Southport Project Ownership Update

RNS Number : 0626A

EQTEC PLC

21 September 2022

 

21 September 2022

EQTEC plc

("EQTEC", the "Company" or the "Group")

Rationalisation and Focus of Southport Project Ownership

EQTEC plc (AIM: EQT), a world-leading technology innovation company enabling the Net Zero Future through advanced solutions for hydrogen, biofuels, SNG and other energy production is pleased to announce that the Company has executed with Rotunda Group Limited ("Rotunda") and certain of its subsidiaries a series of legal agreements to accelerate development of the Southport Hybrid Energy Park (the "Project"), absolve the Company of the requirement to purchase Shankley Biogas Limited ("Shankley") for Phase 1 of the Project and secure the Company's right to develop Phase 2 of the Project through a newly-created and wholly-owned subsidiary EQTEC Southport H2 MDC Limited ("Southport H2").

As announced by the Company on 30 June 2022, Phase 1 of the Project is intended to produce a waste processing facility, an anaerobic digestion ("AD") facility, combined heat and power ("CHP") engines and a battery storage facility, all developed with Anaergia, Inc. Phase 1 of the Project is wholly owned by Shankley, which in turn is owned by Rotunda. The Company previously announced on 27 September 2021 that its wholly owned subsidiary, Southport WTV Ltd, had signed with Rotunda a share purchase agreement (the "SPA") for acquisition of Shankley. The Company has now entered into agreements for the cancellation of the SPA and to secure the outstanding £2,500,000 of development services fees in the form of a secured convertible loan note ("CLN") with Shankley.  The CLN, which bears no interest, is due to be paid to the Company, following sale of or investment into Shankley by any third party.

As also announced by the Company in June 2022, Phase 2 of the Project is intended to add EQTEC synthesis gas ("syngas") technology to the Project, toward conversion of RDF supplied by the Phase 1 waste processing facility, into hydrogen. Phase 2 of the Project is now being developed by Southport H2, together with the Company's technology collaboration partner, Wood. The Company has reaffirmed with Rotunda its right to develop Phase 2 of the Project and that Southport H2 has signed with Rotunda an Option to Lease, valid through August 2025.

Through Southport H2, the Company intends to continue and accelerate Phase 2 development and project funding and understands that Rotunda intends to do the same for Phase 1, through Shankley. All parties will continue collaborating in the best interests of the Project.

Project progress

Phase 1 of the Project is preparing to commence front-end engineering design ("FEED") work, which will be led by Anaergia Inc. ("Anaergia"), the technology partner. Concurrently, Rotunda and its advisors, supported by the Company, are actively engaged with investors for funding or acquisition of Shankley.

The Company has completed the preliminary concept design for Phase 2 of the Project and is working with project consultants to prepare a planning application.  It is anticipated that this application will be filed in Q4 2022, and a decision would be expected 12 weeks after the application is made.  The Company is maintaining its relationships with all local stakeholders, particularly with the local government, which remains supportive of the Project and its goal to bring the UK's first Waste-to-Hydrogen plant to Merseyside.

David Palumbo, CEO of EQTEC, commented:  

"The Southport Project continues to be an exciting one, and we are pleased to have found, with our development partners, a way to focus and drive greater pace toward full funding and financial close. We renew our commitment to engage owner-operators and funders toward making the Project a reality through the Build phase and into Operation. We are also happy to formally focus EQTEC's role on our core capabilities of technology development and engineering, with a degree of broader project development as required to support the Project. Not only does this release us from capital investment commitments that come with sustained SPV ownership, but it accelerates progress with our business strategy, toward becoming exclusively a technology innovator and licensor. "

Further information about the Project

The Project comprises land at Watts Industrial Estate, Crowland Street, Southport, Merseyside.

Phase 1 of the Project would produce a waste processing facility to separate renewables for recycling elsewhere, separate organics for use by an anaerobic digestion facility and produce refuse-derived fuel ("RDF"). The Phase 1 Plant would convert 80,000 tonnes of waste per year for  six million cubic metres of biomethane  to be injected into the national gas transmission system, also pulling gas from the grid to generate 9MWe for export to the national electricity transmission system.

The Company announced on 30 June 2022 that the Phase 1 technology partner, Anaergia had agreed to undertake a full Engineering, Procurement & Construction ("EPC") role for Phase 1 of the Project, as well as a separate, minimum five-year contract to operate & maintain ("O&M") the facilities to be built through Phase 1 of the Project. on 18 July 2022, the Company announced that the Project had received from the local authority a formal resolution to grant planning consent for Phase 1.

Phase 2 of the Project would produce a RDF-to-syngas-to-hydrogen facility that would convert 25,000 tonnes of RDF per year, supplied by the Phase 1 waste processing facility. The RDF-to-hydrogen technology solution would combine the Company's syngas technology with Wood's VESTA syngas-to-hydrogen technology. Implementation of the solution is subject to further planning permission.

With both Phase 1 and Phase 2 solutions in place, the full Plant facilities are expected to export to the grid the equivalent of 20% or more of Southport's energy requirement.

This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No  596/2014, as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended, and has been announced in accordance with the Company's obligations under Article 17 of that Regulation.

ENQUIRIES  

EQTEC plc	[phone]
David Palumbo / Nauman Babar
Strand Hanson - Nomad & Financial Adviser	[phone]
James Harris / Richard Johnson
Panmure Gordon - Joint Broker	[phone]
John Prior / Harriette Johnson
Canaccord Genuity - Joint Broker	[phone]
Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan
Alma PR - Financial Media & Investor Relations	[phone]
Josh Royston / Sam Modlin / Matthew Young	[e-mail]
Instinctif - General Media Enquiries	[phone] / [phone]
Chris Speight / Tim Field	[e-mail]

About EQTEC plc

As one of the world's most experienced gasification technology and engineering companies, with a growing track record of delivering operational and commercial success for transforming waste-to-energy through best-in-class technology innovation, engineering and project development , EQTEC brings together design innovation, project delivery discipline and solid commercial experience to add momentum to the global energy transition. EQTEC's proven, proprietary and patented technology is at the centre of clean energy projects, sourcing local waste, championing local businesses, creating local jobs and supporting the transition to localised, decentralised and resilient energy systems.

EQTEC designs, supplies and builds advanced gasification facilities in the UK, EU and US, with highly efficient equipment that is modular and scalable from 1MW to 30MW. EQTEC's versatile solutions process over 50 varieties of feedstock, including forestry wood waste, vegetation and other agricultural waste from farmers, industrial waste and sludge from factories and municipal waste, all with no hazardous or toxic emissions. EQTEC's solutions produce a pure, high-quality synthesis gas ("syngas") that can be used for the widest range of applications, including the generation of electricity and heat, production of synthetic natural gas (through methanation) or biofuels (through Fischer-Tropsch, gas-to-liquid processing) and reforming of hydrogen.

EQTEC's technology integration capabilities enable the Group to lead collaborative ecosystems of qualified partners and to build sustainable waste reduction and green energy infrastructure around the world.

The Company is quoted on AIM (ticker: EQT) and the London Stock Exchange has awarded EQTEC the Green Economy Mark, which recognises listed companies with 50% or more of revenues from environmental/green solutions.

Further information on the Company can be found at www.eqtec.com .

 

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