John Simpson: Harland and Wolff deal a perfect fit for InfraStrat's gas storage project on Islandmagee
An agreement has been signed that the assets of Harland and Wolff can be sold to an ambitious specialist business, InfraStrata plc, to great joy from the shipyard workers.
For some years InfraStrata has been developing a gas storage project based at Ballylumford on Islandmagee.
The purchase of the assets at H&W gives InfraStrata an engineering base ideally suited to support this project.
This InfraStrata project is unique in the UK. It is expected to make available 25% of the natural gas storage capacity for all of the Union.
There are only two other places in the UK where natural conditions would suit this type of project.
Excavation and disposal of the underground salt deposits will allow a large, self-contained storage space to be created.
This gas storage capacity will offer an important extra dimension to the management of energy supplies in Northern Ireland.
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It will supplement arrangements to offset periods when wind-based generation is low and, in an offset, this gas storage can indirectly maximise the reliance on renewable electricity supplies.
The gas storage project is well advanced but remains dependent on final preparatory stages.
This month an environmental impact assessment is due to be submitted to Daera.
From this assessment, a period of public consultation with information sessions will be opened.
InfraStrata hopes to be able to start preliminary work before the end of this year, and a final investment decision is timetabled for two months' time, in December.
The linkage between the H&W site and work in Islandmagee has helped to make the purchase of the assets of H&W attractive to the new owners.
InfraStrata anticipates that by buying H&W, it will reduce the capital cost of its projects by between 10% and 15% and will reduce the construction timeline by three to five months.
Although it can only be an unproven comment by an observer, there is possibly an added attraction to InfraStrata that it has agreed a purchase price of £6m for the assets at H&W. Other assessments of the value of the H&W assets have suggested higher figures.
The sale of the assets at H&W (and the possible disappearance of the name of H&W itself) has been a remarkable and timely achievement, but the deal is not yet finished.
A backstop timetable is in place and the financial arrangements have provided for a phased handover.
In the coming months there will be keen interest in reaching a firm 'go' decision on the Islandmagee project and also on the success of InfraStrata in winning other contracts.