29 November 2019
Quadrise Fuels International plc
("Quadrise", "QFI", the "Company" and together with its subsidiaries the "Group")
Quadrise Fuels International plc (AIM: QFI) provides the following business update ahead of the Company's Annual General Meeting ("AGM") which commences today at 12:00 noon.
An updated corporate presentation will be provided shortly after the conclusion of the AGM on the Company's website at www.quadrisefuels.com.
Business Development Overview and Update
The Board believes that QFI has demonstrated staged progress during the year in a number of areas that have enabled the Company to increase the breadth and depth of the market opportunities it is concurrently pursuing. As we indicated both at the time of the interims and the preliminary results, this progress has not always been as smooth, or as rapid as we would like, nonetheless this approach is enabling QFI to be benefit from the skills, experience and network of relationships from our various partners, with no immediate cash cost and in a manner which leverages our in-house business development capabilities to the best effect.
We were delighted that, following the announcement of the initial £2m tranche of the £4m Bergen funding, with strong support from both existing and new shareholders, the Company was able to secure funding of £4.5 million during Q3 2019 which will enable QFI to continue its business development activities through to the end of 2020 on the basis of current planned expenditure. A further £2m of the Bergen funding is potentially available to draw down from August 2020.
Key Business Development Updates:
· Morocco - The Company's in-country representative has proven to be very effective for Quadrise in Morocco - having been instrumental in securing the agreement with the major chemicals business to undertake an initial pilot trial at their manufacturing facility which was announced earlier today. Pending the positive outcome of this first stage, we would then seek to progress to a larger-scale study and trials as a precursor to commercial roll-out.
· Freepoint Commodities - remains an important partner for QFI and we remain in close contact on opportunities in Central and South America. We expect they will be more valuable in terms of assisting in the commercialisation of projects, rather than identifying new ones. Freepoint also introduced QFI to Aleph Commodities who we are working with in the Kingdom of Saudi Arabia and Kuwait.
· Redliner - have demonstrated a good understanding of MSAR® technology and has arranged meetings with key parties within Mexico, most recently in November 2019. This is a significant opportunity for QFI, although we cannot overlook the challenges to progress new projects rapidly in the region on a fully funded basis, even for MSAR® projects that deliver material economic gains in the short-term. The Company will follow up during 2019 and into 2020.
· European Oil Major - this work has not progressed materially to date - further progress will, we believe, be dependent on the development of major power or industrial customers for the substantial MSAR® volumes that would be generated at the refinery. We will continue to progress this market development work - which will also be the key to enabling the samples to be provided to enable full testing - given the operational challenges that there have been with the sample lines.
· European Refiner - the initial stage of testing has been completed and visits carried out at both the client site and at QRF. The next stage is currently underway - with the client reviewing the economics of MSAR® compared with other IMO 2020 options, and if this proves positive, we expect to be developing a plan for a site trial during H1 2020.
· Maersk/Marine - discussions have continued in relation to the Royalty Agreement alongside Maersk's revised approach to IMO 2020 compliance that includes the installation of scrubbers on a significant number of their vessels. However, like most operators in the sector, meaningful engagement is not likely until the operational challenges of IMO 2020 readiness is concluded during Q1 2020.
· Kingdom of Saudi Arabia - good progress has been made with Al Khafrah as our new local partner and we expect high level engagement with one of the major stakeholders shortly which will help to define the route to enabling project delivery to commence at the earliest possible time during 2020. This work includes the opportunity to consider MSAR® manufacture in the Kingdom of Saudi Arabia at lower cost.
· Kuwait - the market in Kuwait is undergoing extensive change, with a new grass-roots refinery nearing completion and a major upgrading being completed which will effectively combine two smaller, existing refineries. Recent meetings have confirmed that there is an opportunity at the new refinery and we will undertake initial feasibility work to present to the client team in Kuwait once technical information is received.
· Bitumina - we have continued to review opportunities to access the residue sources and terminals available to Bitumina - which will ultimately depend on accessing suitable consumers in the power, marine or industrial markets.
· Asia - we are continuing to review opportunities in Japan through JGC and we are reviewing a refinery refuelling opportunity. API Poly GCL undertook a study in China and concluded the market in the power and industrial sectors was constrained by local coal and gas, though opportunities in the marine market remain under review - subject to the local operators' (COSCO, etc.) approach to scrubbers in 2020. As a result of challenging economics versus gas from LNG in combined-cycle plants and a change in its approach to the use of its existing assets, we have reached mutual decision with YTL Power Seraya to not renew the current MoU.
· Merlin - we are continuing to review various heavy oil opportunities that would benefit from the use of MSAR®, though none are at the stage of progressing to active projects at this stage.
· Nouryon - a new three-year agreement was signed on 8 October 2019 and recent discussions confirm that there are further opportunities for closer collaboration between Quadrise and Nouryon on project development.
Mike Kirk, Executive Chairman of QFI, said:
"We are very pleased to be able to provide a comprehensive update to our shareholders at the 2019 AGM which demonstrates the success of our strategy to broaden and deepen our business development pipeline. With secured funding now in place we are focused on translating this into tangible actions and trials that will enable us to progress to commercial operations."
For additional information, please contact:
Quadrise Fuels International plc +44 (0)20 7031 7321
Mike Kirk, Executive Chairman
Jason Miles, Chief Operating Officer
Cenkos Securities plc +44 (0)20 7397 8900
Dr Azhic Basirov
Peel Hunt LLP +44 (0)20 7418 8900
Shore Capital Stockbrokers Limited +44 (0)20 7408 4090
FTI Consulting +44 (0)20 3727 1000
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