LONDON, Oct 22 (Reuters) - Infrastrata expects to
make a final investment decision (FID) on its natural gas
storage project in Northern Ireland by the end of the year to
enable construction to start in the first quarter, a senior
executive at the company said on Tuesday.
The company's subsidiary, Islandmagee Energy Limited, plans
an underground natural gas storage facility at Islandmagee, a
peninsula on the east coast of County Antrim, Northern Ireland.
Once built, it will be able to store up to 500 million cubic
metres of gas, equivalent to a quarter of Britain's total gas
storage capacity.
"We hope to do an FID by the end of the year and hope to
start construction in the first quarter," Arun Raman, chief
financial officer of InstraStrata told a Bloomberg New Energy
Finance conference in London.
Infrastrata has agreed with energy trader Vitol to offtake
gas from the facility in a 12-year contract, Raman added.
Britain, as well as its European neighbours, relies on gas
reserves to manage winter demand. Typically, storage is refilled
in summer when gas prices are cheaper and demand is lower in
preparation for higher demand and prices in winter.
Britain's largest natural gas storage site, Rough, has
closed, removing an extra cushion to meet winter demand that
once had capacity to inject gas into the national network for 90
consecutive days if needed.
This year, European gas storage sites have been very full
due to over-supply of gas and liquefied natural gas imports.
However, this was likely a short-term phenomenon, Raman
said.
"It is our belief that the (gas) markets are going to
tighten in the future and so what we have seen this year has
been an exceptional situation," he added.
(Reporting by Nina Chestney; Editing by Mark Potter)
