16 April 2014
Velocys plc (VLS.L), the technology innovator for smaller scale gas-to-liquids (GTL) and biomass-to-liquids (BTL), is pleased to report milestones announced today by British Airways concerning the GreenSky London project being developed by Solena Fuels Corporation (Solena).
In July 2012, Velocys was selected by project founder Solena to provide its Fischer-Tropsch (FT) technology to GreenSky London, Europe's first commercial scale sustainable jet fuel facility.
GreenSky London is the first of several waste-biomass to jet fuel projects planned by Solena. Approximately 575,000 tonnes per year of post-recycled waste, normally destined for landfill or incineration, will instead be converted into 120,000 tonnes of clean burning liquid fuels. British Airways has committed to purchasing all 50,000 tonnes per annum of the jet fuel produced at market competitive rates on a long-term basis.
As previously reported, successful implementation of the GreenSky London project and receipt of the notice to proceed is expected to generate revenues to Velocys in excess of $30 million during the construction phase, and additional ongoing revenues of more than $50 million over the first 15 years of the plant's operation, which is expected to commence in 2017.
Roy Lipski, CEO of Velocys, said:
"Today's announcement of the selected site represents an important step forward for GreenSky London. Velocys is pleased to be part of this ground-breaking project and to contribute to British Airway's strategy for sustainable aviation, as well as Solena's plans for similar projects world-wide."
Jonathon Counsell, Head of Environment at British Airways, said:
"We are delighted that the GreenSky London project is one stage closer to fruition. With the site selected, and world-class technology partners such as Velocys in place, this first-of-a-kind project is laying the foundations for British Airways to reduce its carbon emissions significantly."
Robert Do, President and CEO of Solena, said:
"We are proud to have Velocys as part of the consortium of world class companies assembled for the GreenSky London project, which has taken another big step forward. We are looking forward to successfully building GreenSky London for British Airways, and additional facilities worldwide."
Today's British Airways' announcement is reproduced in full below.
Roy Lipski, CEO
Numis Securities (Nomad and Broker)
Alex Ham – Corporate Broking
Stuart Skinner / Jamie Lillywhite – Nominated Advisor
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GreenSky project prepares to land in Thurrock
Solena Fuels in partnership with British Airways has committed to building the world's first facility to convert landfill waste into jet fuel. This comes just two weeks before the global aviation community joins forces to discuss ways to reduce the industry's environmental impact at the 2014 Global Sustainable Aviation Summit in Geneva.
The chosen location for this innovative project is the Thames Enterprise Park, part of the site of the former Coryton oil refinery in Thurrock, Essex. The site has excellent transport links and existing fuel storage facilities. One thousand construction workers will be hired to build the facility which is due to be completed in 2017, creating up to 150 permanent jobs.
This ground-breaking fuel project is set to revolutionise the production of sustainable aviation fuel. Approximately 575,000 tonnes of post-recycled waste, normally destined for landfill or incineration, will instead be converted into 120,000 tonnes of clean burning liquid fuels using Solena's innovative integrated technology. British Airways has made a long-term commitment to purchase all 50,000 tonnes per annum of the jet fuel produced at market competitive rates.
Willie Walsh, chief executive of British Airways' parent company IAG, said: "We are always striving to reduce our impact on climate change and this first-of-its-kind project marks a significant step for the aviation industry. The construction of the GreenSky London fuel facility at Thames Enterprise Park will lay the foundations for British Airways to reduce its carbon emissions significantly. The sustainable jet fuel produced each year will be enough to power our flights from London City Airport twice over with carbon savings the equivalent of taking 150,000 cars off the road."
Solena has been developing the project and will be using its patented high temperature plasma gasification technology to convert the waste efficiently into synthetic gas. The gas will then be converted into liquid hydrocarbons using third party technologies which will include cleaning and conditioning of the gas, a Velocys Fischer-Tropsch conversion process, hydrocracking and electric power production. With the initial engineering design completed, Solena and its partners are now starting the detailed engineering of the GreenSky London facility.
Robert Do, president and CEO of Solena Fuels, said: "We are excited to help British Airways achieve its sustainability goals by providing an innovative solution to produce drop-in jet fuel. We anticipate starting construction of the site in approximately 12 months after all the requisite permits and agreements have been obtained. We are looking forward to successfully building GreenSky London and partnering with British Airways on additional facilities in the United Kingdom."
Thames Enterprise Park and neighbouring Thames Oilport, established in 2012, is a joint venture with Greenergy as one of the investors and the site project facilitator for this project. It is situated on an industrial site on the estuary of the River Thames.
Andrew Owens, chief executive of Greenergy said: "This is an ideal site for a biofuel initiative like Solena's and we are very pleased to be associated with it. It is located on the Thames with fuel storage and fuel pipelines and good road, rail and jetty infrastructure. Thames Enterprise Park's main goal is to provide regeneration of the former Coryton oil refinery following its closure in 2012. The facility proposed by British Airways and Solena is exactly the type of high profile technology project both we and Thurrock Council want to attract to the site, particularly given the number of skilled jobs provided."
Barclays, as financial adviser, continues to support the GreenSky project. Gabriel Buck, head of CAPEX financing solutions at Barclays, said: "This is undoubtedly a unique and ground breaking project. The economic and environmental fundamentals will, we believe, be attractive to investors from both a debt and equity perspective. The project debt structure has been identified with preliminary agreements in place with an Export Credit Agency who are not only providing the guarantees but also the funding. We are now focused with the project team on getting all aspects of the funding structure completed."
Notes to editors
For further information contact:
British Airways news desk 020 8738 5100, firstname.lastname@example.org
Solena Fuels, (Washington, DC) email@example.com
Thames Enterprise Park, Phil Kennedy, FTI consulting, 020 3727 1286
Greenergy press office, 020 7404 7700
Velocys, Jonathan Charles or Lynn Carratt, Lionsgate Communications 020 3697 1209
Velocys (formerly Oxford Catalysts) enables modular gas-to-liquids (GTL) and biomass-to-liquids (BTL) plants to convert unconventional, remote and problem gas and waste biomass into valuable liquid fuels. Systems based on the Company's technology are significantly smaller than those using conventional technology, enabling modular plants that can be deployed cost effectively at scales that match the biomass collection logistics of BTL facilities. Together with world-class partners, Velocys provides complete modular GTL solutions that address an untapped market of up to 25 million barrels of fuel a day.
Velocys plc is listed on the AIM market of the London Stock Exchange (LSE: VLS). The Company has approx. 100 employees with facilities in Houston, Texas, USA and near Oxford, UK and Columbus, Ohio, USA.
About GreenSky London
GreenSky London is planned to be Europe's first commercial-scale, sustainable jet fuel facility. Established by Solena Fuels, in partnership with British Airways, the project will convert approximately 575,000 tonnes per year of post-recycled waste, normally destined for landfill or incineration, and convert it into 120,000 tonnes (~2,500 barrels per day) of sustainable fuels. GreenSky London intends to use Velocys' proprietary Fischer-Tropsch technology to convert synthesis gas into liquid hydrocarbons.
About Solena Fuels Corporation
Solena is developing biomass-to-liquids plants around the world utilising its proprietary gasification technology. Solena's synthetic fuel is a "drop-in" fuel that allows airlines and shipping companies to utilise a sustainable energy source without any changes to their engines or infrastructure. Solena is a privately held corporation, headquartered in Washington, DC, USA.