UK's InfraStrata abandons plan for floating LNG import terminal in NW England

UK-based InfraStrata said June 30 it has dropped plans for a floating LNG import terminal in northwest England, saying there was no longer a business case for the project.

InfraStrata in 2019 had agreed with Cayman Islands-based Meridian Holdings to hold exclusive talks about the development of a planned 5 million mt/year FSRU at Barrow-in-Furness.

However, progress on the project was slow, and InfraStrata has now abandoned the project altogether.

"The company has formally withdrawn from the proposed FSRU project in Barrow-in-Furness," it said in a trading update.

"The energy complex has undergone a fundamental shift towards renewables and hydrogen over the past 18 months. The company no longer sees a business case for an FSRU project," it said.

At the time of the original exclusivity deal with Meridian, InfraStrata said the FSRU project would add to the UK's security of gas supply and help balance the network on peak demand days.

It also said the terminal would provide clients with optionality between storing LNG, regasifying LNG and sending it to the grid, and storing regasified LNG.

The UK has three operational LNG import terminals -- two in Wales (Dragon and South Hook) and one in southeast England (Isle of Grain).

A fourth site at Teesside in northeast England is currently idled, although trader Trafigura has a license to redevelop the facility.

Gas storage

InfraStrata is also developing the planned 0.5 Bcm Islandmagee gas storage project in Northern Ireland, but is still waiting for a decision on the award of a key permit from the Northern Irish Department of Agriculture , Environment and Rural Affairs (DAERA).

The marine license is required due to expected brine discharge from the facility and needs to be issued before InfraStrata can move the project to final investment decision.

"Given the current political upheavals in Northern Ireland, the marine license continues to await the approval of the minister for DAERA, and there is little that can be done by the company to move the process along at this time," InfraStrata said in the trading update.

In November, InfraStrata slammed DAERA for having "dithered" over the award of the marine license for the project.

While it waits for the permit award, InfraStrata said it continued to "future-proof" the project by planning for the storage site to be transformed into a hydrogen storage site in the future.

"The company believes that, in order to provide for the security of energy supply in future years, the gas store will be used, initially, for the storage of natural gas, followed by a blend of natural gas and hydrogen and, finally, leading to the storage of large volumes of hydrogen when hydrogen production levels increase," it said.

"The company continues to believe that the Islandmagee gas storage project will become an invaluable asset in the country's future hydrogen-based economy."

If Islandmagee is approved as planned it would be the first firm commitment to a new UK gas storage site since 2008.

The UK has only limited, medium-range gas storage since Centrica moved to close the seasonal Rough gas storage facility off the east coast of England in June 2017.