AIM-listed UK Oil & Gas (UKOG) has announced that the Company's planned strategic Dorset and Yorkshire Hydrogen Storage projects have received a letter of support ('LOS') from Summit Energy Evolution Ltd ('SEEL'), a wholly owned subsidiary of major Japanese trading conglomerate Sumitomo.
The LOS states that SEEL, Sumitomo's UK based hydrogen and energy transition subsidiary, 'commits to continue to cooperate with UK Energy Storage ('UKEn'), UKOG's wholly owned Hydrogen Storage subsidiary, with a view to SEEL or Sumitomo investing in UKEn's future hydrogen storage projects'. It also details that 'UKEn's hydrogen storage projects could provide keystone storage for SEEL's Bacton Hydrogen (generation) Project', a proposed 590 Mega Watt low-carbon hydrogen generation facility located close to the existing Bacton Natural Gas Terminals in Norfolk.
This first LOS is an important step for the Company's hydrogen storage projects as applicants for government funded Revenue Support via the Department of Energy Security and Net Zero's ('DESNZ') forthcoming First Hydrogen Storage Allocation Round will be required to furnish such LOS from identified hydrogen storage users and financial backers in order to be successful.
UKEn plans to apply for government Revenue Support for at least one of its hydrogen storage projects in the forthcoming Allocation Round, currently scheduled by DESNZ to commence in Q3 this year, post General Election.
Whilst UKOG's proposed hydrogen 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 key strategic UK infrastructure projects which remain a key part of the Company's overall future strategy. The Company expects to receive further LOS in due course.
The full LOS is available on the Company's website, see Support from Japanese corporation Sumitomo
Stephen Sanderson UKOG's Chief Executive commented;
'We are delighted that SEEL, the UK based energy transition subsidiary of one of Japan's most significant global trading houses, Sumitomo Corporation, has recognised the strategic significance and potential material future value of our planned hydrogen storage projects. Their LOS will help ensure we meet the application criteria in DESNZ's forthcoming Hydrogen Storage Revenue Support Allocation Round, a key step towards delivering our projects. We look forward to continued and fruitful cooperation with SEEL/Sumitomo and to securing further LOS from other potential storage users and investors'.
Source: UKOG
