Shares in Velocys PLC (LON:VLS) edged higher in early deals after the AIM-quoted company signed a definitive agreement with Japanese fabrication group Morimatsu.
Today’s agreement follows on from the memorandum of understanding (MOU) signed between the two parties earlier this year.
Morimatsu will become Velocys’s preferred supplier of module engineering and fabrication for its gas-to-liquid (GTL) fuel plants.
The arrangement is expected to bring down costs for the planned GTL and biomass-to-liquid (BTL) plants.
Velocys said itself and Morimatsu are now working “extensively” with its other alliance partners to “further reduce costs, optimise engineering designs, accelerate pace and reduce overall risk for delivering multiple GTL and BTL plants to its chosen markets”.
Before January’s MOU, the two companies had worked together for 18 months on modular designs for a range of plants.
The strategic partnership is the first to be agreed by Velocys following its strategy review at the end of 2016.
It wants to bring on board more partners so that it can offer customers a “one stop shop” and deliver fully integrated and financed plant solutions.
Shares were up 4% to 63p on Friday morning.