Velocys reports progress on Envia GTL project in Oklahoma

By Erin Voegele | May 04, 2016

U.K.-based Velocys plc recently released 2015 financial results, reporting good progress on Envia Energy’s gas-to-liquids (GTL) project in Oklahoma City, Oklahoma. Envia Energy, a joint venture of a subsidiary of Waste Management, Ventech Engineers International LLC and Velocys, broke ground on a the Oklahoma City GTL in May 2015. Once complete, it will convert landfill gas into fuels and chemicals.

A statement released by Velocys CEO David Pummell notes that 2015 was a challenging year for the Velocys due to both oil prices and leadership changes within the company. “In the face of those challenges, Velocys’ management and its technical and commercial teams remained focused on project delivery, and in particular on the Envia Oklahoma City plant, the successful operation of which will be a transformational event for the company,” he said.

According to Pummell, manufacture of the full-scale Fischer-Tropsch reactors and the initial catalyst charge for the plant were completed by the project’s supply chain partners last year, and all certifications required at this stage were secured. He also noted fabrication of all the modular process units is complete. Those modules, including those incorporating the Velocys reactors, have been delivered and are set in place on site. The project is currently expected to be mechanically complete by mid-2016. Pummell added that Velocys believes the plant will be fully funded through construction, completion and operation following $12 million that the company made available to Envia at the start of 2016.

Velocys is also actively involved in several projects beyond the Envia Oklahoma City plant. One is the Red Rock Biofuels project in Lakeview, Oregon. That plant will incorporate FT technology from Velocys. According to Pummell, Red Rock Biofuels recent merger with Joule Unlimited Inc. has temporarily slowed process with financing the Lakeview project. Unforeseen, but surmountable, permit delays are also being worked through, he noted. “Velocys and Red Rock have signed extensions to the contracts for the supply of Velocys technology to the plant and the project developer remains confident of reaching final investment decision (FID) in 2016,” he said in a statement.

Pummel also provided a brief update of the company Ashtabula project in Ohio, which would take in low-cost natural gas from the Marcellus shale region as feedstock. In addition, he noted an engineering study was recently commissioned by a national gas company in Central Asia, and that Amec Foster Wheeler has begun an initial engineering study of a waste-to-liquids (WTL) project in the U.K.

Velocys reported revenue of £2 million ($2.9 million) last year, compared to £1.7 million in 2014 before exceptional items. Gross margin was £700,000, compared to £1.2 million in 2014. Operating loss was £22.7 million before exceptional items and £22.2 million after exceptional items, compared to £23.2 million and £24.5 million in 2014, respectively.