Strategy Update

RNS Number : 4349E
Infrastrata PLC
04 July 2019
 

 

               

 

4 July 2019

 

InfraStrata plc

("InfraStrata" or the "Company")

 

Strategy Update - Focus on New Projects and Revenue Generation in 2020

 

InfraStrata plc (AIM: INFA), the UK quoted company focused on the development of natural gas storage capacity, is pleased to provide an update and confirmation of its wider strategy to seek to become revenue generating during 2020 after taking Final Investment Decision ("FID") for the Islandmagee Gas Storage Project ("Islandmagee Project").

 

In addition to continuing to progress the Islandmagee Gas Storage Project, in relation to which an update was announced on 03 July 2019, the Company is now involved with potential partners and asset owners to seek to deliver new projects meeting any of the following criteria:

 

·    UK mainland gas storage projects to complement the Islandmagee Gas Storage Project;

·    Floating Storage and Regasification Unit ("FSRU") projects to facilitate the importation and regasification of Liquified Natural Gas ("LNG") into the UK; and

·    existing operational and revenue generating gas storage facilities within the EU.

 

Projects have been identified for all of the above and, whilst these are currently only in discussion and/or undergoing due diligence, the directors of InfraStrata plan for the Company to transform itself during 2019 and 2020 into an organisation that is no longer a sole project company,  but rather a company with multiple projects across various project life cycles.  This is in line with the Company's intention of diversifying in the gas storage industry and energy infrastructure generally.

 

It is planned that income will be generated at the InfraStrata plc level from these new projects, as is similarly expected from the Islandmagee Gas Storage Project, from a number of sources after equity has been sold down to incoming investors at project level, including from:

 

Ø Construction Management;

Ø Operational Management; and

Ø Return on retained equity in projects.

 

The income streams from construction and operational management are planned to be achieved once equity at the project level has been sold down to incoming investors who then intend on retaining the Company's management team to carry out construction and operation activities of these projects.

 

Two new companies have recently been incorporated by InfraStrata, which would be utilised as vehicles to facilitate transactions for these new projects. Further announcements will be made as appropriate as matters progress on each project.

 

The Company expects to fund the initial costs of technical and commercial due diligence on new projects through part utilisation of the grant monies of  EUR1.6 million due to be received from the EU later this year and from a portion of the back costs on the Islandmagee Project that are expected to be reimbursed on completion of Final Investment Decision ("FID") by incoming investors as part of a project equity deal for the Islandmagee Project .

 

John Wood, Chief Executive Officer commented: "We are pleased to confirm our future strategy to ensure that we continue to de-risk InfraStrata by considering additional projects in our niche market of long-term plays within the energy infrastructure sector.  We have had very strong interest in the above-mentioned projects, and we believe that we are ideally placed to work with our partners to put these projects together.  These projects will be a key strategic fit with our existing flagship Islandmagee Gas Storage Project which will continue to receive the attention it requires to ensure it is brought online and in keeping with the commitments that we have made in our recent offtake term sheet with Vitol."

 

 

 

For further information, please contact:

 

InfraStrata plc

John Wood, Chief Executive

 

c/o Yellow Jersey

+44 (0)20 3735 8825

Allenby Capital Limited (AIM Nominated Adviser & Broker)

Jeremy Porter / Liz Kirchner

+44 (0)20 3328 5656



Yellow Jersey

Tim Thompson  

+44 (0)20 3735 8825

 

 

-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. The facility 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 was completed in November 2018 and the FEED report was submitted to the European Union in December 2018 in accordance with the Company's grant conditions. To date approximately £14.5m 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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