22nd Sep 2014 08:48
LONDON (Alliance News) - Velocys PLC Monday said its Red Rock Biofuels customer has won a USD70 million grant to build a biomass-to-liquids plant which will incorporate Velocys Fischer-Tropsch technology, resulting in an initial USD15 million for Velocys and expectations for more revenue to come.
The company, which makes technology for smaller-scale gas-to-liquids projects, said Red Rock, a Colorado-based subsidiary of IR1 Group LLC, will build the new plant in Oregon. The plant will convert around 170,000 tonnes per year of forestry and sawmill waste into 1,100 barrels per day of ultra clean transportation fuels, Velocys said.
The plant is backed by a USD70 million grant under phase 2 of the US Defense Production Act Title III Drop-In Biofuels project.
Velocys said the successful execution of the project would result in revenue of USD15 million to Velocys during construction of the plant, with an additional USD30 million in expected revenue over the life of the facility.
Red Rock is targeting a final investment decision for the project within six months, with the construction of the plant to last 18-24 months, Velocys said.
"We are very pleased to see the Red Rock project moving ahead. This USD70 million government grant is set to make the Oregon project happen and will act as a catalyst for early adoption of biomass-to-liquids in North America," said Velocys Chief Executive Officer Roy Lipski.
Velocys shares were trading 2.2% higher at 242.035 pence per share Monday morning.
By Sam Unsted; [email protected]; @SamUAtAlliance
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