Salmon Evolution initiates preparations for Indre Harøy phase two – signs Heads of Terms with Artec Aqua.
Land-based salmon farmer Salmon Evolution has announced that it has entered into a Heads of Terms, with Artec Aqua for the planning of the phase two build-out at Indre Harøy in Norway.
Heads of Terms is a document which sets out the terms of a commercial transaction agreed in principle between parties in the course of negotiations.
Phase 2 is expected to in principle be identical to phase one and add a further 7,900 tonnes of annual production, bringing the total planned production volume to 15,800 tonnes per annum.
Artec Aqua is the turnkey supplier for Salmon Evolution’s phase one project at Indre Harøy where the first smolt is expected to be released during March 2022 and with the full facility currently expected to be completed in Q4 2022.
According to a release issued by the company, the purpose of the Heads of Terms is to enable Salmon Evolution to be in a position to swiftly commence construction of phase two following the completion of phase one. Such timeline requires significant preparatory activities, including but not limited to, planning, concept and detailed engineering and structuring of subcontractor tender processes.
The preparatory phase will focus on leveraging the know-how and experiences gained from phase one, facilitating implementation of identified areas of improvement, both from a biological, operational and financial perspective. Given the timeline with first groundworks commencing after completion of phase one, the parties should also be able to implement learning effects obtained during the first 12 months of production.
Håkon André Berg, CEO of Salmon Evolution commented, “As the phase one build out at Indre Harøy now is nearing completion, we are very pleased to start the preparations for phase two construction. Phase two will stand on the shoulders of a successful phase one ramp-up and together with Artec Aqua we expect to realize significant efficiency gains while at the same time being able to continue optimizing the facility.”
The Heads of Terms further sets out the main commercial terms to be reflected in a final design and construction agreement between the parties. Capex for phase two is currently estimated to NOK 1.3 – 1.4 billion (€130 – 140 million), reflecting both copy effects from phase one as well as general inflation and increased raw material prices, with final capex target expected to be set in 2H 2022.
The final design and construction agreement is expected to be effectuated during first half of 2022 and will include financing reservations providing Salmon Evolution with the necessary flexibility to align the phase two build out with the Company’s overall financing plan.
