Velocys completes construction of Oklahoma City-based gas-to-liquids plant

AIM-listed Velocys, a UK-based gas-to-liquids (GTL) has announced that the construction of its Envia GTL plant in Oklahoma City, US, is complete.

The plant will convert landfill gas into fuels and chemicals.

On-site loading of catalyst into the Fischer-Tropsch reactors has been completed by Velocys with support from its internationally-recognised partner, Mourik.

Pre-commissioning work, including hydro-testing of the lines and vessels, and a rigorous inspection process, is substantially complete, the company said in a statement. Commissioning and start-up plans are in place for the plant.

Velocys said that 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 senior loan of $9 million (€8m), 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.

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 the company’s 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.”