REG - EnergyPathways PLC - Company Update

EnergypathwaysAnnouncement

15/04/2024 07:00

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RNS Number : 5320K  EnergyPathways PLC  15 April 2024

15 April 2024

 

EnergyPathways plc

 

("EnergyPathways" or the "Company")

 

Company Update

 

EnergyPathways plc (AIM: EPP), a company developing integrated energy
solutions, is pleased to provide the following update regarding operational
and strategic progress as it seeks to deliver clean, home-grown energy for
Britain through follow-up gas development and energy integration growth at its
wholly owned and operated Marram gas project ("Marram" or the "Marram
Project").

 

Key Highlights

·    Outcome of outstanding licence applications expected in H1'24

·    Progressive engagement with regulators to enable fast-track
development of Marram

·    Material progress on Front-End Engineering Design (FEED) workstreams
including commencement of discussions with infrastructure hosts

·    Developing a fully electrified Marram subsea development concept to
be 100% powered with renewable energy for a best-in-class decarbonised
development aligned to Government energy strategy

·    Progressing longer-term growth strategy for development of a clean
energy hub to harness the large untapped gas resources, wind energy and
high-quality geo-storage reservoirs of the UK Irish Sea

 

Operations Update

 

Following recent communications from the regulator, the North Sea Transition
Authority (NSTA), EnergyPathways now anticipates learning the outcome of its
outstanding licence application in Q2'24 rather than in Q1'24 as previously
guided by the NSTA. EnergyPathways anticipates feedback on its other licence
requests within the same timeframe.

 

The Company has applied to the NSTA and the Offshore Petroleum Regulator for
Environment and Decommissioning for Marram's Field Development Plan
approvals and has submitted a licence variation request to the NSTA to enable
a fast-track Marram development to proceed. Meanwhile, the Company continues
to progress Marram towards Final Investment Decision; its Environmental
Statement has been completed and a navigational risk assessment is being
undertaken by Anatec Limited, a market leader in risk-based decision making.

 

The Company was delighted to be invited by the NSTA to speak at the Offshore
Energies UK hosted Share Fair conference, a key industry business development
and supply chain event that was held on 20 March.

 

EnergyPathways continues to engage with all relevant authorities and
stakeholders as it seeks to outline its strategic vision of delivering
innovative net-zero developments for the UK energy system and has submitted
requests to the NSTA for energy storage licenses. Additionally, the Company
also recently commenced discussions with infrastructure hosts and has received
third-party reports on infrastructure technical studies.

 

In terms of wider progress within the Marram FEED process, the technical team
is progressing engineering and design for an all-electric, zero-emission
subsea production system with industry stakeholders, including Verlum,
Advanced Mechatronics and Proserv and has also commenced the next phase of
FEED for drilling and completions engineering with Zenith Energy.

 

As previously disclosed, EnergyPathways has formed a partnership with subsea
engineering houses Mermaid Subsea Services and Cortez Subsea of the MCS Group
and the partnership is progressing tie-back development concept engineering.
In addition, the Company is progressing supply chain engagement and scheduling
of lead times for certain long lead items including subsea controls,
electro-hydraulic umbilical, wellheads, subsea flowline and other major items.

 

EnergyPathways' electrification development design for Marram demonstrates
clear alignment with the NSTA's net zero objectives for new gas developments
and will potentially qualify for financial incentives under Government
decarbonisation schemes. We have also received interest from renewable energy
generators, energy off-takers, debt financiers and major engineering houses in
support of our decarbonisation project.

 

Strategic Update

 

In parallel with progressing EnergyPathways' "ready-to-go" Marram Project, the
Company continues to implement its longer-term strategy, which envisages the
development of an energy hub to harness the large untapped gas resources, wind
energy and high-quality geo-storage reservoirs of the UK Irish Sea, that will
build on its foundation Marram Project. EnergyPathways believes that its
integrated energy strategy offers unique integrated energy transition
solutions to support the UK's fragile energy security and net zero targets.

 

By utilising its foundation 46 BCF gas project, Marram, EnergyPathways intends
to demonstrate its ability to deliver a high-value development with ultra-low
emissions intensity of 4-6 kg CO(2)e/boe, representing a carbon footprint that
is ~90% lower than LNG imports and can reduce CO(2) emissions by 100,000
tonnes per annum.  A key focus through the ongoing FEED process is to ensure
that the production from Marram is wholly powered by renewable energy and that
the facilities will be engineered for energy storage re-use.  Initial studies
indicate that Marram has high quality geo-storage reservoirs suitable for gas
and hydrogen storage. Accordingly, EnergyPathways has submitted energy storage
and production licence requests to the UK regulator and responses are expected
in H1'24.  In the event of successful award for all these licenses, Marram's
storage capacity could potentially be increased 3-fold with the integration of
the nearby Knox, Lowry and Castletown gas discoveries (~140 BCF), increasing
the hub's energy supply potential to 60 million cubic feet of gas per day.

 

The East Irish Sea region lies in close proximity to one of the major grid
constraint boundaries in the UK. This, together with six existing offshore
wind farms with 7-8 GW of existing and planned capacity, makes it an ideal
location for energy storage and backup gas power generation. The Company's
regional focus is based on this and the belief that the East Irish Sea is a
unique environment for short cycle developments, possessing ideal reservoirs
and location for energy storage, optimally located to link new carbon-capture
gas-fired power stations with nearby CO(2) storage, to provide low-cost,
decarbonised and reliable power.  The Company's proposed long duration energy
storage hub will be capable of storing an estimated 7 TWh of energy.

 

The proposed energy hub could be connected to regional CO(2) storage, the
HyNet North-West hydrogen hub and industrial demand centres to produce
reliable and cost competitive "net-zero ready" gas power generation.  EPP
will also be positioned to manufacture high value-added net zero energy
products (hydrogen, ammonia and methanol) and take advantage of opportunities
for price arbitrage during periods of high gas demand.

 

Commenting on the update, EnergyPathways' CEO Ben Clube said:

 

"We are pleased to report on positive progress with regard to the decarbonised
development concepts that underpin our FEED studies for the Marram Project and
the follow-on developments targeted by the Company.  We believe that this
initiative positions the Company well to navigate the Marram Project through
the current uncertainty in the UK's oil and gas regulatory environment.  We
maintain supportive dialogue with the NSTA and understand that we will learn
the outcome of our outstanding licence application in H1'24.

 

We are also making good progress with all the various workstreams that
comprise the FEED process, as we seek to deliver the fast-track development of
our high-value and strategically important Marram Project.

 

Our focus is to ensure that Marram is a best-in-class decarbonised development
that is not only fully compliant with Government and NSTA directives, but also
aligns with Government strategy to support decarbonised energy solutions.
 Our longer-term strategy, to create an energy hub that provides an optimal
solution for the UK's energy security and transition objectives, will build on
Marram's foundation position and the competitive location of the UK Irish Sea.
 In that regard, we intend to undertake third-party studies to optimise the
development of the licences that we have applied for, to enable quick and
inexpensive transition of depleted fields into gas storage, including
potential hydrogen storage, supporting value added energy solutions including
decarbonised back up power generation."

 

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the
European Union (Withdrawal) Act 2018).

 

 

Enquiries:

 

 EnergyPathways                                        Tel: +44 (0)20 7466 5000, c/o Buchanan (Financial PR)

Ben Clube / Ben Hodges

                                                     Email : info@energypathways.uk

 Cairn Financial Advisers LLP (Nominated Adviser)      Tel: +44 (0)20 7213 0880
 Jo Turner / Louise O'Driscoll / Sandy Jamieson
 SP Angel Corporate Finance LLP (Joint Broker)         Tel: +44 (0)20 3470 0470
 Richard Hail / Adam Cowl
 Optiva Securities Limited (Joint Broker)              Tel: +44 (0)20 3137 1903
 Christian Dennis / Daniel Ingram
 Global Investment Strategy UK Limited (Joint Broker)  Tel: +44 (0)20 7048 9000
 Callum Hill / James Sheehan

 

For further information on EnergyPathways visit www.energypathways.uk and
@energy_pathways on X (formerly Twitter).

 

Forward Looking Statements

This announcement contains forward-looking statements relating to expected or
anticipated future events and anticipated results that are forward-looking in
nature and, as a result, are subject to certain risks and uncertainties, such
as general economic, market and business conditions, competition for qualified
staff, the regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political jurisdiction,
uncertainties regarding the results of exploration, uncertainties regarding
the timing and granting of prospecting rights, uncertainties regarding the
timing and granting of regulatory and other third party consents and
approvals, uncertainties regarding the Company's or any third party's ability
to execute and implement future plans, and the occurrence of unexpected
events.

 

Actual results achieved may vary from the information provided herein as a
result of numerous known and unknown risks and uncertainties and other
factors.

 

 

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