Velocys
 

SpeedRead


July 2016


We at Velocys have made solid progress on a number of fronts over recent months. The ENVIA plant in Oklahoma remains the key focus of our dedicated team, and I am very excited to see, week by week, the visible progress being made at the site. Our increased operational role in the project is proving very positive for Velocys and its partners; recent work includes an operability review, commissioning planning, operating manuals and training. Moreover a team of highly experienced Velocys operators and engineers has been seconded to ENVIA until the end of 2016. They arrived on site a few weeks ago in preparation for commissioning and start-up and are serving there under the ENVIA Plant Manager.

We continue to believe that the successful operation of ENVIA's plant will be a transformational event for Velocys and will expedite third party sales opportunities. Even before then, multiple opportunities are progressing towards firm orders. For example, Red Rock Biofuels continues to make progress on permitting, financing and offtake agreements for its biomass-to-liquids plant in Oregon. Also in the US, the air permit was recently issued for the project opportunity involving a major fuels player. Velocys has completed its part of the engineering study underway for a proposed plant in Central Asia, and we continue to uncover and develop new project opportunities in many parts of the world.

Elsewhere, Velocys has put its development of Ashtabula GTL on hold. Our recent analysis has confirmed that the wax market in North America and the projected plant economics remain attractive, but given the challenges in raising equity for capital projects of this nature at present and in order to defer costs, it was prudent to hold the project, pending reassessment as part of the broad strategy review that we are currently undertaking.

I look forward to providing updates on the ongoing review of strategy in due course.

Please get in touch if you would like more information on any of the items highlighted in this newsletter. Email...

         


David Pummell, CEO


What's new?


Business update – ENVIA Energy


On 7 July Velocys released a business update to the market detailing progress at ENVIA Energy's GTL plant. All modular process units, including those incorporating the Velocys reactors, and all other major packaged equipment skids, including the steam methane reformer, cooling towers, landfill gas inlet and syngas compression units have now been set in place on-site. System integration, piping and electrical work is ongoing; 140-150 personnel are currently working on-site. Read more… Webcast…

 

View of the Oklahoma City plant taken May 2016

 

Some of the Fischer-Tropsch modules


On the conference circuit


Philipp Stratmann and Neville Hargreaves, two of Velocys' Business Development Directors, presented at two recent GGFR-sponsored events, the Gas Flare Monetization Forum in Denver and the GGFR Zero routine flaring (ZRF) by 2030 workshop in London. At the latter, Nigeria became the latest country to pledge its support for the ZRF initiative. Both Canada and the US endorsed the initiative in March this year.


At the Natural Gas Conversion Symposium in Tromsø, Norway, our representatives presented "Fischer-Tropsch catalyst deactivation in commercial operations for microchannel reactors" and also gave a commercial update.

Elsewhere, Neville Hargreaves presented "Waste to liquid fuels: a route to project viability" at the World Waste to Energy City Summit in London and Philipp Stratmann presented at the Offshore Technology Conference.

All conference presentations can be seen here.


The busy autumn conference session is approaching. Members of the Velocys team will be presenting at:


  • GTL Technology Forum, Houston, 2-3 August
  • SMi's Gas-to-Liquids event, London, 12-13 October
  • Energy Frontiers International Gas-to-Market & Energy Conversion Forum, Houston, 26-28 October
  • Africa Oil Week, Cape Town, 31 October - 4 November. This is the first time Velocys has been invited to speak at this long-running event. Philipp Stratmann's presentation will focus on how smaller scale GTL can play a crucial role on the continent as the majority of countries are net importers of fuel products and at the same time have abundant gas supplies that are either not fully monetised or wasted through flaring.

In the press


The European Committee for Standardisation (CEN) has approved a new European Standard for paraffinic diesel fuel made from the Fischer-Tropsch process, other synthesis methods or hydro-treatment. It is expected that the new standard, EN 15940, will help the GTL industry by providing a document that can be referenced in contracts, which will facilitate the acceptance of and sale of Fischer-Tropsch diesel. We regard this as a very good development for the alternative fuels industry in general, which is gaining momentum elsewhere. For example, United Airlines became the first US airline to begin use of commercial-scale volumes of sustainable aviation biofuel for regularly scheduled flights.

In July, Neville Hargreaves' commentary on how Velocys' technology could support a sustainable future was featured in the "Future of Energy and Sustainable Cities Special Report", which was distributed with the Sunday Telegraph. Business Reporter featured a longer piece on the same subject. Elsewhere Refining & Petrochemicals Middle East magazine interviewed Neville as part of its Special Report on GTL technologies (see page 32).

Alliance News and Natural Gas Intelligence, amongst other publications, reported on news about ENVIA Energy, Ashtabula and other projects mentioned in the business update Velocys issued earlier in July.

Velocys' final results for 2015, announced at the end of April, were covered by, for example, Biomass Magazine and Interactive Investor. The latter commented, "I still consider the market to be substantial and achievable." Downstream Business and Green Car Congress reported on the company's design of larger Fischer-Tropsch reactors that was mentioned in the end of year report.

In June the USA, Canada and Mexico made a joint leaders' statement on North American climate, clean energy and environment partnership. The three countries committed to reducing methane emissions from the oil and gas industry by 40-45%. Commitments to reduce air pollutant emissions by aligning ultra-low sulphur fuel standards were also made.


Company news


Ivan Greager was recently promoted to the position of Director of Engineering and appointed to the Senior Management Team (SMT) of Velocys. Ivan joined the company in 2013, and brought with him considerable experience in conceptual development, design, commissioning, start-up, optimisation and debottlenecking of complex engineering projects, including Oryx GTL in Qatar. He joins a strong, existing SMT whose members come from diverse backgrounds, bring multiple specialisms to the company and have extensive experience of technical and business unit management, gained at companies including BP, BOC, Esso, Phillips Petroleum, GE and Chevron.


With the aim of engaging more frequently with retail investors, Velocys will start to hold question and answer sessions targeted at that audience. These will be pre-recorded and will take place approximately quarterly, beginning in October 2016. The webcasts will be available over BRR Media's platform. Please send any questions you would like to be addressed at this forum by email by the end of September.


Contact us for further information


General enquiries:

Press enquiries:

Careers:

info@velocys.com

press@velocys.com

careers@velocys.com


Velocys plc trades through its subsidiaries Velocys, Inc., 7950 Corporate Blvd, Plain City, Ohio 43064, USA (Registered in the State of Delaware, USA) and Velocys Technologies Ltd, 115e Olympic Avenue, Milton Park, Abingdon, OX14 4SA, UK (Registered in England No. 5258554). "Velocys", "Think Smaller" and the Velocys logo are trademarks of Velocys. © 2016 Velocys. All Rights Reserved.