ECHO.L Regulatory News (ECHO)

11 Sep 2006 07:01

Independent Resources PLC11 September 2006 Further key step towards appraisal and development of major gas storage project 11 September 2006: Independent Resources plc (IRG), the AIM-quoted natural gasstorage and exploration company, has taken another significant step towards theplanned development of a strategic underground gas storage project at Rivaranear Bologna in northern Italy. The company has submitted the results of a nine-month Environmental Impact Studyfor approval by the Italian Environment Ministry. It is seeking clearance tobegin a €200 million appraisal and development programme, ready for Rivara tocome on stream in 2010. The Rivara gas storage reservoir is a fractured limestone formation that offersthe opportunity to inject and withdraw natural gas rapidly to match seasonaldemand patterns and take advantage of the associated trading opportunities. It lies alongside Italy's balancing point on the gas "motorway" thattransports Europe's long-term gas supplies from North Africa, and could play akey role in mitigating the effects of future gas shortages like the crisis whichhit Italy last winter. At full capacity of 3.2 billion cubic metres, it wouldrepresent over 20% of Italy's current total gas storage and be larger than anycurrent gas storage site in the UK. IRG Chairman Grayson Nash said: "In completing this study, we have workedclosely with the regional and central authorities and stakeholders in order tominimise administrative delays. The Italian authorities have been very focusedon fast-tracking vital energy infrastructural projects, in light of theworsening gas crisis facing the country. We believe Rivara will prove crucial inhelping to secure and balance gas supplies both in Italy and more widelythroughout Europe." The Environmental Impact Study submitted by IRG identifies a wide range ofdirect and indirect effects that the project would have on the local environmentC including its social impact. Its submission for approval follows IRG's 2004 success in winning a concessionto develop and operate facilities at Rivara over a period of up to 40 years, andis necessary to win re-confirmation of the concession. For further information contact: Stephen Staley, Managing Director, Independent Resources plc: 01332 865 253 07771 838 753 Allan Piper, First City Financial Public Relations: 020 7436 7486 07736 064 982 Background details follow: The Environmental Impact Study submitted by IRG identifies, describes, andassesses the various direct and indirect effects of a project and itsalternatives - including not developing the project - on man, the fauna, theflora, the soil, water above and below ground, the air, the climate, and thelandscape, as well as the interactions between and amongst the various effects.These also include material, cultural, social, and environmental assets and thevarious conditions to develop the project. The approach is based on preventiveaction, in which the best policy is to minimize from the beginning any pollutionand adverse effects instead of combating them after the fact. Italy's Comitato Tecnico Idrocarburi e Geotermica (CTIG), representing thecountry's decision-makers from government, academia, and regulatory bodies forsubsurface hydrocarbon activity, recommended the award of the Rivara concessionto Independent Gas Management srl, now a wholly-owned subsidiary of IRG in July2004, subject to approval of the environmental impact assessment now submitted.Last year, it extended the concession life to the maximum currently allowable bylaw (20 years plus two 10-year renewal periods). Italy's existing gas storage capacity is located within depleted gas fields thatare intrinsically limited in terms of performance. They are filled and depletedat more or less constant rates just once through the seasonal cycle. They havegood deliverability at the beginning of the winter season, but as they aredepleted, they become increasingly unable to sustain high flow rates. In comparison, storing gas in a deep, naturally-fractured carbonate reservoirlike Rivara that is hosted in a huge saline aquifer has a number of significantperformance advantages. First, from a financial standpoint, the need for so-called "cushion-gas" - gas whose sole purpose is to provide pressure support for the reservoir - is minimised, saving heavy capital investment. Cushion gas can account for up to 60 per cent of the total storage volume in atypical sandstone reservoir. However, Rivara would require a much smaller volumeC approximately 14 per cent of its total capacity C because it relies instead onthe constant hydrostatic pressure of the aquifer below. Second, the constant pressure within the Rivara UGS would enable it to delivergas quickly at high rates of withdrawal in response to demand fluctuations, andto do so throughout the winter - something no other storage facility in Italy isable to do. Third, because flow-rates can be reversed quickly, additional gas volumes couldbe injected into the Rivara UGS at any time in its cycle, providing valuablecommercial opportunities to take advantage of short-term as well as seasonalfluctuations in the gas price. This information is provided by RNS The company news service from the London Stock Exchange