Billingham Project Variation to the Land Purchase Agreement
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 confirms that, further to its announcement on 26 February 2021, Haverton WTV Limited (“Haverton”) a wholly owned subsidiary of EQTEC, and Scott Bros. Enterprises Limited (“Scott Bros”) have reached an agreement (the “Variation”) to extend the existing, conditional Land Purchase Agreement (the “LPA”) relating to the land on which the proposed, up to 25 MWe Billingham waste gasification and power plant (the “Project”) at Haverton Hill, Billingham, UK, will be constructed (the “Project Site”).
Key terms of the Agreement and Variation:
- The consideration for purchase of the Project Site remains £8,600,000;
- A deposit amount of £260,000 was paid by Haverton to Scott Bros on 26 February 2021;
- A further payment of £250,000 will be paid on or before 24 February 2022, with an additional payment of £500,000 to be paid on or before 30 September 2022 to Scott Bros. These two payments will be deducted from the total purchase price along with the previously paid deposit;
- The balance of £7,590,000 is payable at completion of the land purchase, which must occur on or before 23 December 2022, (the ” Longstop Date “);
- In addition, a further fee of £250,000 as consideration for the Variation, will be paid by Haverton to Scott Bros on or before 24 February 2022;
- All other conditions of the existing LPA remain the same regarding satisfaction or waiver by Haverton of specified conditions prior to the Longstop Date. These conditions refer to development and financing of the Project, including: Haverton’s having reached financial close in respect of such financing; Haverton’s having agreed the form of key construction, operational, offtake and feedstock contracts; and the Project’s having been fully permitted by the relevant planning and environmental authorities; and
- Haverton and Scott Bros have agreed to transfer responsibility for management of the grid connection from Scott Bros to Haverton prior to the Longstop Date. The grid connection has already been secured.
David Palumbo, CEO of EQTEC, commented:
“The Billingham project on Teesside continues to generate strong and varied interest from investors, EPC and technology partners and offtake purchasers, including potential customers for hydrogen or biofuels . As we drive completion of feasibility studies on these options and adjust the proposed business model for the plant, we are increasingly excited about the impact we can make and the role we can play in development of Teesside’s leadership with innovative energy provision in the UK. Our decision last year to defer this project is already giving us the space to gather together an exciting team and to actively engage a range of potential partners in the area. We look forward to providing regular updates on our progress and to sharing more news as we advance as an innovation leader for clean baseload energy and biofuels . ”
Further information about the Project
This announcement follows a number of updates made by the Company in respect of the Project. Most recently, as announced on 13 December 2021, and 1 February 2022, whereby the Company announced it had deferred financial close from 2021 and had been actively engaged with Tier 1 EPC companies planning and costing for the front-end engineering design work. This work commenced on schedule in January 2022. Since then, an EPC legal framework has been defined by the Company.
Over the same period, developments in gas and power markets have created new and compelling opportunities for offtake from the plant. As a result, the Company has entered discussions with local, industrial offtake customers for potential provision of a range of syngas-to-power, syngas-to-heat and syngas-to-chemical applications. The Company has also received updated indicative terms for power offtake from three investment grade, bankable power operators, with improved pricing in line with current wholesale electricity market prices. The Company is evaluating these offers in conjunction with the recent syngas-to-chemicals offtake opportunities to find the optimal revenue mix for the Project.
The Project has existing planning permission for advanced thermal conversion and EQTEC’s revised planning approval both improves the economics of the Project and reduces the size of the footprint of the plant.
This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014 and has been announced in accordance with the Company’s obligations under Article 17 of that Regulation.
+44 203 883 7009
David Palumbo / Nauman Babar
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