The departure of British major BP earlier this year from a planned natural gas storage unit in Northern Ireland has not impacted the economics of the site, its lead project developer confirmed to ICIS on Tuesday.
That company, InfraStrata, is looking to build a 500 million cubic metre (mcm) fast-cycle store at Islandmagee that will have a withdrawal rate of 22mcm/day, and an injection rate of 12mcm/day.
Stewart McGarrity, finance director at InfraStrata, told ICIS that a full range of investors were now looking at potentially backing the project. He said this spectrum included international oil and gas majors through to institutional pension funds, but declined to comment further.
McGarrity added that it was possible more than one investor may come aboard the Islandmagee project, and the terms of the deal would not necessarily have to follow the structure of BP’s option ( see ESGM 28 January 2014 ).
InfraStrata holds a 65% stake in Islandmagee, while Northern Ireland pipeline operator Mutual Energy holds the remaining stock. BP had an option on just over half of the store, which if exercised would have watered down InfraStrata’s stake to around 33%, and Mutual’s share to 18%.
Assuming the financing is secured ahead of winter, a final investment decision on the Islandmagge project could be made in 2015. With land and planning approval already granted, only an environmental permit is needed, which cannot be issued before a final salt core is drilled. This is expected to happen over the coming winter.
The project, which already has exemption from the EU’s third party access rules secured, is expected to cost around £300m (€364m).
Once the final approval is given, it should take three years before some of the store is operational, although a total of five years will be needed before the facility will be completed. This suggests that Islandmagee will not be fully running until 2020.
McGarrity said BP’s departure had essentially pushed the project back by a year.
Entry/exit tariff to the NBP
To make the project attractive to counterparties at Britain’s NBP hub, InfraStrata is hoping the two Irish energy regulators introduce a combined entry/exit tariff for transmission to storage for the island of Ireland.
Northern Ireland’s regulator UR in conjunction with Ireland’s peer CER, is expected to announce plans for such a tariff next month ( see ESGM 13 January 2014 ). But on Tuesday, UR would only say that an update will be ready “before the summer.”
As Islandmagge is one of the many European infrastructure projects now listed as a project of common interest, McGarrity was optimistic the energy watchdogs would be progressive with their regulation. Tom Marzec-Manser