InfraStrata Secures EU Grant
The revised estimate of the project's capital cost, £300mn, has been added to the final paragraph of this article since it was first published.
InfraStrata is set to receive €4mn of EU funding towards a Front End Engineering & Design (Feed) study for its Islandmagee gas storage project.
The UK-based explorer and gas storage developer said June 30 it has concluded a grant agreement with the European Commission (EC), under the EU's Connecting Europe Facility, for 50% of Feed costs, up to a maximum of €4.024mn, for the gas storage project in Northern Ireland. InfraStrata was informed in January that this grant would be forthcoming.
A final investment decision in 2017 is targeted for the project, which is a joint venture of InfraStrata (65%) and Northern Ireland gas network operator Mutual Energy (35%). But the project is unlikely to be realised before 2018, the earliest date by which time the UK may leave the European Union. As such the project's entitlement to any further EU grants is at risk.
Image credit: InfraStrata
InfraStrata CEO Andrew Hindle said: “The company considers that it is premature at this time to make any statement on any longer term impact on the project's [EU] Project of Common Interest status in the context of the UK referendum result on June 23 and we will continue to engage with the EC on the progression of the Feed programme and the project's development as before."
However he said that Islandmagee would boost security of gas supplies in both the Irish Republic and Northern Ireland, support gas-fired power generation back-up for the expansion of renewables across Ireland, and thereby address power intermittency and carbon reduction issues.
The Irish Republic will remain an EU member state. Some politicians in Northern Ireland and Scotland, both UK regions that voted by a majority to remain in the EU, are exploring the possibility of staying in the EU when the rest of the UK leaves. But France and Spain oppose such discussions.
Total costs for the Islandmagee project, which if fully developed would have total working gas storage capacity of 500mn m³, were originally estimated at £400mn in 2013. In its half-yearly report on March 22 2016, InfraStrata revised the project's capital cost downwards: it is now £300mn.
Mark Smedley | www.naturalgaseurope.com