REG - Velocys PLC - Commercial GTL plant go-ahead <Origin Href="QuoteRef">SJP.L</Origin> <Origin Href="QuoteRef">VLSV.L</Origin>

VelocysAnnouncement

06/09/2014 22:28

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RNS Number : 5472N
Velocys PLC
29 July 2014 
 
29th July 2014 
 
Velocys plc 
 
("Velocys" or "the Company") 
 
Commercial GTL plant go-ahead 
 
Highlights: 
 
·     Final investment decision (FID) made to proceed with construction of a
commercial GTL
 plant using Velocys technology; 
 
·     Contract signed for technology license, supply and service with Velocys
at market rates; 
 
·     Project being funded by a JV between Waste Management, NRG Energy,
Ventech
 Engineers International and Velocys (minority holder); 
 
·     Plant will provide a commercial reference site for the Velocys
technology. 
 
Velocys plc (VLS.L), the technology innovator for smaller scale gas-to-liquids
(GTL), is pleased to announce that the final investment decision (FID) has
been made to proceed with construction of a commercial GTL plant using the
Company's technology. 
 
The project is being funded by a joint venture (JV) between Waste Management,
NRG Energy (NRG), Ventech Engineers International (Ventech) and Velocys,
formed to develop a series of GTL plants in the United States and other select
geographies. (See RNS announcement on 24 March 2014 for additional detail on
the JV). 
 
The plant, which is designed to be profitable on a standalone basis, will be
located at Waste Management's East Oak landfill site in Oklahoma, US. It will
provide a commercial reference site for the Velocys technology and will deploy
a number of the Company's full scale Fischer-Tropsch reactors. 
 
Purchase of major equipment has begun, with construction and commissioning to
be complete, and the plant entering full commercial operation, in less than 24
months. The JV has entered into all major contracts needed for the project,
including technology license, supply and service agreements with Velocys (at
market rates), EPC contract with Ventech (lump sum for the modules), land
lease with Waste Management, and gas purchase and product offtakes. Further
detail concerning the project will be released during a ground-breaking
ceremony scheduled for later in the year. 
 
As a minority interest holder in the JV, the Company's investment in the East
Oak plant is limited to some $5 million, drawn down over the course of
construction. This amount, which excludes revenues due to Velocys for the
supply of technology and services, can be comfortably accommodated from the
Company's current balance sheet. 
 
Waste Management is the largest environmental solutions provider in North
America, NRG owns the largest and most diverse competitive power generation
portfolio in the United States; both are Fortune 500 companies. Ventech is a
global leader in the design and construction of modular refineries. 
 
Roy Lipski, CEO of Velocys, said: 
 
"Like the four minute mile, this small commercial GTL plant going ahead is a
major psychological milestone, for the industry and for Velocys and its
customers. 
 
"After 15 years of development, over $300 million of investment, and a
commercial plant underway, Velocys is now poised at the forefront of the
distributed production revolution taking place in this new age of gas
abundance." 
 
- Ends - 
 
For further information, please contact: 
 
 VelocysRoy Lipski, CEOSusan Robertson, CFO                                                                            +1 713 275 5840+44 1235 841 700  
 Numis Securities (Nomad and Broker)Alex Ham - Corporate BrokingStuart Skinner / Jamie Lillywhite - Nominated Adviser  +44 20 7260 1000                 
 Lionsgate Communications (Europe)Jonathan Charles                                                                     +44 20 3697 1209                 
 Pierpont Communications (North America)Krystal Hewitt                                                                 +1 713 627 2223                  
 
 
Notes to editors 
 
Velocys 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. 
 
www.velocys.com 
 
About Waste Management 
 
Waste Management, Inc., based in Houston, Texas, 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 the largest residential
recyclers and also a leading developer, operator and owner of waste-to-energy
and landfill gas-to-energy facilities in the United States. The company's
customers include residential, commercial, industrial, and municipal customers
throughout North America. 
 
www.wm.com 
 
About NRG 
 
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. 
 
www.nrgenergy.com 
 
About Ventech 
 
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. 
 
www.ventech-eng.com 
 
This information is provided by RNS
The company news service from the London Stock Exchange