What it does

Quadrise Fuels International PLC (LON:QFI) has been perfecting a type of fuel called MSAR for the best part of 20 years.

MSAR is made from the thick, almost solid residues left when lighter fractions such as gasoline and diesel have been distilled from the crude oil which are then mixed with a small amount of water and speciality chemicals.

What’s created is a synthetic heavy fuel oil which is around one-third water. With a couple of simple, relatively cheap tweaks to a ship’s engine or a power station’s boiler, it can be used as a direct replacement for diesel or heavy fuel oil.

Because of the high-water content, the combustion temperature is much lower which reduces NOx emissions, and as MSAR is pre-atomised, it burns almost completely, meaning next to no black soot is pumped out into the atmosphere.

Not only is it cleaner – it reduces nitrogen oxide (NOX) emissions by between 20-50% – but MSAR, being made from quite literally the dregs of a barrel, is also cheaper than typical heavy fuel oils as well.

 

How it is doing

In March, Quadrise said it should see a transition to commercial revenues and positive net cash flow by July 2022.

The company described its last three quarters as “amongst the most significant periods in its history”.

Its alternative fuel products – designed to replace heavy fuel oils – are being used in a variety of tests and trials which are progressing through the remainder of 2021 and 2022.

It also raised £7mln in an open offer fundraise that was significantly oversubscribed. 

The results for the six months ended 31 December 2020 saw the company report a £2.3mln loss after, in line with the same period in 2019.

 

What the boss says: Mike Kirk, executive chairman

“As a result of the placing, we now have two major institutional investors, Premier Miton and Canaccord Genuity that have major disclosable investments of approximately 9% and 5%, respectively.”

“We were also delighted that our loyal base of existing holders responded so positively to the open offer which was 3.4 times oversubscribed.” 

“This funding provides Quadrise with the ability to deliver all of the activities required to migrate our active projects in the industrial, upstream and marine markets to commercial delivery.  It also enables completion of the development and testing of bioMSAR and the ability to look at what we believe are significant opportunities to add further value in related activities.”

 

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What the broker says

Analysts at house broker Shore Capital noted they were encouraged by the recent progress Quadrise has made and the breadth of opportunities it has to commercialise MSAR.

“Given its economic, environmental and handling advantages over conventional heavy fuel oil, we believe MSAR has huge potential”, they commented.

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