Infrastrata’s Islandmagee gas storage project has been rescued by a £300,000 loan which will help the project survive until the end of 2017.
Last week, the future of the scheme looked uncertain after the company announced it might be unable to continue as a going concern if funding was not secured by the end of January.
However, the company now says that the loan from Baron Oil will help “meet InfraStrata’s minimum levels of corporate costs and care and maintenance costs on the Islandmagee gas storage project to the end of 2017.”
The move comes just three months after the company announced it planned to “focus entirely on the Islandmagee gas storage project.”
Islandmagee Storage Limited (IMSL), which is 90 per cent owned by Infrastrata and 10 per cent by Mutual Energy Ltd, intends to create up to eight underground caverns below Larne Lough to store 500 million cubic metres of natural gas, enough to satisfy Ireland’s peak demand for 15 days.
The firm already has planning permission for the above ground facilities and discharge consent for the brine by-product.
In an announcement on January 4, majority shareholder Infrastrata had revealed that it was negotiating short-term debt funding, but that there was “no certainty” that this would be secured.
While the loan will enable the company to survive, it does not include cover for the Front-End Engineering Design (FEED) aspect of the Islandmagee plant, for which contractors had previously agreed to provide loans of up to £1million, provided that Infrastrata could secure the remaining funding.
Despite securing EU grant funding of 50 per cent for the FEED, the company needs an additional £3million for this section of the plant. The gross amount which Infrastrata needs to cover corporate overheads, working capital, bridging finance on the EU grant and repayment of the loan is £6million. In this month’s announcement, Infrastrata revealed it has “recently engaged with potential investors with a view to securing the funding for the FEED and corporate overheads.”