TIDMVLS
RNS Number : 3801K
Velocys PLC
21 September 2016
News release
Velocys plc
("Velocys" or the "Company")
This announcement contains price sensitive information.
21st September 2016
Construction complete at ENVIA's GTL plant
Velocys plc (VLS.L), the company at the forefront of smaller
scale gas-to-liquids (GTL), is pleased to announce that
construction of ENVIA Energy's GTL plant in Oklahoma City is now
complete. On-site loading of catalyst into the Fischer-Tropsch
reactors has been completed by Velocys with support from its
internationally-recognised partner, Mourik. Photographs of recent
progress on site are available at
www.velocys.com/media_image_library.php.
Highlights:
-- Construction of ENVIA Energy's GTL plant in Oklahoma City complete.
-- On-site loading of catalyst into Velocys reactors complete.
-- Pre-commissioning activities substantially complete.
-- Early commissioning steps begun.
-- ENVIA GTL plant provides a commercial reference site for the Velocys technology.
-- Drawdown of Velocys' US$9 million senior loan to begin in Q4 2016.
Pre-commissioning work, including hydro-testing of the lines and
vessels, and a rigorous inspection process, is substantially
complete. The team has made extensive and detailed preparations;
operating manuals and procedures have been completed and robust
commissioning and start-up plans are in place. In line with best
practice, the commissioning plan will ensure that each process
system in sequence is working robustly, safely, and within
specification, in order to best assure a successful, safe and
uneventful plant start up. Early commissioning steps have
begun.
In February 2016, as part of a stakeholder capital contribution,
Velocys made available to ENVIA a senior loan of US$9 million,
secured on the project. Additional equity ownership units and
voting rights were granted to the Company as part of the terms of
the loan agreement and Velocys sought and gained greater
operational management involvement in the project.
Velocys has been supporting the EPC contractor, Ventech, in
leading and executing the planning for the commissioning, start-up
and operation of the plant. For example, the Company has provided,
under contract, an operability review, operating procedures and
commissioning management.
Additionally, under the secondment agreement with ENVIA,
Velocys' team of experienced GTL operations managers, operators and
engineers have been on site in Oklahoma City since their deployment
began in July. This Velocys operations team, which is serving under
the ENVIA Plant Manager, will bring essential support to the ENVIA
team through commissioning, start-up and early stage operations
until the permanent operations team is phased in over a planned
period. The Velocys team brings a wealth of operational GTL plant
expertise including commissioning and plant performance
optimisation, drawing on experience gained at a number of large
scale commercial GTL projects as well as from the Velocys pilot
plant.
Drawdown on the loan to ENVIA will begin in Q4 2016, with the
final drawdown expected in Q1 2017. The majority of the drawdown
will fall in the current financial year. Velocys will pursue
options for the early repayment of the loan once the plant is
operational. The Company does not currently anticipate any
additional funding needs from Velocys for the project.
Evaluation continues, with our partners, on future ENVIA
projects using learnings from the Oklahoma City project.
David Pummell, CEO of Velocys, said:
"Operational start-up of the ENVIA plant is now within sight;
its successful steady state operation will represent the next
seminal milestone for Velocys and a significant step for the
smaller scale GTL industry. Velocys and its partners continue to
work together on site in a high-performing professional
collaboration and I remain confident that we will continue to build
on this progress to deliver a safe and successful start-up of the
plant in the near future, and the timely production of
in-specification product."
- Ends -
For further information, please contact:
Velocys
David Pummell, CEO +44 1235 841
Susan Robertson, CFO 700
Numis Securities (Nomad and Broker)
Alex Ham
Stuart Skinner +44 20 7260
Jamie Lillywhite 1000
Camarco (financial communications
& PR)
Billy Clegg +44 20 3757
Georgia Mann 4983
Notes to editors
About Velocys
Velocys is the company at the forefront of smaller scale
gas-to-liquids (GTL) that turns natural gas or biomass into premium
products such as diesel, jet fuel, waxes and base oils. Smaller
scale GTL adds value to a range of gas and biomass resources, and
makes stranded or flared gas economic - an untapped market of up to
25 million barrels per day.
Velocys technology, protected by several hundred patents in over
30 countries, is specifically designed for smaller scales,
combining super-active catalysts with intensified reactor systems.
The Company's standardised modular plants are easier to ship and
faster to install, at lower risk, even in the most remote or
challenging locations. Together with world-class partners, Velocys
works flexibly to unlock gas resources of 15,000 to 150,000 mmbtu
per day, allowing more companies to take advantage of more
opportunities.
Velocys plc is listed on the AIM market of the London Stock
Exchange (LSE: VLS). The Company has a strong, multi-disciplinary
staff operating from its commercial centre in Houston, Texas, USA
and technical facilities near Oxford, UK and Columbus, Ohio, USA.
Construction is complete at its commercial reference plant, which
is located adjacent to Waste Management's East Oak landfill site in
Oklahoma City.
www.velocys.com
Think Smaller(TM). Velocys is changing the way fuels are
made.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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