UKOG Raises Funding for Planned Hydrogen Storage Projects

UK Oil & Gas PLC (UKOG) has raised financing for its planned hydrogen projects.

UKOG has conditionally raised gross proceeds of $1.27 million (GBP 1.0 million) through the placement of new ordinary shares. The proceeds will be directly employed to “further specific activities required to materially advance the company’s hydrogen storage projects,” the company said in a statement.

Specifically, the proceeds will allow UKOG to initiate essential new studies, including environmental surveys, engineering studies and other works necessary to submit applications for government revenue support in the first hydrogen storage allocation round and development consent orders under the Nationally Significant Infrastructure Project planning regime, according to the statement.

The funds will also permit UKOG to further negotiations with identified prospective strategic joint venture partners and conclude a land option agreement for a further hydrogen storage site.

UKOG said it plans to seek further letters of support for its revenue support application similar to those recently furnished by major energy and UK hydrogen infrastructure players RWE, Sumitomo, and SGN.

UKOG Chief Executive Stephen Sanderson said, “The funding, together with the support from leading UK energy and hydrogen-space infrastructure players, RWE, Sumitomo and SGN, means we can now materially advance our nationally significant projects towards the goal of a competitive Revenue Support application. It will also greatly help us to secure at least one major strategic partner as a joint venture participant and to enhance our lobbying efforts with our new Labour government, who to date seem motivated and committed to making hydrogen and its storage a fundamental part of Britain’s renewable superpower ambition”.

In a separate statement last week, UKOG said it received a letter of support from RWE, a global energy company and one of the largest renewable and conventional UK electricity generators, for its Dorset and Yorkshire underground hydrogen storage projects.

RWE is a major player in the UK green hydrogen space, a sector with key synergies to the storage projects of its wholly owned subsidiary UK Energy Storage (UKEn), UKOG said.

RWE’s planned green hydrogen plants within the Solent Cluster, Didcot and Teesside, are both in geographic and planned pipeline proximity to UKEn’s storage projects and present the opportunity to store hydrogen created from excess renewable power for future conversion to power.

Jeremy Smith, RWE UK’s Head of Hydrogen Business Development, said that the hydrogen storage projects would be potentially beneficial to RWE because it allows the company to “offer firm hydrogen supply contracts and to manage production outages,” and “to optimize electricity cost and electrolyser operating regime in response to renewable generation capacity and wholesale market price signals.”

Sanderson said, “We are most grateful that RWE, a leading global electrical power provider and major player in the UK hydrogen space, has given its support to our projects. Their recognition of the potential benefits our storage could bring to RWE’s green hydrogen projects further underscores our project’s credentials and the significant impact they could have on the UK’s hydrogen economy and energy security”.

Source: www.rigzone.com