REG - UK Oil & Gas PLC - RWE Letter of Support for UKEn Hydrogen Storage

UK Oil & GasAnnouncement

02/08/2024 07:00

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RNS Number : 8952Y  UK Oil & Gas PLC  02 August 2024

UK Oil & Gas PLC

("UKOG" or the "Company")

RWE Letter of Support for UKEn Hydrogen Storage

UK Oil & Gas PLC (London AIM: UKOG) is delighted to announce that its
strategic Dorset and Yorkshire underground hydrogen storage projects have
received a further key letter of support ("LOS") from RWE, a leading global
energy company and one of the largest renewable and conventional UK
electricity generators, supplying around 15% of UK power demand. RWE is also a
major player in the UK green hydrogen space, a sector with key synergies to
UKEn's storage projects.

 

RWE's planned green hydrogen plants within the Solent Cluster, Didcot and
Teesside, are both in geographic and planned pipeline proximity to UKEn's
storage projects and present the opportunity to store hydrogen created from
excess renewable power for future conversion to power during periods when the
wind doesn't blow, the sun doesn't shine, or there are unforeseen power demand
spikes.

 

The Company's storage projects are operated by its wholly owned subsidiary UK
Energy Storage ("UKEn").

 

Mr Jeremy Smith, RWE UK's Head of Hydrogen Business Development commented in
the LOS:

 

"We see the operation of UKEn's hydrogen storage projects as being potentially
beneficial to RWE for the following reasons:

 

·    It will enable us to offer firm hydrogen supply contracts and to
manage production outages;

·    It will allow us to optimise electricity cost and electrolyser
operating regime in response to renewable generation capacity and wholesale
market price signals;

·    It will enable the efficient sizing of our optimised production
facility to most efficiently meet our expected offtaker demand;

·    It will help to smooth our hydrogen production profile with the store
acting as a buffer.

 

In support of this proposal, we have committed to working with UKEn to ensure
that the design and delivery of the storage facility meets the needs of RWE
and other potential industry users."

 

"We are giving permission for you (UKEn) to reference RWE as a "supporting
party" in discussions with government and your proposed submission for revenue
support via hydrogen storage allocation rounds."

 

The RWE LOS along with similar LOS from major Japanese trading house Sumitomo
and hydrogen pipeline provider SGN (see RNS of 29th May and 27th June 2024)
will be used as required documentation for the Company's future application
for government hydrogen storage Revenue Support over the coming months. The
LOS identifies a potentially significant storage user together with
highlighting the wider positive impact of UKEn's planned storage upon the
efficient operation of the wider hydrogen energy system.

 

Whilst the Company's strategic storage projects are at an early engineering
design stage and there can be no certainty they will receive government
Revenue Support, the Company is committed to furthering these projects which
will remain as the focus of the Company's overall future strategy. The Company
expects to receive further LOS and agreements with strategic partners in due
course.

 

Stephen Sanderson UKOG's Chief Executive commented:

 

"We are most grateful that RWE, a leading global electrical power provider and
major player in the UK hydrogen space, has given its support to our projects.
Their recognition of the potential benefits our storage could bring to RWE's
green hydrogen projects further underscores our project's credentials and the
significant impact they could have on the UK's hydrogen economy and energy
security.

 

This LOS together with those from Sumitomo and SGN will help build both our
application for government revenue support and provide identified potential
strategic investors comfort that the projects can be successfully delivered."

 

For further information, please contact:

UK Oil & Gas Plc

Stephen Sanderson / Guzyal Mukhametzhanova
                                       Tel:
01483 941493

 

Zeus Capital Limited (Nominated Adviser and Broker)
 

James Joyce / Andrew de Andrade/James
Bavister
Tel: 0203 829 5000

 

CMC Markets (Joint Broker)

Douglas
Crippen
Tel: 0203 003 8632

 

Communications

Brian Alexander            Tel: 01483 941493

 

The information contained within this announcement is deemed by the Company to
constitute inside information under the Market Abuse Regulation (EU) No.
596/2014, as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018. Upon publication of this announcement, this information
is now considered to be in the public domain.

 

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