EVZ’s (ASX:EVZ) Brockman Engineering secures LOI for $40m storage tanks project

• EVZ’s (EVZ) Brockman Engineering secures a Letter of Intent (LOI) from Viva Energy for for the design and construction of three, 30-megalitre diesel storage tanks at the Geelong refinery
• The project is anticipated to be valued around $40 million, with completion scheduled for Q3 FY24
• Initial work will commence in the current quarter while both parties finalise formal contractual agreements
• The project forms part of the federal government’s Boosting Australia’s Diesel Storage Program (BADSP) designed to increase the country’s long-term fuel security
• Shares in EVZ closed 11.5 per cent higher at 14.5 cents on Tuesday

EVZ’s (EVZ) wholly-owned subsidiary Brockman Engineering has secured a Letter of Intent (LOI) from Viva Energy.

The signed LOI is for the design and construction of three, 30-megalitre diesel storage tanks within the greenfield construction area of the Viva Energy Geelong refinery.

Brockman Engineering will commence works in the current quarter with a value of up to $1.9 million, while both parties finalise formal contractual agreements.

The project will not progress beyond the initial phase until a final agreement between Viva Energy and the federal government has been executed, and Viva Energy has obtained the necessary regulatory approvals.

Upon execution of the formal agreements, the total value of the project is anticipated to be around $40 million, with completion scheduled for Q3 FY24.

The tanks will form part of the government’s Boosting Australia’s Diesel Storage Program (BADSP) designed to increase the country’s long-term fuel security.

BADSP will provide up to $260 million in grants over three years to 2023 to 2024.

The program will also provide matched funding to industry to construct new diesel storage tanks, which will result in an estimated 780 millilitres of additional diesel storage being kept onshore.

Projects awarded under this program must be completed by June 30 2024.

EVZ Chief Executive Officer Scott Farthing said Brockman Engineering is well-prepared for what’s to come.

“Brockman Engineering remains well-positioned to secure a share of the additional design and construction contracts expected to be awarded as part of the government’s BADSP and industry tendering activity remains strong.”

This contract, along with other successful tendering activity, increases EVZ’s pipeline of diversified construction and sustaining capital projects to assure future years revenue growth beyond FY22.

Shares in EVZ closed 11.5 per cent higher at 14.5 cents on January 18.