EQTEC PLC (AIM:EQT) said the development of the Southport Hybrid Energy Park in Merseyside will be accelerated and its long-term capital commitments will be lower after the creation of a new subsidiary.
Under new legal agreements with project partner Rotunda Group and its Shankley Biogas arm, the newly created EQTEC Southport H2 MDC Ltd, which will be wholly owned by EQTEC, will own the right to develop the second phase of the project, where its syngas technology will be added.
It will also absolve the AIM-listed company of the requirement to purchase Shankley Biogas for Phase 1 of the project, which is intended to produce a waste processing facility, an anaerobic digestion facility, combined heat and power engines and a battery storage facility.
Phase 1 of the project is currently preparing to commence front-end engineering design work, it added, while Rotunda, its advisors and EQTEC are actively engaged with investors for funding or acquisition of Shankley.
As part of the new agreements, EQTEC has reaffirmed with Rotunda its right for its new Southport H2 subsidiary to develop Phase 2 of the project, with the newly created division having now signed with Rotunda an option to lease, valid through August 2025.
EQTEC said that it intends to continue and accelerate Phase 2 development and project funding through its Southport H2 wing and said it understands that Rotunda intends to do the same for Phase 1, through Shankley.
“The Southport project continues to be an exciting one, and we are pleased to have found, with our development partners, a way to focus and drive greater pace toward full funding and financial close,” said EQTEC chief executive David Palumbo.
“We renew our commitment to engage owner-operators and funders toward making the Project a reality through the Build phase and into Operation.
“We are also happy to formally focus EQTEC's role on our core capabilities of technology development and engineering, with a degree of broader project development as required to support the project.
“Not only does this release us from capital investment commitments that come with sustained SPV ownership, but it accelerates progress with our business strategy, toward becoming exclusively a technology innovator and licensor. "