Tidewater Renewables Ltd. initial unit commissioning at its Renewable Diesel (HDRD) Complex and its financing solution to support the completion and start-up of the HDRD facility, according to a news release.
Following the previously announced capital cost increase, the corporation has significantly enhanced its funding capacity. Tidewater Renewables is in discussion with its lenders to seek consents for increases to its lending facilities. It has also received additional government support, in the form of an issuance of credits that will result in cash proceeds of $43m.
Tidewater executives had previously blamed the cost overruns on the lack of exotic components needed to complete the project, adding on the company’s most recent earnings call that more up-front engineering should have been done to avoid cost increases.
The HDRD Complex continues to progress on schedule and with no change to the previously announced gross capital cost estimate of $342m. Construction is currently estimated to be 93% complete with the last major piece of equipment now on site. Construction operations commissioning has begun on several units with final completion and start-up expected to begin within two months. The HDRD project continues to be a leader in safety performance with zero loss time injuries throughout the life of the project to date.
To support the HDRD project, Tidewater Renewables has recently entered into firm credit sales agreements that will result in $43m of proceeds net to the corporation. Proceeds from the credit sales and the anticipated expansion of its lending facilities will primarily be employed to offset the previously disclosed capital cost increases at the Corporation’s HDRD Complex. Tidewater Renewables believes its enhanced liquidity will sufficiently fund the HDRD project through start-up while providing significant additional flexibility.
“The support from government and our current capital providers has been fundamental to the ongoing advancement and success of our HDRD Complex, which will become Canada’s first Renewable Diesel facility. This project will provide significant value to our stakeholders while reducing the carbon intensity of fuels used in British Columbia and Canada” said Rob Colcleugh, Chairman and Interim CEO.
HDRD Complex Update
- HDRD Complex construction is progressing as forecast and is 93% complete.
- All major equipment for the HDRD Complex is now on site and set.
- The majority of the dry commissioning of the utility packages is complete.
- The tank farm and rail systems are now ready for operation.
- Target start-up is expected within two months.
- Operating at its design capacity, the HDRD Complex is expected to generate annualized run rate EBITDA of between $90 – 115m.
