Velocys and Shiloh in new GTL manufacturing partnership and share purchase agreement
11 March 2014
Velocys plc, a developer and supplier of smaller scale gas-to-liquids (GTL) technology, announced a new manufacturing partnership with and new share purchase by Shiloh Industries, Inc.
Velocys and Shiloh have been working together since 2012 to develop and implement economic, high quality mass-manufacturing capabilities for the Company's Fischer-Tropsch (FT) reactors, based on advanced manufacturing technology and quality systems from the automotive industry. Together with Shiloh, Velocys’ supply chain can support annual FT reactor orders sufficient for 10,000 bpd of production, and plans are in place enabling expansion to 40,000 bpd in time for order growth.
Shiloh is a North American supplier of engineered metal products and light weighting solutions to the automotive industry.
Velocys and Shiloh have agreed to preferentially work together to improve the Velocys’ FT reactor manufacturing, and, over time, to enhancing the effectiveness of the whole GTL plant, as well as exploring other opportunities in the oil and gas market. Shiloh is investing several million in manufacturing resources for Velocys, and is making available to the partnership a dedicated team of engineers.
Shiloh will also purchase 601,326 new ordinary shares in Velocys at a price of 200p (US$3.33) per share.
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