SES to supply gasifiers to Brazil’s Vamtec Vitoria in deal worth more than USD 100m

Synthesis Energy Systems, Inc. (SES) is slated to supply coal gasification technology to a USD 400m Vamtec Vitoria SA biodiesel production plant, according to Vamtec Vitoria Feasibility and Project Director Jean Levitre.

The deal is likely to be valued at more than USD 100m. SES CEO DeLome Fair yesterday that the company remains in “strong consideration” for a project in South America that could net it over USD 100m in revenue, likely in reference to the Vamtec Vitoria project. Pressed by analysts for more information about the deal, she declined to provide further comment.

Vamtec Vitoria recently received a nod from the municipal legislature in Candiota, Brazil to build a local USD 400m methanol gasification-based biodiesel production plant, according to local media reports. The facility will provide 750 tonnes/day of methanol to the local market and utilize SES technology to gasify low rank coal.

Vamtec Vitoria has signed a letter of intent to purchase a 70MW turbine from Mitsubishi Groupsubsidiary Mitsubishi Heavy Industries for the facility. The company is also planning to build a 4000 t/d coal gasification train, 1300 t/d oxygen plant, 1300 t/d argon plant and 200 t/d argon plant. It is preparing an environmental impact assessment now that should be completed within two to three months. Vamtec will meet with its undisclosed investment partner in December to review the capex and opex of the project and, if green lighted,seek an EPC contractor by 2H17.

Vamtec is looking for financing to support the construction of the project, according to local media. The company is attempting to raise 70% of the value of the facility via the Banco Nacional de Desenvolvimento Economico e Social (BNDES) and the remaining 30% via equity investors. Levitre said it is in talks with various investors now and declined to provide more information.

The Vamtec Vitoria plant will help reduce Brazil’s reliance on imported methanol, a key component of biodiesel. Each liter of biodiesel contains about 12% methanol and Brazil currently imports about 1.5m tonnes of the chemical compound annually. Brazil has ramped up its biodiesel production in recent years, a development that has contributed to a 675m-tonne reaction of greenhouse gas emissions.

Based in Houston, Texas, SES sells technology that can convert low grade coal, biomass and municipal solid waste into energy products for applications in the power generation, industrial fuels, chemicals, fertilizers and transportation fuels industries. The company reported revenues of USD 500,000 for the three months ended 30 June, down from USD 4.6m on the year. As of that same day it had USD 13.8m in cash and cash equivalents and USD 2.4m in working capital.

SES has built extensive ties to industry and government in China over the last several years. It is angling to use its base of operations in the country to faciliate a global expansion in the company years. For example, the company’s Chinese joint venture with Suzhou Thvow Technology Co Ltd, known as Suzhou Tianwo SES, is likely to be involved in supplying equipment to SES’ projects in South America, CEO DeLome Fair said earlier this year. Simon India Ltd, another SES partner based in India, is also likely to be involved, Fair said at the time.

SES declined to comment on this story.

 

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