Velocys Signs Microchannel GTL Agreement with Petrobras and Partners; Targeting GTL Deployment on FPSO

10 February 2010

Velocys, the US subsidiary of Oxford Catalysts Group PLC, has signed a Joint Demonstration and Testing Agreement with Petróleo Brasileiro S.A. (Petrobras), alongside its existing partners Toyo Engineering Corporation and MODEC, which provides for the construction and operation of an integrated Gas-to-Liquid (GTL) demonstration plant based on the company’s microchannel reactor technology. (Earlier post.)

Petrobras is the Brazilian national oil company and the largest company in Latin America, Toyo Engineering is a global Engineering, Procurement and Construction company, and MODEC is the world’s second largest owner/supplier of Floating Production Storage and Offloading vessels (FPSOs) to the oil industry.

The GTL demonstration plant, which will be located at the Petrobras facility in Fortaleza, Brazil, will incorporate Velocys’ microchannel reactor and catalyst technologies for the key Steam Methane Reforming (SMR) and Fischer-Tropsch (FT) sections of the plant.

It will be operated for nine months, after its construction and delivery in early 2011 and the subsequent commissioning and testing periods. The total cost of the plant, estimated at tens of millions of dollars, will be covered by Toyo Engineering and MODEC, while Petrobras will be responsible for the installation and operating costs of the demonstration plant.

Following successful demonstration, it is expected that the first commercial deployment of the GTL technology will be on an FPSO, for example, to mitigate flaring of associated gas resulting from the development of offshore oil fields.

The partners will be working to manufacture the reactors with Kobe Steel, Ltd., one of Japan’s leading steel makers, with whom they have been collaborating for more than a year.

Microchannel technology provides a number of advantages for offshore GTL. Not only does it accelerate SMR by 200-fold and FT reactions by 10-15 fold. It also greatly reduces the size of the key pieces of equipment and makes it possible for a GTL facility to be located on a floating vessel.

—Tom Hickey, President of Velocys

In January, Oxford Catalysts signed a binding memorandum of understanding with the Thai state-owned energy company, PTT Public Company Limited, Thailand’s largest listed company, for the development and commercialization of small scale land-based Gas-to-Liquid (GTL) facilities based on the Group’s microchannel reactor and catalyst technologies. (Earlier post.)