17 Dec 2008 07:00
| For Immediate Release | 17 December 2008 |
PORTLAND GAS PLC
Results of Annual General Meeting and Operational Update
At the meeting the CEO Andrew Hindle presented a review of the business and its plans for 2009 which is now available on the Company's website www.portland-gas.com.
The Company would also like to provide a brief update on its current operations.
The primary objective of the Company is to maximise shareholder value from the Portland and Larne Lough projects. These projects are of national importance and between them they could supply up to 42 million cubic metres ("mcm") of gas per day (approximately 10% of the UK and Ireland's gas requirement on a peak day) with the potential to increase the current and approved gas storage capacity in the UK by approximately 20%.
In relation to the Portland project, the Company is now evaluating a phased approach to the construction to reduce the initial capital expenditure, a hurdle in the recent unsuccessful funding process. With the halting of the 2008 funding process for the Portland project, the contract with NM Rothschild & Sons has been terminated. The Company is now seeking a strategic partner for the development of the project through bi-lateral negotiations.
Portland Gas is also committed to developing the gas storage project at Larne Lough in Northern Ireland. A borehole, Ballylumford-1, is planned to be drilled in the spring 2009 and preparations to construct the wellsite are well advanced. A confirmation of the properties of the Permian salt with the borehole will lead to the submission of a planning application for the project anticipated to be later in 2009.
Commenting today, Andrew Hindle, the CEO of Portland Gas, said:
"The goal of the Company is to ensure that shareholders obtain the true value of the gas storage assets in return for their support and investment.
"The strategy of the Company is to add material value in the short to medium-term by bringing forward new projects, and secure long-term shareholder returns by retaining an equity or capacity interest in the assets. Going forward the Company wishes to seek a single strategic partner (or consortium) in our projects. Portland Gas is seeking a partnership of skills, Portland Gas providing the origination team and the leases, licences and land purchases required for the project delivery, and the partner providing the access to capital and the operational and commercial skills.
"The Company has sufficient funds for 2009. It is the view of the management that the recent market conditions have not diminished the potential value of the Portland and Larne Lough projects. Indeed the latest cost estimate for the project has reduced to £450m. The new approach to the funding of projects will allow the Portland Gas team to focus on the origination of projects and unlock the underlying value of the assets."
For further information please contact:
Portland Gas plc
| Andrew Hindle, Chief Executive Officer Craig Gouws, Chief Financial Officer | 020 8332 1200 |
| PR - Watershed Sara Hudston | 01308 420785 |
| Investor Relations - Buchanan Communications Ben Willey | 020 7466 5000 |
| Nominated Advisor and Broker - Seymour Pierce Jonathan Wright Sarah Jacobs Richard Redmayne | 020 7107 8000 |
Notes to Editors:
Background on Portland Gas
Portland Gas' business is focused on the development of two gas storage projects in the United Kingdom and the development of new projects in mainland Europe.
The Portland Project, which the Company owns 100%, will be the largest onshore gas storage facility in the UK, for which planning permission was granted by Dorset County Council in May 2008 and Pipeline Construction Authorisation was granted by the BERR (now known as the Department of Energy and Climate Change) in July 2008. An Environmental Impact Assessment is currently being carried out for the Larne Lough Project in Northern Ireland. Should a borehole in 2009 confirm the suitability of a salt sequence for the development of a gas storage facility a planning application for the project will be submitted later in 2009. The Company has a 65% interest in the Larne Lough project. Its partner in the project is a subsidiary of Northern Ireland Energy Holdings Limited, the owner of the Scotland to Northern Ireland gas pipeline. The two projects could between them provide up to 10% of the total UK and Ireland peak daily demand in the latter part of the next decade.
The company is one of only a few in Europe focused specifically on gas storage development, a sector with significant growth potential in Europe over the coming decades.
Further information is available on the Company's website www.portland-gas.com.