Bordesley Progresses to Construction-ready Status

RNS Number : 3607Z

Mast Energy Developments PLC

21 May 2021

 

Mast Energy Developments PLC

(Incorporated in England and Wales)

(Registration Number: 12886458)

Share code on the LSE: MAST

ISIN: GB00BMBSCV12

("MED" or "the Company")

21 May 2021

Mast Energy Developments Plc ("MED" or "the Company")

Bordesley Progresses to Construction-ready Status

Mast Energy Developments Plc, the UK-based multi-asset operator in the rapidly growing Reserve Power market , is pleased to announce that its Bordesley project has now reached construction-ready status following a rigorous work programme since its LSE listing on 14 April 2021.  

With adequate funding in place, the MED board and management embarked on a work programme to review and evaluate its available pipeline of sites to ensure successful and timely delivery of its business strategy stated in the Company Prospectus. (Available at https://med.energy/wp-content/uploads/2021/03/MAST-prospectus-IPO.pdf )  

The latest progress in this regard is set out below and should be read with the RNS dated 6 May 2021.

Target 1: Bordesley 5 Mw base case with upward optimisation potential of up to 19.12 Mw

Subsequent to the previous Operational Update, dated 6 May 2021, and with the advantage of adequate funding in place, MED intensified its development programme on the Bordesley site, in spite of being denied direct access due to the Covid 19 related lockdown arrangements in force. MED has now obtained an updated EPC Scope of Works (SoW) proposal from Clarke Energy (Preferred EPC provider for MED), commensurate with updated and amended site specifications, briefly summarised below:

§ Reconfiguration of the gas reciprocating engine combination reduced the combined power pack to two engines from the original three. The two generators will provide a total installed generation capacity of 5,352kW and will deliver a minimum net export capacity of 5.2MW.

§ The optimised number of units provide clear benefits with regards to capital cost of equipment, site installation time/cost and operations & maintenance costs. This will also leave sufficient redundant surface area to create an opportunity for future installation of a third generator, thereby increasing the electricity export capacity from the current 5 Mw to a potential 7.5 Mw with commensurate increase in revenue, due to higher electricity sales, of c. GBP12, 500 p/m.

§ The delivery lead time for the selected generation equipment has been optimised to 22 weeks from the original 26.

§ Clarke Energy:

-  Clarke Energy will assume the roles of Principal Contractor and Principal Designer under the CDM Regulations and will include the necessary site facilities during the construction and installation works.

-  As part of the EPC Scope, Clarke Energy shall be responsible for the connection of natural gas supply downstream from the new gas metering kiosk through to each engine, provision of the civil engineering works and compound construction.

§ Finance

-  The "all in" EPC SoW fee proposal is £ c. 2,900,000 vs the previously reported £ 2,800,000 and is due to the inclusion of an exhaust stack, civil engineering works, compound construction and the connection of the natural gas supply to the engines. These items were previously costed in the "Balance of Plant" budget, but now included in the EPC SoW.

-  Debt financing at 65% of project capex currently being negotiated with a blue-chip financier at very competitive commercial terms.

§ Construction

-  MED and Clarke are currently in the process of executing the EPC-agreement and it is expected that construction will commence during June 2021. This timeline is consistent with the indicative timelines stated in the Prospectus.  

Target 2: Site capacity 9 Mw

Target 2 - two of the engines are currently being tested and operated at varying load conditions, with the 3^rd engine to follow suit. The finalisation of the SPA for Target 2 remains well on track and it is expected that the parties involved will be able to finalize the SPA imminently.

Louis Coetzee, Non-Executive Chairman said:   "We are delighted with the progress we have made since announcing the successful IPO of MED.  The operations teams have rapidly gained traction with development of the planned work and we can see the benefit of optimisation of technical work, feeding into commercial and business plans. We are particularly pleased with the significant gains we have already made in terms of savings and improved generation capacity as well as earlier than expected first production timeline."

Paul Venter, CEO of MED said: " I am very satisfied with the progress and pace at which our technical team is working and with the strong commitment to get us to first production on schedule or even ahead of schedule as current projections suggest".

Additional Information

Updates to the EPC SoW, briefly discussed in the RNS above, is outlined in more technical detail below:

§ Reconfigured gas reciprocating engine combination by deploying two No. Jenbacher JMS616GS-NL spark ignition, low emission, gas engine generator sets, each capable of an electrical output of 2.676kWe with an electrical efficiency of 44.0%. This means that 2 engines will be commissioned instead of 3 engines of smaller output capacity. The two generators will provide a total installed generation capacity of 5,352kW and will deliver a minimum net export capacity of 5.2MW.

§ The use of less units also provides clear benefits over the use of a greater number of smaller units with regards to capital cost of equipment, site installation time/cost, operation and maintenance costs. Using fewer containerised gensets with different sized containers creates the opportunity to install a third generator with 2.676 KwE capacity, thereby increasing the electricity export capacity from the current 5 Mw to 7.5 Mw with commensurate increase in revenue due to higher electricity sales. Power output from the generators will be generated at 11000volts, 3phase 50Hz. The generated power will be exported to the 11kV grid network via an 11kV switchboard.

§ The Lead Time (Ex Works) for INNIO Jenbacher generation equipment is currently 22 weeks from the Effective Contract Date as against the previous expected delivery time of 26 weeks.

§ Clarke Energy will undertake the provision of the civil engineering works and compound construction, assume the roles of Principal Contractor and Principal Designer under the CDM Regulations and will include the necessary site facilities during the construction and installation works.

Further information on the Company, including the prospectus published in conjunction with Admission, can be found on the Company's website: www.med.energy

This announcement contains inside information for the purposes of the UK version of the Market Abuse Regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain.

ENDS

For further information please visit www.med.energy or contact:

Louis Coetzee	info@med .energy	Mast Energy Developments Plc	Non-Executive Chairman
Jonathan Critchley & Keith Swann	[phone]	Clear Capital Markets	Broker

 

END

 

 

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