24 March 2014
Velocys plc (VLS.L), the technology innovator for smaller scale gas-to-liquids (GTL), is pleased to announce that it has entered a joint venture (JV) with Waste Management, NRG Energy (NRG), and Ventech Engineers International (Ventech) to develop gas-to-liquids (GTL) plants in the United States and other select geographies.
The JV will pursue the development of multiple plants utilising a combination of renewable biogas (including landfill gas) and natural gas. Waste Management intends to supply renewable gas and, in certain cases, project sites. All four members will work exclusively through the JV to pursue the intended application (GTL using renewable gas, optionally in conjunction with natural gas) in the United States, Canada, United Kingdom and China.
As its first commercial facility, the JV is targeting a plant to be located at Waste Management's East Oak landfill site in Oklahoma, US. Detailed engineering for this first project is being completed, while final draft permitting documents for the facility have been submitted. The JV intends making a final decision to proceed on this first plant this year. Development activities for additional facilities are expected to commence shortly.
Waste Management is North America's leading provider of comprehensive waste management services and the 200th largest company in the Fortune list. NRG owns the largest and most diverse competitive power generation portfolio in the United States and is a Fortune 500 company. Ventech is a global leader in the design and construction of modular refineries.
Velocys holds a minority interest in the JV. Its principal financial commitment to the JV arises after a decision is made to proceed with the first project, which the Company believes it can comfortably accommodate from its current balance sheet. Velocys and other members each have the right, but not the obligation, to participate in the funding of additional future plants.
Roy Lipski, CEO of Velocys, said:
"We're delighted to be providing proven FT technology to, and participating as a partner with Waste Management, NRG and Ventech, in the development of projects that promise to unlock the potential of landfill gas and biogas through the production of cost-effective renewable fuels and chemicals.
"This project is a milestone in the development of GTL in the US. Smaller scale GTL has the potential to achieve significant installed capacity in North America a long time before any large scale conventional facility comes on stream."
Joe Vaillancourt, Vice President Corporate Venturing at Waste Management, said:
"Waste Management has developed a GTL program over many years and selected Velocys technology after completing engineering studies showing it to be the leading smaller scale Fischer-Tropsch technology. We are pleased to have formed a joint venture with a very strong team to take this opportunity forward across several of Waste Management's landfill sites."
John Ragan, EVP of NRG Energy and President, Gulf Coast Region, said:
"We are pleased to be part of this joint venture that fits squarely within our commitment to providing customers with more options to reduce their environmental profile. The joint venture will benefit from NRG's extensive experience in developing large renewable capital projects, strong green customer focus and expertise in the acquisition and transportation of large quantities of natural gas."
Kevin Stanley, CEO of Ventech Engineers International, said:
"This joint venture is the latest in a series of significant steps we have taken to advance smaller scale GTL. Ventech is committed to this market, which we see accelerating on the back of this first of many projects we intend developing at Waste Management sites utilising Velocys technology."
Roy Lipski, CEO
Numis Securities (Nomad and Broker)
Alex Ham – Corporate Broking
Stuart Skinner / Jamie Lillywhite – Nominated Advisor
+44 20 7260 1000
+44 20 3697 1209
Velocys (formerly Oxford Catalysts) enables modular gas-to-liquids (GTL) plants to convert unconventional, remote and problem gas into valuable liquid fuels. Systems based on the Company's technology are significantly smaller than those using conventional technology, enabling modular plants that can be deployed cost effectively in remote locations and on smaller fields than is possible with competing systems. Together with world-class partners, Velocys provides complete modular GTL solutions that address an untapped market of up to 25 million barrels of fuel a day.
Velocys plc is listed on the AIM market of the London Stock Exchange (LSE: VLS). The Company has approx. 100 employees with facilities in Houston, Texas, USA and near Oxford, UK and Columbus, Ohio, USA.
About Waste Management
Waste Management, Inc. is the leading provider of comprehensive waste management services in North America. Through its subsidiaries, the company provides collection, transfer, recycling and resource recovery, and disposal services. It is one of the largest residential recyclers and also a leading developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in North America. The company's customers include residential, commercial, industrial, and municipal customers throughout North America.
NRG Energy, Inc is a Fortune 500 company that serves millions of residential and commercial customers throughout the US and operates the largest and most diverse competitive power portfolio in the country. NRG is driving innovation through solar and renewable power, electric vehicle ecosystems, and carbon capture technology.
Ventech Engineers International LLC is a global leader in the design and construction of modular refineries, gas processing systems, plant relocations, and specialised fabrications for the chemical, refining, and gas production industries. The corporate office and fabrication complex are located in Pasadena, Texas. Additional offices are located in Ankara, Turkey, Moscow, Russia and Alabang, Philippines.