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Velocys sells second commercial license to Red Rock Biofuels
After receiving its first payment of $6m, renewable fuels company Velocys has received a "notice to proceed" for the manufacturing of the Fischer-Tropsch reactors and catalyst at Red Rock Biofuels' biorefinery in Lakeview, Oregon.
Velocys will incorporate its technology into RRB's biorefinery, which was already under construction, in order to assist the group in producing low-carbon, renewable diesel and jet fuel. Velocys' role will be as a licensor for its technology to the project.
The Lakeview project is expected to deliver around $15m revenues to Velocys during the construction and early operation stages of the plant, and an additional $30m or more over the life of the biorefinery. Over $6m has already been invoiced and received from RRB.
RRB, a subsidiary of IR1 Group, which has 325m gallons of installed biofuels capacity, will convert forestry residue into 15m gallons per year of renewable transportation fuels including diesel and jet fuel and has contracts in place from several airlines to purchase 100% of the jet fuel produced at Lakeview each year.
David Pummell, Velocys' chief executive, 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," he added.
As of 0920 BST, Velocys shares had grown 8.89% to 14.70p.