Velocys plc (VLS.L), the company at the forefront of smaller scale gas-to-liquids (GTL), is pleased to announce that ENVIA Energy’s EPC contractor, Ventech Engineers, has signed the final major contract, covering installation of process modules, related piping and ancillary equipment, for ENVIA’s Oklahoma City GTL plant to be located adjacent to Waste Management’s East Oak landfill site.
ENVIA Energy is a Joint Venture, whose members include a subsidiary of Waste Management, Inc (NYSE:WM), Ventech Engineers International LLC, and Velocys plc (LSE:VLS), formed in March 2014 to produce renewable fuels and chemicals from biogas and natural gas using GTL.
Velocys has made available to ENVIA Energy up to US$12 million of further funding as part of a stakeholder capital contribution, following which Velocys expects that this commercial reference plant will be fully funded through construction, completion and operation. Of the US$12 million committed, US$3 million is Velocys’ equity contribution and US$9 million will be provided as a loan secured on the project. The terms of the loan provide Velocys the opportunity to gain a greater equity share of the project and greater influence in the commissioning, start-up and operations of the plant. The funding will be accommodated from the Company’s balance sheet, which as at 31st December 2015 had £38 million of cash. This loan will have a 10% coupon, and the Company has the opportunity for early repayment of the loan after the plant is operational.
Fabrication of the modular process units by Ventech Engineers at their fabrication facility in Pasadena, Texas is essentially complete. The manufacture of Velocys’ full-scale reactors and the initial catalyst charge to be used at the plant were completed in 2015. Mechanical completion of the GTL plant is expected in mid-year 2016.
David Pummell, CEO of Velocys, said:
“ENVIA’s Oklahoma City project is continuing to meet key milestones. The additional funding Velocys has released demonstrates both the Company’s commitment to the project, which will provide an important commercial reference plant for the use of Velocys’ technology, and the confidence we have in its success.”