Michael Williams AFPM International Lubricants & Waxes Conf., November 13, Smaller scale GTL: a local wax supply solution

Transcription

1 Michael Williams AFPM International Lubricants & Waxes Conf., November 13, 2014 Smaller scale GTL: a local wax supply solution

2 Introduction Introduction to Velocys and gas-to-liquids (GTL) Smaller scale GTL for the masses Smaller scale GTL for the tailored production of high-performing specialty and fuel products Commercial roll-out of Velocys technology 2

3 Velocys The company at the forefront of smaller scale GTL Leader in smaller scale gas-to-liquids technology 15 years and >$300 million invested in product development Exhaustive global patent protection (>7,500 granted GTL patent claims) First class partners offering a complete GTL solution Haldor Topsøe, Ventech, Hatch, Toyo, Mourik, SGS, Shiloh Commercial roll-out underway Solena GreenSky London GTL JV Ashtabula GTL Well capitalised with strong resources Commercial center in Houston, Texas; technical centers near Columbus, Ohio and Oxford, UK Permanent pilot plant in operation 3

4 The gas-to-liquids (GTL) process Chemical conversion of gas to refined products Natural gas Reforming Fischer-Tropsch (FT) Syngas (carbon monoxide + hydrogen) e.g. LNG / CNG = physical compression. Product remains natural gas GTL = chemical conversion into refined products (petroleum equivalent) Hydro-processing Clean synthetic fuels & chemicals (diesel, jet fuel, lubricants etc.) Syncrude (synthetic crude oil) e.g. Smaller scale GTL: gas-based minirefinery 4

5 Market environment Ripe for smaller scale GTL Shale revolution ushering age of gas surplus Growing demand for liquid fuels, especially diesel and jet Long-term stability of gas-oil arbitrage expected Decentralized production underpinned by poor transportability of gas Environmental benefits e.g. lower emissions, flare elimination and carbon footprint reduction (bio-to-liquids) Strong location-specific economic and strategic factors Shell and Sasol plants in Qatar showcase viability of GTL Growing visibility: >600 articles mentioned Velocys in past 12 months 5

6 GTL for the mainstream of the industry Think Smaller Broader range of sites 1,500-15,000 barrels per day Suitable for remote locations Lower risk Smaller investments Less risk of cost over-runs Commercial reactor Reduced costs Standardized modules and reactors Possible integration with existing facilities Easier to execute and expand Quicker plant construction (18-24 months) Easier to permit, supply, build and operate Additional trains can be added later 1,400 bpd FT process unit designed by Ventech 90 ft L x 46 ft H x ~40 ft W 6

7 Many applications Upstream, midstream and downstream Source of new demand for abundant shale gas in North America Economic route to market for stranded gas Solution to problem of associated gas Valuable products for existing and new applications Ultra low-sulfur diesel (70 cetane) & jet Waxes, lubricants and solvents Not just gas: also biomass and coal 7

8 Smaller scale GTL refiners De-bottleneck operations Upgrade off spec products: FT diesel has higher cetane and no sulfur Co-location of a refinery and GTL plant reduces capex & opex Leverage existing infrastructure (e.g. reformer and hydrocracker to reduce capex for GTL plant) Use excess steam, water, power from GTL plant in refinery Increases environmental standards 8

9 Smaller scale Velocys GTL Works for anyone Velocys unlocks more business by working flexibly allowing companies to capitalize on more opportunities Smaller projects means more opportunities, accessible to more companies Strong partnerships with key players throughout the value chain Velocys can support all aspects of project development and execution

10 GTL as a production route for specialty chemicals

11 Velocys FT makes top quality, valuable products Paraffinic hydrocarbons made deliberately fit for purpose Syngas Co catalyzed FT Syncrude Straight chain paraffinic hydrocarbons Highest quality and reproducibility Hydrocracking Gasoline blend-stock Transportation fuels, tar diluents Mixed solvent Coatings, adhesives Pure solvent Pharma, electronics, personal care Kerosene Aero fuels, surfactants Diesel Transportation fuels Lubricant basestock Group III+ engine oils Medium wax Candles, construction, tires Hard wax Adhesives, polymers, personal care sulfur, amine and aromatic free Excellent eco-tox profile products Performance advantages in high end product formulations Added value specialty products

12 FT products at the leading edge... useful everyday Making engines run cleaner for longer creating higher performing formulations. delivering more efficient processes Syncrude Hydrocracking Gasoline blend-stock Transportation fuels, tar diluents Mixed solvent Coatings, adhesives Pure solvent Pharma, electronics, personal care Kerosene Aero fuels, surfactants Diesel Transportation fuels Lubricant base-stock Group III+ engine oils Medium wax Candles, construction, tires Hard wax Adhesives, polymers, personal care 12

13 Differentiating features of Velocys FT products.. make existing product performance better Hydrocracking Gasoline blendstock Transportation fuels, tar diluents Mixed solvent Coatings, adhesives Pure solvent Pharma, electronics, personal care Kerosene Aero fuels, surfactants Diesel Transportation fuels Lubricant basestock Group III+ engine oils Medium wax Candles, construction, tires Hard wax Adhesives, polymers, personal care High specificity Reproducible and purpose made Negligible sulphur content Negligible nitrogen compound content No aromatic content Low olefin content High cetane content in diesel and kero Low NOx emissions Reduced use of additives High content in diesel boiling range Easily blendable in existing fuel streams Cost efficient, low intensity modification Hydro-treatment Isomerisation High crystallinity, low melt point wax White, clean products Low viscosity & durable lubricants High-purity solvents High quality waxes 13

14 FT high purity products Conventionally-produced diesel (left) vs FT diesel (right) with very low impurities High purity FT wax produced at Velocys Pilot Plant, Ohio 14

15 Pilot plant and training facility Supporting sales and delivery Integrated GTL pilot plant at the Velocys Ohio, USA site Designed to provide Performance data to support differing client designs Product for client studies Permanent training facility for plant operators Platform for Developing our own field support staff Demonstrating future product generations Add pilot plant photo Pilot plant 15

16 Wax production Market dynamics Transformation in oil refineries Only 30% of the oil refineries in the USA producing on average 3 times the volume of products compared to the 1980s Rest of the world is following the USA s lead as vehicle technology and regulatory norms become globalized A consequence of the changes has been a reduction in the supply availability of traditional by-products such as petroleum wax US supply of wax for use in-country has decreased by 66% since the late 1990s The US currently imports over 70% of its wax demand, mainly from Asia But Asian refiners are converting to modern technologies, further reducing the supply of wax Demand for wax increasing in Asian markets Wax predicted to become scarce and expensive, worldwide 16

17 Wax production Smaller scale GTL an alternative source of wax Users will need to find new sources of wax And alternative solutions to produce it Shale gas is a distributed phenomenon and smaller scale GTL delivers value at distributed scale Enable the rebuilding of local supply chains for these products wherever there is a source of low value gas Enhanced value can be generated from specialty products while producing ultra-clean fuels 17

18 Commercial reference plant under construction Updates on other commercial projects

19 Manufacturing Ready for mass deployment Multi-million dollar state-of-the-art reactor production facility Cost effective mass production Consistent high quality Initial capacity supports 10,000 bpd/yr of orders Reactor manufacture Plans in place to support a 4x capacity increase Reactor approved as fit for deployment Catalyst service partner trained and certified Catalyst loading 19

20 JV with Waste Management, NRG Energy and Ventech Monetizing renewable gas with natural gas through GTL WM (Fortune 500) North America s leading provider of comprehensive waste management services Role: renewable gas and certain locations NRG (Fortune 500) Owns largest independent power generation portfolio in US Role: project development and management Ventech Global leader in design and construction of modular refineries Role: engineering, fabrication, EPC 20

21 First JV project Go-ahead received Adjacent to WM East Oak landfill in Oklahoma City, USA Site of GTL plant Existing pilot plant and lab Landfill Final Investment Decision made to proceed (July 2014): Upfront engineering complete; key permits received; all major contracts signed Construction begun; mechanical completion end of 2015; full operation Q1-Q Will provide first Velocys commercial reference plant

22 Pursuing the development of multiple plants GTLGTL JV LLC First First JV LLC siteplant at East Oak landfill site Development activities for additional sites will begin in the near future 22

23 Acquisition of leading project developer Delivering the Ashtabula GTL opportunity to market Velocys selected by the developer of Ashtabula GTL in September 2013 as FT technology provider This leading project developer of smaller scale GTL in North America was acquired by Velocys in June 2014 Houston-based Project team now operates as part of Velocys Portfolio of sites under development across North America First project will be 4,200 bpd GTL plant in Ashtabula, Ohio, USA First phase of a 10,000+ bpd facility Substantial existing infrastructure enhances economics at site FEED work underway; air permits being resubmitted for larger plant size Velocys technology remains fully available for license to others 23

24 Ashtabula GTL project GTL in the Marcellus/Utica Ashtabula GTL site Will convert abundant low-cost natural gas into: High value specialty products (solvents, lubricants and waxes) Ultra clean transportation fuels 24

25 Ashtabula GTL project Site location & layout Lake Erie Ashtabula GTL Site benefits from access to substantial existing infrastructure: waste water treatment; power plant; cooling water pumping; air separation; gas pipeline; rail and barge; local customers for bi-products 25

26 Red Rock Biofuels US DoD sponsored BTL Velocys selected for 1,100 bpd biomass-to-liquids (BTL) plant Located in Oregon, USA Using forestry waste feedstock Supported by US Department of Defense and US Department of Energy Received $4.1m phase 1 grant for engineering in July 2013 FEED study complete Received a $70m construction grant in September 2014 Targeting final investment decision H Southwest Airlines to offtake 3 million gal/yr of aviation fuel from the plant 26

27 GreenSky London Renewable jet fuel in London Velocys selected by Solena Fuels as FT supplier for commercial 2,500 bpd wastebiomass-to-liquids plant GreenSky London plant in partnership with British Airways Competitive selection process after technology evaluation advised by Fluor BA to provide off-take for jet fuel Pre-Front End Engineering completed Site selection announced April 2014 Site of former Coryton oil refinery in Thurrock, Essex, UK Picture courtesy of British Airways 27

28 Summary Right product, right place, right time The time has come for smaller scale GTL Gas arbitrage, shale gas reserves, flare gas, stranded gas, remote locations, energy security, cleaner fuels legislation Smaller scale GTL: an alternative supply route for wax production High quality products Enable the rebuilding of local supply chains for these products wherever there is a source of low value gas Velocys, the company at the forefront of smaller scale GTL technology 15 years and >300 million invested in its unique innovative technology Working flexibility with first class partners to deliver a complete GTL solution Velocys market leading technology is ready for commercial deployment Commercialisation underway Waste Management JV, Ashtabula, GreenSky/BA, Red Rock Biofuels 28

29 Thank you Michael Williams VP, Strategy & Marketing Houston office "Velocys, Think Smaller and the Velocys logo are trademarks of Velocys 29

30 Think Smaller