Update re. Marine Licence
13 October 2021
Harland & Wolff Group Holdings plc
("Harland & Wolff" or the "Company")
Notification by Department of Agriculture, Environment and Rural Affairs ("DAERA") to issue the Marine Licence for the Islandmagee Gas Storage project.
Harland & Wolff Group Holdings plc (AIM: HARL), the shipyard and energy infrastructure group with over 160 years of maritime and offshore engineering pedigree, is delighted to announce that its subsidiary, Islandmagee Energy Limited ("IMEL"), has been notified by the Department of Agriculture, Environment & Rural Affairs (DAERA) that it will issue the Environmental Consent Decision, Marine Licence, reviewed Abstraction Licence and Discharge Consent for the Islandmagee Gas Storage project (the "Project").
The Company has reviewed the conditions attached to the draft Marine Licence and believes that they are fair and reasonable, and therefore, acceptable, which will lead to the issuance, by DAERA, of the full Marine Licence within the next 28 days. The issuance of this licence will facilitate the abstraction and discharge of seawater and brine respectively during the cavern formation.
Given the ongoing gas supply crisis within Europe and the critically low levels of gas storage currently available in the UK compared with the rest of Europe, the Company believes that it is vital that this storage project is constructed and commercialised to help ensure security of supply in the UK, as well as support the transition to a Net-Zero economy. The Project's gas caverns have the ability to enable Northern Ireland to become a net exporter of energy to the wider United Kingdom. The Project is expected to create at least 400 direct and 1,600 indirect jobs during the construction phase and around 60 direct and 180 indirect jobs during its expected 40-year operational life, supporting investment into Northern Ireland.
Northern Ireland, with a series of wind farm and associated hydrogen projects set to be developed within the next decade, is uniquely positioned to be a world leader in green hydrogen production. A crucial element of moving towards a green hydrogen-based economy is the ability to have large scale storage during periods of surplus production, which can then be injected back into the grid during periods of high demand, very much like natural gas. Subject to regulatory approvals, the Company believes that its Islandmagee Gas Storage project can be well utilised to transition from the storage of natural gas to a blend of natural gas and hydrogen, and, finally, to hydrogen storage in all its caverns. These caverns will not only help provide security of energy supply but will also create flexibility to help balance the grid throughout the year.
Harland & Wolff's Group CEO, John Wood commented: "We are delighted to receive the news that the much- awaited Marine License for the Project is now progressing. This marks a major step forward in the Project's journey, paving the way for the construction of our proposed facility. We have worked tirelessly over a two-year period to ensure that our proposals meet and exceed legislative requirements, taking onboard the many comments made by the local community and other stakeholders.
A lot has changed within the global gas markets over the last two years. The recent energy supply crisis has raised awareness of how vulnerable we are to gas and power markets volatility. Everybody now understands just how important gas storage is for the country's security of supply and to help stabilise gas prices for the end-consumer. We will now work with DAERA to conclude the last set of activities to obtain the formal Marine Licence, after which point, we will review the Project in its entirety to ensure that we reach a Final Investment Decision (FID) as soon as practicable. A further update will be provided to the market in due course."
About the Islandmagee Gas Storage Project
The Islandmagee Gas Storage project is a salt cavern gas storage facility located in County Antrim, Northern Ireland. The Islandmagee peninsula is the site of Northern Ireland's main gas-fired power station at Ballylumford, the strategic electrical interconnection point to Great Britain and the terminating point of the existing Scotland-Northern Ireland gas pipeline, making it an ideal location for an energy project of this type. Once completed, the Islandmagee Gas Storage facility will consist of seven underground caverns, capable of storing a total of approximately 500 million cubic metres of gas in Permian salt beds, a well-proven technique that represents the most environmentally friendly, safe and efficient method of storing large volumes of gas.
The Islandmagee facility is expected to provide over 25% of the UK's current natural gas storage capacity and will support the growing demand for gas-fired power development and renewable energy generation throughout the United Kingdom and the Irish Republic.
Islandmagee is a wholly-owned subsidiary of Harland & Wolff Group Holdings plc (AIM: HARL), formerly known as InfraStrata plc.
As noted by Oxford Analytica* in a report focussing on domestic gas storage, it was highlighted that:
• During construction, 400 direct jobs will be created, as well as between 800 and 1,200 indirect jobs, expected to bring around £7 million into the local economy. It has also been estimated that during this stage that for every £1 million of capital expenditure, a further £2 million will be created in the economy; this means with 75% local content, the wider economy could benefit by around £400 million.
• During operation, a further 60 direct jobs will be created, expected to bring in around £1 million into the local economy and between 120 and 180 indirect which would bring in a further £2-3 million.
• Many of the jobs created will be skilled Science, Technology, Engineering and Mathematics (STEM) jobs as detailed in the Belfast Region City Deal.
* Oxford Analytica Report: https://www.harland-wolff.com/news/3d-flip-book/domestic-gas-storage/
This announcement contains inside information.
For further information, please visit www.harland-wolff.com or contact:
John Wood, Chief Executive
Seena Shah, Head of Marketing & Communications
+44 (0)20 3900 2122
Cenkos Securities plc (Nominated Adviser & Broker)
Stephen Keys / Callum Davidson (Corporate Finance)
Michael Johnson (Sales)
+44 (0)20 7397 8900