EQTEC – Collaboration with Wood to advance project pipeline

November 26, 2021 | Posted by

By Richard Gill, CFA

EQTEC (EQT), the waste gasification to energy technology provider, has further added to its list of leading industry partners by signing a Strategic Collaboration Agreement with FTSE 250 listed Wood Group, the consulting and engineering company across energy and the built environment. Under the deal the two parties will jointly target and pursue market opportunities for collaborative development and deployment of clean, waste-to-synthetic natural gas (SNG) and waste-to-hydrogen solutions and delivery of related projects.

The agreement comes following the award of an independent technology and market review to Wood in October 2020, both of which were completed in Q1 2021. The market review assessed the potential for market expansion of EQTEC’s technology for a variety of waste types with a remit to report technology availability, regional policies, regulations and capital cost comparisons.

On the back of that, the new deal is aimed at expanding the availability and application of EQTEC’s Advanced Gasification Technology and synthesis gas production into new markets, combining it with Wood’s established VESTA methanation technology, engineering capabilities and capacity for scale. The VESTA methanation technology enables producers of clean syngas, such as EQTEC, to connect to existing natural gas networks, offering an alternative route to distribute the low carbon energy produced by EQTEC’s Advanced Gasification Technology.

EQTEC and Wood will now assess and target specific market opportunities for the deployment of new commercial solutions for SNG and hydrogen production from syngas, based on EQTEC’s gasification technology, Wood’s proprietary VESTA methanation and other ancillary technologies. They will establish a Collaboration Management Team to advise and propose opportunities for joint pursuit and clarify the commercial business case in order to safeguard the competitiveness of the offering.


Via this deal EQTEC has added another quality partner to its long list of industry collaborators. Wood is a significant partner to have on board, making $7.56 billion revenues in the last financial year and operating in over 60 countries worldwide. That Wood has signed this agreement with EQTEC, following its due diligence process, is further validation of the quality and potential of EQTEC’s technology. By combining the company’s two technologies and know how the two firms will have additional weight as they begin to pursue entry into the growth markets of waste-to-synthetic natural gas and waste-to-hydrogen.

This is the latest in a long line of positive announcements from EQTEC, with news earlier this week that financial close has been achieved for the Beliše Project in Croatia and first phase funding for a second project in Karlovač has been secured. At the end of October it was revealed that the company had secured a resolution to grant planning consent for an advanced gasification facility deploying its technology at the Deeside Refuse Derived Fuel project in Wales.

Following the £16 million fundraise in May we revised our expectations for the 2021 to 2023 financial years and used these as a basis for providing a valuation. In 2023, as more projects are progressed and the substantial non-contracted pipeline is translated into commercial success, we are looking for revenues to more than double to €149.3 million and EBITDA to grow by 142% to €36.6 million. Using our 2023 forecasts, and on an EV/EBITDA multiple basis discounted back to end 2021, we have a target price of 3.47p per share, some 148% higher than the current share price of 1.4p. Ahead of an updated note to cover recent events in more detail, we retain our stance of Conviction Buy.


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