ScottishPower has sold its underground natural gas storage project at Byley to E.ON UK plc for GBP96 million. As part of the transaction agreement ScottishPower has negotiated a 15-year storage contract for a substantial portion of the planned capacity.
The project, which gained final planning approval last year, will see around six billion cubic feet of gas stored in up to eight underground caverns in Cheshire.
In explaining its decision to sell, ScottishPower said the facility offered more capacity than it needed and that a sale would be in the best interests of shareholders. Securing a long-term storage contract combined with the sale presents an attractive opportunity to immediately maximize value from the development and also to secure access to reliable, high deliverability gas storage, the company added in its release.
Charles Berry, ScottishPower executive director UK, said: Having guided the project through its complex planning phase, we are delighted to have gained an excellent price for the asset and secured our long-term gas storage requirements in the UK. The sale option maximizes shareholder value.