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stephen weedon
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Having worked in the water process, refining and power generation industries for the majority of my life I have a keen interest in energy production and security. Couple this to a keen environmental awarness I have tended to invest in larger companies with strong ecological history or game... More
  • Emulsion Fuels Coming Of Age ? 5 comments
    Jun 11, 2014 11:08 AM | about stocks: QDRSF

    Emulsion fuels coming of age.

    Will British Firm Quadrise Fuels International provide the answers

    There have been many successful projects involving emulsion fuels. Prior to 2006 over 60 million tonnes of Orimulsion® was sold worldwide before political changes in Venezuela put paid to the development.

    Since then numerous trials and companies have come and gone which is strange when you consider the main benefits of this type of fuel, namely:

    1. Lower Nox
    2. Lower CO2
    3. Lower Particulates
    4. Improvements in efficiency

    Quietly in the background those same ex BP engineers that developed Orimulsion® have been working away developing a new family of Emulsions fuels based on fuel oil residue ( the high viscosity residue left at the bottom of the refineries barrel )

    Formed in the 1990 as Quadrise Ltd and since 2010 known as Quadrise Fuels International PLC. QFI is listed on the AIM market in the London Stock Exchange.

    As developments have progressed an important alliance with AkzoNobel has been agreed. AkzoNobel the world's leader in surface chemistry, supply the specialist chemicals that stabilise the emulsion fuels. Two main types of fuel have been developed so far, MSAR for power generation and industrial boiler plant and MSAR2 for marine applications.

    It is looking as if the Marine side to QFI`s fuel range is about to have it next big step.

    In partnership with Maersk (the largest container ship operator and supply vessel operator in the world since 1996), QFI have been testing their fuel on two vessels, one with a Wartsila engine and one fitted with a Man engine. The trials which were started after extensive land based tests are being carried out under fairly strict secrecy. It is known that each vessel / engine will undergo two phases. The first Proof of Concept (POC) phase is carried out over approximately 400 hours and the final phase, Letter Of No Objection (LONO) over approximately 4000 hours. With the first phase of both engines nearing completion, (it is hoped that at least one POC will be completed by end of June 2014.) Preparations are already underway to secure the next quantity of MSAR2 fuel to be produced and delivered to Maersk.

    The link with refineries is the key difference between MSAR2 and other emulsion fuels. By using residual fuel oil the refineries bottom line is improved by releasing higher value distillates that would have otherwise been blended with the fuel oil residue to produce low value HFO. In addition MSAR is easy to handle at normal temperatures and does not need expensive heating in transport or storage. It is envisaged that taking into account savings in production and subtracting the necessary profits that the refiner, AkzoNobel and QFI will obviously still want to make the finished fuel will still be 10-20% cheaper than existing marine heavy foil oils.

    The Marine Market

    Shipping lines are under increasing costs pressure and the main cost is marine fuel. In addition the next big changes in emission regulations (MARPOL) are due to come into force in 2020/2025. It is estimated that current changes just coming into force in 2015 will have added $200M to Maersk`s fuel bill alone. As noted above MSAR2 has all the benefits' of an emulsion fuel in reducing Nox, Co2 and particulates but it is the cost savings of 10-20% that will enable the shipping lines to invest in the additional technology such as exhaust gas scrubbers required to remove the sulfur levels down to the planned 0.50% m/m. ( outside SECA / ECA areas )

    Conclusion

    With the MSAR2 project further de-risked and the very positive news that QFI is already preparing for the next LONO phase, coupled to the fact that QFI is partnered by two international leaders in their respective fields ( AkzoNobel and Maersk ) bodes very well for this companies future and the development of emulsion fuels. Certainly the next couple of weeks are going to be very exciting.

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Comments (5)
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  • jolacious
    , contributor
    Comments (91) | Send Message
     
    @SW, a very interesting blog. The next phase of development could well be transformational. I hope the Americans jump on board, because the Train is about to leave the station. ATB from UK.
    12 Jun, 06:51 AM Reply Like
  • thehog2
    , contributor
    Comment (1) | Send Message
     
    This company isn't a one trick pony, see:

     

    http://bit.ly/1xOQT65

     

    Either Marine or KSA/Aramco will be game changers, together they will create a FTSE 250 company.
    12 Jun, 12:25 PM Reply Like
  • stephen weedon
    , contributor
    Comment (1) | Send Message
     
    Author’s reply » Absolutely, QFI have a number of ongoing projects any one of which has the opportunity to be a real game changer.
    QFI is certainly concentrating on its Marine developments and this is why this segment was the center of my instablog. We are approaching end June when the next RNS is due. I suspect that after the start of the 4000 hour LONO stage of testing onboard the two Maersk vessels we will start to hear more about possible new refinery partners and industrial developments.
    13 Jun, 06:31 AM Reply Like
  • Gaelic 12
    , contributor
    Comments (2) | Send Message
     
    Am investing in a UK pension scheme (SIPP)!
    Basically responsible for decisions on what to do and have had advice from colleagues in the Investment world on starting out and major holdings are in Shares Funds recommended by them!
    Need to gain greater knowledge on Investing!
    4 Jul, 08:45 AM Reply Like
  • Gaelic 12
    , contributor
    Comments (2) | Send Message
     
    Guys, Really appreciate the knowledge provided as have been in this purely on a friends recommendation some years ago and hope that this is the Game Changing Moment!
    Also whoever wrote the Seeking Alpha origina bac earlier this yaer to be congratulated on the comprehensive and thorough analysis provided
    4 Jul, 08:46 AM Reply Like
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