Petrofac backs into UK storage scheme

Petrofac is taking a 20% interest in Gateway Storage Co., the developer of a new subsea gas storage facility in the East Irish Sea off northwest England.

Offshore staff

EDINBURGH, UK -- Petrofac is taking a 20% interest in Gateway Storage Co., the developer of a new subsea gas storage facility in the East Irish Sea off northwest England.

Under the agreement, Petrofac will join Gateway as technical project operator, with joint responsibility for developing the project ahead of a final investment decision in 2011.

The cash consideration involved is up to £33 million ($51.7 million), some in the form of an upfront payment. Further payments are contingent on the accomplishment of various milestones, including a further planned equity sale.

Gateway says front-end engineering and design for the project is nearing completion and the focus now switches to project execution and finalization of the consortium of storage capacity holders and investors.

The new 1.5 bcm (52.97 bcf) facility involves conversion of a subsea salt cavern. Assuming the project comes onstream in 2016 as planned, it should add almost 30% to the current UK gas storage capacity.

12/06/2010

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