There is a sense of anticipation growing internally and externally for the start-up of ENVIA Energy's Oklahoma City GTL plant. We have a truly world-class team on the ground there; Velocys operations managers, operators and engineers who are supporting commissioning and early stage operations, as well as the strong management from ENVIA. Members of the team have extensive experience in the commissioning and operation of large scale GTL projects, experience that they are now bringing to bear for ENVIA. People visiting the site are struck, not only by the team's professionalism, but also by the state of preparedness and by the quality of the processes that we and our partners have put in place to ensure we execute the commissioning phase safely and with minimum risk. From experience, some problems invariably occur during the commissioning of plants such as this one but we have the right people and robust systems in place to solve these problems expertly and move on.
We have made good headway on the review of company strategy and routes to market in the last quarter. We have completed the data gathering phase of the project and have identified a number of very attractive opportunities. Our efforts are now focused on further scrutinising a subset of opportunities and inviting challenge from trusted sources. We have also started strategic discussions with a number of potential partners regarding how we could work together to unlock these opportunities. I expect to be in a position to provide a fuller update on this review by the end of the year and will update you in the next issue of Speedread.
Please get in touch if you would like more information on any of the items highlighted in this newsletter. Email...
David Pummell, CEO
Construction complete at ENVIA's GTL plant
On 21 September Velocys announced that construction of ENVIA Energy's GTL plant in Oklahoma City was complete. On-site loading of catalyst into the Fischer-Tropsch reactors has also been completed by Velocys with support from its internationally-recognised partner, Mourik. Pre-commissioning activities are substantially complete and early commissioning steps have begun. Read more… Webcast…
In September Dr Jan Verloop retired from his position as one of Velocys' Non-executive Directors. We thank him for his 10 years of wise and faithful service. Jan's retirement coincided with the announcement that construction was complete at the company's commercial reference plant. Read more…
Interim results for the period ending 30 June 2016
The interim results for 2016 were posted on 26 September. CEO, David Pummell, commented, "Successful commissioning and operational start-up of the ENVIA plant is now within sight and its steady state operation will represent a seminal milestone for Velocys". Read more…
On the conference circuit
Paul Schubert, COO, presented both, "Enabling larger capacity microchannel reactors" and "The problem of syngas contaminants; a survey", at the GTL Technology Forum in Houston as well as a presentation at the Energy Frontiers International Gas-to-Market & Energy Conversion Forum.
Neville Hargreaves, Velocys' Business Development Director, presented an update on Velocys' design of its larger Fischer-Tropsch (FT) reactors and on progress at the ENVIA Energy plant at SMi's Gas-to-Liquids conference in London and Jeff McDaniel, Commercial Director, recently presented at the CAAFI Biennial General Meeting in Washington DC. All conference presentations can be seen here.
Philipp Stratmann, another of our Business Development Directors, will be presenting at Africa Oil Week in Cape Town next week, the first time Velocys has been invited to speak at that event. Heinz Robota, Director of Catalysis, will be presenting, "Developing a quantitative spatial resolution of deactivation effects on FT synthesis in a microchannel reactor when operating with ultra-low sulphur levels", at the AIChE Annual Meeting in San Francisco in November.
Canaccord Genuity and Numis both published analyst notes after the announcement that construction was complete at ENVIA and Velocys' 2016 interim results were posted. Their recommendations are now respectively "Speculative Buy" (target price 110p – up from 95p) and "Buy" (target price 114p). Canaccord notes, "Velocys has spent the past two years transforming itself from a technology concept into a delivery engine. At our recent visit to ENVIA-1 … we were struck by the depth of knowledge and personnel that Velocys has built up on all aspects of building, commissioning and operating FT GTL process plants."
Following September's news Shares Magazine published a positive article entitled "Velocys to regain velocity". The Daily Telegraph and Investors Chronicle both mentioned that construction was complete at ENVIA, and Proactive Investors, Hydrocarbon Engineering, Lube Report and Biomass Magazine published articles on the subject. After the interim results were posted Malcolm Graham-Wood wrote a positive comment on his blog and the news was covered in Biofuels International and elsewhere. David Pummell recorded a BRR Media webcast on the status at ENVIA.
Looking more broadly, Chemical and Engineering News published a useful summary regarding the status of the use of bio-based jet fuel, describing 2016 as the year "renewable jet fuel took off".
Earlier this month Velocys held its first pre-recorded question and answer session targeted at retail investors. Listen…
Following positive feedback on this event, and with the aim of continuing to engage more frequently with investors, we plan to record similar Q&A sessions approximately quarterly. Please email us with any questions you would like us to address at the next event.
Canaccord Genuity was appointed as Velocys' joint brokers in September. Numis remain Velocys' NOMAD and joint broker.
Contact us for further information
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.