Velocys Plc (LON:VLS) has signed an agreement with Japanese fabrication group Morimatsu which will become the company’s preferred supplier of module engineering and fabrication for its gas-to-liquid fuel plants.
The AIM quoted group highlights that the arrangement is expected to bring down costs for the planned GTL and biomass-to-liquid (BTL) fuel plants.
Today’s news of a memorandum of understanding comes after the two companies worked together for eighteen months on modular designs for a range of plant sizes, and it is expected that the terms agreed in the MOU will be reflected in legally binding documentation within the next few months.
Velocys highlighted that this is the first strategic partnership to be agreed following its strategy review, completed in the fourth quarter of 2016, which sees the group aiming to work with partners so that it can offer customers a “one stop shop” - to deliver a fully integrated and financed plant solutions.
Chief executive David Pummell said: “The potential benefits of further modularisation of smaller scale GTL plants are significant in terms of reduced plant build schedule, reduced risk of delays, lower capex and opex.”
“I am confident that together, Morimatsu and Velocys will continually improve the plant offer to our customers, underpinning both the economics and the delivery of an integrated solution in our renewable fuels and stranded gas markets.”