EU
22 October 2013 - HM Treasury Boost for Islandmagee Gas Storage Project PDF Print E-mail

Hot on the heels of being designated as an EU ‘Project of Common Interest’, the major £400million gas storage project being developed at Islandmagee, Co Antrim has received another significant boost – this time from the Treasury in London.

The project has been ‘pre-qualified’ (deemed eligible for support) under the Treasury’s ‘UK Guarantee Scheme’ which is making cover of up to £40billion available to ensure that key infrastructural projects across all sectors in the UK, those that really ought to go ahead, are not held back due to any difficulty in obtaining finance. Under the scheme the Government will guarantee a certain proportion of the capital required to fund projects, so that banks can lend more freely in today’s risk-averse lending environment.

The pre-qualification of the Islandmagee project by the Treasury was today welcomed by the project developers Islandmagee Storage Ltd (IMSL). ISML Director Paddy Larkin said,

“We are delighted that so soon after the EU recognised the strategic importance of our project, with the PCI designation, the Treasury is now effectively doing the same thing.

“We welcome that, at a time when it is trying to make savings, the Government is ready to lend its backing to ensure that the most important infrastructure projects, such as IMSL’s gas storage project, can get the finance they need.

“In our case, we are particularly pleased that of the 16 projects publicised today, we are the only one from Northern Ireland and the only natural gas storage project anywhere in the UK. This underscores the fact that our project is not only hugely important for Ireland, North and South, but for security of supply and system flexibility across these islands and beyond.”

Mr Larkin added,

“ ISML remains very confident that this project can be financeable and that Governments and markets recognise the value that it can bring. This is great news from the Treasury. It is well understood in Government that at Islandmagee, with its uniquely favourable geology and proximity to strong points on the gas and electricity networks, we have an overwhelmingly advantageous location for a gas storage facility.

“We welcome both the ‘vote of confidence’ from the Treasury but also the fact that they are ready to back the project financially if necessary. It is good to have the backing of Government following recent strong support from the EU.

“The major outstanding issue now blocking progress is the inter-jurisdictional regulatory decision on gas storage transportation tariffs for gas entering and leaving the store across jurisdictional boundaries. Despite several years of consideration, a joint UReg/CER decision has still not been determined.

“We now require an immediate decision from Dublin and Belfast regulators which will allow a gas storage facility anywhere on the island of Ireland to operate effectively and competitively across the Irish and UK markets. Such a decision will take a renewed level of cooperation and focus from the two regulators and given the massive security of supply benefits which a gas storage facility could bring to gas customers on the island the extra effort should be easily justified.”

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