Infrastrata EU funding safe?

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InfraStrata refused to comment on how Brexit will affect a recently-agreed €4.024 million EU grant for the Islandmagee gas storage project.

The oil and gas exploration company intends to create seven underground caverns to store 500 million cubic metres of natural gas, enough to satisfy Northern Ireland’s demand for 60 days.

On June 30, a week after the UK voted to leave the EU, the company announced that it had concluded a grant agreement with the European Commission under the Connecting Europe Facility for 50 per cent of the project’s Front End Engineering & Design (FEED), up to a maximum of €4.024 million.

The project is a joint venture between InfraStrata, which owns 65 per cent, and Mutual Energy Limited (MEL), which owns 35 per cent.

In a statement, the company said that it has “sufficient cash resources to cover its anticipated project management and administrative expenditure to the end of December 2016.”

It added that it was “working with MEL and advisers” to secure new investors to take the project through to a Final Investment Decision, which it has “targeted for 2017.”

The firm said that the new investors, which it hopes to secure over the summer months, would “enable the FEED to proceed as programmed and to meet other project commitments as they fall due, including land option payments, adviser and project management costs.”

Commenting on the funding, CEO of InfraStrata Andrew Hindle said: “The grant support is available by virtue of the project’s Project of Common Interest (“PCI”) status afforded by the European Union and recognising the importance of the project to European energy security.

“The Company considers that it is premature at this time to make any statement on any longer term impact on the project’s PCI status in the context of the UK referendum result on June 23 and we will continue to engage with the European Commission on the progression of the FEED programme and the project’s development as before.”