LONDON (Alliance News) - Velocys PLC said Tuesday it has completed a review of its strategy, leading it to introduce a new business model to increase control over project delivery through a partnership approach and to focus on the most attractive markets.
The gas-to-liquid technology company said its all-important commercial reference plant in Oklahoma, US has been completed and commissioning is ongoing. The new strategy is underpinned by "four key themes" - strategic partnerships, a new model, its offering and its leverage capabilities.
Velocys said it will implement alliances with partners that have the resources, scale and capability to access large, high-value markets and drive growth. With those partners, Velocys wants to become "the clear market leader" by taking control of multiple projects in order to reduce delivery risk and speed up growth.
At the same time, that business model would still allow Velocys to remain "capital light, with strong economics from technology sales."
Velocys wants to offer a "one-stop-shop" to customers with its new partners, offering a "fully integrated and financed, cost-effective and operations-ready plant solution."
Velocys said it will leverage its differentiated technology and other capabilities to work with partners to modularise and drive down costs of the "complete offer".
The new strategy will be implemented in three key markets - the renewable diesel fuel and jet fuel markets, stranded gas, and offshore gas flaring.
The technology turns gas into various liquid forms, allowing it to be turned into different products and being more easily transported.
Velocys said it aims to supply premium renewable diesel and jet fuels, and premium wax products from landfill gas and woody biomass in specific high growth markets. North America will be the company's starting point.
It also wants to utilise stranded gas assets, those with resources but no available infrastructure such as a pipeline to transport it, to produce wax products in North America and said that would be an "entry point into other global stranded gas markets".
Velocys also plans to develop an integrated gas-to-liquid offering to help offshore gas projects avoid flaring gas.
"Velocys has achieved significant milestones over the last 15 years, culminating in the construction of our commercial reference plant in Oklahoma City, which is now being commissioned. The time is now right to build on our position of strength. We are mobilising to create world-class partnerships to take leadership positions in key high-value markets," said Chief Executive David Pummell.
"I am confident that we have the right strategy that will deliver a substantive growth business. I look forward to providing further details of the strategic alliances that will underpin this strategy as we roll them out," he added.
Velocys shares were down 0.8% to 36.20 pence per share on Tuesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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