Cork, Ireland based bioscience and waste gasification firm EQTEC plc (AIM: EQT) has provided an update on the progress made with its near-term project pipeline since the completion of acquisition and readmission on 28 December 2017.
The company explained that as stated in the Admission document dated 27 November 2017, a series of projects have been secured by way of an EPC contract and/or an MOU including, Reliable Energy Melton Hull and Reliable Energy Seal Sands projects as well as Zebec Energy project located in the municipality of Usk, Wales.
The company claimed that significant progress has been made by signing a new Memorandum of Understanding (“MOU”) and taking key steps towards commencing these projects.
The Usk project (previously known as Zebec Energy project) is to be located in the municipality of Usk, South Wales which will have a capacity to process ca. 42,000 tonnes of wood waste per year and a power output of 6.4 MWe.
The Company was recently informed by Brooke Energy, Ltd (“Brooke”) that the Usk project is now to be built and operated by a consortium led by Brooke, a company that builds, operates and manages biomass fuelled power plants that cover the South West of England and Wales.
EQTEC explained that it had to renew its agreements with the new operator of the project and has now signed an MOU with the consortium containing Brooke, Exergon Sp. z o.o. and RAFAKO SA.
Under the terms of the MOU, EQTEC will sell its patented EQTEC Gasifier Technology to RAFAKO which is the Engineering, Procurement and Construction (“EPC”) Contractor for the whole power plant and will exclusively use its proprietary EGT for the gasification and gas cleaning process.
The Usk site already has gas engines, a biomass drier, absorption chiller and grid connection in place, among other equipment, and the new owner has chosen EGT to complete the project.
Brooke will seek to secure equity finance for the project and RAFAKO will seek the debt financing. Financial close and the commencement of the project is, as previously expected, in the first half of 2018.
EQTEC revenues from the Usk Project are still expected to be c. €11 million to be invoiced over a period of two years.
Reliable Energy Solutions is focused on developing Melton Hull and Seal Sands, two 16 MWe waste to energy projects in the North East of England.
A primary EPC contract was signed in July 2017 between Reliable and Energy China for both projects which specifies the use of the Company’s EGT. The total project investment for the two plants is forecast to be approximately €210 million and each plant is expected to process 130,000t of waste each year.
EQTEC added that it is working with Energy China on the engineering of a revised scheme for the application of EGT coupled to a steam turbine instead of the previous scheme of coupling to a gas engine.
The shift to a steam turbine is because initial indications show an increase on the projected returns of the project. A future benefit of this revised scheme was said to be that the additional engineering work will enable the company to compete in a wider range of projects with power outputs up to 50 MWe.
As a result of the revision of the scheme, financial close and the commencement of both projects is now expected to occur within the next three to six months, when the engineering works to develop the revised scheme for the application of EGT coupled to a steam turbine will be finished. The estimated turnover of EQTEC on each project is €19 million of the EPC contract to be spread over a period of two years.
Discussions are ongoing with China Construction Bank for debt finance for the projects and with a major third-party investor for the provision of equity for each project.
“We are pleased that our three near-term projects in the UK are all progressing well,” commented Luis Sanchez, CEO of EQTEC plc.
“The objective of our strategy of forming strategic alliances with major players in the energy infrastructure sector such as COBRA, Energy China and RAFAKO is to accelerate growth and increase scale in order to take advantage of the lack of domestic incineration and gasification capacity that is forcing the UK to pay European incinerators to take its waste. The strategic alliances also enable us to be in a prime position to win Energy from Waste projects in the UK, Spain, France and Croatia,” he added.
A video featuring Ian Pearson, chairman of EQTEC Plc further explains the company’s pipeline of projects in the UK and Croatia following the deal last year between EQTEC and EQTEC Iberia.
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