The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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I am very happy to let the many excellent posters get on with it regarding how to make MSAR into a viable sector solution. My focus is more on the commercials and in this case the dynamics of this business. One way or another we enter the most crucial phase in QFI history - where fortuitously the market has evolved in our direction - creating in my view a now or never opportunity.
This issue of a sales director or not is a complete distraction at this time - the challenge here is about QFI being one part of a complex proof of concept leading to a collective commercial proposition. Be it Utah, Morocco, MSC, Mexico or some other place. Indeed I really don't know what a sales director would be doing all day - apart from absorbing much needed cash. Perhaps a sales role will emerge once we have both commercially viable production in place and end users - but even then that may still be a part of a collective effort. At this moment the key players here are the technical team aided by external expert input - and changing the team would in my view create more issues than it solves. Behind the scenes there will be a multitude of complexities - and the bigger the potential partner the more voices that wish to have a say. Just the way it is.
Next week will be very telling - as much about mood music as anything else.
(And for the record I have nearly 40 years of Sales and Marketing under my belt - about 30 as a Sales Manager/Director)
You know nothing about me Indigo but if you want to carry on in your role of uninformed, unappointed form monitor, then good luck.
With a lot of money already committed, I would be very surprised to learn that Greenfield do not have more than one client 99% committed to buying the fuel. And a reputation is on the line, to boot.
Perhaps a deal closing sales director might be the answer. Just a passing thought.
100% Indigo without clients and commercial not worth a penny
A review of four production options available to the Utah JV of Petroteq, TomCo and Valkor;
1. Sell the 12 API SynBit to local refineries at WTI+
View: Non starter. It’s actually 10.9 API and it's not WTI+, it's not even WTI. Based on Canadian SynBit price discount at 19 API it's more likely to be WTI discounted by 20-40%. This production and sales model has sunk every previous Utah tar sands project.
2. Refine the SynBit slightly on-site using low temperature cracking.
View: Non-starter; cracking requires a combination of temperature, pressure and a catalyst, and custom built equipment. Reduce one and the other two have to increase. Increasing the pressure will increase the temperature. So it has to be the catalysts - and more of it - and more sophisticated. Still at the research stage. Not yet field proven and not oven ready.
3. MSAR /BioMSAR
View- the obvious choice for reasons previously expressed. In addition, LS-MSAR competes with VLSFO at WTI+15%. LS-BioMSAR has no identifiable competitors as it is a @50% 'well to wake' Carbon reduction 'drop-in' fuel. Hydrogen and Ammonia engines are a decade away.
4. Refine the SynBit onsite to a diesel fraction for subsequent blending with other diesel grades at a 3rd party refinery, and the residual bitumen sold for road building.
View; The Utah operation will be wholly dependent on the whims of a 3rd party refinery - or refineries to take the diesel fraction and dictate the price. The residual bitumen from a 5,000 bbl/day plant, or a 10,000 bbl/day plant - or the vision of multiple plants across Utah would require a cosmic road building / re-surfacing campaign for the next 20 years.
Option 3 is the only scaleable route to realise the objective of multiple 5,000 /10,000 bbl/day plants springing up across Utah; and to safeguard the continual sale of the end product whose market fluctuating base price is still at production cost plus 20%. A drop-in Low Carbon low polluting fuel fits that criteria. Selling a % of output as a diesel blend to a rapacious refiner doesn't.
Based on Valkor's moves to invest in Petroteq and Tomco, option 3 is predicated
on Valkor establishing a JV with a railroad / tanker truck hauliers and an LA or Houston Bunker.
Or a JV with a company that offers both - eg. Freepoint - with whom QFI have a pre-existing CMPDA.
Option 3 ultimately requires buyers across the USA in the marine / shipping, electric grid power generation, industrial process steam raising and process power generation sectors.
That’s quite a few potential customers to sign up across three not insignificant sectors - all of which are under pressure to de-carbonise.