UK Oil & Gas PLC (AIM:UKOG), the energy group, saw its shares jump by as much as 30% on Wednesday as it moved one step closer to receiving a government grant for its hydrogen storage projects.
The AIM-listed group signed a letter of support (LOS) with a UK-based sustainable energy subsidiary of Sumitomo, the Japanese trading giant. stating that it committed to co-operate with the group on future projects.
The LOS also said that UKOG arm UK Energy Storage could be a keystone for Summit Energy Evolution’s proposed 590 mega-watt low-carbon hydrogen generation facility in Norfolk.
A letter of support is vital in the group’s pursuit of government-funded revenue support, a grant provided to help financially support net-zero ventures such as hydrogen storage projects.
To receive the grant, companies must show proof of support from hydrogen storage users and financial backers.
UK Energy Storage plans to apply for government revenue support for at least one of its hydrogen storage projects, expected to commence in the third quarter after the general election.
Stephen Sanderson, UK Oil and Gas’s chief executive, said: “We look forward to continued and fruitful cooperation with SEEL/Sumitomo and to securing further LOS from other potential storage users and investors.”