TIDMQFI
RNS Number : 5682Q
Quadrise Fuels International PLC
07 June 2018
Quadrise Fuels International plc
("Quadrise", "QFI" or "the Company")
Update and Investor Conference Call
Quadrise Fuels International plc (AIM: QFI) provides the
following update on recent business development activities.
Quadrise is progressing opportunities in the power, marine,
upstream, petrochemical and refinery refuelling markets:
-- There are opportunities to use the facility at Cepsa for
supply to the marine or power markets. Cepsa remains supportive of
Quadrise and recently hosted a refinery visit from a prospective
Middle Eastern client, which was well received. This prospective
client also travelled to the UK and visited Quadrise Research
Facility ("QRF") to witness MSAR(R) being produced from its own
residues.
-- There remain significant opportunities in the power market in
the Middle East and the Far East and we are continuing to address
these either directly or through our relationship with JGC
Corporation.
-- Where appropriate, we are also looking to establish new
relationships with counterparties who have a strong presence in key
regional markets.
-- In the marine market, we have witnessed momentum building on
the implementation of exhaust gas cleaning systems (or "scrubbers")
across all major segments, now including tankers, bulkers and
container ships, in addition to the cruise and ferry markets where
there has historically been a significant installed base. The
economic case for MSAR(R) is also improving, with the spread
between high sulphur heavy fuel oil ("HFO") and low sulphur fuels
widening significantly in the futures market up to 2020 and beyond
- this also reinforces the economic benefits of scrubber
installation, versus <0.5% sulphur fuel use. In addition, we are
seeing increasing demand from ship owners looking for term high
sulphur fuel supply contracts aligned with scrubber installation,
which could provide an opportunity for MSAR(R) supply to consumers
and major hubs.
-- The Company is progressing an opportunity in the
petrochemical market, which demonstrates that MSAR(R) technology is
adaptable and could, the Board believes, open up new potential
markets.
-- In the upstream oil sector QFI is working with the owner of a
significant low sulphur heavy oil asset where MSAR(R) could,
subject to necessary funding, be used as part of a number of
processing facility solutions to enable lower cost steam generation
to improve the economics of crude oil production and export.
-- QRF has now been relocated to new premises - which has
significantly reduced rental costs without any impact on the work
that QRF does to support development and operations.
Alongside these activities, we continue to assess the potential
to work with selected partners to accelerate our planned
development activities.
Opportunities in the Kingdom of Saudi Arabia ("KSA")
The announcement made on 9 April 2018 highlighted the challenges
that led to the planned combustion boiler trial project in KSA not
progressing. This was a hugely disappointing outcome for the
Company, but was the result of the inability of the KSA oil and
electricity companies to enter into a back-to-back agreement for
the trial. Ultimately this led to the withdrawal of the refinery
counterparty from the project, due to the KSA oil company not
having signed the required fuel supply agreement.
We understand that the KSA Ministry of Energy, Industry and
Mineral Resources is formulating a new energy strategy for the
Kingdom, which is expected to be published in June 2018. There are
also plans to restructure the power sector in KSA, which is
expected to include the current dominant supplier being split into
a small number of companies, each with a similar mix of generation
assets. This restructuring should, we believe, be a positive factor
for Quadrise, creating a requirement to "sweat" existing assets and
reduce operating costs (primarily fuel costs). Even with the
ambitious targets for renewables that have been put forward
recently in KSA, liquid fuels will, in our view, still be a major
fuel source for power generation and desalination in KSA for many
years to come.
Despite the challenges of working in KSA, the Company continues
to see significant economic and environmental advantages to the use
of MSAR(R) technology there. Current HFO demand in KSA exceeds
domestic supply; and converting just half of domestic demand to
MSAR(R) , a low-cost alternative to HFO, could save KSA more than
US$500M pa. Recent increases in the prices of low sulphur fuels
relative to HFO in the futures markets have materially increased
the realisable savings from MSAR(R) in recent months, and are
likely to continue to do so leading up to and beyond 2020.
Given the complex structure of the stakeholders in KSA, we are
seeking to engage with the relevant ministries to illustrate the
"In-Kingdom-Total-Value-Added" opportunity that implementing
MSAR(R) would enable in the short term, as a complementary enabler
for KSA to progress longer-term goals for renewable energy in the
future, at the lowest cost today.
In addition, there are significant opportunities in the cement
industry within KSA and the region that Quadrise is currently
exploring with industry stakeholders as fuel subsidies are
withdrawn.
Investor Call
The Company will be hosting an investor conference call at 09.30
a.m. (London time) on Monday 11 June 2018, where it will provide
investors with an opportunity to ask questions on these recent
developments.
The details for investors wishing to participate in the call
are:
United Kingdom: 0203 059 8124, International: +44 203 059
8124.
When dialling in, please enter the passcode '4839391#', then
state the title of the call: "Quadrise Fuels -- Investor Conference
Call." To ensure that you will be connected promptly, it would be
helpful to dial-in ten minutes in advance of the scheduled
start-time.
The Company invites investors to lodge questions in advance via
ir@quadrisefuels.com.
This announcement is inside information for the purposes of
Article 7 of EU Regulation 596/2014.
For further information, please refer to the Company's website
at www.quadrisefuels.com or contact:
Quadrise Fuels International Plc
Mike Kirk, Executive Chairman +44 (0)20 7031 7321
Jason Miles, Chief Operating Officer
Nominated Adviser
Smith & Williamson Corporate Finance Limited
Dr Azhic Basirov +44 (0)20 7131 4000
Ben Jeynes
Katy Birkin
Broker
Peel Hunt LLP
Richard Crichton +44 (0)20 7418 8900
Ross Allister
Public & Investor Relations
FTI Consulting
Ben Brewerton +44 (0)20 3727 1000
Sara Powell
Notes to Editors
QFI is the supplier of MSAR(R) emulsion technology and fuels, a
low-cost alternative to heavy fuel oil (one of the world's largest
fuel markets, comprising over 450 million tons per annum) in the
global shipping, oil refining, and steam and power generation
industries.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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