Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Q&A: Velocys believes CIS deal will be a door-opener

Velocys, formerly Oxford Catalysts, owns technology that powers small scale gas to liquids plants. It recently announced a commercial deal to sell a reactor to an unnamed customer in the Commonwealth of Independent States (CIS).
Q&A: Velocys believes CIS deal will be a door-opener

Velocys (LON:VLS), formerly Oxford Catalysts, owns technology that powers small scale gas to liquids plants. It recently announced a commercial deal to sell a reactor to an unnamed customer in the Commonwealth of Independent States (CIS). 
Proactive Investors (PI) recently spoke to Dr Neville Hargreaves, the company’s Business Development director.

PI: First, how significant is this latest deal?

Hargreaves: I think its significance lies in the enormous potential of the market in Russia and the other CIS countries, for gas to liquids. There's an enormous amount of stranded gas there. There's also a significant flaring problem in many parts of the region. So, we've always felt that that market was pretty important to us, and it's great to get a real sale into it.

PI: But this, itself, is actually quite small, isn't it? Because I think revenue is - what - just US$2mln a year. Is that right?

Hargreaves: That's the right order of magnitude, yes. So, it's a starting point, really. It's pretty small in terms of the commercial plants we expect to be selling in the future. It's only a single reactor, but although, obviously, we welcome the revenue, the greatest significance, I think, is that we're recognised as having the solution to some of the big problems in that industry, in that market.

PI: Well, let's take a look at this, because as you say, you've got this technology to build what many regard as relatively low cost plants, to generate synthetic liquids from natural gas, which is widely expected to be a big turning point for investors, as you just alluded to. How far away are you from this significant point?

Hargreaves: Well, it's always a hard question to answer, which is why I'm smiling, but I really do think we're very close. We have a number of projects that have gone through a significant amount of engineering, due diligence, understanding project development, and it's the final investment decision. You only know when you've got there, but I do think that getting what we call a full commercial multi-reactor plant will happen soon.

PI: So, 2014 could, potentially, be very exciting for investors. Just outline the strategy.

Hargreaves: I think, really, we need just to keep doing what we're doing. We're very confident that smaller scale gas to liquids will happen soon in North America, in the CIS, and elsewhere. It's just a question of exactly when those points of inflection occur. So, I think we carry on working with those customers we're working with. We're attracting new people in all the time, and make sure we're there to deliver when we're required.



Register here to be notified of future VLS Company articles
View full VLS profile

Velocys Timeline

Related Articles

Oil rig
April 04 2017
Europa’s CEO, Hugh Mackay said: “The remainder of 2017 will see Europa participate in high impact development and exploration projects for which our share of the costs is now funded”
wind turbine in the sea
November 04 2016
Shares are up 13% this year, despite the negative effect of Brexit
Offshore oil operations, North Sea
September 29 2016
Jersey continues to “work actively” on a number of opportunities in the UK, which it expects will lead to the acquisition of producing oil and gas assets in the near future.

© Proactive Investors 2017

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use