Southwest and BA fuel deals send Velocys shares surging by over 40%

Shares of London-listed fuels technology firm Velocys rose by more than 40% on Wednesday after it announced two deals related to the supply of aviation fuel. The company said its subsidiary, Velocys Renewables, had entered into an agreement with Southwest Airlines. The deal relates to a planned biorefinery in Mississippi, with Southwest set to buy an expected 219m gallons of sustainable aviation fuel at a fixed price across a period of 15 years. “After blending, this will enable approximately 575 million gallons of net zero SAF,” Velocys said. The Bayou Fuels biorefinery is slated to start commercial delivery of fuel “as early as 2026.” In addition to the deal with Southwest, Velocys Renewables signed a memorandum of understanding with the International Consolidated Airlines Group. Again, the deal is connected to the Bayou Fuels project. According to Velocys, it “covers the purchase by IAG’s constituent airlines, which includes British Airways, Aer Lingus and Iberia amongst others, of an expected 73m gallons of SAF, in aggregate, at a fixed price.” The purchase contract is due to last for 10 years from 2026. Post blending, the equivalent of 192m gallons of net zero SAF will be generated.<br/>