VLS.L Regulatory News (VLS)

27 Oct 2009 07:00



27th October 2009 

OXFORD CATALYSTS GROUP PLC

("Oxford Catalysts" or "the Group" or "the Company"

$5.9 million Contract

Oxford Catalysts Group PLC, the leading technology innovator for clean synthetic fuels, is pleased to announce that it has signed a definitive agreement (Joint Development Agreement  or "JDA") with SGC Energia, SGPS, S.A. ("SGCE"), for the demonstration and commercialisation of the Group's Fischer-Tropsch ("FT") technology, primarily for Biomass-to-Liquid ("BTL") and Waste-to-Liquid ("WTL") applications. 

SGCE is a holding company that acts as the renewable energy investment arm of João Pereira Coutinho, one of Portugal's most successful businessmen. It is owned by Mr Coutinho and his SGC Group; the latter is active in 13 countries and has an annual turnover of €1 billion (see notes to editors). 

Oxford Catalysts' US subsidiary, Velocys, Inc. ("Velocys") and SGCE have been working together since 2007 under a memorandum of understanding. The recently signed JDA formalises the commercial relationship between the parties and provides $5.9 million of further funding directly to the Group over the balance of 2009 and 2010. 

In addition to other Group expenses, the JDA will contribute towards the costs incurred for the FT demonstration unit, now ready for shipping, as well as covering all the expenses associated with the extended demonstration run, planned to take place in Güssing, Austria. Güssing is arguably the prime location globally for demonstrating bio-conversion technologies such as BTL − it is unique in having a commercial scale biomass gasifier, operational since 2005, that supplies the entire energy needs of the 10,000 inhabitants of the local town (see notes to editors).

The demonstration plant, which will have a capacity of approximately 10,000 gallons/year, will be operated on gasified wood chips. The demonstration equipment is due to be received in Güssing in December; commissioned and started up in the first quarter of 2010; and thereafter operated for some six months. Following demonstration, the equipment will be relocated to the Wright-Patterson Air Force Base near Dayton, Ohio, USA where it will be evaluated for the production of synthetic jet fuel. 

Under the terms of the JDA, SGCE will have lead responsibility for commercialising the Group's FT technology for BTL, WTL and Coal-to-Liquid applications. The JDA also provides for commercial involvement by one of SGCE's partners, a very large industrial multinational. 

Roy Lipski, CEO of Oxford Catalysts Group said:

"We are pleased to have successfully progressed our relationship with SGCE. The JDA is a strong endorsement of our technology and is illustrative of our commercialisation strategy in action, whilst also delivering a material financial contribution to the Group. 

"We're confident that we have found in SGCE, and through their impressive associations, a strong partner with which to commercialise our FT technology for BTL and WTL applications.

"We are also delighted to have secured such a high profile and ideally suited location to demonstrate our FT technology. Successful demonstration at Güssing will be a significant step towards being ready to take commercial orders for full scale plants."

Vianney Vales, CEO of SGCE said:

"SGCE is fully committed to the production of clean fuels and is deploying substantial resources in this market. We are confident that the Velocys technology provides a important competitive advantage in this area, and that through our partnership with them we will secure a leading position in the production of clean next generation synthetic fuels." 

- Ends -

For further information, please contact:

Notes to Editors

Oxford Catalysts designs and develops technology for the production of clean synthetic fuels from both conventional fossil fuels and renewable sources such as biowaste. The Group is primarily focused on the emerging market for distributed smaller scale production of synthetic fuels via Fischer-Tropsch ("FT")  synthesis − a market that has the potential of producing as much as 25 million barrels of fuel a day. 

The FT reaction is used when converting natural gas, coal or bio-mass into clean high-performance liquid synthetic fuels, processes known as GTL, CTL and BTL respectively. The Group is the recognised world leader in the design and development of high-activity catalysts and associated novel chemical reactors for the small scale production of synthetic fuels. (The Group's reactor technology − known as microchannel process technology − is marketed under the brand name of Velocys).

Oxford Catalysts Group PLC is listed on London's AIM market (LSE: OCG). The Group has some 90 employees with facilities near Abingdon, Oxfordshire, UK and Columbus, Ohio, USA.

www.oxfordcatalysts.com 

www.velocys.com 

About SGCE

SGC Energia, SGPS, S.A. ("SGCE") is a Portuguese incorporated holding company that acts as the investment arm of João Pereira Coutinho, one of Portugal's richest men, in the renewable energy sector.  Mr Coutinho, through his holdings, is involved in the production of conventional biofuels and the development of next generation bio and synthetic fuel technologies, as well as the supply of complex integrated solutions for the production of alternative energy. Mr Coutinho's activities in the sector include the operation of a 125,000 ton/yr biodiesel production facility, the establishing of over 30,000 ha of biomass energy crops in Africa, and, with partners, the development and demonstration of gasification, syngas cleanup, and syngas-to-liquids technologies. His staff participate in the engineering and operation of facilities, as well as the business aspects of projects. SGCE is owned by João Pereira Coutinho and his SGC Group.  SGC Group is active in 13 countries and has an annual turnover of €1 billion.

About Güssing

Güssing, in South Burgenland, Austria, is a pioneering "eco-town" of around 10,000 people. It is a completely self-sufficient town in terms of energy, producing its entire heat, power and fuel requirement from local renewable materials, such as wood, sourced from within a 5 km radius. Since 2005, a power station based on gasification of wood chips has operated in the town, with an output of 4.5 MW heat and 2 MW electricity, for domestic and industrial consumers. The biomass gasifier at this facility will also be used to supply synthesis gas for conversion to fuels via the Group's Fischer-Tropsch ("FT") demonstration unit.

www.renet.at/english/sites/guessing.php 

www.eee-info.net/cms