

Background on Portland Gas 

Portland Gas' business focuses on the development of gas storage projects and associated infrastructure in the United Kingdom and internationally. It currently has two projects in its portfolio, the first on Portland, Dorset, and the second at Larne Lough in Northern Ireland. Further information is available on the Company's website www.portland-gas.com. The company is one of only a few in Europe focused specifically on gas storage development, a sector with significant growth potential given the projected significant increase in demand for gas in Europe over the coming decades.

Background to gas storage

Natural gas is an extremely important source of energy, currently contributing 39 per cent of the UK's energy needs. For many years, the UK has relied heavily on its North Sea gas fields. That resource of secure and sustainable gas flow has limited the need to provide significant storage volumes since daily and seasonal demands for gas have been accommodated by the flexibility of supplies close to shore. This relative luxury is becoming less and less sustainable as the UK becomes increasingly reliant on less flexible imported gas, the outcome of which is that in order to maintain control of supply and demand requirements, the need for a substantial portfolio of natural gas storage facilities is now a national issue.  

Gas storage plays an important role in managing swing demand and mitigating the need for (expensive) emergency imports. Gas storage facilities can be filled during times of lower demand to be available during periods of higher demand, either on a daily basis or seasonally.

Opportunities for a safe and environmentally friendly method of storing gas are relatively few. One of the safest and most environmentally friendly methods of storing large quantities of gas is deep underground within caverns created within salt sequences.  

 

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