Ashtabula Gas-to-Liquid Project Put ‘On Hold’

ASHTABULA, Ohio – Velocys plc informed investors Thursday that it has put “on hold” development of its proposed plant here.

Velocys, a British company “at the forefront of smaller scale gas-to-liquids (GTL) that turns natural gas or biomass” into products such as diesel, jet fuel, waxes and base oils, told investors that analysis during the first half of 2016 found the projected economics for the Ashtabula GTL plant remain favorable.

But with current challenges in raising equity “for capital projects of this nature” and deferring costs, Velocys put development of the Ashtabula plant “on hold, pending reassessment as part of the broad review of the strategy of the business that the company is currently undertaking.” The 5,000-barrel-per-day plant would focus on the production of waxes and other specialty products, according to the company.

Pinto Energy announced in 2013 that it would build a $200 million gas-to-liquids plant that would produce 2,800 barrels per day on an 80-acre site that was once part of the Union Carbide complex. Pinto was acquired in June of that year by Velocys. Last year, Ashtabula Energy, a Velocys division, applied for a permit from the Ohio Environmental protection Agency that would allow it to discharge treated water into Lake Erie as part of the plant project.

Meanwhile, construction of Velocys’ ENVIA Energy GTL plant in Oklahoma City I “progressing well,” the company reported. Modular process units including reactors and the other major prepackaged equipment skids have been set on site, where about 150 personnel are now working.

Under a new agreement between the two companies, a Velocys team will serve on-site under the ENVIA team plant manager during commissioning and start-up through the end of the year.

“The ENVIA plant is the key focus of the team, and excellent progress is being made,” said David Pummell, Velocys CEO.

“On other fronts, multiple opportunities are progressing toward firm orders,” he continued. “I look forward to updating shareholders on the ongoing review of strategy and future developments in due course.”

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