Velocys in US GTL company buy

Gas-to-liquids (GTL) player Velocys has made another splash in the North American market, snapping up a player in the US.

The company has bought Pinto Energy, taking with it the Ashtabula GTL project that envisages utilising cheap gas from the Marcellus shale.

Pinto concentrates on smaller GTL projects in North America, although the 2800 barrels-per-day Ashtabula project in Ohio is its first.

A final investment decision is expected to be made on the project in the next six to nine months. Further expansions could take the capacity up to more than 10,000 bpd.

Pinto is also looking to develop smaller GTL projects across North America.

The acquisition will see Pinto receive almost 1 million Velocys shares initially and just over 1 million more on the successful financial closing of the Ashtabula project. In addition it will receive five-year warrants of up to $750,000 worth of Velocys shares that will be granted for each additional project in the Pinto pipeline, up to a maximum of two projects, that achieve financial closure by the end of 2015.

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