ARMADA, through a 50:50 JV with UK-listed Navigator Holdings, has signed an MOU with international energy company Uniper (UK) Limited (Uniper) to explore liquid CO2 storage and carriers.
Kenanga said it believes the capex requirements will be lower than those of LNG projects and maintains its forecasts, TP of RM0.58 and MARKET PERFORM call.
ARMADA and Navigator Holdings Ltd announced that Bluestreak CO2, their 50:50 JV established through a previously announced non-binding MOU, has entered into an MOU with Uniper. This collaboration will explore opportunities arising from the UK government's goal of decarbonizing the power sector by 2030.
Under the MOU, the parties will explore the feasibility of implementing a jetty-moored floating liquid CO2 storage facility and liquid CO2 carrier solution for the export of CO2 from Uniper's proposed Grain carbon capture project on the Isle of Grain, United Kingdom. While this is a positive development for ARMADA, it is still early to assess the economics of the CO2 projects.
The house said based on its channel checks, a CO2 carrier vessel could require a capex of USD100m-USD200m, while a floating storage unit could require USD100m-RM300m. However, ARMADA's final capex requirement will depend on the ownership structure of the potential assets. Kenanga said it believes the required capex will be lower than for LNG
projects of similar function (storage and carrier). However, the LNG industry is more mature than the CO2 industry. As a result, it believes the project carries less risk when executed in conjunction with its two partners.