Kistos to buy EDF UK gas storage assets for £25m

20th Feb 2024 12:17

(Sharecast News) - Kistos has finalised a sale and purchase agreement to acquire EDF Energy Gas Storage, it announced on Tuesday, including two gas storage facilities onshore in the UK, namely Hill Top Farm and Hole House Farm.

The AIM-traded firm said the £25m transaction was part of its strategic move to expand its portfolio in alignment with its energy transition objectives.

It said that by assuming operatorship of both Hill Top and Hole House, it aimed to capitalise on the stable marketplace and substantial growth prospects offered.

The company said it also intended to collaborate with a partner for gas trading operations at the sites.

Hill Top Farm, with a gas capacity of 17.8 million therms and plans to increase the volume to 21.2 million therms in the short term, contributes significantly to the UK's onshore gas storage capacity.

Kistos said that with swift operational capabilities, Hill Top could cater to up to 11% of the UK's flexible daily gas capacity.

The inclusion of Hole House Farm, although currently non-operational, offered further potential to augment the UK's gas storage capacity on reactivation and development.

Moreover, both facilities were being evaluated for their adaptability to future energy storage applications, such as compressed air or hydrogen storage.

"Our entry into the gas storage market marks another advancement in our growth strategy to expand the business through value-accretive acquisitions," said executive chairman Andrew Austin.

"Not only do these assets complement our upstream UK assets, but they also diversify our presence across the energy value chain with a foothold in the midstream market.

"We look forward to benefiting from the experience of the existing team at these sites as we assume operatorship."

Austin said their specialist expertise would be valuable as the company looked to maximise the potential of the assets and evaluate its options to expand operations via other energy storage sources, such as compressed air or hydrogen.

"In essence, Kistos will own one of the most flexible 'batteries' in the UK, vital for energy security and supply."

At 1414 GMT, shares in Kistos Holdings were up 8.7% at 150p.

Reporting by Josh White for Sharecast.com.