Companies: IRG   

Gas storage specialist Independent Resources expects a permit for its 3.2 billion cubic metre Rivara underground facility in Italy by early 2009.

Assuming the Italian authorities do not delay the process, Grayson Nash, the US resources player who chairs AIM-quoted Independent, says Rivara, in the Po Valley, should be up and running by 2013. The Derbyshire-based company estimates Rivara, prospectively valued by brokers at around £400 million, should be able to deliver 32 million cubic metres a day, costing around £8.56 per unit, which compares favourably with similar facilities elsewhere.

Nash, who says the next £10 million appraisal phase for Rovara is already half-funded, argues that Independent can enhance the returns on the project by playing the seasonal price spreads of gas, among other strategies. Italy’s current gas price controls provide a price floor, but anticipated liberalisation should increase returns, as could an element of loan finance in the project funding on which the company will have to embark.

Well versed in Italy’s bureaucratic procedures and politicised commercial structures, Nash recently signed a joint venture agreement for Rivara by which a subsidiary of Italy’s ERG energy group is to invest £7.6 million for 15 per cent of the project. The funding now contemplated could involve another partner coming aboard.

Elsewhere in Italy, Independent is also considering alternative ways of developing an estimated 92 billion cubic feet coal bed methane project at Fiume Bruna. Outside the country, the company is seeking a partner for its Ksar Hadada oil and gas project in Tunisia.

Floated at 60p in late 2005, Independent Resources shares have surged from last February’s 39.5p low to 139.5p, valuing the company at £46.54 million. If the Rivera permit and funding go well, their medium-term prospects should be fair.           

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Independent Resources	AIM	£20.36m	50.00p	-1.00p
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Other company articles:
Italian hopes at Independent			02/06/2008
Independent progressing its Italian gas storage venture			31/03/2006
Independent gets Tunisian farm-in approved			17/02/2006
Newcomer - Independent Resources			12/12/2005
IRE-TEX			31/08/2000