Velocys PLC Advancing towards U.S. Dept. of Agriculture Loan
June 19 2017 - 2:00AM
RNS Non-Regulatory
TIDMVLS
Velocys PLC
19 June 2017
News release
Velocys plc
("Velocys" or "the Company")
19 June 2017
Advancing towards U.S. Dept. of Agriculture Loan Guarantee
Velocys plc (VLS.L), the company at the forefront of smaller
scale gas-to-liquids and biomass-to-liquids (BTL), is pleased to
announce that the U.S. Department of Agriculture (USDA) has invited
Velocys to submit a Phase II Application to obtain a loan guarantee
for a commercial-scale biorefinery. This invitation was made after
a successful Phase I Application process. The loan guarantee could
apply to up to $200 million of debt as part of the total installed
cost of the project.
The plant is being designed to produce approximately 19 million
gallons per year (1,400 barrels per day) of renewable diesel fuel
from approximately 1,000 dry tons per day of woody biomass residues
in the Southeast U.S. There is an abundant supply of low-cost
feedstock sourced from this region that will provide a long term
strategic supply of biomass to the plant.
The USDA 9003 Biorefinery, Renewable Chemical, and Biobased
Product Manufacturing Assistance Program (9003 Program) enhances
the economy of rural America by providing loan guarantees to
biorefineries, such as those that Velocys and its partners are
developing, which produce advanced biofuels. Under this program, a
material portion of the project debt is guaranteed by the USDA,
accelerating the timeline and financially de-risking the project to
final investment decision (FID). Velocys has engaged the global
leading project finance bank, Sumitomo Mitsui Banking Corporation
(SMBC), as the lender of record and as its financial advisor.
The Company will now initiate the final phase of the loan
guarantee process. The steps required under this process identify
and mitigate risk and complete evaluation of the project. These
steps match the typical development stages for biorefineries. Work
is already underway on Velocys' integrated technology demonstration
with its strategic gasification partner ThermoChem Recovery
International (TRI), and the Front End Loading (FEL-2) study with
IHI E&C, an internationally-recognized Engineering, Procurement
and Construction (EPC) company.
Velocys has the goal of completing all work packages required by
the USDA 9003 Program, concluding commercial negotiations such as
feedstock supply and offtake agreements, securing project equity
funding, and reaching FID during the course of 2018.
David Pummell, CEO of Velocys, said:
"We have made strong progress in accelerating the implementation
of the first stage of our strategy as we start to deploy the
additional funds raised in May. Today's announcement builds on the
deployment of our technology at ENVIA Energy's plant in Oklahoma
City; technology that will be used in our first biorefinery. As
well as the first plant, Velocys has identified other locations in
the Southeast U.S. that could host plants with capacities totalling
100 million gallons over the next 10 years.
"This announcement represents an important step in the ongoing
development of the integrated plant offer that we and our partners
are developing for the renewable fuels market. We remain on track
to secure a conditional commitment from the USDA and this would
financially de-risk our first BTL project, creating an attractive
financeable solution for project investors in what we intend to be
the first of many repeatable plants."
- 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
Notes to editors
About Velocys
Velocys is the company at the forefront of smaller scale
gas-to-liquids (GTL) and biomass-to-liquids (BTL), 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. Standardized 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. First product has been produced at its
commercial reference plant, which is located adjacent to Waste
Management's East Oak landfill site in Oklahoma City.
www.velocys.com
About the USDA's Biorefinery Assistance Program
USDA 9003 Biorefinery, Renewable Chemical, and Biobased Product
Manufacturing Assistance Program was authorized by Congress under
the 2008 Farm Bill. It provides loan guarantees to capitalize on
the growing opportunities in renewable energy provided by advanced
biofuels. The Program is designed to assist with the commercial
deployment of production technologies to produce advanced biofuels,
and thereby increase the energy independence of the United States;
promote resource conservation, public health, and the environment;
diversify markets for agricultural and forestry products and
agriculture waste material; create jobs and enhance the economic
development of the rural economy.
https://www.rd.usda.gov/programs-services/biorefinery-renewable-chemical-and-biobased-product-manufacturing-assistance
This information is provided by RNS
The company news service from the London Stock Exchange
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