INFA.L Regulatory News (INFA)

28 May 2020

InfraStrata plc

("InfraStrata" or the "Company")

Acquisition of FSRU Project

InfraStrata plc (AIM: INFA), the UK quoted company focused on strategic infrastructure projects and physical asset lifecycle management, is pleased to announce that it has entered into a term sheet with West Face Long Term Opportunities Global Master L.P. (the "Vendor"), conditional on final investment decision ("FID"), for the acquisition of Meridian Holdings Co., under which sits the proposed Floating Storage and Regasification Unit Project ("FSRU Project"), located in Barrow-in-Furness, northwest England.

Background

The proposed FSRU Project will be the UK's first to be developed and commercialised. Given that more than 30% of the UK's natural gas supplies arrive via LNG (liquified natural gas) cargoes, the FSRU Project is ideally positioned to take advantage of LNG arriving in the UK and seeking storage and regasification.

The FSRU Project involves developing a floating LNG receiving facility offshore Barrow-in-Furness, Cumbria, in northwest England, and is designed to deliver regasified volumes of natural gas directly into the UK market via its own National Transmission System interconnection at Barrow-in-Furness. The estimated CAPEX for the FSRU Project will be circa £350m-£450m with further CAPEX optimisation planned through value engineering. The CAPEX for the FSRU Project is expected to be funded by putting together a consortium of partners at the project level.

At a projected capacity of approximately 5-6 million tonnes per annum, the FSRU Project would add to the UK's security of gas supply by:

1. Helping to balance the gas network during peak demand days

2. Providing its clients with a high level of optionality between storing LNG, regasifying LNG and sending it to the National Grid

3. Enabling the long-term storage of regasified LNG for future withdrawals from underground gas storage

Key highlights of the deal are as follows:

· Estimated project revenues in the region of £80-£100MM annually with a 25-30 year project life

· Total consideration ("Consideration") payable to the Vendor at FID is £8m

· 60 million warrants over ordinary shares of 0.01 pence each in the capital of the Company ("Ordinary Shares") with a 2-year expiry to be issued to the Vendor at FID with an exercise price of 5 pence per share, a c.12-times multiple to the current share price

· Where FID is not taken, no amounts will be payable, and no warrants will be issued to the Vendor

· Sales and Purchase Agreement ("SPA") to be executed on or before 31 July 2020, with FID currently estimated to be taken within 36 months of execution of the SPA

· Discussions with key partners have commenced; a consortium consisting of globally recognised companies involved in the development, construction, operations and commercialisation of regasification terminals worldwide will be formed in due course

· Offtake discussions geared towards long-term capacity offtake have commenced with leading LNG trading houses

John Wood, CEO of InfraStrata, commented: "I am very pleased that we have now signed this term sheet, leading to the formal Sale and Purchase Agreement over the course of the next couple of months. This is the culmination of many months of hard work by the InfraStrata team. The continued traction that we have been receiving from global players within the LNG markets since the day we announced the exclusivity agreement last year, validates our belief that this FSRU Project is strategic and crucial to the UK's future natural gas supplies.

"As we move towards a more decarbonised economy, natural gas will be the transitional fuel of choice, with LNG playing the all-important role of balancing natural gas and power markets by acting as baseload feedstock for power generation, on the one hand, and providing peak shaving capabilities on the other.

"The intermittency of power generation from wind and solar means natural gas will continue to be the fuel of choice for at least the next few decades. We, therefore, continue to remain focussed on energy infrastructure projects like the FSRU Project which have a long life, robust economics and provide security of energy supply to the UK whilst casting our eye on future scenarios involving the likes of hydrogen and other new technologies."

This announcement contains inside information.

For further information, please visit www.infrastrataplc.com or contact: