REG - EQTEC PLC - Petrofac selected for FEED on Billingham Project

EQTECAnnouncement

18/07/2022 07:00

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RNS Number : 7019S  EQTEC PLC  18 July 2022

18 July 2022

EQTEC plc

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

 

Selection of Petrofac for FEED on Billingham Project

 

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 it has selected Petrofac
as its front-end engineering design ("FEED") contractor for its
multi-technology, waste-to-energy project at Haverton Hill, Billingham,
Teesside, UK (the "Project"). The Company and Petrofac (together, the
"Parties") have signed a Letter of Intent ("LoI") to formalise their joint
commitment to collaborate on the FEED and as potential EPC partner for
development and delivery of the Project.

 

The Project

 

The Project site is in a heavily industrialised area, adjacent to major plant
facilities and estates, including those of CF Fertilisers UK Limited, Seqens
Group pharmaceuticals and many others. Through its wholly owned project SPV,
Haverton WTV Limited ("Haverton"), the Company has secured all relevant
permits and permissions to build a refuse-derived fuel ("RDF")-to-combined
heat and power ("CHP") facility that would transform 200,000 tonnes per year
of RDF into up to 25MW of electricity for export to the national grid, with
the potential for creating up to 34MW of thermal energy. The Company has
secured the contract for a grid connection and is also pursuing discussions
with neighbouring companies about provision of private wire offtake.

 

The Company in December 2021 confirmed it was investigating new offtake
opportunities for the Project and that it was working with partners toward
feasibility work at both sites. As the RDF-to-CHP plant would utilise less
than 40% of the total land to be acquired by Haverton, the Company earlier
this year pursued additional work to consider how best to leverage the
remaining land and increase the value of the Project as a result. Following
full review of multiple financial models for the Project, technical
feasibilities and updated site drawings, the Company and its partners are now
considering a range of additional facilities including for hydrogen
production, battery storage and/or hydrogen refuelling. All such options would
be subject to further planning permission and agreement of future owners of
the Project, which the Company intends to sell in whole or in part.

 

The primary focus of the Company now is collaboration with neighbouring
industrial companies, partners and potential investors, toward finalisation of
development options and of project finance that will enable progress toward
financial close and deployment of EQTEC technology with others in a
multi-technology facility. To enable the funding optionality and flexibility
brought by the multi-technology approach, the Company also intends to
apportion Haverton into multiple, special-purpose vehicles (the "SPVs").

 

FEED partner and potential EPC

 

The Company has been working with Petrofac since 2021, during which the
Parties collaborated on pre-FEED work including a thorough review by Petrofac
of EQTEC's technology. The Parties' collaboration culminated in a formal and
robust proposal by Petrofac for provision of the FEED for the RDF-to-CHP
facility. On the basis of this and Petrofac's experience as both an
Engineering Services provider and EPC contractor, EQTEC have selected Petrofac
to be the nominated FEED contractor for the project.

 

In the interest of pursuing project finance for the Project, the Parties have
not set a formal start date for the FEED, so that prospective investors may be
included in consideration of the various site designs. Petrofac has agreed to
support the Company's efforts with engagement of funding candidates, in the
interest of sharing its views on the delivery strategy, including procurement
and integration risks and how it would mitigate them. Although the Company
will appoint Petrofac for the FEED work, selection of the EPC partner would
require approval of the SPVs' owners at the time of appointment. The Company
believes Petrofac would be the leading candidate for the EPC work.

 

Letter of intent

 

To formalise its collaboration with Petrofac on the Project, the Parties have
signed a LoI which specifies they will:

 ·         Exclusively pursue FEED and appointment of Petrofac as EPC (subject to partner
           approval) for one or more SPVs of the Project;
 ·         Jointly present the Project and its investment case to potential funders, with
           EQTEC leading on presentation of the overall financial case, investment
           opportunities and core technology and with Petrofac leading on presentation of
           the perceived risks to successful delivery of the Project and the mitigations
           it proposes;
 ·         Seek to agree a formal FEED contract or other formal, commercial agreement
           between the SPV and Petrofac;
 ·         Continue joint qualification of further collaboration opportunities beyond the
           Project; and
 ·         Continue joint consideration of a broader, collaboration agreement for joint
           business planning, target identification and pursuit and co-development of
           projects that apply EQTEC technology.

 

Jeff Vander Linden, COO of EQTEC, commented:

 

"Petrofac has for decades been a leader in delivery of large-scale, complex
projects in the oil & gas industry and now are one of the global EPCs
moving most quickly to bring that expertise to new energy businesses. Our
engagement with Petrofac over the past year or so has been interactive and
focused, with a dedicated, joint team and open collaboration toward
finalisation of the FEED proposal and heads of terms that will support work
start and steady progress at Billingham. As our largest and most complex
project, Billingham represents a wide range of opportunities for innovative
application of EQTEC technology in concert with other technologies; but it
also requires a different approach to assemble investment. By applying
flexible funding options and strong partners, I believe we will advance the
Billingham project steadily, toward bringing EQTEC syngas-based solutions to
Teesside and to the wide range of industrial businesses that will benefit from
them."

 

Jon Carpenter, Vice President New Energy Services at Petrofac commented:

 

"We look forward to supporting the engineering of EQTEC's Billingham project
and to working with their team to de-risk the project leveraging our
construction experience of complex process plants to ensure the design is
efficiently constructable and operatable. We are excited by the potential of
the waste-to-value sector in the UK and are excited to be working with
pioneers such as EQTEC in turning this potential into reality and delivering
the energy transition in the process."

 

ENQUIRIES

 

 EQTEC plc                                                     +44 203 883 7009
 David Palumbo / Nauman Babar

 Strand Hanson - Nomad & Financial Adviser                     +44 20 7409 3494
 James Harris / Richard Johnson

 Arden Partners - Joint Broker                                 +44 20 7614 5900
 Ruari McGirr (Corporate) / Simon Johnson (Sales)

 Canaccord Genuity - Joint Broker                              +44 20 7523 8000
 Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan

 Alma PR - Financial Media & Investor Relations                +44 20 3405 0205
 Josh Royston / Sam Modlin                                     EQTEC@almapr.co.uk (mailto:EQTEC@almapr.co.uk)

 Instinctif - General Media Enquiries                          +44 (0) 20 7457 2381 / +44 (0) 7887 884794
 Chris Speight / Tim Field                                     EQTEC@instinctif.com (mailto:EQTEC@instinctif.com)

 

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
(http://www.eqtec.com/) .

 

About Petrofac

 

Petrofac is a leading international service provider to the energy industry,
with a diverse client portfolio including many of the world's leading energy
companies.

 

Petrofac designs, builds, manages and maintains oil, gas, refining,
petrochemicals and renewable energy infrastructure. Our purpose is to enable
our clients to meet the world's evolving energy needs.

 

Petrofac's core markets are in the Middle East and North Africa (MENA) region
and the UK, where it has built a long and successful track record of safe,
reliable and innovative execution, underpinned by a cost effective and local
delivery model with a strong focus on in-country value. Petrofac operates in
several other significant markets, including India, South East Asia and the
United States. It has 8,200 employees based across 31 offices globally.

 

Petrofac is quoted on the London Stock Exchange (symbol: PFC).

 

For additional information, please refer to the Petrofac website
at www.petrofac.com
(https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=9fe21fdf68d48cc06116e9fe9587a1c8&application_id=1389901&site_id=news_data&application_name=news)

 

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