Update on active programmes

RNS Number : 6860A

Quadrise Fuels International PLC

24 February 2014

 



24 February 2014

Quadrise Fuels International Plc
("QFI", "Quadrise" or the "Company")

Update on active programmes

Quadrise, the emerging supplier of MSAR®, a low-cost alternative to fuel oil in the shipping, refining and power generation markets, is pleased to issue this further update on its principal project programmes to date.

Marine MSAR® 2

The two seaborne programmes on which the A.P.Møller-Mærsk ("Mærsk") 'Proof of Concept' ("POC") confirmation is based are progressing independently.

The first phase of the Wärtsilä seaborne programme has been completed. The interim report confirmed that the performance of the vessel engine using Marine MSAR®2 met expectations and is consistent with land-based test engine results. The final phase concludes with high load tests and continuous operations using the fuel. Minor modifications are currently being made to the installed test equipment to complete this last phase.  Completion of the Wärtsilä programme is anticipated by early Q2 2014.

In the case of MAN Diesel, the scheduled land based tests required to determine the optimum settings for seaborne service have not yet been completed. This is due to third party delays which are unrelated to MSAR®. It is planned to obtain MAN Diesel POC confirmation during Q2 2014.

As previously advised, POC confirmation will be followed by urgent preparations for commercial operations including the negotiation of contract terms between Quadrise International Limited ("QIL"), AkzoNobel, the refiner and Mærsk. The first production volumes during the second half of 2014 will be applied to the Letter Of No Objection ("LONO") confirmation phase. This enables the engine manufacturers to complete the required hours of seaborne service and collect the performance data necessary to issue a LONO. Since each engine manufacturer issues a separate proprietary LONO, delays to one programme are not expected to hold back the transition to commercial operations and the installation of Marine MSAR® manufacturing capacity.

Shareholders are advised that the Company has also, this morning, announced the extension of the royalty agreement between QIL and Mærsk.

Saudi Arabia

As previously announced, Quadrise MSAR® technology has been approved for installation in Saudi Aramco refineries and a number of related project opportunities have been identified. The potential value of the transition from current practice to MSAR® fuelling for thermal power generation in Saudi Arabia is considerable.

Saudi Aramco have designated a large refinery complex with linked steam and power generation facilities for the first MSAR® Manufacturing Unit installation. This could potentially be expanded progressively to produce up to 5 million tonnes of MSAR® per annum to fuel on-site utilities generation and identified power plants in the Kingdom.

QIL and Rafid, our Saudi partners, met with the Aramco team in Saudi Arabia during January to review the requirements and the proposed timetable for the installation of the first manufacturing unit. QIL has provided the requested information in support of the associated project proposal. It is expected that this will be submitted by the Aramco team for budgetary approval before the end of February. The agreed intention by all parties is to have the fuel system designed, installed and operational to supply a power generation facility for the demonstration phase during Q4 2014.

The basis on which QIL will provide support services for the pre-production phase in 2014 is under discussion.

South America

Following the on-site review at the Ecopetrol refinery in Colombia in December, work is ongoing to complete the MSAR® manufacturing feasibility study during Q1 2014.

The samples of refined residue have now been received for MSAR® testing in Europe. Analysis, testing and evaluation to confirm their suitability for production of thermal power MSAR® fuel and Marine MSAR®2 is scheduled for Q2 2014.

It is expected that the concluding phase of identifying and contacting potential consumers of MSAR® will also be carried out during Q2 2014 to conclude the agreed MOU activities and initiate discussions on the potential commercial implementation plan.

Commenting on these developments, Ian Williams, Chairman of QFI said;

"There has been an unprecedented interest in QFI over recent months which correlates with the step-change in market capitalisation and a growing appreciation of the 'game changing' potential of our project programmes.

"This is truly gratifying and recognises the commitment of management and shareholders over several years as the Company transitions to continuous commercial operations.

"Quadrise now has several projects at an advanced stage at the same time and the Company looks forward to updating shareholders on further progress in due course."

For further information on the Company, please refer to www.quadrisefuels.com or contact:

Quadrise Fuels International Plc
Ian Williams, Executive Chairman	[phone]
Hemant Thanawala, Finance Director
Nominated Adviser
Smith & Williamson Corporate Finance Limited
Dr Azhic Basirov	[phone]
Siobhan Sergeant Ben Jeynes
Broker
Peel Hunt LLP
Richard Crichton	[phone]
Matthew Armitt
Ross Allister
Public & Investor Relations
Pelham Bell Pottinger
Philip Dennis	[phone]
Rollo Crichton-Stuart

 

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