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13M sells today that smack of one of our erstwhile large scale holders. Plus a bit of fiddly diddly by the MMs. Yet again. All a bit disappointing . Wouldn't it be nice to see a few positive days to match our good news quota.
Great post Olderandwiser. Fully agree with the points you make. Kicking the can down the road a bit whatever decisions the BEIS make going forward, it will have the potential to affect Islandmagee storage considerably.
Indeed, Brewsea. I thought the NG guy is living in a Polyannaish world, unable or unwilling to accept the possibility of a serious supply outage could have on both UK domestic and industrial customers, however short-term in duration.
The issue for IslandMagee, however, is different. Roddy Monroe stated on several occasions that the economics didn't justify a replacement for Rough, however tight is the effective spare capacity at peak demand. But we are interested solely in whether or not the economics justify a commercial ROE for a fast cycle storage facility, not a seasonal one. We aren't going down the seasonal route, AFAICT. The Select Committee may make some noises about marginal tax incentives for storage providers generally, but these will be medium term in coming through, if at all, by which time the equity funder(s) will have had to commit to the project with a FID by mid-2019.
No, the case for IslandMagee will rest crucially on the FEED cost estimates to be calculated this month. Any improvement on the £300mn full-cost indicative projection which enhances the IRR from 15% will surely make this project fly, with or without government assistance. Cost overruns beyond £300mn may add a question mark to its viability.
I have no insight into which side of the central cost case we will see in the FEED study, but I am encouraged by the statement in the January 2018 presentation, "One of the Board’s objectives for the FEED is identifying ways to reduce the project capex".
Finally got a chance to listen to the BEIS Select Committee's programme.
It would appear Duncan Burt director of operations for the national grid system believes the system is adequate. That may well be the case but as Dr Laura Cohen who is from the gas security group and chief executiveof the british ceramics federation and Roddy Monroe chair of the gas storage operations group and former head of regulatory affairs at Centrica Storage, were at pains to point out that if gas supply is tight then it doesn't matter how adequate your system is if there is not enough gas stored in reserve in our own country then we will always be at the beck and call of other countries.
Laura and Roddy also seemed to be campaigning for fast cycle gas rather than seasonal gas.
I hope Rachel Reeves chairwoman for the BEIS Select Committee and the rest of her committee get the message. Antoinette Sandbach the Conservative MP certainly understands the pickle we are in.
You're probably right Olderandwiser but there's an outside chance an equity funder is already pouring over the details. I like to dream.
Looking forward to meeting Mr Dawski, all the regulars and many new SS INFA shareholders in London Next month. Not to forget our new Captain John Brown and his lieutenants.
Brewsea,
I think an offtake partner announcement is far more likely than an equity funding one, simply because the funding partner will want to pore over the detailed FEED cost estimates first.
Olderandwiser, I'm hoping we have some form of equity funding in place or at the least an offtake partner announced by then.
I wonder if JW will slip out the cost estimates for the FEED study before this meeting in early December?
If on schedule, they will have been completed this month.
https://twitter.com/InfraStrata_Plc/status/1057918996660580352
On Twitter now.
As just about every day we start with a 2M sell. Clearly aimed at deterring the buyers, (and succeeding). MM tactics to suppress the SP. But why and on whose behalf? This is not accidental. The INFA SP should be well past 1p but it's struggling to stay above .5p.
Dana
Good to see you back on the Board .
Sorry mate....emabarrassed to repost...please see my post on advn.
Yep. An accident of history, Snowman.
O & W
This post was posted ad verbatum 1 minute later on ADVN with Divmad taking credit....are you one and the same person?
I have just tweeted one of the members of todays committee suggesting they get the Directors of INFA before them to advise them that there is a project for Gas Storage in Northern Island partly funded by EU.
Very good summary! The committee seemed amazed that they considered the system "worked" as the price spiked to record levels! Gas storage is very important if even just to prevent so much volatility let alone the security of supply issues. The only LNG tanker inbound at that time was SIX days away ffs!!
"If we had more gas storage, we wouldn't have had...the gas price rises that we had (in the Beast from the East last March)"
"We should plan for extremes in the weather" Chairman of Select Committee
"Very high likelihood of further disruptions" Laura Cohen
"Storage was the most reliable supply during that event"
"The UK has the lowest levels of gas storage relative to annual demand...2% versus 25% in the rest of Europe".
"To replace Rough would cost around £1.3bn and take eight years to build" Roddy Monroe
"Investment incentive required to encourage new investment in storage" I think, Laura Cohen
"I will be very surprised to see any more seasonal storage capacity, only small scale additions" eg IslandMagee, is her referring to? Roddy Monroe
"Market signals to justify new storage aren't there" Roddy Monroe
My take:
The witnesses (except for the National Grid spokesman who seems to live in La La Land) and the Select Committee members seem convinced that the UK have very clear insufficiency of gas storage, either to cope with a Beast from the EAst again this Winter, or in the future. The closure of Rough has exacerbated this supply constraint but market incentives to replace Rough in scale are not there. The rest of Europe is increasingly facing its own storage problem, as flexible supplies of domestic gas are shrinking (Groningen in the Dutch NS sector), and as NS gas fields mature, with less pressure, pumping out at maximum rates as it is. So the choices are: interconnectivity with Europe via pipelines, LNG, storage. Problems with each, so more gas storage would seem to represent a national strategic benefit.
I am not sure how much this discussion today impacts on IslandMagee, as it will be a short term storage facility, not a seasonal one like Rough. And clearly on its own, it will not solve the UK's storage capacity deficiency. Maybe 2 or 3 IslandMagee's would.
Although not discussed directly, I can envisage, after this session especially, that gas price volatility will increase over any future period, versus historic volatilities under calmer conditions of flexible supply. This will play directly into IslandMagee's strength, and should be a USP to any offtake customer/partner.
Tower hill Looks like a typo
Town Hill tube? Where's that?
Lol, thanks! Is it getting a thumbs up or are they burying their heads in the sand?
The need for 'Gas Storage' in the UK.
What's the jist of what's being said? I'm in work so can't watch :(
Business, Energy and Industrial Strategy Committee - Subject Gas Storage
https://www.parliamentlive.tv/Event/Index/1dd6a361-4cd5-4957-8138-bcc37d288fbc