Velocys announces agreement with KPS for US SAF facility

By Velocys | June 30, 2021

Velocys plc, the sustainable fuels technology company, is pleased to announce the execution of a strategic framework agreement with Koch Project Solutions, a subsidiary of Koch Engineered Solutions, for Velocys’ Bayou Fuels biorefinery project in Natchez, Mississippi, U.S.

Subject to completion of due diligence and integrated licensor work, KPS may be awarded a turnkey engineering, procurement and construction (EPC) contract to deliver the project facility, including an integrated performance guarantee wrap backed by a parent company guarantee.

This project is expected to produce approximately 33 million US gallons/year (125 million liters/year) of sustainable aviation fuel (SAF) with negative carbon intensity and naphtha made from woody biomass from the pine plantations in the counties surrounding Natchez in Mississippi. Upon successful execution of an EPC contract, KPS will be responsible for constructing and commissioning this first-of-its-kind facility, which includes the use of renewable power with carbon capture and storage of the plant’s by-product carbon dioxide. The conversion process from gasification of wood chips to FT synthesis generates a significant volume of biogenic carbon dioxide as a by-product. This carbon dioxide is clean, of high concentration and dry and can be used for commercial purposes, replacing fossil based carbon dioxide, or permanently sequestered.  The fuels produced from the facility will meet all requirements and regulations to be sold in the US and generate Federal and State credits under RFS-2 and the relevant State Low Carbon Fuel Standards.

The company continues to retain Worley as engineering partner for the development of pre-feasibility, feasibility and fully integrated technology packages for all Velocys projects, including the planned FEED phase for this Bayou Fuels project.

Henrik Wareborn, CEO of Velocys, said, “The framework agreement with KPS is an important step in the progress of staged development of the Bayou Fuels biorefinery in Mississippi, US, which will support a financing package for the FEED phase of the project. We selected KPS due to their expertise in strategically evaluating and managing complex projects, particularly in the energy infrastructure space.

“The project will deliver SAF with a Carbon Intensity of -144g CO2e/MJ through the combination of biogenic feedstock, renewable power and carbon capture and storage. Such fuels significantly contribute to improved air quality, by reducing particulate emissions by up to 90%, lower Nitrogen Oxides and 99% lower Sulphur emissions compared to fossil fuels and standard aviation fuel.

“The US is gathering considerable momentum backed by much needed SAF policy support, as seen with the recently announced ‘Sustainable Skies Act’, which will establish the SAF blenders tax credit. Velocys is well positioned to deliver the Bayou Fuels Project with an integrated technology to drive down the Carbon Intensity of its aviation industry clients.”

Paul Switzer, president of Koch Project Solutions, said, “Koch Project Solutions is proud to support the Velocys Bayou Fuels project and look forward to using the full breadth of our resources to deliver this pioneering biorefinery project on time and to budget. KPS is committed to contributing to the advanced renewable fuels industry and the Bayou Fuels project fulfils our vision.”