Waste Management, Velocys, NRG, Ventech form renewables, natgas-to-fuels JV

First plant go/no-go expected in 2014; target: Oklahoma.

Future expansion in North America, UK, China.

In Oklahoma, 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.

As its first commercial facility, the JV is targeting a plant to be located at Waste Management’s East Oak landfill site in Oklahoma, US. Detailed engineering for this first project is being completed, while final draft permitting documents for the facility have been submitted. The JV intends making a final decision to proceed on this first plant this year. Development activities for additional facilities are expected to commence shortly.

Capacity and target fuels and chemicals were not discussed by the project partners. • The Velocys process targets diesel and jet fuel; after upgrading, products can include lubricants, solvents, base oils and waxes as well as ultra-clean liquid fuels. The process also 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.

In terms of capacity, in 2013 Ventech placed a first order of commercial scale FT reactors, sufficient for a plant of capacity 1,400 barrels per day (21.4 million gallons per year).

Waste Management is North America’s leading provider of comprehensive waste management services and the 200th largest company in the Fortune list. NRG owns the largest and most diverse competitive power generation portfolio in the United States and is a Fortune 500 company. Ventech is a global leader in the design and construction of modular refineries.

Velocys — named a finalist in The Digest’s 2014 Transformative Technologies competition — noted that it holds a minority interest in the JV. Its principal financial commitment to the JV arises after a decision is made to proceed with the first project, which the Company believes it can comfortably accommodate from its current balance sheet. Velocys and other members each have the right, but not the obligation, to participate in the funding of additional future plants.

More about Velocys’ process and progress

The most recent examples of Velocys’ progress towards commercialization include:

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; and, successful running of its BTL demonstration plants in Güssing, Austria.

In addition, 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).

Comments from the partners

Roy Lipski, CEO of Velocys: “Unlocking the potential of landfill gas and biogas through the production of cost-effective renewable fuels and chemicals: This project is a milestone in the development of GTL in the US. Smaller scale GTL has the potential to achieve significant installed capacity in North America a long time before any large scale conventional facility comes on stream.”

Joe Vaillancourt, VP Corporate Venturing at Waste Management: “Waste Management has developed a GTL program over many years and selected Velocys technology after completing engineering studies showing it to be the leading smaller scale Fischer-Tropsch technology. We are pleased to have formed a JV with a very strong team to take this opportunity forward across several of Waste Management’s landfill sites.”

John Ragan, EVP of NRG Energy and President, Gulf Coast Region: “The joint venture will benefit from NRG’s extensive experience in developing large renewable capital projects, strong green customer focus and expertise in the acquisition and transportation of large quantities of natural gas.”

Kevin Stanley, CEO of Ventech: “This joint venture is the latest in a series of significant steps we have taken to advance smaller scale GTL, {in the] first of many projects we intend developing at Waste Management sites utilising Velocys technology.”