22 Nov 2018 12:42
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
22 November 2018
InfraStrata plc
("InfraStrata" or the "Company")
Islandmagee Gas Storage Project - Completion of FEED & P90 Estimate
InfraStrata plc (AIM: INFA), the UK quoted company focused on the development of natural gas storage capacity, is pleased to announce that work on the FEED (Front End Engineering Design) for its Islandmagee gas storage project (the "Project") has now been completed by the engineers and consultants, both for the surface and subsurface elements, and the final reports received by InfraStrata.
FEED commenced in May 2018 and has been completed in full as contracted, having been delivered on budget and ahead of time. In accordance with the EU grant provisions for the FEED study, the required reports will be submitted to the EU in December 2018.
The Owners Engineer teams, WSP (surface) and Atkins (subsurface), have been working tirelessly, ensuring the technical elements of the FEED studies are in keeping with InfraStrata's expectations as FEED has been reaching a climax in recent weeks. Whilst it will take InfraStrata some time to fully analyse the studies, it is clear that nothing material has been uncovered during either the surface FEED works carried out by Costain or the subsurface FEED works carried out by DEEP KBB that should physically prevent construction of the gas storage facility.
As part of the FEED studies, a "P90" cost estimate has been undertaken for delivering the Project determined by probabilistic analysis. P90 values are established to provide a high level of confidence (90% confident) such that the Project outturn cost will have a 90% chance to be below this estimate and a 10% chance above. The P90 estimate is consistent with the economic modelling undertaken on the Project and therefore InfraStrata proceeds into the next phase of development with a high level of confidence from a technical, cost and economic basis.
The economic modelling undertaken was on a range of cost estimates of £100m - £120m for delivering Phase 1 (2 caverns) and £300m - £330m for Phase 2 (adding an additional 6 caverns, resulting in a total of 8 Caverns). The combined FEED studies have delivered P90 cost estimates of £114m for Phase 1 and £265m for Phase 2, with an additional risk allowance for a total of £11.6m for both phases. The schedule has confirmed an expectation of injection of first gas for storage in 2022 with full operations (withdrawal and injection) expected in Q1 2023 assuming FID (final investment decision) is taken by the end of H1 2019. The Company continues to work with various potential partners in relation to providing funding for the Project and updates will be provided as appropriate.
The engineering design that has been completed will position InfraStrata's Islandmagee facility as a globally competitive and technologically advanced, fast cycle, pioneering gas storage facility. Costain, Deep, Atkins and WSP have all worked together seamlessly to ensure the best possible outcome for InfraStrata.
John Wood, Chief Executive Officer commented: "Completing FEED successfully and receiving independent confirmation that the Project can be constructed within our financially modelled ranges is a credit to the entire team that has worked on the Project. We are now working on planning the next development stages of the project whilst ensuring all elements come together for a successful final investment decision before the end of H1 2019. I would like to thank Costain, Deep KBB, Atkins and WSP for the delivering the FEED study in the time available to realise the EU Grant."
Current Milestone Progress
Milestone | Month | Description | Status | |
1 | April | Contract Award Costain | InfraStrata | √ - Completed |
2 | May | Contract Award DEEP | InfraStrata | √ - Completed |
3 | May | Appointment of Subsurface Expert | InfraStrata | √ - Completed |
4 | May | Issue FEED schedule, project and quality plans | Costain | √ - Completed |
5 | May | Current Design Agreed | Costain | √ - Completed |
6 | June | Current Design Agreed | DEEP KBB | √ - Completed |
7 | June | Appoint Owners Engineer | InfraStrata | √ - Completed |
8 | July | Issue Process Flow Diagrams | Costain | √ - Completed |
9 | August | Gas & Leaching layout review | Costain | √ - Completed |
10 | August | All Process & Instrumentation Diagrams | Costain | √ - Completed |
11 | Oct. | Engineering Design Complete | Costain | √ - Completed |
12 | Oct. | All Investigation work on samples complete | DEEP KBB | √ - Completed |
13 | Oct. | Cavern Design & Rock Mechanics Complete | DEEP KBB | √ - Completed |
14 | Nov. | Surface FEED Deliverables & Estimates | Costain | √ - Completed |
15 | Nov. | Subsurface FEED Deliverables & Estimates | DEEP KBB | √ - Completed |
16 | Dec. | Submit Reports To EU | InfraStrata |
For further information, please contact:
InfraStrata plc John Wood, Chief Executive
| c/o Yellow Jersey +44 (0)20 3735 8825 |
Allenby Capital Limited (AIM Nominated Adviser & Joint Broker) Jeremy Porter / Alex Brearley / Liz Kirchner
| +44 (0)20 3328 5656 |
SI Capital Limited (Joint Broker) Nick Emerson
| +44 (0) 20 3871 4038 |
Yellow Jersey Tim Thompson | +44 (0)20 3735 8825 |
-ENDS-
Notes to editors:
InfraStrata is an independent gas storage company focused on the UK and Ireland. Further information is available on the Company's website: www.infrastrataplc.com
Background on the Islandmagee Storage Project
The Islandmagee gas storage project is a proposed salt cavern gas storage facility located on Islandmagee in County Antrim, Northern Ireland. The Board of InfraStrata believes that the proposed 500 million cubic metres Natural Gas Cavern Storage facility will provide over 25% of the UK's Natural Gas Storage once constructed, and will be situated adjacent to the Scotland Northern Ireland (gas) Pipeline (SNIP) and the Moyle 500 Megawatt Electricity Interconnector. Work commenced in 2007 with the acquisition of 3D seismic data to image the Permian salt in the Larne Lough area. During 2012, planning permission was granted for the project and a gas storage licence was issued by the Utility Regulator. In 2015 a well was drilled to core the salt and confirm the technical feasibility of the project, supported in part by the European Commission. The Front End Engineering and Design (FEED) element of the Project is scheduled for completion by the end of 2018. To date approximately £13.5m has been invested in the project.
Further information is available on the company's website: www.infrastrata.co.uk
The Front End Engineering & Design (FEED) and Insitu Downhole Testing programme for the Islandmagee gas storage project is co-financed by the European Union's Connecting Europe Facility.
Disclaimer releasing the European Union from any liability in terms of the content of the dissemination materials:
"The sole responsibility of this publication lies with the author. The European Union is not responsible for any use that may be made of the information contained therein."