Last checked at 18 Jul 2022 07:00
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 |
Instinctif - General Media Enquiries | +44 (0) 20 7457 2381 / +44 (0) 7887 884794 |
Chris Speight / Tim Field | 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.
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