UK Oil & Gas
PLC
("UKOG" or the
"Company")
RWE Letter of Support for
UKEn Hydrogen Storage
UK Oil & Gas PLC (London AIM:
UKOG) is delighted to announce that its strategic Dorset and
Yorkshire underground hydrogen storage projects have received a
further key letter of support ("LOS") from RWE, a leading global
energy company and one of the largest renewable and conventional UK
electricity generators, supplying around 15% of UK power demand.
RWE is also a major player in the UK green hydrogen space, a sector
with key synergies to UKEn's storage projects.
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 during
periods when the wind doesn't blow, the sun doesn't shine, or there
are unforeseen power demand spikes.
The Company's storage projects are
operated by its wholly owned subsidiary UK Energy Storage
("UKEn").
Mr
Jeremy Smith, RWE UK's Head of Hydrogen Business Development
commented in the LOS:
"We see the operation of UKEn's hydrogen storage projects as
being potentially beneficial to RWE for the following
reasons:
·
It will enable
us to offer firm hydrogen supply contracts and to manage production
outages;
·
It will allow us
to optimise electricity cost and electrolyser operating regime in
response to renewable generation capacity and wholesale market
price signals;
·
It will enable
the efficient sizing of our optimised production facility to most
efficiently meet our expected offtaker demand;
·
It will help to
smooth our hydrogen production profile with the store acting as a
buffer.
In
support of this proposal, we have committed to working with UKEn to
ensure that the design and delivery of the storage facility meets
the needs of RWE and other potential industry
users."
"We are giving permission for you (UKEn) to
reference RWE as a "supporting party" in discussions with
government and your proposed submission for revenue support via
hydrogen storage allocation rounds."
The RWE LOS along with similar LOS
from major Japanese trading house Sumitomo and hydrogen pipeline
provider SGN (see RNS of 29th May and 27th June 2024) will be used
as required documentation for the Company's future application for
government hydrogen storage Revenue Support over the coming months.
The LOS identifies a potentially significant storage user together
with highlighting the wider positive impact of UKEn's planned
storage upon the efficient operation of the wider hydrogen energy
system.
Whilst the Company's strategic
storage projects are at an early engineering design stage and there
can be no certainty they will receive government Revenue Support,
the Company is committed to furthering these projects which will
remain as the focus of the Company's overall future strategy. The
Company expects to receive further LOS and agreements with
strategic partners in due course.
Stephen Sanderson UKOG's Chief Executive
commented:
"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.
This LOS together with those from Sumitomo and SGN will help
build both our application for government revenue support and
provide identified potential strategic investors comfort that the
projects can be successfully delivered."
For
further information, please contact:
UK
Oil & Gas Plc
Stephen Sanderson / Guzyal
Mukhametzhanova
Tel: 01483 941493
Zeus Capital Limited (Nominated Adviser and
Broker)
James Joyce / Andrew de
Andrade/James
Bavister
Tel: 0203 829 5000
CMC
Markets (Joint Broker)
Douglas
Crippen
Tel: 0203 003 8632
Communications
Brian Alexander
Tel: 01483 941493
The
information contained within this announcement is deemed by the
Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014, as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018. Upon
publication of this announcement, this information is now
considered to be in the public domain.