Velocys reports a successful 2014

By Erin Voegele | May 04, 2015

Velocys plc has released financial results for 2014, reporting that last year was one of the most successful in the company’s history. Velocys’ first commercial plant is currently under construction in Oklahoma and scheduled to begin commissioning during the first half of 2016.

“2014 was one of the most successful years in the history of Velocys,” said Roy Lipski, CEO of the company. “With over $85 million of cash on the balance sheet, the unwavering support of major partners and our first commercial plant under construction, Velocys is poised to take advantage of the significant opportunities which typically surface during times of market volatility such as these, and notwithstanding some potential near-term headwinds in the oil and gas industry, to establish an even stronger business and market position. Interest in smaller scale GTL remains high and I look forward to achieving the significant milestones ahead of us.”

During the year, the modular gas-to-liquids (GTL) and biomass-to-liquids (BTL) technology supplier formed a GTL joint venture with Waste Management, NRG Energy and Ventech. The Oklahoma project is the first project under development by that joint venture.

The facility is located at Waste Management’s East Oak landfill site in Oklahoma. It will provide a commercial reference site for the Velocys technology and will deploy a number of the company's full scale Fischer-Tropsch reactors. 

According to Pierre Jungels, chairman of Velocys, the joint venture, which was recently renamed ENVIA Energy, is now evaluating candidate sites for possible additional plants.

In addition to the Oklahoma project, Lipski also noted Velocys has received an order for a reactor for a demonstration facility in the Commonwealth of Independent States. That system is in fabrication for delivery later this year.

“Another project that has made significant headway in 2014 is the Red Rock Biofuels project,” Lipski continued. “In September 2014, it was announced that this customer was awarded a $70 million grant from the U.S. Department of Defense to construct a biomass-to-liquids (BTL) plant incorporating Velocys technology. Red Rock Biofuels, a subsidiary of IR1 Group LLC, has experience constructing and operating commercial-scale biofuels facilities. The new BTL plant in Oregon will convert some 170,000 tons per year of forestry and sawmill waste into approximately 1,100 barrels per day of ultra clean transportation fuels. As well as securing the grant, the project owners also announced in 2014 that they had secured an offtake agreement for jet fuel from Southwest Airlines.”

Velocys reported revenue of -£6,000 (-$9,071) in revenue last year, compared to £4.75 million in 2013. However, the company also indicated revenue before exceptional items was £1.7 million and noted 2014 was the first year with 100 percent commercial revenue. Gross profit was £1.2 million, down from £1.45 million the prior year. The company reported an operating loss of -£24.55 million, compared to -£18.15 million in 2013. The loss for the year was -£22.37 million, compared to -£16.62 million the previous year.