9th Jul 2019 10:39
(Alliance News) - Natural gas storage firm InfraStrata PLC has agreed a period of due diligence to assess the feasibility of working on a UK floating storage project, it said Tuesday.
The agreement has been signed with Cayman Islands-based Meridian Holdings Co, which owns a proposed floating storage regasification & reloading unit project in Barrow-on-Furness, Cumbria.
The project is designed to deliver re-gasified volumes of natural gas to the UK market.
InfraStrata will have three months of exclusivity to look into the feasibility of the project, and if this is finished satisfactorily it will buy the project with the help of investors and financiers.
If a deal goes ahead, InfraStrata will issue 25 million new shares to Meridian, and then another 75 million shares if a final investment decision goes ahead. There would also be a cash consideration at the completion of the deal worth more than the 100 million shares to be issued.
The shares would be issued at the volume-weighted average InfraStrata share price in the seven business days prior to the final investment decision.
Infrastrata shares were down 7.8% at 0.58 pence each on Tuesday. At that price, the 100 million shares would be worth GBP580,000, with the cash part then worth more than that.
InfraStrata Chief Executive John Wood said: "We are very pleased to enter into this exclusivity agreement with Meridian Holdings. The UK gas market is witnessing a significant shift in its supply stack and LNG is set to form an important part.
"As an energy infrastructure company, we are looking at not only building a diverse portfolio of assets but also creating the ability for each asset to complement the others. Such a strategy adds significant trading value to our prospective clients who themselves have a portfolio of energy contracts to monetise."
A typical project such as this, InfraStrata said, would require capital expenditure of between GBP250 million to GBP400 million, taking three to four years to build. As a result, the company would look for new investors.
George Collard; [email protected]
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