Patent Application

RNS Number : 2114W

Portland Gas plc

09 June 2008

 



For Immediate Release

9 June 2008

PRESS RELEASE

Portland Gas Files a Patent Application

The Directors of Portland Gas plc (AIM: PTG) ('the Company' or 'Portland Gas') announce that the Company has filed a patent application to the UK Intellectual Property Office describing a system to allow 'cushion gas' within a conventional salt cavern to be removed in times of high demand or national emergencies.  

For any storage system the gas must be stored at a pressure that is maintained within acceptable limits. To accomplish this, conventional gas storage systems require that a volume of cushion gas is retained at all times to maintain the gas pressure above an acceptable minimum threshold level. The invention allows for the removal of the cushion gas from a cavern during a period of high gas demand by moving a fluid into the cavern to maintain an acceptable pressure of the gas in the cavern. 

Commenting on the method, Andrew Hindle, CEO of Portland Gas plc, stated 'The effective storage capacity of the cavern is increased and the cushion gas can be viewed as a strategic asset available at times of acute need for the supply of gas to markets. 

'In the case of our Northern Ireland project at Larne Lough, we will be reviewing the feasibility of using seawater to displace the cushion gas in times of a national emergency or very high demand. The cushion gas could provide an additional volume of approximately 290 million cubic metres ('mcm') to the proposed normal 'working gas' of 500 mcm. Portland Gas estimates this could provide an additional 13 days of supplies to the island of Ireland market in the latter part of the next decade if the project goes ahead. The availability of this gas to the market, particularly at the end of winter when conventional gas stocks are low, would add significantly to security of supply for the island of Ireland and add to other proposed production and import projects, together with other joint initiatives of the Department of Communications, Energy and Natural Resources and the Department of Enterprise, Trade and Investment, Northern Ireland.'

For further information please contact:

  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, for which planning permission was granted by Dorset County Council in May 2008, 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 Larne Lough Project

The interpretation of 3D seismic data acquired in 2007 has indicated that the Permian salt sequence encountered in 1981 in the Larne-2 borehole extends under Larne Lough into the area where Portland Gas was granted an exploration licence in 2007 by The Crown Estate. The salt in the target area is at a depth of approximately 1,400 metres with a thickness of approximately 200 meters. Portland Gas is planning to drill a borehole later in 2008 on Islandmagee to confirm the seismic interpretation and to take cores of the salt sequence to complete the design of the caverns to store natural gas. The Company is seeking a suitable site from which to drill the borehole within the area of its onshore mineral licence, awarded in 2007 near Ballylumford by the Department of Enterprise, Trade and Investment.

Portland Gas is also undertaking an Environmental Impact Assessment ('EIA') with the intention of submitting a full planning application for the gas storage project in 2009, subject to concluding any necessary landowner agreements. The EIA, which will thoroughly consider all aspects of the surrounding environment, is being undertaken by RPS (Ireland), the engineering and environmental consultant company. Technical support for the project is being provided by DEEP. Underground Engineering GmbH. The Company will liaise closely during 2008 with all stakeholders to ensure that the surface facilities, required to create the caverns and compress the gas into store, are located in the most appropriate place and designed to minimise visual and environmental impact. The caverns would be created within the salt sequence below Larne Lough but accessed from directionally drilled boreholes on the land. The nearest point of connection to the national gas infrastructure is at the Scotland to Northern Ireland Pipeline ('SNIP') above ground installation at Ballylumford.

In May 2008 Portland Gas announced that its Northern Ireland subsidiary Portland Gas NI Limited has agreed Heads of Terms with Moyle Energy Investments Limited, a subsidiary of Northern Ireland Energy Holdings Limited ('NIEH'), operator SNIP, for NIEH to participate in the Larne Lough gas storage project. Under the terms of the agreement NIEH have an option, following completion of a due diligence process and consultation with their stakeholders, to become a joint venture partner taking a 35% equity interest in the Larne Lough project and paying their share of the development costs.

Network, market, technical and economic analyses are also underway to determine the most appropriate storage capacity and the gas injection and withdrawal rates for the facility. Initial studies indicate that the facility could have a storage volume of up to 500 million cubic metres (18 billion cubic feet) of gas. In this case some reinforcement of the current gas infrastructure will be required to manage the injection and withdrawal of gas and provide sufficient flexibility to meet demand spikes for customers. 

 

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