Oxford Catalyst shares take off as BA agrees $500mln jet fuel deal
Fri 4:24 pm by Jamie AshcroftBritish Airways has agreed to buy sustainable jet fuel from the plant over a ten year period.
Oxford Catalyst Group (LON:OCG) shares rocketed nearly 30% on Friday as the jet fuel innovator revealed a number of key milestones had been reached in an exciting project with British Airways.
The AIM-quoted gas-to-liquids expert is the project developer for a new plant, called GreenSky London, which will be operated by US bio-fuel specialist Solena.
It will use OCG’s patented technology as part of the process to turn waste-biomass into jet fuel.
Today it was also revealed that British Airways, the airline owned by International Consolidated Airlines Group (LON:IAG), has agreed to buy the sustainable jet fuel from the plant over a ten year period, in a deal worth US$500mln (£315mln) at current prices.
British Airways says the project is now well on the way to making sustainable aviation fuel a reality.
Today’s breakthroughs sparked a sharp rise in the shares, which have now more than doubled since September. Heading into the close on AIM OCG shares were up 32.35p, or 28%, at 146p each.
"Today's confirmation of British Airways' financial commitment to the project represents a major step forward for GreenSky London,” said chief executive Roy Lipski.
“We are very pleased to be part of this landmark facility and to contribute to British Airways' strategy for sustainable aviation, as well as Solena's worldwide project roll out plans."
A project start date was confirmed for 2015, and Barclays has been appointed as an advisor on funding. A letter of interest has been secured in respect of possible financing.
The partners have an exclusive option over a site for the facility, while pre-front end engineering and design work has begun.
GreenSky will process 500,000 tonnes of London’s waste into 50,000 tonnes of jet fuel, equating to 1,100 barrels of fuel per day (bpd). It will also process 50,000 tonnes, or 1,100 bpd, of ultra-low sulphur diesel.