Quadrise Fuels International PLC Programme Update and Purchase of MSAR MMUs (1133A)
December 18 2014 - 2:00AM
UK Regulatory
TIDMQFI
RNS Number : 1133A
Quadrise Fuels International PLC
18 December 2014
18 December 2014
Quadrise Fuels International plc
("QFI", "Quadrise" or the "Company")
Programme Update and Purchase of MSAR Manufacturing Units
Quadrise, the emerging supplier of MSAR, a low cost alternative
to heavy fuel oil in the shipping, refining and power generation
markets, is pleased to provide an update on the Marine Fuels and
Saudi Arabian programmes. In addition the Company announces that an
agreement has been signed with ENH Engineering A/S ("ENH") to
purchase up to two proprietary MSAR Manufacturing Units ("MMUs")
designed for the processing of refinery heavy residues and
production of MSAR fuel emulsions. ENH is a leading supplier of
high quality bitumen emulsion manufacturing plant to the
international refining and asphalt industries.
Highlights:
-- The first long term production contract with an oil refiner
for Marine MSAR Fuels is now expected to be executed in Q1 2015, a
short delay, with fuel expected to be available during Q2 2015 to
service the LONO programme.
-- In order to meet production requirements for the Marine and
Saudi programmes, Quadrise has placed an order for one refinery
specification MMU for delivery early Q2 2015 and has agreed an
option to acquire a second identical unit in 2015.
-- The Saudi project is still anticipated to proceed in 2015
with the programme now scheduled to begin towards the end of the
year, after the summer power demand peak.
With the initial objective of having the plant installed and
assured fuel availability by end Q1 2015, Quadrise and Maersk have
been working together to both select a refinery and execute
agreements for the supply of Marine MSAR fuels by end 2014. Whilst
discussions are advancing, it is now considered unlikely that
contractual terms can be finalised and contracts executed until Q1
2015. As a consequence, commercial fuel production may now only
start in Q2 2015.
Whilst the delay is regrettable, a number of refineries are keen
to engage with Quadrise and Maersk as the commercial drivers for
MSAR are advantageous.
The increased time taken to identify and agree terms with a
preferred refinery has provided the opportunity to closely define
the specifications for the MMU's required to meet current and
anticipated regulatory standards for EU refinery sites.
Consequently, on 17 December 2014, the Company signed an agreement
with ENH Engineering A/S ("ENH"), for the supply of one 1,000 ton
per day refinery specification MMU, with an option for a second
identical unit exercisable at the Company's discretion during
2015.
In Saudi Arabia the client has agreed that a commercial scale
demonstration project, including both MSAR fuel production in a
domestic refinery and combustion of MSAR fuel in a base load
thermal power station should take place during 2015. Contractual
terms for this programme have been proposed but have not yet been
finalised. On success, this is expected to lead to a progressive
conversion to MSAR fuel production at qualifying refineries in
Saudi Arabia and to substitution of both heavy fuel oils and crude
oil in thermal power stations in the Kingdom.
The client requirement for extended operations of the power
plant on MSAR fuel as the basis for evaluation has proved to be
problematic during Q1 2015 due to the availability of base load
power plants prior to the high demand for electricity in the summer
season. Given these practical difficulties the focus has moved to
implementation during the autumn of 2015. This re-scheduling allows
more time for preparation of the refinery MMU installation and
power plant fuel systems. This will be beneficial in ensuring the
successful delivery of the MSAR project in Saudi Arabia.
Commenting on this development, Ian Williams, Executive Chairman
of QFI, said:
"Both the Marine LONO programme and the Saudi Arabian
demonstration project are high visibility 'milestone' activities
for Quadrise involving major market entries with commercial scale
installations and operations. Quality standards will be critically
important throughout and ENH continues to impress Quadrise - having
demonstrated high quality standards in every facet of their
activities and throughout our association with them to date.
We are delighted to have placed the order with ENH for up to two
new MSAR commercial scale manufacturing units that will ensure that
Quadrise will be ready to meet the needs of the Marine and Saudi
Arabian MSAR projects in 2015 and beyond.
The recent decrease of the crude oil price has been a shock to
the oil sector at large. Fortunately for Quadrise the spread
between refined oil product prices, that underpin the MSAR business
and oil refinery margins respectively, have not been impacted to
the same extent. Furthermore the Company is privileged to be
dealing with major clients who have experience of these economic
cycles and hold a longer term outlook for their businesses."
For further information, please refer to the Company's website
at www.quadrisefuels.com or contact:
Quadrise Fuels International Plc
Ian Williams, Executive Chairman +44 (0)20 7031 7321
Hemant Thanawala, Finance Director
Jason Miles, Chief Operating Officer
Nominated Adviser
Smith & Williamson Corporate Finance
Limited
Dr Azhic Basirov +44 (0)20 7131 4000
Ben Jeynes
Broker
Peel Hunt LLP
Richard Crichton +44 (0)20 7418 8900
Matthew Armitt
Ross Allister
Public & Investor Relations
Bell Pottinger
Philip Dennis +44 (0)20 3772 2500
Rollo Crichton-Stuart
This information is provided by RNS
The company news service from the London Stock Exchange
END
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