UK-headed Velocys plc, a developer of advanced biofuels gas-to-liquids (GTL) technology has announced that it has signed a site option agreement with Adams County in the State of Mississippi for its first advanced biofuels biorefinery in the United States (US) to be located in Natchez, Mississippi (MS).
According to a statement, Velocys has been offered economic development incentives from Adams County estimated to be worth the equivalent of US$42 million. The project expects to qualify for additional incentives worth up to US$15 million, provided via Mississippi’s Advantage Jobs Act and other statutory tax incentives.
These incentive packages would reduce the company’s future tax liabilities and are subject to Velocys meeting certain minimum requirements for capital investment and local employment opportunities.
Velocys has also received commitments from Adams County worth approximately US$4 million relating to the land and upgrades to the site and an additional US$1 million site upgrade commitments from local utility suppliers, further increasing the attractiveness of the site.
We are pleased to have Velocys join our growing industrial family. These quality jobs, significant investment and purchases of area forestry products will have a huge and meaningful impact on our area and local economy, said Mike Lazarus, President of the Adams County Board of Supervisors.
The company highlights that the site and local area benefits from:
- an attractive regulatory and tax regime;
- the availability of an abundant local supply of low-cost forestry residue that will form the feedstock of the plant;
- advantaged transportation infrastructure including barge, rail, and road;
- accessible utilities;
- land that meets all the required criteria including space and terrain to support an industrial development;
- a local workforce skilled in servicing the forestry industry;
- and, a local community with facilities and amenities that will attract additional skilled personnel during construction and ongoing plant operations.
Future biorefinery sites
The 100-acre (≈ 40 ha) Natchez site was confirmed after the company analyzed a broad set of operational and tax considerations at 12 possible sites in four States in the Southeast United States. Due diligence, including site visits, was completed at each of these sites and incentive offers were received from each State in question.
The Mississippi Development Authority wishes Velocys continued success in their new venture in Natchez and Adams County. With its strategic location and close proximity to a major waterway, Natchez was a natural fit for this proposed capital investment of several hundred million dollars, said Billy Klauser, Chief Economic Development Officer of the Mississippi Development Authority.
The analysis also lays the foundation for future biorefineries. Velocys is maintaining its list of other “advantaged sites” in the region, which could host plants with capacities totalling 100 million (US) gallons (≈ 378.5 million litres) over the next 10 years. Velocys remains in close contact with the economic development officials in these other States regarding the locations and timing of future renewable fuels facilities.
USDA loan criteria milestone fulfilled
The announcement also completes one of the work packages required for the US Department of Agriculture (USDA) loan guarantee application announced in June 2017. Site permitting activities have now begun for the Natchez site.
This is an important step towards the development of our first biorefinery in the US to address the attractive and growing renewable fuels market. We welcome the significant support for this plant at the local level, including the future financial support that further enhances plant economics. Velocys and its partners are continuing to make significant progress towards completing other work packages needed to deliver a successful USDA loan guarantee application, which we are targeting in 2018. We look forward to updating our stakeholders on the progress of this transformational project in Mississippi, said David Pummell, CEO of Velocys.