Infrastrata PLC Replacement - Completion of FEED & P90 Estimate (5525I)
November 27 2018 - 1:01AM
UK Regulatory
TIDMINFA
RNS Number : 5525I
Infrastrata PLC
27 November 2018
The following announcement replaces the announcement released on
22 November 2018 at 12:42 under RNS number 2370I. The first two
sentences of the fifth paragraph have been amended, to clarify that
the cost estimates of GBP300m-GBP330m in the economic modelling and
GBP265m in the FEED studies are for both phase 1 and phase 2. The
corrected announcement is set out below and all other details
remain unchanged.
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ("MAR"). With the publication of this announcement,
this information is now considered to be in the public domain.
InfraStrata plc
("InfraStrata" or the "Company")
Islandmagee Gas Storage Project - Completion of FEED & P90
Estimate
InfraStrata plc (AIM: INFA), the UK quoted company focused on
the development of natural gas storage capacity, is pleased to
announce that work on the FEED (Front End Engineering Design) for
its Islandmagee gas storage project (the "Project") has now been
completed by the engineers and consultants, both for the surface
and subsurface elements, and the final reports received by
InfraStrata.
FEED commenced in May 2018 and has been completed in full as
contracted, having been delivered on budget and ahead of time. In
accordance with the EU grant provisions for the FEED study, the
required reports will be submitted to the EU in December 2018.
The Owners Engineer teams, WSP (surface) and Atkins
(subsurface), have been working tirelessly, ensuring the technical
elements of the FEED studies are in keeping with InfraStrata's
expectations as FEED has been reaching a climax in recent weeks.
Whilst it will take InfraStrata some time to fully analyse the
studies, it is clear that nothing material has been uncovered
during either the surface FEED works carried out by Costain or the
subsurface FEED works carried out by DEEP KBB that should
physically prevent construction of the gas storage facility.
As part of the FEED studies, a "P90" cost estimate has been
undertaken for delivering the Project determined by probabilistic
analysis. P90 values are established to provide a high level of
confidence (90% confident) such that the Project outturn cost will
have a 90% chance to be below this estimate and a 10% chance above.
The P90 estimate is consistent with the economic modelling
undertaken on the Project and therefore InfraStrata proceeds into
the next phase of development with a high level of confidence from
a technical, cost and economic basis.
The economic modelling undertaken was on a range of cost
estimates of GBP100m - GBP120m for delivering Phase 1 (2 caverns)
only and GBP300m - GBP330m for including Phase 2 (adding an
additional 6 caverns, resulting in a total of 8 Caverns). The
combined FEED studies have delivered P90 cost estimates of GBP114m
for Phase 1 only and GBP265m for including Phase 2, with an
additional risk allowance of an aggregate total of GBP11.6m for
both phases. The schedule has confirmed an expectation of injection
of first gas for storage in 2022 with full operations (withdrawal
and injection) expected in Q1 2023 assuming FID (final investment
decision) is taken by the end of H1 2019. The Company continues to
work with various potential partners in relation to providing
funding for the Project and updates will be provided as
appropriate.
The engineering design that has been completed will position
InfraStrata's Islandmagee facility as a globally competitive and
technologically advanced, fast cycle, pioneering gas storage
facility. Costain, Deep, Atkins and WSP have all worked together
seamlessly to ensure the best possible outcome for InfraStrata.
John Wood, Chief Executive Officer commented: "Completing FEED
successfully and receiving independent confirmation that the
Project can be constructed within our financially modelled ranges
is a credit to the entire team that has worked on the Project. We
are now working on planning the next development stages of the
project whilst ensuring all elements come together for a successful
final investment decision before the end of H1 2019. I would like
to thank Costain, Deep KBB, Atkins and WSP for the delivering the
FEED study in the time available to realise the EU Grant."
Current Milestone Progress
Milestone Month Description Status
1 April Contract Award Costain InfraStrata - Completed
------- ---------------------------------- ------------ ------------
2 May Contract Award DEEP InfraStrata - Completed
------- ---------------------------------- ------------ ------------
3 May Appointment of Subsurface Expert InfraStrata - Completed
------- ---------------------------------- ------------ ------------
4 May Issue FEED schedule, project Costain - Completed
and quality plans
------- ---------------------------------- ------------ ------------
5 May Current Design Agreed Costain - Completed
------- ---------------------------------- ------------ ------------
6 June Current Design Agreed DEEP - Completed
KBB
------- ---------------------------------- ------------ ------------
7 June Appoint Owners Engineer InfraStrata - Completed
------- ---------------------------------- ------------ ------------
8 July Issue Process Flow Diagrams Costain - Completed
------- ---------------------------------- ------------ ------------
9 August Gas & Leaching layout review Costain - Completed
------- ---------------------------------- ------------ ------------
10 August All Process & Instrumentation Costain - Completed
Diagrams
------- ---------------------------------- ------------ ------------
11 Oct. Engineering Design Complete Costain - Completed
------- ---------------------------------- ------------ ------------
12 Oct. All Investigation work on samples DEEP - Completed
complete KBB
------- ---------------------------------- ------------ ------------
13 Oct. Cavern Design & Rock Mechanics DEEP - Completed
Complete KBB
------- ---------------------------------- ------------ ------------
14 Nov. Surface FEED Deliverables & Costain - Completed
Estimates
------- ---------------------------------- ------------ ------------
15 Nov. Subsurface FEED Deliverables DEEP - Completed
& Estimates KBB
------- ---------------------------------- ------------ ------------
16 Dec. Submit Reports To EU InfraStrata
------- ---------------------------------- ------------ ------------
For further information, please contact:
InfraStrata plc c/o Yellow Jersey
John Wood, Chief Executive +44 (0)20 3735
8825
Allenby Capital Limited (AIM Nominated
Adviser & Joint Broker) +44 (0)20 3328
Jeremy Porter / Alex Brearley / Liz Kirchner 5656
SI Capital Limited (Joint Broker) +44 (0) 20 3871
Nick Emerson 4038
Yellow Jersey +44 (0)20 3735
Tim Thompson 8825
-S-
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, and 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 is scheduled for completion by the end of
2018. To date approximately GBP13.5m has been invested in the
project.
Further information is available on the company's website:
www.infrastrata.co.uk
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."
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END
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