InfraStrata is set to acquire Meridian Holdings, the proponent of a floating storage and regasification unit project (FSRU Project) in Barrow-in-Furness, northwest England.
The UK-based company, which is engaged in developing energy infrastructure projects, has entered into a term sheet with West Face Long Term Opportunities Global Master in this regard to acquire Meridian for £8m.
The acquisition will be conditional on a final investment decision (FID) taken on the proposed FSRU Project, which is expected to have a capital expenditure (CAPEX) of about £350m-£450m. The FSRU is expected to become the first such project to be developed and commercialised in the UK.
According to InfraStrata, the FSRU Project’s CAPEX is anticipated to be financed by putting together a consortium of partners at the project level.
The company said that considering that over 30% of the UK’s natural gas supplies arrive in the form of liquified natural gas (LNG) cargoes, the FSRU Project is ideally placed to take advantage of LNG arriving in the country and seeking storage and also regasification.
The project involves the development of a floating LNG receiving facility offshore Cumbria. It will be designed to supply regasified volumes of natural gas directly into the UK market through its own National Transmission System interconnection at Barrow-in-Furness.
The FSRU Project is expected to have 5-6MTPA capacity
With an estimated capacity of nearly five to six million tonnes per annum (MTPA), the FSRU Project is expected to aid in balancing the gas network during peak demand days, said InfraStrata.
The company said that it has started discussions with key partners and in due course, is expected to form a consortium for developing the project. The consortium will comprise globally recognised firms involved in the development, construction, operations, and commercialisation of regasification terminals across the world, said InfraStrata.
The company has been looking to acquire the project since last year and had even signed an exclusivity agreement with Meridian Holdings last June.
InfraStrata CEO John Wood said: “The continued traction that we have been receiving from global players within the LNG markets since the day we announced the exclusivity agreement last year, validates our belief that this FSRU Project is strategic and crucial to the UK’s future natural gas supplies.
“As we move towards a more decarbonised economy, natural gas will be the transitional fuel of choice, with LNG playing the all-important role of balancing natural gas and power markets by acting as baseload feedstock for power generation, on the one hand, and providing peak shaving capabilities on the other.”
