Velocys announces alliances with Morimatsu, TRI

By Erin Voegele | January 27, 2017

In January, Velocys plc, a developer of smaller-scale gas-to-liquids (GTL) plants, announced strategic alliances with Morimatsu (Jiangsu) Heavy Industry Co. Ltd. and ThermoChem Recovery International Inc.

The company announced the signing of a memorandum of understanding (MOU) with Japan-based Morimatsu (Jiangsu) Heavy Industry, a subsidiary of Morimatsu Industry Co. Ltd., on Jan. 17. Morimatsu will be Velocys’ preferred supplier of module engineering and fabrication services for its plants. According to Velocys, the agreement with Morimatsu is expected to drive down the costs for GTL and biomass-to-liquids (BTL) plants based on its technology by optimizing the design and fabrication of plant modules.

Velocys and Morimatsu have been working together for the past 18 months on the modular design of the Fischer-Tropsch section for a range of plant sizes. In a statement, Velocys indicated that both companies will work with other strategic partners to further drive down costs for the plants through innovative modularization. The collaboration extends to both GTL and BTL plants.

The MOU between Velocys and Morimatsu is expected to be reflected in legally binding documentation within the next few months.

"The potential benefits of further modularization of smaller scale GTL plants are significant in terms of reduced plant build schedule, reduced risk of delays, lower capex and opex,” said David Pummell, CEO of Velocys. “Morimatsu has a world class team of engineers and impressive fabrication facilities in China. I am confident that together, Morimatsu and Velocys will continually improve the plant offer to our customers, underpinning both the economics and the delivery of an integrated solution in our renewable fuels and stranded gas markets. I look forward to providing further details of this deal and other strategic alliances that will support our new strategy, as we roll them out."

The MOU with TRI was announced Jan. 26. Under the agreement, TRI will be Velocys’ preferred supplier of gasification systems for its BTL plants. Under the agreement, the two companies are expected to rapidly deploy an integrated biorefinery offering that companies Fischer-Tropsch technology with TRI’s gasification technology.

TRI is a provider of steam reforming gasification systems suitable for wood biomass and other waste feedstocks. The company operates a demonstration plant in Durham, North Carolina, that has run for more than 10,000 and shown that the syngas it produces is well-suited to the Fischer-Tropsch process and upgrading to fuels.

According to Velocys, the two partners have already started a joint development of the engineering design for a 1,400 barrel per day BTL plant to produce renewable diesel and jet fuels from woody biomass. TRI is expected to support Velocys and its partners to further optimize overall plant costs and the financing of BTL plants. This could include accessing government loan guarantee processes and securing independent engineering reviews.

In a statement, Velocys said a key next step for the partnership will be an in integrated technology demonstration. Velocys is expected to relocate its skid-mounted pilot plant from Ohio to the RFI facility in North Carolina. According to the company, the joint demonstration has been selected for support as part of a competitive award granted by the U.S. Department of Energy.

The MOU between Velocys and TRI is not exclusive on either party. The terms of the agreement are expected to be reflected in legally binding documentation within the coming months.

"We are excited to be working with TRI who we believe have best-in-class gasification technology,” Pummell said. “We believe our integrated technology solution will be a proven and financeable route to cost-effective plants producing premium renewable fuels. It represents a very significant step forward in the development of a fully integrated offer to our customers, increasing our control over delivery through world class partnerships. I look forward to providing further details of this deal and other strategic alliances that will support our new strategy."