NIEH to join Larne Lough gas storage project

NIEH signed a nonbinding joint venture agreement with Portland Gas Northern Ireland for the development of gas storage caverns in underground salt deposits under Larne Lough in Northern Ireland.

May 13th, 2008

Uchenna Izundu
International Editor

LONDON, May 13 -- Northern Ireland Energy Holdings Ltd. (NIEH) signed a nonbinding joint venture agreement with Portland Gas Northern Ireland Ltd. for the development of gas storage caverns in underground salt deposits under Larne Lough in Northern Ireland.

NIEH is operator of the Scotland-Northern Ireland Pipeline (SNIP) into which the Larne Lough gas storage project would be connected. The proposed venture would give NIEH a 55% stake in the project as well as a share of the estimated $500 million construction costs.

Larne Lough is a lough or inlet in County Antrim in Northern Ireland, near the town of Larne. It is designated as an Area of Special Scientific Interest, Special Protection Area, and Ramsar Site (under the Ramsar Convention, an international treaty) for conservation and sustainable utilization of its wetlands environment.

The proposed storage facility would be created from a Permian salt sequence in the Larne area by leaching out salt to create caverns that could hold as much as 500 million cu m. Northern Ireland currently has no gas storage facilities.

Portland is evaluating tenders for the drilling rigs, pipelines, and other facilities, which were received at the beginning of the year. Other firms have expressed interest to joining the joint venture, officials said.

The company is awaiting planning permission from the Dorset Country Council to build the facility. It is also waiting for authorization from the Department of Business, Enterprise, and Regulatory Reform to construct the pipeline.

Contact Uchenna Izundu at uchennai@pennwell.com.

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