REG - EnergyPathways PLC - MESH Update

EnergypathwaysAnnouncement

19/09/2024 07:00

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RNS Number : 8479E  EnergyPathways PLC  19 September 2024

19 September 2024

 

EnergyPathways plc

 

("EnergyPathways" or the "Company")

 

MESH Update

 

EnergyPathways plc (AIM: EPP), a company developing integrated energy
solutions, is pleased to provide the following update regarding its plans to
develop its MESH infrastructure project, a large-scale natural gas and green
hydrogen storage facility.

 

Highlights:

·    Accelerating energy transition strategy with upscaled MESH energy
storage project to be a larger value energy infrastructure project

·    MESH project has potential to generate significant cash flows and
high yield returns with estimated ROR of ~20+% over the project's 20-year life

·    Progressing discussions with contractors and wider project
stakeholders including a global wind power developer and an integrated oil and
gas company

·    MESH project directly aligns with the UK government's ambitions and
energy policy to deliver both Energy Security and Net Zero

·    Updated MESH project schedule aligns to regulatory backdrop with FID
now expected late 2025 and first energy supply anticipated in 2027

·    New investor presentation available on website

 

The MESH gas storage facility, located off the UK's Lancashire coast, will be
initially equivalent in size to the Rough facility, currently the UK's largest
gas storage facility. EnergyPathways has further identified growth upside to
expand MESH natural gas and green hydrogen storage capacity by as much as
three times.

 

EnergyPathways' upscaled MESH development will be a decarbonised, fully
electrified storage facility that can supply natural gas and green hydrogen to
the UK market, at scale. EnergyPathways believes it has the potential to
generate significant cash flows and high yield returns with a ROR of ~20+%
over the project's 20 year life.

 

EnergyPathways anticipates that energy storage infrastructure will become a
major multi-billion pound growth sector to emerge from the UK energy
transition landscape as the UK progresses towards increasing wind capacity
threefold between now and 2030. EnergyPathways' strategy seeks to integrate
energy systems to develop energy infrastructure solutions in a manner that can
provide a secure, dependable and decarbonised supply of natural gas and green
hydrogen for the UK market.

 

EnergyPathways is progressing discussions with a global leading Tier-One
engineering consultancy for the pre-FEED, FEED and EPIC contractor for the
MESH project development. Discussions are also progressing with one of the
world's largest developers of wind power which is expected to provide the MESH
project with power under a long-term supply arrangement for the storage
facilities and the production of green hydrogen. EnergyPathways is also
engaged in discussions with one of the world's largest integrated oil and gas
companies for the provision of long term gas storage capacity and long term
gas and hydrogen supply as well as the provision of project development
financing.

 

The Company is developing the MESH project so that it is wholly in line with
the UK government's energy policy and ambitions, to deliver both Energy
Security and Net Zero. The Board hopes that this will engender demonstrable
support for the project from both the government and the NSTA.

 

EnergyPathways has considered the likely impact of the government's recently
announced plans for new environmental guidance. This guidance comes as a
result of the Supreme Court's "Finch Ruling" that requires regulators to
consider the impact of scope 3 emissions in the Environmental Impact
Assessment of new projects. The government has advised that this new guidance
will be available in the spring of 2025.

 

With MESH positioned to have a favourable impact on global scope 3 emissions,
EnergyPathways does not consider any new guidelines will be of concern to the
project's progression. The Company has discussed the subject with the NSTA and
aligned its project schedule with the timing of these new regulatory
guidelines.

 

Based on the upscaled and expanded scope of the MESH gas and hydrogen storage
project, including its plans to integrate energy systems as part of the
development and to develop a fully decarbonised facility that aligns with new
regulations, EnergyPathways currently expects that FID for the MESH project
will be late 2025, with first energy supply commencing late 2027.

 

 

New Investor Presentation

 

EnergyPathways will be presenting at the Proactive ONE2ONE investor forum this
evening and will upload to its website a new corporate presentation that will
provide a detailed summary of MESH and the enhanced value proposition.

 

Commenting on the update, Ben Clube, CEO of EnergyPathways, commented:

 

"When EnergyPathways completed its admission to AIM in December last year, our
plan was to initially deliver a new fast track supply of low carbon gas in
support of UK energy security, before leveraging this position to transition
into integrated energy storage and hydrogen solutions.

 

"Since that time, we have witnessed further changes in government policy that
has increased the emphasis on investment in decarbonised energy solutions and
has placed greater scrutiny and reduced incentives in traditional UK oil and
gas investment.

 

"In response, EnergyPathways has accelerated its energy transition strategy to
design integrated energy solutions and has now developed its MESH energy
storage project to be a significantly upscaled and materially higher value
energy infrastructure project which can offer shareholders long-term high
returns over MESH's 20+ year projected project life.

 

"MESH is exactly the type of energy solution that the UK will require as it
expands its wind capacity threefold by 2030 and becomes increasingly reliant
on imports to meet its energy needs. Energy storage will be vital to harness
the UK's excess wind energy and to ensure it has a dependable and flexible
supply of natural gas - the UK's major source of energy - and EnergyPathways
is establishing an early mover advantage to secure an important role in this
fast-growth and high-value market.

 

"We continue to progress our engagement with all the relevant authorities and
stakeholders in the MESH project and feel confident that we are presenting a
compelling vision that will deliver long-term shareholder returns."

 

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)207 466 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
 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
 Buchanan (Financial PR)                               Tel: +44 (0)207 466 5000
 Ben Romney / Barry Archer
Email: energy@buchanan.uk.com (mailto:energy@buchanan.uk.com)

 

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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