ENERGY business Gas2 has secured £5.5 million from existing shareholders as it moves towards commercialising its technology.

The company has developed a system which turns gas into liquid fuel in a cheaper and more environmentally friendly way than is currently on offer.

The money will be used to hire four people and build a plant to further test and demonstrate the invention at the specialist petrochemical research Wilton Centre in Cleveland, England.

Laboratory work and computerised modelling will continue in Aberdeen where Gas2's 16 staff are based.

Mike Fleming, managing director of Gas2, said: "We are entering a new and exciting phase with the build of the pilot plant which will validate on a larger scale the commercial viability of the Gas2 process. We have a unique technology and process, and the commercial prize is great for a successful outcome."

Simmons and Company were advisers on the deal with Lime Rock Partners, Robert Gordon University and a group of private investors all participating in the fundraising.

Saad Bagach, managing director of Lime Rock, said: "Gas2 has a new technology that has the potential to fundamentally disrupt the gas-to-liquids market.

"The global demand for new solutions is vast and the ability of Gas2 to secure this level of funding in today's economic climate is a powerful indicator of confidence in the company and the potential of its technology."

Testing at the Cleveland plant is due to start before the end of 2012 with the firm hoping to start marketing products in 2013.

Potential applications for the technology include making more remote gas reserves commercially viable, disposing of unwanted offshore gas to prevent flaring and converting gas to products such as diesel or gasoline.