4 May 2017
Quadrise Fuels International plc
("Quadrise", "QFI" or the "Company")
Maersk Notification
Quadrise Fuels International plc (AIM:QFI), the emerging supplier of MSAR® 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 and supply partner CEPSA have been formally notified by Maersk Line A/S ("Maersk") of its intention to let the Operational Trial Agreement between the parties expire once the MSAR® fuel currently on-board the test vessel has been consumed (the "Notification").
Further to the Company's announcement of 7 April 2017, Maersk has now formally notified the Company of its intention, in achieving compliance with the International Maritime Organisation's ("IMO") 2020 sulphur limit environmental legislation, to use only compliant fuel (less than 0.5% sulphur) from 2020 and that the use of MSAR® alongside exhaust gas scrubbers ("Scrubbers") will not be considered as an option for Maersk going forward.
Marine MSAR® supplied to date has been higher than 0.5% sulphur and one option in the future is to use such fuel together with exhaust gas scrubbers ("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®, 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.
As recently reaffirmed by Maersk, the MSAR® operational trial has been successful to date and this should be further confirmed by the interim inspection report and Interim LONO from Wärtsilä. Following receipt of the Notification the Company is continuing to work with Maersk to progress the release of the interim inspection report and an Interim LONO for MSAR® use and to clarify Maersk's previously confirmed intention to work collaboratively with QFI to use the aforementioned to progress the commercialisation of MSAR® to the wider global marine industry.
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® will enable operators to obtain additional economic and environmental advantages over the use of heavy fuel oil. As noted in the announcement of 7th April 2017, the commercialisation of Marine MSAR® will now be focused on other operators and we are actively working on this, though this will have a longer lead-time than the originally envisioned plans with Maersk.
Mike Kirk, Executive Chairman, said:
"As we have previously highlighted, whilst Maersk's decision is disappointing, we are working hard to ensure that we can gain the benefit from the positive results of the trial to date. We are actively engaged with Maersk to progress the interim inspection report and interim LONO.
The underlying opportunity remains substantial and many in the marine fuel and refining industries see the use of high sulphur fuel and scrubbers as the most economic option for compliance with the 2020 IMO sulphur regulations.
It is also important to note that this decision by Maersk is enabling both QFI and Cepsa to further progress plans for the use of the spare MSAR® production capacity for new customers in the marine and power markets."
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 |
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Mike Kirk, Executive Chairman |
+44 (0)20 7031 7321 |
Hemant Thanawala, Finance Director |
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Nominated Adviser |
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Smith & Williamson Corporate Finance Limited |
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Dr Azhic Basirov |
+44 (0)20 7131 4000 |
Ben Jeynes Katy Birkin |
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Broker |
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Peel Hunt LLP |
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Richard Crichton |
+44 (0)20 7418 8900 |
Ross Allister |
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Chris Burrows |
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Public & Investor Relations |
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FTI Consulting |
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Ben Brewerton |
+44 (0)20 3727 1000 |
Sara Powell |
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