LONDON, Oct 16 (Reuters) - British American Tobacco ( BTI )

will launch a version of its Velo nicotine

pouches using synthetic nicotine in the United States, David

Waterfield, president of the company's U.S. subsidiary Reynolds

American, said on Wednesday.

Smoking alternatives like vapes from big tobacco companies,

including BAT, usually contain naturally occurring nicotine

derived from the tobacco plant, whereas synthetic nicotine is

made in a lab from chemicals.

Waterfield said BAT's new Velo product, Velo Plus, due to

launch in 2025 and offering more nicotine strengths, contained

synthetic nicotine - one of the first clear examples of

synthetic nicotine use by a big tobacco company.

"Nicotine derived from tobacco and synthetic nicotine, from

a chemical point of view, they are the same," Waterfield told

investors at a capital markets event.

He added that BAT would look at other opportunities in

synthetic nicotine going forward.

Synthetic nicotine began being used more widely in the

United States in recent years as a means to avoid a lengthy

application process with the U.S. Food and Drug Administration

(FDA), which manufacturers were required to undergo in order to

market new nicotine products.

It has so far been used mostly by smaller manufacturers of

vapes or nicotine pouches, which users insert under the lip to

get a buzz.

Initially, the FDA only had authority over naturally

occurring nicotine, so manufacturers of synthetic nicotine

products did not have to follow the FDA's application process.

The law was changed in April 2022.

Waterfield said that Velo Plus was a product it acquired. An

FDA application for the product was submitted by its previous

owner before a May 2022 deadline, meaning it can stay on the

market while its application is pending, Waterfield said.

BAT estimates that the size of U.S. industry-wide vape

revenues will grow from around 9 billion pounds ($11.7 billion)

today to up to 14 billion pounds by 2030, Waterfield said. It

expects U.S. nicotine pouch industry revenues to grow from 1.7

billion pounds to up to 7 billion pounds over the same period.

BAT sees current U.S. combustible tobacco revenue declines

of around 9% as "abnormal", Waterfield said, adding BAT expects

U.S. industry revenue growth to settle at around 1% for the rest

of the decade.

($1 = 0.7682 pounds)