What else could it be if what I would like the situation to be (ie, what I am wishing) cannot be reasonably adduced as correct or not because you, on the other side of the fence, are actively refusing to back up what you claim to be the true facts?
You either cannot give that information, for reasons of confidentiality (which I doubt), or because you don't actually know what the facts are (which would mean that you would be a liar), or that you are pretending to be privy to information which the rest of us do not know so as to puff up your own self-importance (as toads do when threatened), which would mean that you would be lying toad, whether you are Fluky or not.
To settle the matter of whether your point of view is based in reality or, conversely, that it is solely the construct of a confabulator, you could simply supply the name of the patent holder for the catalysts supplied to EFT - but then your game would be over.
I've been on this website for many years and didn't even know that the board even existed - I presumed that this was the only one! Anyway, I've now found it and intersting it is!
"Spurious" seems to know what he is talking about and does make a compelling case for VLS being the holder of the intellectual property rights for the catalysts supplied to EFT whilst "Fluky" is unbelievably coy in not naming the company whom (he says) is not VLS and holds the patents for the catalysts which are supplied to EFT.
Today #VLS responded to the @hmtreasury single-use plastics consultation. Our UK waste to renewable fuel plant will take waste left over after recycling (including any plastics) and convert it into clean-burning, sustainable aviation fuels. #StopThePlasticTide
doc-lee: you should read the post exchanges between Spurious and Fluky on the ADVN board to really connect the dots.
Fulcrum uses the Emerging Fuels Technology FT catalyst and reactor technology, which is less expensive, less technologically advanced than the Velocys one.
Abengoa is the engineering company which will the engineering, procument and construction of the Fulcrum plant.
I agree that the congratulations are a bit odd. Maybe Velocys is happy to see that the TRI technology get a first large test before Velocys will use it at their Natchez plant.
Can you elaborate on this? I've found the snippet in Twitter but I've found nothing on the Fulcrum biofuels beyond the following description of their technology:
"Third, the syngas is processed and purified using standard refining systems, before being converted to liquid fuel using conventional Fischer-Tropsch technology. In reactor tubes, the syngas reacts with a catalyst and forms a synthetic crude oil substitute that is then upgraded to renewable transportation fuels, including jet fuel and diesel."
This could fit VLS to a T but no mention of VLS is to be found anywhere in the website. Instead their technology is supplied by ThermoChem Recovery International (producer of syngas), Emerging Fuels Technology (who describe themselves as "one of the worlds foremost authorities on Fischer-Tropsch (FT) and related synthesis" and Abengoa (?solar energy?). The company is supported by Cathay Pacific, United Airlines and BP (amongst others).
Unless I'm missing something very obvious, Fulcrum would appear to be a direct competitor to VLS. I'm all for gentlemany behaviour and politeness but congratulating one's direct competitors on its success on starting a project (for which VLS would have been a perfect fit) seems to be a bit odd...... or are you saying that any progress in the on-ground development of this technology is to be congratulated even if it is by a direct competitor?
I'd been watching VLS for some time and had done enough research, including chart watching, to make me decide to buy a fairly large chunk. I started buying a couple of weeks ago around the 16-16.5p mark. Some I got just under 16. I completed my buying last Friday and was sitting there quite comfortably waiting for news to emerge and the Market to catch up. Talk about bad timing. Its the quickest 30% loss I've ever had.
I haven't sold any as the fundamentals are still there but I hope either of your first 2 scenarios are right. We do need some clarity though.
A few people getting spooked, rightly or wrongly. It's disappointing from a personal perspective, only because I picked up my shares on Tuesday at about 13.5p and could have got them a lot cheaper. My average is now down to 21.4p, which is a lot lower than I ever thought it would be. Not sure if that's a good or a bad thing, although I now hold 200k so am very much "all in".
It's too early to say definitively what the issue is or how long it will take, so everyone's holding their breath. Take your pick on the next RNS:
1) Best case - reasonable chance
Error identified, we're fixing/have fixed, production back on track. I could see this taking the share price back to its 18p+ trajectory very quickly after announcement.
2) Middling case - reasonable chance
We're still running tests but have identified the issue. It's going to take a couple of months to design and install a fix, but we continue to run on one reactor in the meantime. Cash profitability now due for end of Q3. Share price to stay at this level for a while longer before moving back up to its previous range on reaching ENVIA cash break even and positive news elsewhere.
3) Worst case - smallest chance
There are major issues to resolve with the design of the ancillary systems and the second reactor has also stopped working. This would be a financial and PR disaster, to put it mildly. I shudder to think what would happen to the price in this scenario, but I emphasise that this is the least likely outcome. Now they know about the issue, they will keep a very close eye on the second reactor. They are also very likely to have insurance to cover the plant in this type of scenario.
Its a real pity about the leak but these things happen. We don't know whats happened nor what it will cost in cash and time. Fortunately VLS received $6mn from Red Rock and more from the placing. Even with redesigning the faulty area I can't imaging VLS will need to go to the market for more funds to correct the problem. It would need to be immense for this to happen IMHO.
It looks like things have calmed down and investors are coming back for perceived bargains. I'd agree with their reasoning. 25% down on the SP was way over the top. It is a setback but the concept remains proven and the process is continuing at the other unit so fundamentally VLS is OK.
Be nice to get some sort of update before the weekend though. They must be able to tell us something by now surely.
A rational post donatron and I would be inclined to agree with nearly all of it although having won the contract with Red Rock that may have provided sufficiency of headroom to neutralise and offset any effects.
My first thought was also that now was a good opportunity to buy in more, but at this juncture we only have an initial take on what went wrong, not why nor whether there might be knock-on effects.
One would hope, therefore, that we get an update as soon as the suspected cause of the problem is confirmed together with a reasonably accurate estimate of how long it will probably take to mitigate the design problem. The bigger the redesign and construction of whatever failed, the longer it will take and the greater the worry that such a big misdesign managed to get through. At least it has been found on the first production model and not much later when replacement of the defective parts would have been even more expensive in the longrun.
I sympathise, I originally bought in at 98p and topped up again with £11k at 32p just before the placing. I'm therefore sitting on an average of 43p.
That said, I've this morning put my full £20k allowance in my ISA and will attempt use the lot to buy some more VLS around the 13p mark today. That will finally bring me down closer to a 21p average.
I'm 32 - maybe I'll end up with something for the great grandchildren to enjoy at this rate!
In all seriousness, I hope this is a minor snag. As people on other boards have already mentioned, there is still one reactor working and they'll review that as part of this issue. Q3 to breakeven at ENVIA vs Q2 to breakeven is neither here nor there from a timeline perspective. Hopefully it gives them lessons to take away for the next plant too.
The bigger issue from an investor's perspective is that the company may well have to go back to the markets for another placing earlier than they would have hoped. Really we want to do that from a position of strength, with as many ducks lined up as possible. We'll have to see where things lie now in terms of what this will mean for any future placing price.
Have held VLS and its previous existence for over 10 years. I have always believed that their technology ought to offer significant benefits. However, they have tested loyalty continually during that time. Every time good times seem to be approaching some storm breaks and we are back to square one. Sometimes it is outside their control such as the collapse in the oil price. Often it seems that VLS management are just not up to the job. Todays share drop is yet another disappointment however a leak in a mechanical plant is not a reason to throw in the towel - provided it is just a mechanical fault and not some indication of process problems.
Maybe my loyally held shares will be a minor part of my estate!
"Mitch Jackson, Vice President of Environmental Affairs and Chief Sustainability Officer at FedEx recently shared that one of FedExs goals is to obtain 30% of jet fuel from alternative sources by 2030 with Red Rock providing several million gallons of fuel annually for a period of years. We have been working with select companies on alternative sources of fuel so we can start using it, Jackson told Environmental Leader.
It isnt all easy as pie though as Jackson told Environmental Leader, One of the challenges is getting the refinery capacity up to provide the fuels so we contracted with Red Rock to buy half of the fuel they would produce from this upcoming refining operation. And we continue to look for other alternative sources for jet fuel as well.
Now if you were Mitch Jackson and reading back on this article to see if they had misquoted you what else might you be left thinking?
Articles don't come much better than this one I'm afraid.
I especially like this quote.
There are so many interesting pieces to this project making us keep an eye on it from Red Rocks connections and offtakes with airlines and FedEx, to the technologies involved with Velocys and Red Rock, to the money, estimated revenues, and bond financing. It just seems like the stars are aligning on this one which makes it a pretty exciting project to follow."
What a glowing advertisement for Velocys and the many other cards it has up its sleeve. It hints at the background to it all, the airline demand for biofuels that is out there and it leaves you wondering where FedEx will be turning to next for the rest of its Biofuel consignment? BA deal mentioned also ... and so forth.
Please copy across to any other forums and channels if not already done.
DH; you are correct my remark about VLS using EFT technology was tongue-in-cheek. However, ultimately the most economical solution will prevail. Velocys has a higher tech solution than EFT but it is doubtful if it is more economical.
Do you suggest that VLS lacks manpower to manage the joint operation with TRI at the Southern Research Institute? The ENVIA plant reached 200 bpd at the end of October which is more than 6 months ago. Two possibilities: ENVIA continues to need Velocys operational report or the integrated pilot plant is not yet operational. Both are problematic.
Hopefully the upcoming Financial Results will give answers...
"Another suggestion is that Velocys talks to EFT to incorporate EFT's catalyst/reactor technology in their biorefineries"
weren't you being a bit fanciful as the only evidence as to the quality of EFL's technology is a very old pilot and the Juniper GTL plant which has been delayed for many years and which was last scheduled to be operational in 2017 but still isn't!
As ENVIA is now operational and the output being delivered to customers and accredited for RINS etc it is how to see that you were being serious.... or was it a 'tongue in cheek' suggestion?
"Velocys moved their demo unit from Plain CIty to the TRI set-up at Southern Research Institute. That move happens last year and that should be operational now. "
You know very well I'm sure that the Envia team were seconded for months to assist in successfully commissioning the Envia plant. Prior to that, they conducted many months of trial runs with the pilot to refine the technology and have reported the results extensively.
DH: The TRI-EFT pilot was in operation about 7 years ago. Velocys moved their demo unit from Plain CIty to the TRI set-up at Southern Research Institute. That move happens last year and that should be operational now. As you know Velocys did not give any information since about one year ago.
Juniper is now in the hands of an equity company which also bought SGCE which was one of the partners in that JV mid 2016.
Since the raw material is natural gas they are not eligible for RINs, but they are focusing on wax production.
I see that paper was prior to 2010 and whilst it did involve FT reactors from EFT it would appear that TRI has subsequently been looking into using VLS FT technology as evidenced from their partnership with VLS in 2017. See
There is certainly little to be found in the news about progress there and nothing I can find to show that it is close to being commissioned and to be actually producing anything. I realise of course, that these projects are very difficult to get off the ground and are technically challenging.
Maybe the Juniper plant is close to production and they are keeping quiet about it for some reason. It will certainly be interesting to hear more about it!
Will it be eligible for RINS credits do you know and what type?
OWT I want to second Millwallfans thanks! I really appreciate you taking the time to summarise all of that information.
Ive believed in this company since my initial investment in OCG years ago and I think the next 5 years will prove to be truly transformational for VLS. It feels like everything is beginning to fall into place for them now.
I took the opportunity to top up as much as I could afford at 10p and Im in for the long haul.
Velocys sells its second commercial license to Red Rock Biofuels
Velocys receives first $6 million as part of "notice to proceed" action
Velocys plc (VLS.L), the renewable fuels company, has received a "notice to proceed" action to commence manufacturing of the Fischer-Tropsch reactors and catalyst for the Red Rock Biofuels LLC ("RRB") biorefinery that will be located in Lakeview, Oregon, USA. RRB has commenced construction of the biorefinery, which will incorporate Velocys' technology, and produce low-carbon, renewable diesel and jet fuel. Velocys' role will be as a licensor for its technology to the project.
RRB is a subsidiary of IR1 Group LLC, which has 325 million gallons of installed biofuels capacity. The biorefinery in Lakeview will convert forestry residue into 15 million gallons per year of renewable transportation fuels including diesel and jet fuel. Enough jet fuel will be produced by the plant to fuel 1,800 round trips per year from Portland, Oregon to San Francisco. RRB has in place contracts from several airlines to purchase 100 percent of the jet fuel produced each year.
RRB's Lakeview project is expected to deliver around $15 million revenues to Velocys during the construction and early operation stages of the plant, and an additional $30 million or more over the life of the biorefinery. Over $6 million has already been invoiced and received from RRB.
With broad international agreement in the aviation industry for carbon-free growth beyond 2020, airlines are actively seeking low-carbon jet fuel to reduce their greenhouse gas emissions. The civil aviation industry alone will require around 1.5 billion gallons per year of new renewable jet fuel production capacity to meet this commitment.
Velocys' technology, be it via licensed third party projects like RRB's biorefinery, or through Velocys' own projects such as the Natchez, Mississippi project, will supply the aviation and road haulage industries with a scalable, sustainable supply of fuel.
By using forest and sawmill residues, RRB's biorefinery will not only avoid competition for agricultural resources, but also reduce the risk of catastrophic wildfires by removing waste biomass from overgrown forests. It will also help to regenerate the local forestry industry.
David Pummell, CEO of Velocys, said:
"This is a very important milestone for Velocys, our second commercial license sold; our first licence being ENVIA. Our technology positions us at the forefront of this huge market opportunity. RRB's success is a significant milestone for the sector, one that further demonstrates the market's appetite for renewable transportation fuels. The successful funding of this project is a validation of the commercial viability and bankability of Velocys' technology. The licensing of our technology to RRB is complementary to our strategy to develop our own biorefineries, the first of which will be located in Natchez, Mississippi."
You will also in the same breath as the UK Biorefinery see mention of the terminology F4C.
This is a government initiative that launched in August 2017 and is designed to promote the development of an advanced low carbon fuels industry within the UK.
Under the initiative £22 Million pounds of Government funding has been set aside to be matched by private sector investment, to help construct first-of-a-kind production facilities in the UK.
It is focussed on fuels capable of tackling the hard-to-decarbonise Aviation and HGV sectors.
It is split into 2 stages.
Stage 1 invites competitive applications for up to £2 million of project development funding. The window for Stage 1 applications closed in December 17. The Department for Transport was expected to announce the winners in April 18 but that has just recently been pushed into May, so namely around now.
Those who are then successful at Stage 1 can then bid for a portion of £20 million pounds of capital grant funding to construct a UK-based plant. The deadline for this is end of September18 with the decision in January 2019. (There may be a little slippage now on these dates for the above reason)
An easy to digest presentation for you highlighting the scheme
Velocys we were also made aware had a meeting with ministers at the Department for Transport also around this time.
In September 2017, the Company entered a partnership with various parties to prepare a business case for a commercial scale waste-to-renewable jet fuel plant in the United Kingdom.
Those partners were British Airways, Suez Recycling and Recovery UK Ltd and Norma Investments, another investment vehicle of Roman Abramovich esquire.
The plant will be taking post-recycled waste, destined for landfill or incineration, and converting it into clean-burning, sustainable jet fuel, hence BAs involvement.
This plant will divert landfill waste from exactly that and whereby there will be significant cost savings per tonnage deposited in any landfill.
Associated with this you will hear the words negative cost and as such because of the saving in landfill deposit costs Velocys and its partners it would appear will actually be being paid to divert the household waste from landfill sites and turn it into aviation fuel. So in theory they would already be making money prior to processing it and turning it into jetfuel.
There has also been a recent macroeconomic change in the Uk political landscape concerning biofuels destined for the aviation industry whereby aviation fuels are now eligible for RTFCs Renewable Transport Fuels Credits. This is effectively a subsidy amount given to the producer for each gallon produced. It is the UK equivalent of the American variety called RINs (see previous post)
The key numbers being talked about are an input of 300,000 - 500,000 tonnes per year of housefold waste and that this UK waste-to-renewable jet fuel plant would be capable of producing an output of between 10 million and 20 million gallons per year once the plant is fully operational.
There is a feasibility study ongoing for this project evaluating potential sites with a few site options under evaluation for the proposed plant. This I believe started last year and not long after British Airways signed up for the project.
A few related links.
Presentation by Neville Hargreaves the UK project lead at Velocys
A good article if you can gain access
This is the site chosen by Velocys for its second US biorefinery.
The same Velocys technology will be used to produce aviation fuel and biodiesel etc but on this occasion they will use what is termed woody biomass. The best way to describe this would be all the wastage and unusable part of a tree from any sawmills and also fallen trees and clearance from forests. This clearance also helps in an eco-friendly way with the prevention of forest fires and the rapid spread this deadwood can create.
In October 2017, the Company signed a site option agreement with Adams County in the State of Mississippi for this second US biorefinery.
The Company was offered economic development incentives from Adams County (Natchez being the county seat) estimated to be worth the equivalent of $42 million. It then expects that the project woul qualify for additional incentives worth up to $15 million, provided via Mississippi's Advantage Jobs Act and other statutory tax incentives. These incentive packages would reduce the Company's future tax liabilities also. The Company also received further commitments from Adams County worth approximately $4 million (relating to the land and upgrades to the site) and $1 million site upgrade commitments from local utility suppliers, further increasing the attractiveness of the site.
The Directors themselves have stated that the Natchez biorefinery will be the first of a series of woody biomass residue conversion to renewable fuels biorefineries to be set up by Velocys.
Velocys have also already commenced the process of selecting strategic partners for this Mississippi biorefinery project back in early 2017 and continues to assess and refine its choice of partners.
Site permitting is ongoing. Pre-FEED has been completed and the integrated technology demonstration is expected to commence shortly. The initial phase of the FEED engineering study is expected to commence in the first quarter of 2018 and Velocys is also in the process of selecting an EPC partner to complete the FEED study.
The Final Investment Decision on all of this and signature of feed/offtake agreements is expected during the middle part of 2019.
The construction of the plant is then expected to commence following the Final Investment Decision, with plant commissioning expected to begin during 2021.
US Department of Agriculture Loan Guarantee for $200Million.
USDA Loan Guarantee Application
The Natchez site option agreement completed one of the work packages required for the U.S. Department of Agriculture loan guarantee application. Velocys are now at Phase II of this process for which they can apply to up to $200 million of debt being guaranteed as part of the total installed cost of the project. The Company has engaged SMBC as its financial advisor on this and expects to receive the US Department of Agriculture's conditional decision on this loan guarantee in the third quarter of 2018. From any potential shareholders point of view this should guarantee $200 Million pounds worth of debt, as opposed to equity and having a fundraising for this amount.
Some good dates amongst all of this and some news awaited.
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