Petrofac gets onboard Gateway storage project

6th Dec 2010 07:21

Oilfield services provider Petrofac has snapped up a 20% interest in UK gas storage outfit, Gateway Storage.The cash consideration could be up to £33m over time, and will be funded from Petrofac's cash resources. The consideration will be split into a fixed upfront payment and additional contingent payments subject to key project development milestones being achieved, including the outcome of a further successful equity sales process.Petrofac will join Gateway as the technical project operator of the Gateway Gas Storage project in the East Irish Sea, and will be represented on Gateway's board. The front end engineering and design phase of the project is nearing completion and the focus is now turning to project execution and finalisation of the consortium of storage capacity holders and investors to develop the project towards the final investment decision in 2011.Gateway is targeting 2016 for the commencement of storage services to the UK energy markets. The project is set to expand gas storage capacity in the UK market by almost 30%.As at 31 March 2010, Gateway had gross assets of around £19m and reported a loss after tax for the year ended 31 March 2010 of about £3m.The development and operation of the Gateway gas storage project is the principal activity of Gateway.