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Providence gains as study supports gas storage plan

SHARES in Providence Resources rose again yesterday after the oil and gas explorer said a planned gas storage facility off Dublin was "viable".

Providence plan to create an undersea storage facility, known as the "Ulysses project" in the Kish Bank Basin, close to Dalkey. If completed, the facility could provide about half of Ireland's storage capacity required under EU directives. Yesterday, the company published the results of a viability study of the plan which confirmed constructing such a facility was "both economically and technically feasible".

Providence, through its subsidiary Eirgas, said it would assess the full results of the survey, while more geological data would be uncovered as the company drills the nearby Dalkey Island exploration prospect.

Technical director John O'Sullivan described the initial results from the study as "encouraging".

"The initial results provide a range of potential project sizes and development concepts which could be built to meet market requirements," he said.

"We will now move to refine the future development plans, including the all-important sub-surface technical parameters, and we will continue to advance discussions with potential users and partners."

Davy Stockbrokers analyst Caren Crowley said the project could potentially be worth $100m. Providence closed up 5pc at €3.15.

Meanwhile, Tullow Oil rose 3.38pc to €16.23 in Dublin after the company said it had hit gas at two sites off the west coast of Africa.

The company said it struck gas at the Tweneboa-3 appraisal well off the coast of Ghana. The well is more than 6km from the Tweneboa-2 well and 12km from the Tweneboa-1 discovery well.

Tullow exploration director Angus McCoss said the well "confirmed excellent quality reservoirs at this location" and the firm would now move forward to "assess other development options" in the area.

While the company did not provide details on the volumes of gas that had been discovered at the well, it reassures investors of the viability of the greater Tweneboa area, said analysts.

Elsewhere, the Limerick-based Circle Oil said drilling crews had encountered a six-foot thick block with the "potential for hydrocarbons" at a site in Egypt.

Irish Independent