TIDMVLS
RNS Number : 2921U
Velocys PLC
17 January 2017
News release
Velocys plc
("Velocys" or the "Company")
17th January 2017
Establishment of a strategic alliance with Morimatsu
Velocys plc (VLS.L), the company at the forefront of smaller
scale gas-to-liquids (GTL), is pleased to announce that it has
signed a memorandum of understanding (MOU) with Morimatsu (Jiangsu)
Heavy Industry Co., Ltd., a subsidiary of Morimatsu Industry Co.,
Ltd. (Morimatsu) establishing a strategic alliance. Morimatsu will
be Velocys' preferred supplier of module engineering and
fabrication services for the plants. This will drive down costs for
GTL and biomass-to-liquids (BTL) plants based on Velocys technology
by optimising the design and fabrication of plant modules.
Morimatsu is a Japanese fabrication and engineering firm with
over 70 years' experience and expertise in the design, engineering
and fabrication of modular processing facilities for oil and gas,
petrochemical, fine chemical, pharmaceutical, power and
metallurgical industries. Its clients include the world's leading
players in these industries. Its fabrication facilities include
five plants in Japan and three in China with over 800,000 m(2) of
floor space. Its revenues totalled US$700 million in 2016.
Velocys and Morimatsu have been working together for the past
eighteen months on the modular design of the Fischer-Tropsch (FT)
section for a range of plant sizes; a design that will deliver
targeted reductions in both capital cost and plant footprint.
The two companies have identified strategic synergies that
underpin an alliance where the partners shall collaborate with
other strategic partners to further drive down costs across all
areas of the plant, through innovative modularisation. This
collaboration will extend to both GTL and BTL plants. Morimatsu
will continue to commit significant resources during this ongoing
work programme.
The Company expects the terms of the MOU to be reflected in
legally binding documentation within the next few months.
This is the first strategic partnership that has been formalised
since a review of Velocys' strategy was completed in 4Q 2016. A
core theme of Velocys' new strategy is to deliver, jointly with
partners, a "one-stop-shop" offer to customers - a fully integrated
and financed, cost effective and operations-ready plant
solution.
David Pummell, CEO of Velocys, said:
"The potential benefits of further modularisation of smaller
scale GTL plants are significant in terms of reduced plant build
schedule, reduced risk of delays, lower capex and opex. Morimatsu
has a world class team of engineers and impressive fabrication
facilities in China. I am confident that together, Morimatsu and
Velocys will continually improve the plant offer to our customers,
underpinning both the economics and the delivery of an integrated
solution in our renewable fuels and stranded gas markets. I look
forward to providing further details of this deal and other
strategic alliances that will support our new strategy, as we roll
them out."
Koei Nishimatsu, CEO of Morimatsu, said:
"We think highly of Velocys' market leading technology and
business strategy. We have already a track record of working in
close collaboration preparing the ground work for an exciting range
of modular low cost plants. I am delighted that our companies
intend to finalise this strategic partnership. Morimatsu is at the
forefront of innovation and technical excellence and we look
forward to continuing to work with Velocys as a route to accessing
new markets for our engineering and fabrication expertise."
- Ends -
For further information, please contact:
Velocys
David Pummell, CEO +44 1235 841
Susan Robertson, CFO 700
Numis Securities (Nomad and joint
broker)
Alex Ham
Stuart Skinner
Jamie Lillywhite +44 20 7260
Tom Ballard 1000
Canaccord Genuity (Joint broker)
Henry Fitzgerald-O'Connor +44 20 7523
Ben Griffiths 8000
Camarco (Financial communications
& PR)
Billy Clegg +44 20 3757
Georgia Edmonds 4983
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
Notes to editors
About Velocys
Velocys is the company at the forefront of smaller scale
gas-to-liquids (GTL), providing the bridge connecting stranded and
low value feedstocks such as natural gas, landfill gas or biomass
with markets for premium products such as renewable diesel, jet
fuel and waxes.
With its partners, Velocys aims to deliver the most economically
compelling conversion solution; a fully integrated offer that can
be deployed at scale into the growing, attractive markets on which
it focuses. 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. Standardised modular plants can be deployed readily in a
wide range of locations, and Velocys' capabilities and extensive
experience deliver a proven route to operation.
Velocys plc is admitted to trading 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. Its commercial reference plant, which is
located adjacent to Waste Management's East Oak landfill site in
Oklahoma City, is currently being commissioned.
www.velocys.com
About Morimatsu
Morimatsu is specialised in the design, engineering and
fabrication of modular processing facilities for the oil and gas,
petrochemical, fine chemical, pharmaceutical, power and
metallurgical industries.
With its design and fabrication expertise, Morimatsu provides
total solutions for its clients; from process equipment to packages
and modular plants. Many international first-class companies have
qualified Morimatsu and established long-term strategic cooperation
relationships with the company.
The headquarters of Morimatsu is located in Gifu, Japan, while
the process equipment and packages are mainly fabricated in three
plants in China. Morimatsu offers a combination of competitive
Chinese labour costs and Japanese quality and management
systems.
www.morimatsu.jp/english/
www.morimatsu.com.cn/en
This information is provided by RNS
The company news service from the London Stock Exchange
END
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