Update on Islandmagee gas storage project

RNS Number : 1388H

Infrastrata PLC

27 November 2015

 

27 November 2015                                                                  

InfraStrata plc

("InfraStrata" or the "Company")

Update on the Islandmagee gas storage project - completion of 2015 work programme to start monetisation process and EU reconfirmation as a PCI

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to provide an update on its Islandmagee gas storage project.

In the Company's update announcement on 4 September on the 2015 programme of work, InfraStrata confirmed that following successful drilling of the Islandmagee-1 data gathering well to obtain core samples of the Permian Salt and wireline data, all end of well reports had been finalised and the initial results from the laboratory testing on the cores were encouraging and being used by InfraStrata's engineering team to update the facility design and costs estimates.

Test results on the salt cores and rock mechanics have now been incorporated into the preliminary design of the subsurface and surface facility and cost estimates for the project have been updated.

InfraStrata is therefore pleased to confirm that with the finalisation of this work, the five stages of the £3.8 million programme of work have been successfully completed, on time and within budget. The overall results from the technical programme of work are positive and the objective to confirm the feasibility of the development of an underground gas storage facility in salt caverns in this location has been met.

The thickness and depth of the Permian Salt were both within 10% of pre-drill estimates. The Permian Salt average thickness over the area of the proposed gas storage caverns is approximately 200 metres to a depth of approximately 1,300 metres sub-sea. The rock mechanical properties of the salt determined from the core data are in line with data for Permian Salt at other locations across northern Europe where caverns for gas storage have been constructed and are in operation.

The successful completion of the programme is a major milestone for the project and InfraStrata can now commence the monetisation process to attract investors into the project to take it through to detailed design and on to full construction.

In addition, InfraStrata is pleased to announce that the status of the Islandmagee gas storage project as an EU Project of Common Interest ("PCI") was reconfirmed recently with the adoption of the latest PCI list by the European Commission on 18 November 2015. The list of PCIs is reviewed and updated every 2 years and continued inclusion is a significant boost for the project. Islandmagee is the only gas storage project in northwest Europe to be awarded PCI status.

Under PCI rules, PCI projects benefit from accelerated permitting procedures and improved regulatory conditions and are also eligible to apply for financial support from the Connecting Europe Facility ("CEF"). A budget of €5.35 billion has been allocated under CEF for 2014-20 to help PCIs be implemented faster and make them more attractive to investors. As an existing PCI, InfraStrata, on behalf of the project company Islandmagee Storage Limited ("IMSL"), successfully applied in 2014 for a €2.5 million grant to support its 2015 programme of work and IMSL will continue to seek to utilise the benefits PCI status brings to the project including further applications for financial support, where appropriate.  

Commenting on the announcement, Andrew Hindle, CEO of InfraStrata said:

"We are very pleased with the outcome of the programme of works which will enable InfraStrata to move forward with the monetisation phase. This process should be helped by the confirmation that Islandmagee gas storage has been reconfirmed as a PCI, which not only underlines its strategic importance as a key energy infrastructure project at a European level, but also provides the potential to access further grant funding through CEF to assist with its development."

For further information please contact:

InfraStrata plc

Andrew Hindle, Chief Executive Officer                                                               020 8332 1200

Stewart McGarrity, Finance Director

Nominated Adviser and Joint Broker - Allenby Capital Limited

Jeremy Porter / Alex Brearley                                                                           020 3328 5656

Joint Broker - VSA Capital Limited

Andrew Raca/ Richard Buckle                                                                           020 3005 5004

Notes to Editors:

Background on InfraStrata plc

InfraStrata is an independent petroleum exploration and gas storage company focused on Northern Ireland.

Further information is available on the Company's website www.infrastrata.co.uk.

Background on the Islandmagee Storage Project

The Islandmagee gas storage project is owned 65% by a wholly owned subsidiary of InfraStrata plc and 35% by a wholly owned subsidiary of Mutual Energy Limited. Work commenced in 2007 with the acquisition of 3D seismic data to image the Permian salt in the Larne Lough area. In October 2013, the gas storage project was granted a 'Project of Common Interest' ("PCI") status by the European Commission. PCI status means recognition by the European authorities that the Islandmagee gas storage project brings benefits not only to the Member State in which it is located, but to a much wider area. A data gathering well (Islandmagee-1) was drilled in May/June 2015 to obtain cores of the salt sequence and subsequently undertake further engineering design work. This work programme was part-funded with a €2.5 grant from the European Commission under the Connecting Europe Facility. During 2012 planning permission was granted for the project and a gas storage licence was issued by the Utility Regulator. In addition the project holds Marine Discharge and Water Abstraction Licences, lease agreements with the Crown Estate for the construction of the underground caverns and laying seabed pipelines, together with ownership or access rights to the land required to construct and operate the facility are in place.

In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, the information contained in this announcement has been reviewed and signed off by the Chief Executive Officer of InfraStrata plc Andrew Hindle BSc, MSc, PhD, a Chartered Geologist with 30 years' experience, a Fellow of the Geological Society of London, and a member of the American Association of Petroleum Geologists and the Petroleum Exploration Society of Great Britain.

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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