Velocys Share Discussion Threads

[thebigshortfella] 05/1/2018 16:07

25October1969 - many thanks. That makes perfect sense and had never thought about it like that. I think in binary "up" and "down" but if you have a large position, I can see why a short term dip or increase would be beneficial. Cheers!

[25october1969] 05/1/2018 15:57

thebigshortfella the punter who went short 100,000 shares may own say 1,000,000 shares and just wants to hedge part of his position,if short term dip in price he closes position and makes money, then makes money if price increases...or could be 100 other reasons, none of which we are likely to ever know....

[gac141] 05/1/2018 15:49

Once the RIN's have been approved and we are getting them for any stock we have reserved we can all agree it will be significant revenue to Velocys and the first meaningful revenue in it's history.

[meijiman] 05/1/2018 15:48

I would expect the plant to run 24/7 for around 330 days. The other days will be downtime for maintenance/annual shutdown etc.

[fluky] 05/1/2018 15:34

The ENVIA plant will run 24/7 but not 24/7/365. There will be down time for maintenance, catalyst change out, repairs, etc.

[gac141] 05/1/2018 15:24

Fluky it is my understanding that it is scheduled to run 24/7 there may be some down time I agree but minimal.

[thebigshortfella] 05/1/2018 15:20

I am confident that Erogenous Jones is correct that ENVIA's operational capacity is scheduled to be 250 bpd.

[fluky] 05/1/2018 15:19

gac141: per the October 30 news release: the target operational capacity is 250 bpd. Chemical plants up time is not 100%; a good operation runs about 330 days per year.

[gac141] 05/1/2018 15:17

If it is 250 then the following apply.

Barrels per day 250 45165

Days a year 365 16485225

% due to Velocys 33 $5,440,124.25

Cellulosic fuel R7 I believe is about $80 and RIN credits + Cali LCFS inc fuel is about $320/b

[thebigshortfella] 05/1/2018 15:14

Erogenous Jones - 100,000 sell order. That's interesting. I did a £1k per point long spread bet on VLS this week. They took the opposing view...

I find this type of short hard to understand. The upside is limited at £30k and losses are unlimited. Plus, if you know anything about VLS's situation, imminent news could cause the price to spike upwards.

Can anyone fill me in on why someone would do this type of short? Thanks.

[gac141] 05/1/2018 14:56

A 1400 bpd plant..with a 15% income for us...

Barrels per day 1400 247884

Days a year 365 90477660

% due to Velocys 15 $13,571,649.00

[gac141] 05/1/2018 14:54

Based on my numbers and 33% coming to Velocys..the 33% is my number.

Barrels per day 300 54198

Days a year 365 19782270

% due to Velocys 33 $6,528,149.10

[brucie5] 05/1/2018 14:46

Erogenous Jones
5 Jan '18 - 14:16 - 934 of 935
0 0 0
Ever the optimist, Brucie5.
--------------------------------
Is that you or me?;)

[deutsch3] 05/1/2018 14:25

Someones not impressed with the silence!

[brucie5] 05/1/2018 13:55

Thanks both. EJ - are you bullish again here?

[gac141] 05/1/2018 13:53

Thanks EJ- To have these targets amongst all four of them - They will have spoken at length to Velocys Management. I am in no doubt these targets will be met this year.

[brucie5] 05/1/2018 13:38

Gac, is this where we still are with brokers? (FRom Sept, 2016)
----------------------------------------------------------------------
Numis reiterates 107p target

New report issued today to their clients. A reminder of the current price targets:

FinnCap 144p
Numis 107p
Canaccorrd 80p

[brucie5] 05/1/2018 12:22

We just need clarity around the business plan now. Everything else, by which I mean, the tech, and the plant, the market, seems to be in place. Oh, and the share price, which is at the bottom of the historic range. Watch for 45p on the immediate retrace upwards, then it will be in play again as a momentum stock.
Standard risks apply, main one being any possible need for cash. Perhaps you can just update us on that, Gac?
I also hold ITM and RED.

[gac141] 05/1/2018 09:46

The swans may be swimming quietly on the surface while below they are certainly peddling like mad... I expect news soon.

Great article.

Waste to jet fuel: using garbage to power planes
By Joe Baker

The aviation sector has shown an increasing interest in renewable jet fuels in light of a new drive from the industry. Fuel manufacturer Velocys is developing a new plant that will convert household waste into a clean, sustainable fuel that could be used to power planes.

British Airways (BA) is one of many aircraft operators bound by an ICAO agreement to begin paying to offset its carbon emissions from 2020 onwards. Credit: Stuart Bailey / BA.

Biofuel companies are scrambling to find new biological sources for renewable fuels. But could one of these be the garbage we chuck away?

Velocys played a role in the creation of the ENVIA Energy plant in the US, which was established to produce renewable fuels from gas emitted by landfill waste. Credit: Velocys.

British Airways (BA) is one of many aircraft operators bound by an ICAO agreement to begin paying to offset its carbon emissions from 2020 onwards. Credit: Stuart Bailey / BA.

Biofuel companies are scrambling to find new biological sources for renewable fuels. But could one of these be the garbage we chuck away?

The aviation industry has vowed to take more responsibility for its environmental impact, with the International Civil Aviation Organisation (ICAO) pledging to reduce net aviation CO2 emissions by 50% by 2050, relative to 2005 levels. Renewable jet fuels have been seen as a vital part of this process, and various companies are therefore scrambling to find new biological sources to derive these from. But could one of these be the garbage we chuck away?

In September 2017, renewable fuels company Velocys announced it had entered a new partnership with the aim of developing a commercial waste-to-renewable-jet-fuel plant in the UK. The concept was one of many being talked about at the most recent Global Sustainable Aviation Summit, hosted by Air Transport Action Group (ATAG) in Geneva.

The proposed plant is expected to take in hundreds of thousands of tonnes of post-recycled waste and convert it into clean-burning, sustainable plane fuel. Garbage that would otherwise be incinerated or rot in a landfill site will end up helping airlines to reduce their carbon output.
“We are in the business of making renewable fuels with a very high quality that have the- characteristics of conventional fuels but with a much lower carbon footprint, and this is an opportunity to do that,” says project leader Neville Hargreaves.

From trash to transport fuel
The gases emitted by waste have already been used to create biofuels. Velocys played a role in the creation of the ENVIA Energy plant in the US, which was established to produce renewable fuels from gas emitted by landfill waste. However, the use of solid waste presents a different challenge.
“The process we’re operating here is different,” says Hargreaves. “It’s actually taking the solid waste as it comes out of a municipal collection. We have a number of sites in contention. We’re in discussion with site owners and local authorities to choose the best one.”

Once waste arrives at the proposed plant, it will be converted into fuel through three stages. First, it will be heated in a controlled atmosphere during a gasification procedure that will break down the solid blocks of waste into carbon monoxide and hydrogen. The mixture of these gases, known as ‘syngas’, will then be converted into hydrocarbons via a series of chemical reactions known as the Fischer-Tropsch process.

“The third step is what’s called a hydrocracking reaction which is a refining step,” says Hargreaves. “So essentially we break down the waste, synthesise hydrocarbons, and then refine into fuels.”

The jet fuel to be produced at the proposed Velocys plant is expected to reduce greenhouse gas emissions by up to 70% and deliver a 90% reduction in particulate matter emissions compared with conventional jet fuel. This will not only contribute to carbon emissions production but also help improve air quality at airports.
“The chemical nature of the fuel we make is very similar to conventional kerosene but it has less of certain types of molecules in it, and that means that when it’s combusted you get lower particulate emissions and lower hydrocarbon emissions,” says Hargreaves.

“One of the primary concerns if you live next to an airport is the quality of the air that you breathe, so when a plane is taking off with our fuel it will emit significantly less of those harmful exhaust emissions,” he says.

Rallying support
Velocys has received support for its project from a number of partners, including British Airways (BA). The involvement of the UK’s largest airline is unsurprising; it is one of many aircraft operators bound by an ICAO agreement to begin paying to offset its carbon emissions from 2020 onwards.

“BA of course has been working on this sort of thing for a long time,” says Hargreaves. “They’re not new to this concept of reducing carbon in their operations, but it is fundamental and we agree with them that there’s only so much you can do without finding a replacement for petroleum-based fuels.”
Velocys is set to provide the technology and engineering operations to the project but will rely on its partners to fill in the various gaps. Leading waste management company Suez will manage the supply of feedstock to the proposed plant, while Norma, an affiliate of Ervington Investments, has been the largest financier for the project.

“The attraction of this partnership for us is that it brings together key people from throughout the supply chain who have an interest in making this happen,” says Hargreaves. “It’s always difficult to build plants to do projects of this type, so understanding that we have these partners on-board gives us great confidence.”
This year, the Department for Transport announced changes to its Renewable Transport Fuel Obligation (RTFO), under which UK companies using biofuels can claim credits that can be traded to other companies needing to meet their RTFO obligations. Jet fuel now qualifies for these credits, which Velocys believes will give a substantial push to its goal of developing a series of waste-to-jet fuel plants in the UK.

“The Department for Transport have [also] created a separate pool of what they call development fuel credits which apply to heavy goods vehicles, aviation and a few other applications,” says Hargreaves. “Those changes – the development fuels and the inclusion of aviation – are critical for this project in the UK.”

Making progress overseas
Velocys has set an aim of achieving a final investment decision in 2019, and is currently participating in an initial feasibility stage. One of the biggest challenges will be sourcing additional funding to help bring the plant to fruition, and Hargreaves claims this will involve persuading investors that the processes involved in waste-to-jet fuel have been done before.

“Each of the steps we’re following has been embodied in a commercial plant somewhere else,” says Hargreaves. “It’s a case of knitting them together, and making sure that they all join up correctly so it does operate reliably and produces the amount of fuel required.

“I think getting it financed will involve some innovative mechanisms, some ways of working with the financial communities that are a bit different from the conventional project, and then we just need to build it.”

Nevertheless, success achieved elsewhere could harbour promising prospects for the project. In the US, Fulcrum BioEnergy has made developing waste-to-jet fuel its mission, having received backing from a number of investors to build its Sierra Biofuels Plant in Nevada.

The first phase of the Sierra project was completed in 2016, with the production of a feedstock processing facility next-door to one of the largest landfills in Western US. From 2020, the feedstock produced from the waste will head into the Sierra Biorefinery, where it will be converted into a low-carbon synthetic crude oil, or ‘syncrude̵7;.
Fulcrum claims that Sierra is expected to process 175,000t of feedstock annually, creating 10.5 million gallons of syncrude per year. With around $280m of capital investment going into the project, the company has so far achieved a level of backing that Velocys will hope to match. Countries outside the UK and the US will also be looking to see if this kind of renewable jet fuel is one that is worth supporting.

“I think [the UK Government] has made an important and bold step in taking this on,” Hargreaves says. “It’s difficult in aviation for the obvious reason that if airlines don’t like the regime, they just pick their fuel up from somewhere else, so it’s important that the mechanism is structured in such a way as to make it cost-neutral for the airlines, which is what the present one has done.”
Given that these projects are still in their early stages, it’s unlikely that waste-to-jet fuel will be powering flights worldwide anytime soon. Nevertheless, the increasing number of planes taking off for the first time using biofuel has indicated that airlines are recognising the commercial and environmental benefits of this sort of project.

“I think in the present form, we use a lot of fuel as a society and we’d have to take an awful lot of waste in order to make enough fuel,” says Hargreaves. “I think the simple answer is waste can be an important contributor and it may be the gateway to other things in the future.”