EnergyPathways plc (AIM: EPP) has secured a series of technical agreements expected to deliver more than £20 million in cost savings at its MESH energy storage project, accelerating development of its salt caverns and supporting plans to secure infrastructure debt financing.
The UK energy transition company confirmed that the agreements provide access to existing geotechnical data and specialist analytical services covering its Gas Storage Licence GS009 in the East Irish Sea, near Barrow-in-Furness, Cumbria.
The arrangements will allow EnergyPathways to develop detailed geological and engineering models of the underground salt formations without undertaking additional appraisal drilling or seismic surveys.
The company estimates that using existing data could avoid more than £20 million in pre-final investment decision expenditure, significantly reducing the cost of progressing the project towards commercial development.
The technical studies will involve reprocessing and interpreting geological information to assess the suitability of the salt formations for constructing large-scale underground gas storage caverns.
EnergyPathways is targeting completion of a financial bankability certification during the first half of 2027, providing technical evidence intended to support discussions with infrastructure debt providers.
The certification is expected to assess the feasibility of cavern construction and help reduce risks associated with financing the storage infrastructure.
The company also confirmed that the planned technical work will satisfy a significant proportion of its existing gas storage licence obligations.
The MESH project benefits from a salt formation estimated to be 500 to 600 metres thick, which EnergyPathways believes offers favourable geological characteristics for developing large-scale storage caverns.
The company highlighted the formation’s low insoluble content, strong geomechanical properties and suitable depth as factors supporting efficient cavern construction and long-term structural integrity.
Its offshore location also provides potential advantages for managing brine generated during solution mining, while relatively shallow water depths could help reduce development drilling costs.
These characteristics will be examined through the forthcoming technical modelling programme before the company seeks independent certification.
Chief Executive Ben Clube said the agreements would allow EnergyPathways to accelerate technical development while maintaining tight control over expenditure.
He highlighted that avoiding additional drilling and seismic acquisition could deliver substantial savings while bringing the project closer to the technical certification required for infrastructure financing.
The MESH development forms part of EnergyPathways’ wider strategy to establish integrated energy storage and production infrastructure in the East Irish Sea and Barrow region.
About MESH: https://energypathways.uk/mesh
For investors, the anticipated £20 million-plus reduction in development expenditure represents a significant potential saving, particularly as the company works towards securing financing for its planned salt cavern infrastructure.
However, the savings remain estimates, and the successful completion of geotechnical studies does not guarantee certification or the availability of project debt financing.
Attention will now turn to the completion of the geological modelling and targeted bankability certification in the first half of 2027, which could represent an important step towards securing funding and advancing MESH to a final investment decision.
