Velocys plc, the developer of smaller scale gas-to-liquids (GTL) plants, signed a memorandum of understanding (MOU) with Morimatsu (Jiangsu) Heavy Industry Co., Ltd., a subsidiary of Morimatsu Industry Co., Ltd. establishing a strategic alliance. Morimatsu will be Velocys’ preferred supplier of module engineering and fabrication services for the plants. This will drive down costs for GTL and biomass-to-liquids (BTL) plants based on Velocys technology by optimizing the design and fabrication of plant modules.
Morimatsu is a Japanese fabrication and engineering firm with more than 70 years’ experience and expertise in the design, engineering and fabrication of modular processing facilities for oil and gas, petrochemical, fine chemical, pharmaceutical, power and metallurgical industries. Its clients include the world’s leading players in these industries. Its fabrication facilities include five plants in Japan and three in China with more than 800,000 m2 of floor space. Its revenues totalled US$700 million in 2016.
Velocys and Morimatsu have been working together for the past eighteen months on the modular design of the Fischer-Tropsch (FT) section for a range of plant sizes—a design that will deliver targeted reductions in both capital cost and plant footprint. The two companies have identified strategic synergies that underpin an alliance where the partners shall collaborate with other strategic partners to further drive down costs across all areas of the plant, through innovative modularization.
This collaboration will extend to both GTL and BTL plants. Morimatsu will continue to commit significant resources during this ongoing work program.
Velocys expects the terms of the MOU to be reflected in legally binding documentation within the next few months.
This is the first strategic partnership that has been formalized since a review of Velocys’ strategy was completed in 4Q 2016. A core theme of Velocys’ new strategy is to deliver, jointly with partners, a “one-stop-shop” offer to customers— a fully integrated and financed, cost effective and operations-ready plant solution.