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InfraStrata eyes UK FSRU plan
UK
LONDON-LISTED gas storage developer Infra- Strata has signed an exclusivity agreement with the Cayman Islands-registered Meridian Hold- ings on an FSRU in the UK. e project would involve the installation of a receiving vessel o - shore Barrow-in-Furness, Cumbria, in the coun- try’s northwest.
is would allow gas to be delivered into the UK via its own interconnection, the company said on July 9. e plant would have 5 million tonnes per year (tpy) of capacity. InfraStrata said typical costs on such a project would be GBP250- 400mn ($307-491mn), with construction taking three to four years.
The agreement gives the company three months, with possible extensions, to investigate the project’s feasibility. is will give InfraStrata the possibility of an acquisition, but terminates a er 12 months.
Meridian acquired the project in 2012 from Hoegh LNG, striking a 20-year gas sales agree- ment in 2015 with E.ON Global Commodities.
The statement said InfraStrata would seek investors to take equity stakes in a subsidiary, Infra- Strata Energy UK, which would oversee the FSRU work. The plan is for these investors to reduce InfraStrata’s stake in the subsidiary to a minority before the acquisition of the FSRU project.
“ e UK gas market is witnessing a signif- icant shi in its supply stack and LNG is set to form an important part. As an energy infra- structure company, we are looking at not only building a diverse portfolio of assets but also creating the ability for each asset to comple- ment the others,” said InfraStrata’s CEO, John Wood. “Such a strategy adds signi cant trad- ing value to our prospective clients who them- selves have a portfolio of energy contracts to monetise.”
The FSRU concept has planning permis- sion from Barrow-in-Furness for the o shore component. A detailed review is being carried out. e various land parcels and easements for onshore equipment and pipelines have also been acquired or have options on them.
If the deal goes ahead, InfraStrata would issue 25 million new shares to Meridian on the agree- ment of a term sheet. Should the project reach final investment decision (FID), another 75 million shares would be issued. On completion of the acquisition, the buyer would pay cash of more than the value of the 100 million shares.
e move into the FSRU space complements InfraStrata’s Islandmagee gas storage project, which is based in Northern Ireland. is would have capacity to store 500mn cm. ™
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Week 27 11•July•2019