Mr Abramovich’s Ervington Investments took part in a placing this week by Oxford Catalysts, which raised £30.6m. He bought 4m shares at 125p a share, giving him a 3.5 per cent stake in the Aim-quoted company. The shares closed on Friday at 155p.
Oxford Catalysts’ business is focused on a technology known as “gas-to-liquids” or GTL, which uses chemical reactions to physically change the composition of gas molecules, yielding a high-quality liquid fuel. This can then be blended with crude or upgraded to produce diesel or jet fuel.
GTL is based on the so-called Fischer-Tropsch process, pioneered in Germany during the 1920s and later used by the Nazis during the second world war to turn coal into badly needed petroleum. Later, South Africa adopted the technology as a UN-led embargo against the country’s apartheid regime blocked oil imports.
Royal Dutch Shell has led the revival of global interest in GTL, building a huge refinery in Qatar called Pearl which turns the emirate’s abundant natural gas into an odourless, colourless fuel similar to diesel but without the sooty pollutants. It is now considering building a GTL plant in the US, where the boom in shale gas has provided a cheap and plentiful feedstock.
Oxford Catalysts is spearheading a different approach, focusing on the construction of small, modular GTL plants which can be deployed at remote oilfields. These convert gas that is extracted as a byproduct of oil and would otherwise be simply burnt off or “flared” into the atmosphere. Other companies are working on similar approaches: the Brazilian state oil company Petrobras is piloting a small reactor developed by CompactGTL for some of its offshore oil installations.
Roy Lipski, chief executive of Oxford Catalysts, said, “We are delighted to welcome new investors Ervington Investments and Invesco on board along with our existing institutional shareholders. We look forward to building on our selection for two commercial projects and to commercialising our GTL technology in the oil & gas sector.”
Oxford Catalysts was spun out of Oxford university and floated on AIM in 2006. It took off two years later when it acquired US-based Velocys. a leading designer of chemical reactors.
Velocys is providing the reactors for GreenSky London, a venture between British Airways and Solena Fuels Corp. which will convert waste destined for landfill into low-carbon jet fuel and biodiesel.
Mr Abramovich, who made his fortune in the Russian oil industry, has recently made a number of investments in clean tech. Last November, his vehicle, Ervington Investments, injected £8.67m in UK-based AFC Energy, which specialises in industrial fuel cell technology. It has also invested in energy-from-waste company Waste2tricity and Alter NRG, which converts organic matter into synthetic gas using plasma technologies.
The Financial Times