30th Sep 2013 13:35
LONDON (Alliance News) - Stobart Group Limited Monday said that Stobart Biomass Products Limited has entered into a new 15-year contract to supply biomass fuel to Western Bioenergy Limited.
The group said that it has entered a long-term contract with Western Bioenergy Limited for the supply of about 150,000 tonnes of biomass fuel a year into Western's biomass plant, at Port Talbot in South Wales.
It said that the new contract is the first to result from the master framework agreement with Greensphere Capital, which was announced on September 9, and follows the acquisition of Western by Greensphere.
Stobart said that the contract requires a mix of virgin wood and grade A recycled wood, with the recycled component expected to increase, following planned upgrades to the plant.
It said that Stobart Biomass, the segment of the company which specialises in the supply of sustainable biomass for the generation of renewable energy, will supply approximately 50% of the volume itself and manage and process the remainder, which will be supplied by a third party.
The group said that in light of the relationship between Greensphere and Stobart Biomass, it has decided to invest GBP0.8 million to acquire a small stake in the equity and debt of the project, alongside Greensphere.
"We are pleased to have been able to make an investment in the project, which we expect to result in attractive returns for the Group, in addition to the profit generated by the supply of biomass," said Chief Executive Officer, Andrew Tinkler, in a statement.
Stobart shares were trading 1.3% lower Monday afternoon, at 123.40 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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