Velocys sells its second commercial license for FT renewable diesel and jet technology to Red Rock Biofuels
Velocys plc, a developer of microchannel Fischer-Tropsch (FT) biorefineries, has received a “notice to proceed” action to commence manufacturing the FT reactors and catalyst for the Red Rock Biofuels LLC (RRB) biorefinery that will be located in Lakeview, Oregon. RRB has begun construction of the biorefinery, which will incorporate Velocys’ technology, and produce low-carbon, renewable diesel and jet fuel. Velocys’ role will be as a licensor for its technology to the project.
The contract represents Velocys’s second commercial license, the first being to ENVIA for a gas-to-liquids plant. (Earlier post.)
RRB is a subsidiary of IR1 Group LLC, which has 325 million gallons of installed biofuels capacity. The biorefinery in Lakeview will convert 136,000 tons of forestry residue into 15 million gallons per year of renewable transportation fuels including diesel and jet fuel. Enough jet fuel will be produced by the plant to fuel 1,800 round trips per year from Portland, Oregon to San Francisco.
By using forest and sawmill residues, RRB’s biorefinery will not only avoid competition for agricultural resources, but also reduce the risk of catastrophic wildfires by removing waste biomass from overgrown forests. It will also help to regenerate the local forestry industry.
RRB has in place contracts from several airlines (Southwest Airlines and FedEx as offtake partners) to purchase 100% of the jet fuel produced each year.
RRB’s Lakeview project is expected to deliver around $15 million revenues to Velocys during the construction and early operation stages of the plant, and an additional $30 million or more over the life of the biorefinery. More than $6 million has already been invoiced and received from RRB.
With broad international agreement in the aviation industry for carbon-free growth beyond 2020, airlines are actively seeking low-carbon jet fuel to reduce their greenhouse gas emissions. The civil aviation industry alone will require around 1.5 billion gallons per year of new renewable jet fuel production capacity to meet this commitment.
This is a very important milestone for Velocys, our second commercial license sold; our first licence being ENVIA. Our technology positions us at the forefront of this huge market opportunity. RRB’s success is a significant milestone for the sector, one that further demonstrates the market’s appetite for renewable transportation fuels. The successful funding of this project is a validation of the commercial viability and bankability of Velocys’ technology. The licensing of our technology to RRB is complementary to our strategy to develop our own biorefineries, the first of which will be located in Natchez, Mississippi.—David Pummell, CEO of Velocys
Velocys’ biomass-to-liquids process comprises three steps:
Gasification. Preparation of synthesis gas or “syngas”, a mixture of carbon monoxide and hydrogen, by the gasification of the solid feedstock.
Fischer-Tropsch. The Fischer-Tropsch (FT) process, using Velocys microchannel reactors, converts the syngas into paraffinic hydrocarbons.
Upgrading, Upgrading (hydrocracking, isomerization and fractionation) produces finished, premium products.
Conventional FT plants are only economically viable at large scales—30,000 barrels per day (bpd) or more. Velocys’ microchannel FT technology is commercially optimal at capacities of as low as 1,400 bpd (around 19 million gallons per year), making it an ideal choice for biorefineries using low density woody feedstock that would be uneconomic to transport over long distances to a large scale central processing facility.
Microchannel FT reactor diagram.
Velocys combines the best aspects of conventional fixed bed and slurry bed FT reactors. The FT process is highly exothermic, or heat generating. Mass and heat transfer limitations reduce the efficiency of conventional FT reactors.
In Velocys’ microchannel FT reactors, thousands of process channels with dimensions in the millimeter range and filled with catalyst are constructed immediately adjacent to water-filled coolant channels. The small-size channels dissipate heat more quickly than in conventional FT reactors. As a result, more active catalysts can be used.
Channels in an FT microchannel reactor.