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Sean83 – I agree it will happen but it will have to be done economically.
Here are the numbers for the Bayou Fuels plant which I found in a Velocys presentation by Stratmann, dated July, 2018.
“Significant value uplift from feedstock at equivalent $1/gallon to final products at $8.20/gallon of which federal credits (50%), state credits (25%) and product revenues (25%)”
SE: Time will tell...but even well endowed investments funds will require a healthy return on their investment which Altalto cannot provided without governmental help.
Thurgaton: I also have tried to post comments that are verifiable and to separate facts from opinions. Here is a fact for the Altalto project. I agree that the prospects of the Altalto project have been enhanced byt Friday’s endorsement, the economic reality is the jet fuel produced cannot be currently produced at a cost comparable to the jet fuel based on fossil fuels. Hence the Altalto products will need to be subsidised by the government for an extended period. When investors consider this project, they will need guarantees from the government. The Bayou Fuels project has the same issue of course. The Bayou Fuels project received a loan guarantee for the US government and yet they have not found investors. Unless the crude oil price goes back to $100/barrel, this project, however green it is, will depend on public moneys.
See Biofuelsdigest.com for Fulcrum's reaction. In short:
- the cost overruns are not $100M
- project is 85% complete
- Fulcrum said the arbitration ruling is not yet in
- Abengoa has not abandoned the project
We'll follow this quickly developing story!
share4: don't forget Enerkem...
Not so sure if we lost a competitor. I am pretty sure Fulcrum will find a way to finish the project. By the way, that happpens with Envia as well. Velocys was the only JV partner which put in the funds to finish to project.
If interested you should read the original article in El Confidencial. Here are a few extracts which hopefully help clarifying the situation.
"The company chaired and directed by Gonzalo Urquijo was awarded this project, promoted by the Californian company Fulcrum , in late 2017 with a delivery time of about two years. The original budget was around $ 200 million. The extraordinary costs, motivated by multiple modifications of the project during its construction, thus amount to 50% of the initially planned expense ." Indeed, in September 2018, Fulcrum switched FT technology providers from Emerging Fuels Technologies to Johnson Matthey/bp.
Background: In May 2015, Fulcrum awarded an engineering, procurement and construction contract to Abengoa for the construction of the Sierra Biorefinery. The $200 million fixed-price contract guarantees the schedule, cost and performance of the Sierra Biorefinery.
"A few months ago, and at this level of changes, Abengoa demanded its payment from Fulcrum. But the new direction of the project in the client refused. The Spanish company then requested arbitration before the International Chamber of Commerce. The result of that arbitration, according to the same sources, has been Solomon's judgment like. Each party must assume 50% of those extra costs, that is, 50 million dollars each. Additionally, Abengoa must assume another 17 million financial guarantees associated with the project, which Fulcrum executed . This caused Abengoa to bring that execution to court."
"Obtaining renewable fuel for airplanes through the use of urban waste is a process still in a very experimental phase and whose commercial viability has yet to be demonstrated. The Fulcrum plant is precisely a worldwide milestone to test whether this circular economy process can be generalized ."
A new company was created yesterday to produce sustainable aviation fuel.
"Over a 15-year stretch, LanzaTech has developed technologies that can turn carbon emissions into ethanol that can be used for chemicals and fuel. Today, the company announced the spin-out of LanzaJet, alongside its corporate partners Mitsui, Suncor and All Nippon Airways, to bring sustainable aviation fuel to the commercial market."
Sean83: The answer to why Velocys needs Fulcrum to be successful is that the gasification part of the plant is provided by TRI which is also Altalto's gasification technology provider. The Abengoa-Fulcrum dispute will delay the startup of the Reno plant for months. This will affect Velocys' case to attract investment.
You mentioned in a previous post that you are "an engineer on an alkylation unit on a UK refinery, we make high octane alkylate for jet fuel so I can say with some confidence that the science behind this is sound." Since you are obviously a chemical engineer, I expect you to have an appreciation for the fact that feeding black bags of rubbish is not the same as feeding crude oil to a refinery. Then you also know that when the refinery switches to a different crude oil, this requires a major re-optimisation of the refinery processes. Municipal solid waste does not have a steady composition and requires a quite different approach. In addition, the cleaning up of the syngas produced in the TRI gasifier and the Linde Hot Oxygen Burner is a challenging proposition, especially because of the variations in contaminant content of the feedstock.
Does anyone know why the publication of the preliminary results and the AGM are delayed? Must be a material event...
Velocys changed their Financial calendar on their Investors page: the 2019 preliminary results are no longer to be announced in May 2020, but tba!
Swanseayellow: Expatbrat and I are not one and the same poster…however we have one thing in common: we are both fact based.
Sorry forgot rubbish...
IM: from the article you quoted: "Hundreds of thousands of tonnes of black bin bag rubbish would be converted using developed technology by the Oxford University spin-out, that merged with a US tech company."
Which technology will Velocys use to feed black bin bag to TRI's gasification unit?
Thurgaton: have a look at the incorporation of Altalto Ltd, Altalto Immingham Ltd, and Altalto Immingham Holdings Ltd and you will find no one else but Velocys. BA and Shell are not part of these companies for the moment. The JDA mentioned in the May 12 press release mentions that British Airways and Shell have each been granted an option to take a one-third share in the equity capital of Altalto Limited (a subsidiary of the Company) at a strike price of £1, as a pre-cursor to a full Shareholders’ Agreement for Altalto Limited in due course.
Let us set emotions aside and take a look at how Velocys will generate revenues. Expatbrat is correct, the Velocys owned technology is about 15% of the total plant. The revenue will come from the license fees, reactor and catalyst sales. The catalyst sales are repetitive on an approximately biannual basis. The license fees are 100% Velocys, but the reactors and catalyst are manufactured by partners, so that revenue is shared. They might be able to generate some revenue from the engineering and commissioning activities but that is only a minor part, because they do not have to manpower to make major contributions. They will be a partner in the Altalto JV, but it will be a minor part, like the ENVIA JV. The revenues from Altalto are 4 to 5 years away. The question is will Velocys have the wherewithal to stay alive until then.
In addition, the Velocys proprietary catalyst and reactor technology development has stopped when they closed the catalyst development lab in Abington a few years ago and reduced the R&D staff. This means that the technology market window is closing since the competing technologies continue to catch up if they have not already.
The bottom line is that Velocys need to sell/license their technology much more aggressively they have done so far, in addition to developing slowly evolving projects, to get out of the valley of death they are in now. The upcoming annual report will show if they are moving in the right direction or not.
Last day for the preliminary results...
Pro.88: Lanzatech is a private company, hence it does not have a market cap. However they did very well in raising money: LanzaTech have raised a total of $276.3M in funding over 6 rounds.
Thurg: not quite so...
Shell is an equity partner in W2C-Rotterdam together with Enerkem, Air Liquide, Nouryon and the Port of Rotterdam. I have not heard that Shell is an equity partner in Altalto. At the other hand, no final investment decision for the R'dam plant has been made.
Enerkem has also signed a project development agreement with Suez to build a similar plant in Tarragona, Spain. The combination is called Ecoplanta Molecular Recycling Solutions.
Both plants have a nominal capacity of 270 million litres per yr of methanol. (https://enerkem.com/company/facilities-projects/)
That is CA$ 616.5M of course...