Envia idles GTL plant, Velocys focuses on Mississippi project

Velocys has announced that Envia Energy will suspend operations at its Oklahoma City plant due to financial circumstances. The gas-to-liquids (GTL) facility, which features Velocys’ Fischer-Tropsch technology, began producing finished products in mid-2017.

The Envia plant experienced a leak in May. Investigations performed by Envia and its appointed third-party insurance company found an ancillary coolant system was the root cause of the leak and determined the leak was not a result of any flaw in the core FT technology.

On Sept. 10, Velocys announced Envia’s board has elected to suspend operations at the plant and to undertake a review of strategic alternatives to preserve value inherent at the facility. According to Velocys, the decision was driven by financial circumstances following the May leak.

Information released by Velocys indicates Envia has been operating the plant at reduced capacity using a single reactor to generate products since May. However, that configuration of the plant does not meet the specific process energy requirements applicable under its Renewable Fuel Standard pathway to generate renewable identification numbers (RINs), which has further exacerbated Envia’s operating losses. Envia announced EPA approval to generate D7 cellulosic diesel RINs in March 2018.

Velocys said its board fully supports Envia’s decision to suspend operations at the Oklahoma City plant given the likely capital requirements of the plant. Velocys also said it believes that its capital is better invested in progressing its proposed U.K. waste-to-jet projects and its Mississippi biorefinery, which reached an environmental milestone in August. 

“The decision to suspend plant operations was taken after careful consideration by the Boards of Envia and Velocys and with our Envia JV partners,” said David Pummell, CEO of Velocys.  We are working with Envia to find a strategic alternative that will realize the maximum value potential inherent in the facility.

“I am very proud of the Velocys team who had to intervene during plant commissioning and start-up and provide leadership and support,” Pummell continued. “The design and engineering of the integrated plant by Ventech (“Ventech XTL Oklahoma City, LLC”), the EPC contractor, created significant operational issues that needed considerable effort and additional investment to resolve. Without the Velocys team, the decision that has now been made by the Envia Board, would likely have been made many months ago. Nonetheless, the Oklahoma City plant has demonstrated the scalability and commerciality of our technology, providing a strong strategic foundation for Velocys to deliver our U.K. and U.S. biorefinery projects.”