Losses at energy company aiming to develop gas storage facility in Co Antrim

InfraStrata, a London-listed energy company seeking to develop a salt cavern gas storage facility in Co Antrim that could provide gas supply for the island of Ireland, has posted pre-tax losses of more than £963,000 (€1m) in its latest annual results.

The company wants to develop a 500 million cubic gas storage facility at Islandmagee that could potentially provide more than 25 per cent of the UK’s natural gas storage and a flexible supply of gas for the island of Ireland.

InfraStrata, which has secured the backing of both the Irish and UK governments for the Islandmagee project, had zero revenue in the 12 months to July 2018, but its management and administrative expenses jumped from £725,820 in 2017 to £863,413 in the financial year. This pushed total pre-tax losses at the company from £783,459 in 2017 to £963,413 last year.

InfraStrata’s non-executive chairman Graham Lyon said 2018 was a “transformational year” for the company, and that it was a “very different organisation today compared with a year ago”.

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According to Mr Lyon, InfraStrata is moving into the next phase of its proposed Islandmagee project, and the commercial rationale for the gas storage facility has strengthened since the permanent closure of the UK’s largest gas storage plant, the Rough facility off the coast of Yorkshire, has left the UK without 70 per cent of its former storage capacity.

An estimated £13.5 million has been invested in the proposed Islandmagee project to date, and last year InfraStrata applied for a grant of £40 million from the European Union to help finance the project.

The Islandmagee gas storage facility was previously designated by the EU as a Project of Common Interest (PCI) because of its geographical location.

Mr Lyon does not believe that the uncertainty surrounding Brexit will impact on the Islandmagee project.

Energy security

“It is now recognised that energy security in Northern Ireland, and the UK as a whole, is an issue that politicians can no longer ignore.Gas storage at Islandmagee is good for Northern Ireland, good for the UK and good for the EU. We still hold Project of Common Interest status with the EU, and we have applied for further grant funding. Brexit will not affect these initiatives as the UK government has confirmed that it will honour any EU grants previously awarded,” Mr Lyon said.

According to the latest set of accounts, when InfraStrata’s total loss for 2018 is added to cumulative losses of £27,725,224 it leaves a retained loss of £28,272,541.

Mr Lyon said the company recognised “that funding will always remain an issue until regular revenue is achieved”.

“We as a company remain convinced that the project will not only provide shareholders with a return on their investment, capacity users a commercial opportunity and good profits, and project investors long term cash flow returns to service their equity investments, but also, importantly, to provide security of energy supply to the island of Ireland and the UK.”