Kistos announced positive results from a gentle cycling relaxation trial conducted at its Hill Top Farm gas storage facility. The trial, conducted in early May and supervised by independent geotechnical experts, confirmed the ability to increase useful 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 revenues from seasonal intrinsic trade and extrinsic trade. This conversion of 4.2 million therms of cushion gas to working gas brings the Hill Top facility into compliance with the original design parameters and will allow Kistos to sell the gas at an optimal time to maximize revenue intrinsic, while our trading partner will strive to take advantage of market-induced price volatility to achieve additional gains.
Although 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 that has been initiated under EDF ownership, and demonstrates the opportunity to realise significant short to medium term gains from the assets. Kistos is currently assessing the economics of recommissioning the Hole House facility. Hole House was developed specifically for gas storage and was operational from 2001 until 2018, when a period of cavern resurfacing began.
Three of the four caverns are now filled with brine and the cushion gas is sold on the market. Hole House requires about one third as much buffer gas as Hill Top for the same amount of working gas. This study should be completed during the second half of 2024.
