Islandmagee gas storage project: Islandmagee expects ‘sell or invest’ decision in Q4

Harland and Wolff may sell its Islandmagee gas storage project in Northern Ireland, the company said. The company said a Final investment decision (FID) had been delayed due to judicial review over its Marine Licence, but “the advice we have is favourable to the company” and it expected to take an FID or sale decision in Q4 this year.
In the company’s annual report, group chief executive John Wood said the judicial review application “has little chance of success” He added, “There have been numerous changes in the funding environment for this project and it provides us with a number of options as we continue dialogue with interested parties.
“Whilst the economics of the project remain encouraging, we are equally enthused by the level of interest we have received in relation to an outright sale of the project. The time to extract maximum value for this project will be after any successful outcome of the judicial review”.
Wood also said of the project, which remained stalled during Covid, “In the event that the judicial review does not find in our favour, we have alternative technical solutions that do not require a Marine Licence and will mean that the project will not be stalled again”.
The company said, “our biggest operational inhibitor is not having a large enough skills base to deal with the growth coming through” and last year it employed 35 apprentices. It added, “We will be looking to increase our total number of apprentices to over 100 during the next academic year” and also said it would “Develop further in-house engineering capability and capacity”
The company said its energy (ie oil and gas) and renewables markets (along with its defence, cruise/ferry and commercial sectors) “are awash with opportunities”.
It highlighted the ScotWind leasing round announcement, saying, “With two of our facilities located in Scotland, we are set to significantly benefit from this. Harland & Wolff has already built strong relationships with many of the winning developers and is well-placed to benefit from these new wind farm developments.”
Chief finance officer Arun Raman added, “As we move into FY23, we expect to observe a change in the nature of projects withinour portfolio, with defence and renewable projects becoming predominant. …we are currently targeting between £100 million – £120 million of revenues in FY23”.