Velocys: Biofuels Digest’s 2014 5-Minute Guide

February 10, 2014 |

Company description:

Velocys enables modular gas-to-liquids (GTL) and biomass-to-liquids (BTL) plants to convert unconventional, remote and problem gas and waste biomass into valuable, drop-in liquid fuels.

The Situation:

In March 2014, Velocys, Waste Management, NRG Energy, and Ventech Engineers International announced a joint venture to develop gas-to-liquids plants in the United States and other select geographies.

The JV will pursue the development of multiple plants utilising a combination of renewable biogas (including landfill gas) and natural gas. Waste Management intends to supply renewable gas and, in certain cases, project sites. All four members will work exclusively through the JV to pursue the intended application (GTL using renewable gas, optionally in conjunction with natural gas) in the United States, Canada, United Kingdom and China.

Major Investors:
LSE:VLS:L
• Lansdowne Partners
• Henderson Global
• Invesco
• Ruffer
• Battelle Memorial Institute
• Ervington Investments
• Baillie Gifford

Type of Technology(ies):
• Fischer Tropsch (FT) microchannel reactor technologies for the efficient and economic small scale distributed production of biofuels via BTL and liquid fuels from natural gas via GTL
• Microchannel reactor technology for steam methane reforming (SMR)
• Patented OMX method for the development and preparation of tailored highly active selective and stable catalysts for use in microchannel reactors and for the generation of clean fuels.
Feedstocks:
• For biofuels: a wide range of waste feedstocks including agricultural, municipal and construction waste, forestry waste
• For gas-to-liquid fuels: stranded and associated gas from oil wells which would otherwise be reinjected, vented or flared
Fuel Type (if applicable): (e.g. ethanol, biobutanol, biodiesel, renewable diesel, renewable jet fuel, power etc):
• Synthetic diesel and jet fuel from biomass waste feedstocks via BTL
• Synthetic diesel and jet fuel from stranded and associated gas via GTL

Co-products
• After upgrading, products of the FT process can include ultra-high quality specialty products – lubricants, solvents, base oils and waxes as well as ultra-clean liquid fuels.
• The FT process produces high temperature steam which can be used for district heating or to assist the initial gasification stage of the BTL process to enhance process efficiency, or to enhance project economics by integration with co-located refinery operations (for GTL).

Past Milestones:
• Joint demonstration testing agreement between Velocys, offshore facility developers MODEC, global engineering firm Toyo Engineering and the Brazilian State Oil Company, Petrobras to build and operate an integrated 6 bpd GTL demonstration facility in Fortaleza, Brazil.
• Successful running of a number of other demonstration plants: at a BTL facility in Güssing, Austria; and at an integrated energy provider
• 2012: First selection to provide FT technology for a commercial scale project. As of January 2014, Velocys has been selected for a total of four commercial projects of more than 1,000 bpd (BTL: GreenSky London, Red Rock Biofuels, Oregon, USA and two GTL projects in the USA being developed by Pinto Energy and Calumet Specialty Products).
• 2013: First order of commercial scale FT reactors (to Ventech, sufficient for a plant of capacity 1,400 bpd).

Business Model:  Technology developers and licensors

Competitive Edge(s):
• Systems based on Velocys technology are significantly smaller than those using conventional technology. This enables modular plants that can be deployed cost effectively in remote locations and on smaller fields than is otherwise possible as well as at scales suitable for biofuels facilities.
• Velocys has the world’s largest microchannel patent portfolio with over 25,000 claims in more than 800 patents worldwide. The Company’s patent estate includes fundamental and broad patents relevant to smaller scale gas-to-liquids. The Intellectual Property portfolio is of high quality, having been cited more than 3,000 times in others’ patents. Velocys’ patent strength has been demonstrated through an excellent record of successful defence and re-examination of its patents that have been challenged.
• Catalyst development, including OMX, a patented method, for producing highly active and more stable catalysts by enabling greater control of the particle size resulting in a narrower particle size distribution of crystallites in the nanometre diameter range which exhibit terraced surfaces. Both of these features enhance catalyst activity. OMX also produces fewer very small crystallites that could sinter at an early stage of operation. This results in greater catalyst stability.

Distribution, Research, Marketing or Production Partnerships or Alliances.
• Joint demonstration testing agreement between Velocys, offshore facility developers, MODEC, Toyo Engineering and the Brazilian State Energy Company, Petrobras, to build and operate a microchannel gas to liquid (GTL) demonstration facility in Fortaleza, Brazil.
• Onshore, Velocys is working with Ventech, Haldor Topsøe, Mourik, PTT, SGS, Hatch and others to offer a complete modular GTL solution.

Stage 
Commercial roll-out underway.

Velocys technology has been demonstrated in the field and validated via selection for customer projects. Velocys has been selected as sole FT supplier to GreenSky London, Europe’s first commercial scale sustainable jet fuel facility, being developed in partnership with British Airways. The Company has also been selected to supply FT technology for two commercial GTL plants in the USA of over 1,000 barrels per day. These are being developed by Calumet Specialty Products and Pinto Energy. The company has received 2 orders for commercial-scale reactors from Ventech and from an unnamed company in the CIS region.

More on the company.

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