JAMMY
25 Aug 2018
ENVIA Insurance and impact on Velocys Donatron: since the 2nd reactor assembly is still off line, it is not a far fetched assumption that one or all reactor cores were damaged by the cooling mishap. Velocys does not have spare reactors sitting around. Even if it was decided to replace the reactor core(s) it will take a while before the 2nd reactor assembly will be back up. It is now over 3 months since the leak was announced. I would venture that the assembly will come back on line within the next two months.
JAMMY
25 Aug 2018
ENVIA Insurance and impact on Velocys MM: a couple of data points about ENVIA’s ownership and Velocys additional funding from news releases: 5-2-2016: … US$9 million will be provided as a loan secured on the project. The terms of the loan provide Velocys the opportunity to gain a greater equity share of the project and greater influence in the commissioning, start-up and operations of the plant. from 2016 Annual Report - ownership of ENVIA up to 28% after loan 15-5-2017: from fund raising - additional $3.4M in loan - added to $9.3M to $12.7M from 2017 Interim report - ownership in ENVIA up to 33% after NRG exit 30-10-2017: additional $0.7M in loan - total loan $13.4M 15-1-2018: from fund raising - “(iii) to fund the Company’s working capital and central operating costs, including additional support to ENVIA until it reaches sustainable profitability expected in the second quarter of 2018†- no info how much money went into ENVIA but it was not a loan. We don’t know the original ownership structure between the 4 partners, but based on the numbers above, Velocys is the only partner who put more money in ENVIA.
Donatron
24 Aug 2018
ENVIA Insurance and impact on Velocys Personally I think it’s just a simple question of needing new parts, which are custom-engineered with a long manufacturing lead time and which are likely to be expensive. I would expect there was at least some damage to the reactor given the amount of time that has now passed, so parts of it may need to be rebuilt. I think this is also linked to the insurance claim and not wishing to prejudice that while it is still on-going. It’s in nobody’s interest not to repair the reactor, as the plant is profitable once fully operational. Given the first reactor has now been operating for about a year without any drama (that we know of), you would expect that the second reactor can do the same once repaired.
Mikemine
24 Aug 2018
ENVIA Insurance and impact on Velocys “We know who the owners are? Velocys, VPI LF-GTL (part of Ventech and not a part that has gone into bankruptcy) and Waste Management Inc., investing through the WM Organic Growth Group.†Thank you for that. I obviously misunderstood the structure of the company. I assume any costs will be split 3 ways. It follows that ongoing financial support might be split 3 ways as well, although all we’ve heard about is VLS’s involvement presumably via additional loans. The working reactor was modified fairly quickly. Unless there was additional damage to the 2nd reactor its fair to say it could have been modified and back in action pretty quickly IMO. It begs the question why is it still out of action? 3 scenarios spring to mind, there are probably others. First, the 3 partners cannot agree on who pays for what. This could be the case especially if the others have lost interest. This might lead to the whole project closing down as Envia won’t make a profit with just one reactor. I rate this a low probability though. Secondly, Envia won’t move without the insurance issue being sorted. I find this not realistic as IMO the insurance company should have indicated its opinion by now and, if won’t pay, Envia will have had to make a decision to repair the damage itself or close down. Its been nearly 4 months now. Thirdly, Envia are waiting until the first reactor has performed to a certain standard over longish period of time. I find this to be the most compelling. It would be most embarrassing if they repaired the reactor only for it to fail again a short time afterwards. I don’t expect Red Rock would be overly impressed and they might well be viewing other sites in which to use VLS again. Its all conjecture. Only news from Envia/VLS will tell us the truth. An update would be most welcome.
Donatron
24 Aug 2018
ENVIA Insurance and impact on Velocys Thats the trouble with Envia, its very opaque. Without paying money I can’t even find out who the owners are. We know who the owners are? Velocys, VPI LF-GTL (part of Ventech and not a part that has gone into bankruptcy) and Waste Management Inc., investing through the WM Organic Growth Group. Ventech Engineers International, LLC was the part of Ventech that acted as Engineering, Procurement and Construction (EPC) contractor and went bankrupt in April 2017. Per the recent financial statements: The EPC for the ENVIA project, Ventech Engineers International, LLC, entered bankruptcy proceedings in April 2017, during the commissioning of the plant. (VPI LF-GTL, who is a part owner of ENVIA Energy LLC, was not subject to the bankruptcy proceedings). During this period, Velocys was called upon to leverage its experienced team of technical advisors to support the ENVIA team on site, which allowed work to proceed close to the original plan, as well as supporting the delivery of the subsequent operational milestones. As part of the commissioning process, throughout 2017 the ENVIA team, supported by Velocys’ technical advisors, implemented improvements to the plant’s control system. This has removed a number of single point failures of the plant and has significantly decreased the number of spurious trips associated with the non-FT units, leading to improved operational reliability. On a side note, this was also in the financial statements, which may go some way to explaining the situation with the leak: RISKS AND MITIGATION Risk description and impact No ENVIA EPC recourse Due to the bankruptcy filing of Ventech Engineers International, LLC, there may be no financial recourse to the EPC of the ENVIA plant for problems that would normally be the responsibility of the EPC. The inability to recover damages against the EPC could result in ENVIA’s having to shoulder liabilities that should otherwise be allocated to the EPC, resulting in additional expense for Velocys and other JV members. Risk management strategy ENVIA, with support from Velocys, is continuing to identify and mitigate ongoing EPC legacy issues at the plant in a timely and cost-effective way. The impact of this risk is significantly reduced as the operational life of ENVIA increases.
Mikemine
24 Aug 2018
ENVIA Insurance and impact on Velocys Jammy, thats a reasonable conclusion to come to but its not knowledge. We don’t know for sure that WM and NRG had or have lost interest nor that they have not contributed more. Thats the trouble with Envia, its very opaque. Without paying money I can’t even find out who the owners are. Without proper news we are left with suppositions and rumour. The elephant in the room is still this Envia situation and it needs to be cleared up now.
JAMMY
23 Aug 2018
ENVIA Insurance and impact on Velocys Donatron, I wonder about this since the February 6, 2016 news release when VLS announced the $12M loan to ENVIA. MM: If you read that news release you can read between the lines that only VLS came up with money. NRG had lost interest by that time; Ventech was running out of money and only WM was financially in a good shape. However, they were also losing interest in their ventures via WM Organic Growth Group.
Mikemine
23 Aug 2018
ENVIA Insurance and impact on Velocys Jammy “Remember that none of the JV partners besides VLS put up money to keep the plant going once all initial investment was gone.†Thats very interesting but how do you know that?
Donatron
23 Aug 2018
ENVIA Insurance and impact on Velocys To totally contradict what I said earlier, WM is a listed company: [link] In fact, it’s a HUGE company. I always assumed it was a small, local waste company but it has a market cap of $39bn. It makes it all the more amazing that VLS are carrying all the costs at ENVIA at the moment. I guess they don’t really want to spend further money on what is, to them, a tiny side project. With revenues of $14bn last year, ENVIA is a rounding error to them. I wonder why they didn’t throw more weight behind it though?
JAMMY
23 Aug 2018
ENVIA Insurance and impact on Velocys Actually, Waste Management invested in ENVIA via the WM Organic Growth Group. I tried to track this subsidiary down without much luck. I think WM closed it down because most OGG’s executives have left WM. Remember that none of the JV partners besides VLS put up money to keep the plant going once all initial investment was gone. ENVIA did not make any effort to create a profile as a project developer which it originally was - no marketing - no branding. Velocys is the sole active member of the JV and has been carrying this company from the construction phase on.
investmaster
23 Aug 2018
ENVIA Insurance and impact on Velocys WM have always been quiet about ENVIA. They may well say something when we get stable supply again. We will get an update from VLS in about a month’s time with results. I Hope to see some update soon on strategic investors…
Donatron
23 Aug 2018
ENVIA Insurance and impact on Velocys That’s really just to publish “aren’t we great†press releases though. Nobody voluntarily publishes bad stories about themselves! Good idea though, I hadn’t thought to look at the other JV partners’ websites. An update of some sort is sorely needed.
Mikemine
23 Aug 2018
ENVIA Insurance and impact on Velocys I found this [link] but no mention of Envia. Pity.
Donatron
23 Aug 2018
ENVIA Insurance and impact on Velocys You can see the partners’ official websites here: [link] Waste Management [link] NRG Energy (no longer part of the joint venture) [link] Ventech no longer has a website. As far as I can tell, there is no mention of ENVIA on Waste Management’s website. I don’t believe it is a listed company, so really it has no need to publish anything about the leak.
Mikemine
23 Aug 2018
ENVIA Insurance and impact on Velocys I have been trying to get an alternative view on the leak in Oklahoma. I admit I’m not very good at research but I’ve been trying to get corporate news about Envia from Waste Management, without any success I might add. I think I’ve identified the correct company, there seem to be various under more or less the same name, but the parts of their website I’ve found do not refer to Envia at all and the news flow section seems very happy clappy, much different to UK companies. Has anybody else gone down this road trying to get a view from Envia’s other partner?
