An innovative young Aberdeen firm has secured a multi-million-pound funding boost for its novel method of turning gas to liquid fuel.

Gas2 Limited, an independent technology company, has received the first tranche of a £10m growth capital investment in the company. The investment from Lime Rock Partners, a global energy-focused private equity firm, and a group of existing investors, will fund the further development of Gas2's innovative technology. With half of the world's natural gas stranded in fields which make it either physically or economically unusable, the race is on to find a cheaper way of utilising the reserves.

As natural gas is much more expensive to transport than oil, converting it into liquid makes economic sense. Several major oil companies have already announced plans to build gas-to-liquid plants to produce low sulphur diesel.

Gas-to-liquids' green credentials are further enhanced by the fact that the process can potentially be used to harness the billions of cubic metres of gas that are otherwise flared off into the atmosphere each year.

Gas2 was founded in 2005 by chief executive Willie Reid, a chemist and process engineer, and fellow entrepreneur Mike Fleming.

It is developing a portfolio of novel gas to liquids technologies which were originally conceived at the Robert Gordon University in Aberdeen. The original development of the technology dates back to the 1920s when two German scientists invented the Fischer-Tropsch process for converting coal to liquids. However, it is only in recent years that high energy prices and sufficient technological advances have allowed its wide consideration for natural gas processing.

"The gas to liquids market is growing quickly with analysts predicting that tens of billions of dollars will be spent on this market during the next decade," said Reid.

Simmons & Co were financial advisers and Maclay Murray Spens were legal advisers to Gas2.