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  • Writer's pictureMark Watson-Mitchell

Harland & Wolff – Islandmagee Energy findings on project for storing hydrogen gas in salt caverns

The Harland & Wolff Group Holdings (LON:HARL), which owns the Islandmagee gas storage project in County Antrim in Northern Ireland, has just issued the findings of a report into the development of its important project.

The company believes that the study and the Report's findings takes it one step further in future proofing the project and preparing it for the transition from a natural gas to a hydrogen led economy.

In due course, it is expected to provide 25% of the UK’s natural gas storage capacity.

The pioneering facility is a low-cost fast cycle operation aimed at providing safe, secure and flexible gas storage that will serve the island of Ireland and mainland UK.

It plans to create up to seven salt caverns, which when fully developed the facility will be capable of storing up to a total of up to 500m cubic metres of gas in Permian salt beds approximately 1,500 metres below Larne Lough.

Storage caverns will be developed in a natural salt structure below the seabed and will enable gas to be delivered, stored and then returned to the UK’s national transmission system.

The Islandmagee facility will support the growing demand for gas-fired power development and renewable energy generation throughout the UK and the Irish Republic.

The project would provide security of supply during peak demand for up to 14 days.

Continuation of good group news

The good news keeps on coming from this group.

It recently announced a positive Business Update and Management Outlook for this current year and into 2024.

Its order backlog of over £900m covers contracts over the next seven years, while its new order pipeline is swelling with prospects of over £3.6bn in the next five years.

Apart from owning Islandmagee, the group operates through five markets: commercial, cruise and ferry, defence, energy and renewables and six services: technical services, fabrication and construction, decommissioning, repair and maintenance, in-service support and conversion.

Its Belfast yard is one of Europe's largest heavy engineering facilities, with deep water access, two of Europe's largest drydocks, ample quayside and vast fabrication halls.

The group also has two Scottish-based yards, focused upon work for the renewables, energy and defence sectors.

In addition, it also has a sizeable undercover drydock at Appledore.

Analyst Opinion – looking for trebled sales this year and reduced losses

Analyst Peter Renton at the group’s NOMAD and Joint Broker Cenkos Securities has a Buy recommendation out on the company’s shares.

His estimates for the current year to end December look for a 350% rise in group revenues to £100m but he then goes for a 2024 doubling of that figure to £200m.

On the basis of those figures, he looks for a pre-tax loss this year of £34.1m falling to £20.0m next year.

Conclusion – share price to double

The group’s shares at just 15.5p, up 2% on today’s news, look to be very capable of doubling in price in the next year or so.


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