InfraStrata at next stage of Irish gas storage project
Exploration company InfraStrata will turn the Islandmagee salt deposit into a gas storage plant after securing funding from the EC
UK exploration company InfraStrata is moving ahead with its project to turn the Islandmagee salt deposit in Ireland into a gas storage plant, having secured funding from the European Commission (EC) that covers half the cost of the recent drilling operations. Core samples of rock have been sent to Germany for analysis. This will show the possible characteristics of the storage site, such as the number of caverns, how to dissolve the salt, the facility’s optimal operating pressure and so on.
The expectation is that during Q4 2015 there will be enough certainty to enable a final investment decision in 2016. At that point InfraStrata will look for partners, CEO Andrew Hindle told Petroleum Economist, possibly from among the major utilities already operating such storage sites on the UK mainland. They will provide technical expertise and financial backing for the £275m project. “We are looking at all options to monetise our interest in the project,” he said. InfraStrata shareholders include major financial institutions such as Legal & General and JP Morgan.
The Irish Republic and Northern Ireland have a common electricity market and while the winter-summer spread is at present very thin which makes storage a less profitable line of business, at times of high gas demand rules exist to enable the generation sets switch from gas to diesel, which will push up the power price. There is already a lot of wind on the system and this is posing a problem for gas, he said. When the wind drops, gas demand shoots up, but gas supplies about 65% of the island of Ireland’s power needs, so it needs access to flexibility. The plant will not be operational for another five years and the characteristics of the GB market may well have improved significantly in that time, he said.
The EC has deemed the plant a project of common interest because there are questions of security of supply for Ireland, which at the moment receives the majority of its gas from the UK mainland. It comes from an interconnector at Moffat, in Scotland. By the end of the year, the Corrib field in the East Irish Sea should be at least at the commissioning phase but the delivery profile means it will be in decline from about 2022/2023 with “three-quarters of the Republic of Ireland’s gas coming from Moffat,” he said.
Once the company has found a way to monetize Islandmagee it will turn its attention to exploration and production activity in Ireland and the UK mainland. Islandmagee is within the Larne Lough Neagh basin, which has geology “very like” Corrib, and which is an under-explored area for petroleum exploration owing largely to the technical challenges of basalts at the surface impeding imaging the sub-surface and, above ground, the warfare that disrupted life in the province.