Infrastrata PLC Project Update (5827Y)

TIDMINFA

RNS Number : 5827Y

Infrastrata PLC

09 May 2019

9 May 2019

InfraStrata plc

("InfraStrata" or the "Company")

Project Update

InfraStrata plc (AIM: INFA), the UK quoted company focused on the development of natural gas storage capacity, is pleased to provide an update on recent progress with the Company's Islandmagee gas storage project (the "Project").

The Company is at an advanced stage in negotiations with the final two potential offtake partners and the board of InfraStrata believes these negotiations will reach a conclusion in the near future. It may be that InfraStrata is able to secure an offtake deal for all seven caverns (phase 1 &2) rather than just the two caverns originally planned for in phase 1. If this is the case, FID (final investment decision) for phase 2 (five caverns) may be advanced by approximately 12 months from Q4 2020 to Q4 2019, with the knock-on effect of this that FID for phase 1 is delayed by six months to end 2019 due to phases 1 and 2 being addressed together. However, overall this would represent a six month improvement on phase 2 FID and bring the benefits of a larger project than phase 1 alone. However, this is still only another indicative scenario and the final terms and timing of any offtake agreement cannot be guaranteed at this stage. Once an offtake agreement has been signed the Company will be able to provide details of the final agreement and an update on dates for FID.

If the scenario materialises where further up front work is required to undertake FID on all 7 caverns (phase 1 & 2), a convertible loan facility may be provided by a potential equity partner to seek to ensure that the first gas date is not effected and the Project is further de-risked.

In relation to the draft marine license, InfraStrata has now provided the relevant authorities with the final draft reports requested and following feedback received, the Company is currently in the process of updating these reports and will re-submit them to the relevant authorities shortly. As previously mentioned, the Company sees no reason that a full marine license will not be issued for the Project in due course.

The Company has now submitted the final EU application for the FEED study that was completed last year and the sum of EUR1.6 million is expected to be received in the next 8 weeks from the EU. In addition, the Company is looking to submit applications for additional grants for circa EUR8 million in relation to FEED studies for the reverse flow of the existing Scottish Northern Ireland Pipeline (SNIP) (in conjunction with Mutual Energy) and twinning of that pipeline.

InfraStrata continues advancing its studies for future project development opportunities on the potential FSRU (floating storage regasification unit) opportunity and additional caverns, moving from the concept development stage to a feasibility study in the near future. In addition, as previously advised, we continue to evaluate other potential energy related infrastructure projects, one of which is other potential salt storage opportunities in the UK.

All land purchases and easements have been completed apart from purchasing plots 1 and 1.1, which were delayed after a request from the land owner to provide a further extension. The cost of these lots is agreed and they are due to complete by the end of June.

John Wood, Chief Executive Officer, commented: "As we reach the final stage of our offtake negotiations an additional scenario has arisen that may see FID taken for phases 1 and 2 at the same point in time, which may affect our previously advised FID date of H1 2019 for phase 1 (2 caverns). We are extremely pleased with the rate of progress of all the negotiations that are ongoing and are confident of reaching a conclusion on our offtake negotiations in the near future, which will in turn drive the other workstreams in the Project ".

For further information, please contact:

 
 InfraStrata plc                           c/o Yellow Jersey 
  John Wood, Chief Executive                [phone] 
                                            8825 
 Allenby Capital Limited (AIM Nominated 
  Adviser & Joint Broker)                  [phone] 
  Jeremy Porter / Liz Kirchner              5656 
 SI Capital Limited (Joint Broker)         [phone] 
  Nick Emerson                              4038 
 Yellow Jersey                             [phone] 
  Tim Thompson                              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. The facility 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 was completed in November 2018 and the FEED report was submitted to the European Union in December 2018 in accordance with the Company's grant conditions. To date approximately GBP14.5m has been invested in the project.

Further information is available on the company's website: www.infrastrataplc.com

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."

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

UPDALMFTMBAMBJL

(END) Dow Jones Newswires

May 09, 2019 12:56 ET (16:56 GMT)