UK Oil and Gas has raised £500,000 to fund a new hydrogen storage project in Yorkshire.
The company plans to acquire farmland in East Yorkshire, strategically located with direct access to the North Sea. The proximity to the sea is crucial for accessing the brine necessary to create salt caverns for hydrogen storage. This move is seen as an opportunity to secure long-term purchase and leasehold rights in a region with the UK’s most extensive salt deposits.
The planned site lies within the East Coast cluster’s boundaries, which is known for various low-carbon initiatives, including carbon capture and low-carbon hydrogen production projects. Last year, the Department for Energy Security and Net Zero selected several projects within this cluster, which have received significant government backing. As a result, UKOG believes its hydrogen storage project aligns with national efforts to develop carbon capture and storage (CCUS) facilities.
The hydrogen storage site is also strategically placed near the initial stage of the proposed Project Union national hydrogen pipeline network. This network is designed to connect hydrogen producers, hydrogen-to-power stations, storage sites, and end users throughout the East Coast cluster. UK Oil and Gas is optimistic about securing planning consent for the project due to the area’s strong precedent for similar infrastructure developments.
With the new site, UKOG aims to expand its hydrogen storage portfolio, complementing another site under development in Dorset. The goal is to establish one of the largest hydrogen storage portfolios in the UK, positioning the company to benefit from the government’s future hydrogen storage allocation around 2025.
To raise the required funds, UK Oil and Gas conducted a share placing at a discount to the closing price. Additionally, it launched a separate retail offer for existing shareholders with a minimum investment threshold.
