Quadrise Fuels International PLC Update on Maersk (9518B)
April 07 2017 - 07:04AM
UK Regulatory
TIDMQFI
RNS Number : 9518B
Quadrise Fuels International PLC
07 April 2017
7 April 2017
Quadrise Fuels International plc
("Quadrise", "QFI" or the "Company")
Update on Maersk
Quadrise Fuels International plc (AIM:QFI), the emerging
supplier of MSAR(R) emulsion technology and fuel, enabling a
low-cost alternative to heavy fuel oil (one of the world's largest
fuels markets, comprising over 450 million tonnes per annum) in the
global shipping, refining and power generation markets, announces
that the Company has noted information in the public domain
relating to Maersk Line A/S ("Maersk") and its likely plans for
compliance with upcoming environmental legislation.
The Company has noted a presentation given by Maersk Oil Trading
that indicated Maersk's initial approach to compliance with the
International Maritime Organisation's ("IMO") 2020 sulphur limits
to be implemented in 2020 will be to use compliant fuel (less than
0.5% sulphur), rather than installing exhaust gas scrubbers
("Scrubbers") and using higher sulphur fuel. The Company's
understanding is that this approach has not been formally adopted
by Maersk but that this is anticipated to be adopted by Maersk in
the near future.
Marine MSAR(R) supplied to date has been higher than 0.5%
sulphur and one option in the future is to use such fuel together
with Scrubbers to achieve IMO 2020 sulphur limit compliance. For
operators who choose to use a compliant fuel, a second option would
be for QFI to work with refiners or suppliers to produce a
compliant (less than 0.5% sulphur) Marine MSAR(R), but this would
be dependent on availability of low-sulphur residual streams and
further work is being carried out to assess the viability of this
solution.
Maersk has reaffirmed that the MSAR(R) trial has been successful
to date and it will continue to work with Wärtsilä to ensure that a
detailed interim inspection report is prepared following the recent
inspection and that following this an "Interim LONO" will be issued
- which is expected to confirm that Marine MSAR(R) fuel is safe and
suitable for Wärtsilä 2-stroke engines.
Maersk has further confirmed that it wishes to continue to work
with Quadrise to explore the wider commercial options for Marine
MSAR(R) after the issuance of the Interim LONO. Whilst the Board of
the Company has not yet been able to fully assess the effects of
Maersk's anticipated policy decision, it is now expected that the
timetable for continuation of the trial in Q4 2017 and
commercialisation of Marine MSAR(R), as originally envisaged to
commence with Maersk later this year, will be impacted.
Despite this indication from Maersk, QFI continues to believe
that the industry will ultimately move to the use of Scrubbers and
high sulphur fuel as the most economic compliance option and that
Marine MSAR(R) will enable operators to obtain additional economic
and environmental advantages over the use of heavy fuel oil.
Mike Kirk, Executive Chairman, said:
"We understand Maersk's likely decision to adopt an approach to
2020 compliance that minimises its capex commitments in the
short-term. However, there remain significant challenges for the
bunker industry to ensure that there will be the required quantity
and quality of compliant fuel available from the refining industry
for the operators. QFI, like many in the industry, continues to
believe that the use of Scrubbers and high sulphur fuel will be the
lowest cost option for marine operators and we will continue our
efforts to commercialise MSAR(R) for the global marine
industry.
We look forward to getting the results of the interim inspection
and the Interim LONO and working with Maersk to pursue the
commercial opportunities for MSAR(R) within the global marine
industry. The confirmation of the positive trial programme results
to date combined with a positive Interim LONO will enable Quadrise
to progress its plans for commercialisation of Marine MSAR(R), with
an initial focus on those marine operators who have, or are
planning to install Scrubbers as their preferred compliance
option."
It is also worth reiterating that since the beginning of 2017,
we have been working with Cepsa to review new opportunities for
utilising the spare MSAR(R) production capacity at the facility for
new customers in the marine and power sectors and these discussions
are progressing well.
We are also progressing plans for the commencement of the
production to combustion trial in KSA in late 2017 - which will
require significant engineering and operational support during the
design, procurement and commissioning stages - in addition to the
continued support during the extended production campaign to
produce the significant quantities of MSAR(R) fuel required for the
combustion trial.
In addition, our discussions with a number of oil majors and
refiners in Europe, the Middle East and Asia are continuing and
plans for evaluation of sample residues at the Quadrise Research
Facility from a number of refineries are an integral part of this
process and these are expected to be progressed during the
remainder of 2017. These cover a range of applications including
marine, power and refinery refuelling."
Niels H Bruus, Head of Future Solutions of Maersk Line A/S,
said:
"As we have previously confirmed, during the MSAR(R) trial
programme Maersk has enjoyed a close and professional collaboration
with our technology partner QFI and supply partner CEPSA, resulting
in a smooth operation during which the MSAR(R) fuel has performed
well. The interim inspection has now been completed by Wärtsilä and
we will be working with them to ensure the prompt release of the
interim inspection report and an Interim LONO for MSAR(R) use. We
will then work collaboratively with QFI to use these important
milestones to progress the commercialisation of MSAR(R) to the
wider global marine industry.
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
Hemant Thanawala, Finance Director
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
Chris Burrows
Public & Investor Relations
FTI Consulting
Ben Brewerton +44 (0)20 3727 1000
Sara Powell
This information is provided by RNS
The company news service from the London Stock Exchange
END
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