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Insurance settlement reached for Envia incident

Published by , Senior Editor
Hydrocarbon Engineering,

Velocys plc has announced that Envia Energy LLC has executed an agreement with Liberty Surplus Insurance Corp. and Zurich American Insurance Corp. to settle all claims and disputes related to the incident at the Envia plant announced on 15 May 2018.

Last year, a leak was detected at the plant that is believed to have originated inside one of the plant’s two Fischer-Tropsch (FT) reactors.

Based on the preliminary investigation by Envia and supported by Velocys personnel, the root cause of the issue was believed to have originated with the design of an ancillary system.

The settlement amount totals US$2.3 million and has already largely been paid to Envia with the final payment of US$330 000 due to Envia on 25 March 2019. The agreement also removes any potential for current or future liability on part of Envia or Velocys.

In addition to its minority equity stake and secured lending to the Envia project, Velocys has been the technology licensor to Envia for the central processing unit (two micro-channel FT reactors), which was designed to convert landfill gas to liquid fuels and which has been operational at the Oklahoma site during the last two years. Velocys believes that the objectives of this demonstration plant have now been met. This will allow Velocys to focus its resources on developing its commercial waste to jet fuel plants in the US and the UK as well as supporting its licensee in Oregon.

Henrik Wareborn, CEO of Velocys, said: “We are pleased that Envia has reached this positive agreement with respect to the insurance settlement.

“The Envia demonstration plant has provided Velocys with an invaluable experience and track record, and creates a good platform for the company to move forward. It now allows us to focus our efforts on progressing with the development of our Bayou Fuels biorefinery project in Mississippi and our Altalto Immingham UK waste-to-jet-fuel project in the UK, working with our strategic partners to produce commercial scale volumes of renewable fuels.”

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