REG - EQTEC PLC - Southport Project Ownership Update

EQTECAnnouncement

21/09/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220921:nRSU0626Aa&default-theme=true

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                                                       +44 203 883 7009
 David Palumbo / Nauman Babar

 Strand Hanson - Nomad & Financial Adviser                       +44 207 409 3494
 James Harris / Richard Johnson

 Panmure Gordon - Joint Broker                                   +44 207 886 2500
 John Prior / Harriette Johnson

 Canaccord Genuity - Joint Broker                                +44 207 523 8000
 Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan

 Alma PR - Financial Media & Investor Relations                  +44 203 405 0205
 Josh Royston / Sam Modlin / Matthew Young                       EQTEC@almapr.co.uk (mailto:EQTEC@almapr.co.uk)

 Instinctif - General Media Enquiries                            +44 207 457 2381 / +44 788 788 4794
 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/) .

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDFFFLIAIIIFIF