A model of intelligent design, EnergyPathways’ MESH Project (Ticker: EPP) has the potential to become the “industry standard” when it comes to fully integrated co-location energy storage infrastructure, and it could well be the answer to the many challenges faced by the Clean Energy 2030 Mission. As the company prepare to resubmit their gas storage license to the NSTA and launch a Section 35 Directive request for key components of the project not under the remit of this application, let’s take a look at the recent rapid evolution of the MESH Project and how it works.

Last week saw EnergyPathways in the news as shares plummeted due to the release of an RNS stating that the NSTA (North Sea Transition Authority) has requested that the company resubmit their gas storage license due to “changed circumstances”.

Obviously, critics jumped on the bandwagon, and in the hysteria, there was a big sell-off. However, the more level-headed among us noted that this was not a refusal from the NSTA, but a request to resubmit an updated application to take into consideration the “changed circumstances” with regard to the massive transformation, in scope and scale, of the MESH Project in recent months. In addition, EPP has also submitted a Section 35 Directive to the Secretary of State to streamline approvals for around 80% of the project that doesn’t rely on the NSTA gas storage license.

The Marram Energy Storage Hub (MESH) is a project of great ambition and complexity, but at the heart of its design is an elegant simplicity. It’s a model of efficiency, where waste energy and emissions are utilised to create products and commodities that are useful, green and clean, and highly valuable. MESH is set to produce homegrown UK natural gas, green hydrogen, clean ammonia and decarbonising synthetic graphite, whilst providing a diversified array of energy storage solutions, all vital for the government’s Clean Energy 2030 Mission and the UK economy as a whole.

Not only does this broad and efficient offering make for good business, but it also ensures MESH ticks all the relevant regulatory boxes in the eyes of government energy and net-zero policymakers. So, with this in mind, why have they been asked by the NSTA (North Sea Transition Authority) to resubmit their gas and hydrogen storage license application?

One of the reasons cited is a “change of circumstance”, and since the original license application was submitted in August 2024, the MESH Project has undergone a major transformation.

Listed on AIM in December 2023, EnergyPathways has recognised and sought to respond to the critical needs of the UK energy sector, and in doing so, MESH has evolved from a standalone gas production outfit to its latest incarnation which aims to become the largest integrated energy storage infrastructure project in the UK with a highly diversified revenue mix, encompassing natural gas production, gas storage, green hydrogen production and storage, compressed air LDES (long-duration energy storage), synthetic graphite and clean ammonia production.

This transformation has been driven by EnergyPathways’ forward-thinking team, led by CEO Ben Clube, who has spearheaded the project to meet the various urgent demands of the UK energy sector and to address the challenges faced by the Clean Energy 2030 Mission. Alongside EnergyPathways, collaborations and partnerships with companies such as Siemens Energy, KBR, Costain, and Wood Group have brought unrivalled industry expertise to the table during the PreFEED and FEED phases, driving the project down exciting, cutting-edge avenues to further enhance efficiency, productivity, and profitability.

Situated 11 miles off the Lancashire Coast, EnergyPathways holds a 100% stake in the Marram Energy Storage Hub project (MESH) and is ideally located for energy storage with the highest population and industrial demand outside of London nearby and close proximity to the HYNET Cluster. Also, as well as benefitting from high-quality geo-storage reservoirs, MESH is surrounded by an expansive 7-8GW array of planned and existing offshore wind farms in the Irish Sea. The overall aim will be to provide the UK with a secure and reliable supply of LDES, natural gas and green hydrogen for over 25 years, as well as high-grade synthetic graphite and clean ammonia. The MESH Project is set to be the UK’s largest energy storage facility with an overall storage capacity of up to 20TWh, equivalent to 7% of the UK’s current annual electricity demand, with the capability of heating 2.7 million UK homes over winter with gas storage to provide a secure and dependable energy supply to the UK grid.

MESH is designed to be a fully zero GHG emissions facility and will be electrified by a combination of green energy sources, including solar, batteries and also energy from the same nearby wind farms from which they will be producing hydrogen. It will also utilise energy management AI to oversee energy loading, security and other key processes. With MESH being so close to existing late-life gas pipelines, gas processing facilities and offshore transmission lines, it can use these to readily connect new energy supply to the UK market via this existing infrastructure, not to mention exploit other “stranded” gas fields in the Irish Sea area.

With a focus to solve many of the problems faced by the renewables sector and the clean energy transition as a whole, from converting waste offshore wind energy into clean hydrogen and compressed air LDES, (thus saving the government and taxpayers hefty curtailment costs and helping to lower consumer bills), to producing synthetic graphite via methane pyrolysis, (an ingenious way to decarbonise whilst producing a highly valuable and useful product).

MESH offers a practical, profitable and pragmatic approach to energy infrastructure design. When it employs zero emissions practices, it’s in order to take a waste product and convert it into something useful. It’s not zero emissions for net zero’s sake.

So yes, since the original gas storage license application, MESH has evolved into a potentially vast piece of integrated energy storage infrastructure. However, despite its scale, the project is now far better equipped to satisfy the regulatory demands placed on it by the NSTA in terms of overall efficiency, SCOPE 3 emissions, and almost every other criterion asked of it. In essence, the resubmitted application will be far superior and more likely to be approved than the original from August 2024.

Also, since the last submission, EnergyPathways has established key strategic partnerships with tier-one industry leaders who will be collaborating on the project. These include Siemens Energy, KBR, Costain, Wood Group, Hazer Group, PDi Ltd and Zenith Energy. So, they are no longer submitting these applications in isolation.

In order to streamline the approval process further, EnergyPathways has submitted a. Section 35 Directive. This is a process that aims to seek direct approval from DESNZ (Department of Energy Security and Net Zero) and the Secretary of State for Energy, for all aspects of the MESH Project that are not dependent on the NSTA gas storage license application. This includes compressed air LDES, flexible low-carbon power generation facilities, onshore gas and hydrogen conditioning facilities, the MESH clean hydrogen production facilities, and the MESH clean ammonia and synthetic graphite production facilities. The Section 35 Directive will cover approximately 80% of the MESH Project in proportion to scale and revenues, and there is a 28-day expected timeline from request to response.

Let’s take a look at how MESH works and what is covered by the Section 35 Directive, and what falls under the gas storage license remit…

MESH: A model of elegant, intelligent design.

Natural Gas Production and Storage:

In its first phase, MESH will produce homegrown UK natural gas from Marram, a fully appraised, 100% owned, 46bcf (460m therms) gas field in the East Irish Sea, for which EnergyPathways was granted an Operatorship license by the NSTA in January 2025.

The gas mix in Marram contains relatively high levels of nitrogen (48%), but despite this, it is projected to have a break-even price per therm of around 35p, so even as a standalone gas production setup, it’s highly commercially viable. However, EnergyPathways has an ace up its sleeve with regard to Marram’s nitrogen, but we will come back to that and its potential uses later in this article. Based on gas production revenues, coupled with gas storage and offtake income, this arm of the MESH project on its own promises to be highly profitable.

As the gas flows and generates revenue, the subsea caverns will empty, allowing the reservoirs to be used for gas storage. The aim will be to store natural gas in phases 1 & 2 and green hydrogen in a later stage of development alongside compressed air long-duration storage.

First gas production is planned for late 2027, and gas storage will be possible as soon as early 2028 and can commence when approximately 20% of the subsea cavern is depleted. PreFEED data produced with lead engineering partner Wood Group has upped initial estimated gas storage levels to between 500-600m therms, which is equivalent, if not more than, the UK’s largest energy storage facility: Rough, operated by Centrica.

Currently, the UK’s working gas capacity is ranked 11^th in Europe, behind the likes of Hungary and Slovakia and a mere tenth of the capacity of Germany and Italy. As we have seen from recent geopolitical events, the need for energy independence and storage is critical, especially with Centrica’s Rough facility set to close soon.

As mentioned earlier, in August 2024, EnergyPathways was granted the opportunity to submit an “out of round” gas storage license application and was, until recently, awaiting formal approval from the North Sea Transition Authority. However, due to the expansion of the project, an updated application has now been requested. The gas storage license will also cover hydrogen storage.

Hydrogen Production and Storage:

The MESH Project will have a hydrogen storage capacity of 2.8TWh, and is surrounded by an array of existing and planned wind farms from the likes of ORSTED and BP (See map)

Currently, the UK’s offshore wind power infrastructure isn’t very efficient, and every year, the government pays substantial wind curtailment costs and turns wind farms off when the wind blows too much, as grid constraints mean much of the excess wind energy is wasted. The government uses the Contracts for Difference (CfD) scheme to support wind energy projects, and it guarantees a price for electricity generated by wind farms. Therefore, any wasted energy costs the government money. In 2024, that amounted to around £1bn, and by 2030 it’s estimated to rise to at least £6bn a year. Basically, when the wind blows, there’s a glut of wind power that cannot get to the grid and be sold, and that electricity is wasted. However, when the wind doesn’t blow, gas-fired power plants are called upon to bridge the energy gap.

MESH will aim to take that excess wind energy and convert it into green hydrogen and compressed air LDES that can be stored and deployed as and when necessary, therefore providing the UK energy grid with dispatchable energy as and when needed. Also, it will save the government and the taxpayer a considerable amount of money per year, money that can help lower consumer energy bills.

The stored hydrogen energy can be used for a variety of applications, from heating homes to powering the Northwest Industrial Hub and the region’s fleet of planned hydrogen-fuelled public transport vehicles. In 2024, we saw nearby HYNET sign the first hydrogen offtake agreements with Northwest industrial partners Essar and Kimberley Clarke.

It’s worth noting that the storing of hydrogen falls under the remit of the NSTA gas storage license application; however, the compressed air LDES does not, and can be authorised to commence via the Section 35 directive.

Converting excess wind energy into Green hydrogen is potentially a game-changer for the UK energy transition, but it’s not the whole story at EnergyPathways, as they plan to produce hydrogen via another route too.

 Hydrogen - Methane Pyrolysis and Graphite Production: 

In a recent MOU (Memorandum of understanding) signed with Hazer Group and KBR, EnergyPathways plan to use “The HAZER^® Process” to convert natural gas into hydrogen and high-quality synthetic graphite. The HAZER^® Process will aim to produce extremely cost-effective ‘clean’ hydrogen with ultra-low carbon dioxide emissions.

So, in simple terms, methane from the Marram gas field will be harnessed to create low-cost hydrogen, and in doing so, the process produces valuable high-grade synthetic graphite as a by-product, therefore diversifying the company’s product offering and revenue streams. Current estimates are of an indicative hydrogen production capacity of 90MW (20,000 tonnes per annum), with synthetic graphite of approximately 60,000 tonnes pa. The graphite being produced will be highly crystalline and has excellent comparison to high-end commercial forms of graphite used in lithium-ion batteries.

It's worth noting, a further bonus of this partnership is the impact it will have on mitigating SCOPE3 emissions and how that will be positively perceived by the government with regard to the gas storage license resubmission and Section 35 request. It represents an ingenious way to achieve zero emissions and decarbonise the gas production process whilst producing a highly valuable and useful product. Methane pyrolysis is also an eligible technology for financial assistance under the Hydrogen Allocation Round, and additionally, the UK Government has designated graphite as a critical mineral, noting that the country is currently almost completely reliant on Chinese imports.

This process will fall under the Section 35 Directive request and not the NSTA license application, and by all accounts, the MOU with Hazer Group and KBR is likely to be very lucrative. However, as well as hydrogen offtake and graphite sales revenue, there is also another intelligent and profitable use for this hydrogen resource: The production of Ammonia.

 Ammonia Production:

EnergyPathways will also be incorporating Hazer Group’s strategic alliance partner KBR for the integration of the Hazer technology for the production of low-carbon ammonia, and this is where Marram’s nitrogen comes into play.

Normally seen as a problematic waste emission in the gas production process, in the case of the MESH Project, nitrogen will be highly advantageous, as it will be combined with green hydrogen to make clean Ammonia. Using the estimated 20,000 tonnes pa of hydrogen created via the HAZER^® Process as feedstock, we can draw up a very approximate production target of 110,000 tonnes of clean ammonia per year.

In 2027, the UK Government will introduce the Carbon Border Adjustment Mechanism, adding a tariff to ammonia imports that will affect UK consumers. EnergyPathways aims to competitively produce clean ammonia domestically, supporting UK re-industrialisation and reducing reliance on high-emission, fossil fuel-based ammonia imports. It seems EnergyPathways are positioned very much in the right place, at the right time.

This process will also fall under the Section 35 Directive request and not the NSTA license application, and is another prime example of the zero emissions approach adopted by EnergyPathways to utilise wasteful emissions to produce a useful, valuable commodity in a decarbonised way.

Compressed Air LDES (Long Duration Energy Storage):

The partnership with Siemens Energy allows the MESH project access to leading-edge expertise, in particular, in LDES compressed air systems, electrical gas compression systems and, critically, a deep understanding of integrated energy systems. These technologies will be at the heart of the UK's smart grid revolution as it transitions to a renewables-dominated power system.

The H-CAES compressed air long-duration storage facility will compress air and store it in subsea caverns. When energy is needed, the air is released and subsequently expands to drive a series of turbines to generate electricity. It has proven to be an efficient and cost-effective method of LDES. It is estimated to provide up to seven days of storage capacity, which is significantly longer than existing technology that deals in hours rather than days. EnergyPathways also owns the intellectual property rights to the revolutionary H-CAES technology and plans to exploit the design beyond MESH, which could prove to be a very lucrative endeavour in itself.

Interestingly, as the government has indicated, it will not be willing to invest in the interconnecting pipelines that feed the oil and gas industry (unless they are repurposed for the green economy), so as the Irish Sea infrastructure is decommissioned, many gas fields will become stranded assets. These extensive stranded assets off the northwest coast will be accessible by the MESH storage hub, and that in itself provides a huge opportunity, with more homegrown gas production potential and energy storage options.

Long Duration Energy Storage will also fall under the Section 35 Directive request and not the NSTA gas storage license application.

The Team

CEO Ben Clube brings to the table extensive experience and a direct, no-nonsense style to proceedings. Aside from a background in Geology, Clube was the Executive Director and Chief Operating and Commercial Officer of FAR Ltd, an Australian Gas explorer, from 2012 to 2018. During his leadership, he propelled the company to a AUD$655m market cap (£334m), gaining FAR Ltd notoriety as striking the “world’s biggest gas discovery” in 2014. Under Ben’s management FAR Ltd was widely regarded as one of the most successful Australian oil explorers for over a decade.

He also has 20 years' experience as a finance executive, including a role as Senior Vice President of Finance at BHP Petroleum. He’s served on the boards of UK and Australian-listed energy and resource companies, and more recently, he formed a start-up company to develop sustainable energy solutions with reduced carbon footprint. Ben has a track record of completing company-transforming commercial and M&A transactions creating significant shareholder value. In short, he brings extensive capital markets expertise.

It would appear the CEO has a vision and wants to deliver value to EPP shareholders, as well as himself, having considerable skin in the game holding around 5.76% of the company.

Alongside Ben, the small, focused team brings together a depth of experience and competency and are held in high regard throughout the industry. Most recently, we have seen the appointment of Max Williams as CFO, who has over 30 years of experience in the Energy and Natural Resources sector.

Due to recent announcements, it’s important to recognise that EPP are not in this alone. Partnerships with industry majors such as KBR, Costain and Siemens Energy add substantial weight to the legitimacy of the project. Companies like these don’t get involved without substantial due diligence.

Risks

The Political Situation

The Mesh Project and EPP’s strategy as a whole is perfectly aligned with the current Labour government's Net Zero and Clean Energy goals. From the zero emissions electrification of the facility to the harnessing of renewable wind energy to create green hydrogen. However, it would be wrong to assume that EnergyPathways are, therefore, reliant on a Labour government for MESH to be a success.

The diversification of MESH through gas production/storage and hydrogen production/storage means that it truly has universal appeal, as does the fact it requires no public or taxpayer funding due to its private sector backing.

Phase 1 of MESH is centred on natural gas production, which has cross-party support, as does phase 2, which will incorporate gas storage. As mentioned earlier in this investment case, since the Russia/Ukraine conflict, it has become of critical national importance to increase the UK’s gas storage capacity and gain a greater level of energy independence. Energy independence after all, is national security.

For both gas and hydrogen storage, it was in fact, the Conservatives who initiated the policy in 2021 under Kwasi Kwarteng (See hyperlink below). It was also the Conservative government that initiated the CfD (Contracts for Difference) scheme to support wind energy projects. The CfD scheme guarantees a price for electricity generated by wind farms, wind farms like the ones surrounding the MESH project. Therefore, any wasted energy costs the government money. Currently, that’s a hit of £1bn a year and by 2030, it’s estimated to rise to £6bn a year. So, Green Hydrogen Production would be seen very favourably by any incoming administration as it would benefit the government with substantial savings.

If, at the next general election, we saw Labour ousted and either Reform or the Conservatives (or a coalition of the two) enter Downing Street, then, in my opinion, the worst-case scenario would be that there may potentially be fewer grants and incentives for zero-emissions electrification of MESH. However, the overall outlook for Gas production, storage and Hydrogen Storage would be much the same as it is of critical importance cross-party. Add to the mix, lucrative domestically produced ammonia and graphite and MESH’s status as a vital piece of energy infrastructure for the economy remains intact, whoever is in charge.

For those dubious of anything zero emissions, I mentioned earlier:

“It’s not zero emissions for net zero’s sake.”

In the meantime, the Labour government will be championing projects like MESH, and should the project receive government funding, it will surely receive a fanfare of mainstream media attention.

Links to Conservative energy policy:

https://assets.publishing.service.gov.uk/media/64c7e8bad8b1a70011b05e38/UK-Hydrogen-Strategy_web.pdf

https://www.gov.uk/government/news/government-hits-accelerator-on-low-cost-renewable-power

Conclusion

EnergyPathways’ MESH Project offers a key infrastructure investment with potential high-yield returns for investors of 20%+ over a 25+ year lifespan of the project. It aims to provide a pragmatic, common-sense solution to the UK’s energy storage plight, as well as the issue of rising energy bills and the wider problems faced by the clean energy transition, and it will do so whilst employing North Sea oil and gas workers, and efficiently converting waste products and emissions into valuable commodities such as hydrogen, graphite and ammonia. Not just zero emissions for net zero’s sake, but a practical, profitable and pragmatic approach.

Energy storage hubs like the MESH Project can help the UK achieve its clean energy ambitions and the switch to a low-carbon electricity system in a practical and efficient way. The government has stated exactly what they need to deliver the Clean Energy 2030 Mission, and EnergyPathways has listened and aims to deliver for the UK energy sector. MESH has evolved to perfectly align with UK energy policy, and all it now requires are the relevant license approvals to be able to get on with the task at hand.

With a new and improved gas storage license application update ready to go, and a key Section 35 Directive submitted, EnergyPathways is doing all it can to fast-track the Marram Energy Storage Hub. And, as the Prime Minister recently said, “energy security is national security”, and I’m sure he’d agree that streamlining the route to market for key energy storage infrastructure projects like MESH is in the nation’s best interest.

Additional Key Points and Highlights:

• The MESH project is an integrated energy storage hub combining natural gas, hydrogen and compressed air storage technologies that will have an overall storage capacity of up to 20TWh, equivalent to 7% of the UK’s current annual electricity demand.
• 400MW hydrogen and compressed air Long Duration Energy Storage (LDES). Potentially Europe’s largest LDES facility, providing multi-day power supply.
• 700MW low-carbon flexible power. Highly flexible, future-proofed system for transition to carbon-free hydrogen power
• MESH will produce green hydrogen and high-grade synthetic graphite via methane pyrolysis using methane emissions through Hazer Group’s revolutionary process.
• MESH will utilise nitrogen emissions and green hydrogen to produce clean ammonia.
• EnergyPathways has made high-level strategic partnerships with Siemens Energy, Costain, KBR, Wood Group and Hazer Group.
• Capable of heating 2.7 million UK homes over winter with gas storage to provide a secure and dependable energy supply to the UK grid.
• Revolutionary H-CAES compressed air long-duration energy storage (LDES) will diversify the energy storage offering further.
• EPP own the intellectual property rights to the H-CAES compressed air long-duration energy storage (LDES) and plans to commercially exploit the technology beyond the MESH project.
• State-of-the-art AI energy management system to be deployed.
• 100% owned, fully appraised Marram Gas Field containing a recoverable 46bcf gas.
• With the addition of the Knox and Lowry Gas fields, recoverable gas will be 100bcf.
• Operatorship License Approval was granted for Block 110/4a, which includes the Marram Energy Storage Hub (MESH) by NSTA (North Sea Transition Authority) January 2025.
• Phase 1 & 2 of MESH will provide between 500-600 million therms of gas storage with injection rates of 1.7m-2.0m therms per day at Marram.
• The addition of the Knox and Lowry fields, at this stage, is estimated to triple this.
• Hydrogen storage capacity at Marram is estimated to be 2.8TWh; the aim would be to triple this with the addition of the Knox and Lowry fields.
• Recent capital raises with substantial buying.
• MOU signed for cornerstone investment with a Green Energy fund at multiples of the current SP (6p at time of announcement)
• FTSE 100 Tier One partner talks for long-term gas storage and gas sales offtake agreements, as well as providing project-level debt finance.
• FID (Final Investment Decision) scheduled for the end of 2025
• First Gas production scheduled for H2 2027
• First Gas Storage scheduled for as soon as 2028
• EnergyPathways has formed a consortium of tier one energy companies to develop MESH, comprising one of the world’s largest developers of wind power, one of world’s largest integrated oil and gas companies, a FTSE 250 global leading engineering consultancy and global market leader in industrial automation and industrial software.
• In October 2024, the Department of Energy Security and Net Zero (DESNZ) invited EnergyPathways to participate in the Hydrogen Storage Business Model (HSBM) Design Group. This group comprises a select number of Tier-One companies that are at the forefront of the UK's energy transition.
• Diversification across natural gas production and storage, as well as Hydrogen, graphite and ammonia production and compressed air LDES.
• Requires no governmental or taxpayer funding due to its private sector backing.

Text and Images: Thom Hudson and EnergyPathways PLC