Kistos, the low carbon intensity energy producer pursuing a strategy to acquire assets with a role in energy transition, is pleased to announce the positive results of a soft cycling relaxation trial completed at its Hill Top Farm gas storage facility in the UK. The trial, conducted at the start of May, and overseen by independent geotechnical experts, has confirmed the ability to increase 'working gas' capacity by 24% from 17.8 million to 22 million therms, an increase of 4.2 million therms, which is expected to significantly increase the revenue from both intrinsic seasonal trades and extrinsic trading.
This conversion of 4.2 million therms from cushion gas to working gas brings the Hill Top facility in line with original design parameters and will allow for the gas to be sold by Kistos at an optimal time in order to maximise intrinsic revenues, whilst our trading partner will aim to capture additional upside from market-driven price volatility.
Whilst this is the first study undertaken since the acquisition of the Hill Top Farm and Hole House Farm facilities from EDF Energy (Gas Storage) Limited earlier this year, the trial represents the fifth phase of a project which was initiated under EDF ownership, and demonstrates the opportunity to realise significant near and medium term upside from the assets.
Kistos is now evaluating the economics of recommissioning the Hole House facility. Hole House was developed specifically for gas storage and was operational from 2001 through to 2018 when a period of re-brining the caverns commenced. Three out of the total four caverns are now brine filled, with cushion gas sold to market. Hole House requires approximately one-third as much cushion gas as Hill Top for the same amount of working gas. This study is due to complete during H2 2024.
Commenting on the acquisition, Andrew Austin, Kistos' Executive Chairman, said:
'Our entry into the gas storage market is providing immediate returns and what we believe to be significant near-term upside for the Group. This study has quickly demonstrated the ability to increase capacity and revenue from Hill Top and further increases its importance as one of the most flexible 'batteries' in the UK.
As we seek to further maximise the value of the assets, we are undertaking an economic review of the opportunity to recommission the Hole House caverns, which operated up to 2018 with 17.8mm therms of working gas. The results of this, if positive, could offer the potential for another material increase in revenue from these facilities.'
Source: Kistos
