Canatxx Gas Storage Limited ("CGSL") and Canatxx LNG Limited ("CLNG") announces that it has retained BNP Paribas Corporate Finance to advise it in seeking strategic investors to take a stake of up to 50 per cent in the Company.
The planned gas storage facility is located in the county of Lancashire on the Irish Sea coast. The site is planned to be the largest onshore natural gas storage facility in the UK, with initial working storage capacity of 12 billion cubic feet (bcf) in 2013, increasing to 42 bcf by 2018.
Canatxx is also seeking indications of interest from parties to enter into long-term gas storage agreements of up to a total of 20 bcf. The Company is offering withdrawal from storage with firm entry rights into the National Transmission System.
Bidders are also invited to express interest in an option to purchase equity and/or terminal usage rights from Canatxx LNG Limited, which owns the LNG re-gasification project at Anglesey, Wales. Canatxx received its planning permission in March 2008 and this is one of the only permitted LNG projects in Europe.
William Reynolds, Chief Financial Officer of Canatxx, said, 'The United Kingdom is currently the world's seventh largest gas market, but the volume and flexibility of domestic gas production have been in decline since 2000 and this trend is expected to continue, increasing the country's net import requirements over the coming years.
"In addition, decreasing domestic production, an expected growth in gas fired generation and increased renewable generation are expected to result in substantially higher volatility and larger swings in short-term gas demand.
"Addressing these developments is widely anticipated to require considerable gas storage capacity growth with a particular need for highly responsive and flexible gas storage capabilities.
"Our planned facilities will add significantly to the UK's existing flexible gas storage and increase the capacity to add gas into the transmission system on a daily basis. We are submitting our planning application for this facility to Lancashire County Council in early 2009.
"The total capital required for the gas storage project is in excess of GBP300 million. The project represents a unique opportunity to develop the last and largest on-land salt cavern natural gas storage facility in the UK. Salt cavern gas storage is dynamic and highly responsive, especially when compared to storage in depleted gas fields. This combination of LNG re-gasification linked directly to fast-cycle gas storage makes this one of the only integrated facilities in the world providing an unmatched ability to respond to short-term natural gas demand volatility cost-effectively.
We look forward to working with equity investors on this exciting development which will be of strategic importance to reducing volatility in the UK gas market in the years ahead."
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