Petrofac takes stake in UK gas storage project
10 Jan 2011
London - Petrofac has acquired a 20% interest Gateway Storage Co. Ltd, the developer of the 1.5bn cubic metre salt cavern gas storage facility in the East Irish Sea.
Petrofac will join Gateway as the technical project operator and will be jointly responsible for developing the project ahead of a final investment decision in 2011.
Petrofac, which will be represented on the Gateway board, said its investment in Gateway is based on a cash consideration of up to £33million over time, funded from cash resources.
This is split into a fixed upfront payment and additional contingent payments subject to key project development milestones being achieved, including the outcome of a further successful equity sales process.
The front end engineering and design (FEED) phase of the project is nearing completion and the focus of Gateway Storage will now turn to project execution and finalisation of the consortium of storage capacity holders and investors.
Gateway Storage is targeting 2016 for the commencement of storage services to the UK energy market. When built, Gateway Storage will be one of the UK’s largest salt cavern storage facilities and will add nearly 30% to the current gas storage capacity in the UK market.
The company secured the UK Department of Energy & Climate Change’s first ever Storage Licence in February 2010 after obtaining the main planning and environmental consents and permits in late 2008.
George Grant, chairman of Gateway Storage said: “Gateway is the most advanced gas storage project in the UK that has not yet committed to construction, so we are delighted to have an organisation with the execution and operational track record of Petrofac to take the project forward through to financing and into construction.”
Rob Jewkes, managing director of Petrofac Energy Developments added: “With FEED activities largely complete, we are entering the project at this stage to bring confidence to the investor group that execution and delivery objectives for the complete facilities can be met, and will utilise the full capabilities of our group to optimise the facility design and deliver the project.”
