BP has pulled out of plans to develop a £400million project to store gas in caves under Northern Ireland.
The Islandmagee project would see up to 500million cubic metres of gas stored in caves located in Permian salt beds a mile beneath the surface at Larne Lough.
The project had been operated by InfraStrata and Moyle Energy, but the British oil and gas giants had an option to take a majority stake in the project.
However, the company has decided not to take up the deal, following a review of its gas portfolio – leaving the project’s developers on the hunt for cash to take the project forward.
“Although we are disappointed that BP Gas Marketing is leaving the project due to their wider strategy reasons, we very much appreciate their financial support and the dedication of their team, which has enabled the project to be developed significantly further over the past two years,” said InfraStrata chief executive Andrew Hindle.
“The project remains as important as ever for security of gas supplies to the north and south of the island and a critical piece of infrastructure for the development of renewable generation on the island.
“Gas storage development on the island is a key element to resolve these impending infrastructure issues.
“InfraStrata will work closely with our Northern Ireland project partner to seek a new partner for this strategically important project over the coming months.”
Despite the setback, the company said it still hoped to drill the first well on the project later this year, after getting the go-ahead in late 2012 to build the above ground facilities for the storage facility.
Around £5million has already been invested in the development through BP and its partners, but InfraStrata revealed a further £4million would be needed to take the project to the point where a decision on investment could be made.
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