£1.9m needed to drill test well at Islandmagee

A photomontage produced by IMSL showing how its proposed ground-level plant would look beside Ballylumford power station. INLT 25-611-CON

A photomontage produced by IMSL showing how its proposed ground-level plant would look beside Ballylumford power station. INLT 25-611-CON

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Oil and gas exploration company InfraStrata plans to sell millions of shares in a bid to fund work on its gas storage project at Islandmagee.

The £400m project, which involves the creation of underground caverns to store 500 million cubic metres of natural gas a mile beneath Larne Lough, appeared to have stalled after InfraStrata’s partner, BP pulled out last year.

Funding was also lacking to drill an important well to extract a salt core sample for testing.

But the project was boosted by the support of the European Commission, which in August 2014 agreed to stump up £1.9m for the drilling and testing of the first well, dubbed Islandmagee-1; as long as InfraStrata can match the sum.

Now the company is planning a placing and subscription of 52,000,000 new ordinary shares to raise the other half of the well cost.

The placement will go ahead on the London Exchange on February 24 if the company’s shareholders approve the move at a meeting the day before.

With the well site already constructed, the plan is to raise sufficient funds to drill the first well in May.

The EU-backed gas storage project is being managed by Islandmagee Storage Limited (IMSL), a joint venture between InfraStrata, which holds 65 per cent, and Moyle Energy Investments, which owns the remaining 35 per cent.

IMSL was granted planning permission for the project in 2012.

The proposal has attracted hundreds of objections, with environmentalists fearing the firm’s intention to pump brine out to sea from the excavated caverns will harm marine and bird life.