Infrastrata PLC Acquisition of FSRU Project (1416O)
May 28 2020 - 2:00AM
UK Regulatory
TIDMINFA
RNS Number : 1416O
Infrastrata PLC
28 May 2020
28 May 2020
InfraStrata plc
("InfraStrata" or the "Company")
Acquisition of FSRU Project
InfraStrata plc (AIM: INFA), the UK quoted company focused on
strategic infrastructure projects and physical asset lifecycle
management, is pleased to announce that it has entered into a term
sheet with West Face Long Term Opportunities Global Master L.P.
(the "Vendor"), conditional on final investment decision ("FID"),
for the acquisition of Meridian Holdings Co., under which sits the
proposed Floating Storage and Regasification Unit Project ("FSRU
Project"), located in Barrow-in-Furness, northwest England.
Background
The proposed FSRU Project will be the UK's first to be developed
and commercialised. Given that more than 30% of the UK's natural
gas supplies arrive via LNG (liquified natural gas) cargoes, the
FSRU Project is ideally positioned to take advantage of LNG
arriving in the UK and seeking storage and regasification.
The FSRU Project involves developing a floating LNG receiving
facility offshore Barrow-in-Furness, Cumbria, in northwest England,
and is designed to deliver regasified volumes of natural gas
directly into the UK market via its own National Transmission
System interconnection at Barrow-in-Furness. The estimated CAPEX
for the FSRU Project will be circa GBP350m-GBP450m with further
CAPEX optimisation planned through value engineering. The CAPEX for
the FSRU Project is expected to be funded by putting together a
consortium of partners at the project level.
At a projected capacity of approximately 5-6 million tonnes per
annum, the FSRU Project would add to the UK's security of gas
supply by:
1. Helping to balance the gas network during peak demand days
2. Providing its clients with a high level of optionality
between storing LNG, regasifying LNG and sending it to the National
Grid
3. Enabling the long-term storage of regasified LNG for future
withdrawals from underground gas storage
Key highlights of the deal are as follows:
-- Estimated project revenues in the region of GBP80-GBP100MM
annually with a 25-30 year project life
-- Total consideration ("Consideration") payable to the Vendor at FID is GBP8m
-- 60 million warrants over ordinary shares of 0.01 pence each
in the capital of the Company ("Ordinary Shares") with a 2-year
expiry to be issued to the Vendor at FID with an exercise price of
5 pence per share, a c.12-times multiple to the current share
price
-- Where FID is not taken, no amounts will be payable, and no
warrants will be issued to the Vendor
-- Sales and Purchase Agreement ("SPA") to be executed on or
before 31 July 2020, with FID currently estimated to be taken
within 36 months of execution of the SPA
-- Discussions with key partners have commenced; a consortium
consisting of globally recognised companies involved in the
development, construction, operations and commercialisation of
regasification terminals worldwide will be formed in due course
-- Offtake discussions geared towards long-term capacity offtake
have commenced with leading LNG trading houses
John Wood, CEO of InfraStrata, commented : "I am very pleased
that we have now signed this term sheet, leading to the formal Sale
and Purchase Agreement over the course of the next couple of
months. This is the culmination of many months of hard work by the
InfraStrata team. The continued traction that we have been
receiving from global players within the LNG markets since the day
we announced the exclusivity agreement last year, validates our
belief that this FSRU Project is strategic and crucial to the UK's
future natural gas supplies.
"As we move towards a more decarbonised economy, natural gas
will be the transitional fuel of choice, with LNG playing the
all-important role of balancing natural gas and power markets by
acting as baseload feedstock for power generation, on the one hand,
and providing peak shaving capabilities on the other.
"The intermittency of power generation from wind and solar means
natural gas will continue to be the fuel of choice for at least the
next few decades. We, therefore, continue to remain focussed on
energy infrastructure projects like the FSRU Project which have a
long life, robust economics and provide security of energy supply
to the UK whilst casting our eye on future scenarios involving the
likes of hydrogen and other new technologies."
This announcement contains inside information.
For further information, please visit www.infrastrataplc.com or
contact:
InfraStrata plc c/o Newgate Communications
John Wood, Chief Executive +44 (0)20 3757 6880
Cenkos Securities plc (Nominated Adviser
& Broker)
Stephen Keys / Cameron MacRitchie (Corporate
Finance)
Michael Johnson (Sales) +44 (0)20 7397 8900
---------------------------
Newgate Communications (PR)
Elisabeth Cowell/ Ian Silvera/Jamie Williams +44 (0)20 3757 6882
---------------------------
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END
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