Member Info for dustofnations

I am dealing with family-related issues, so I haven't been paying close attention to Quadrise (and won't have much time for a short while).

The Persian Gulf situation is likely a significant factor in terms of dragging away attention and resources from projects such as ours. It's a big challenge, but that's why we brought someone of Peter's background in, so let's see if he can work some magic either on MSC or by bringing additional shipping company/companies.

The economics of blend on board (BoB) are not as compelling for MSAR Classic; a key economic driver for is use of cheap residuum from a refinery (or directly from the heavy bitumen, etc). You can't do that with BoB.

Use of BoB for bioMSAR may be more viable.

I agree with Willswag, BoB is not a priority right now.

@GrumpySod The trials don't require bunkering in the far east. You're thinking of post-trial commercial negotiations and rollout plans, which hopefully will happen if/when the trial succeeds and Quadrise looks to deploy MSAR to the wider MSC fleet.

Peter's view was that once we reach the commercial phase, it is essential for us to demonstrate to MSC that we have a robust bunkering presence in the Strait of Malacca (to supply their vessels throughout SE Asia on their journeys from China <-> Europe, etc). There are several good options in that region, including Singapore, but plenty of Malaysian and Indonesian refineries and terminals are now trying to get into the game as well.

Clearly, from where we stand today, these feel like "nice problems to have" :-).

Let's stick to the Mediterranean and NW Europe, ey 😅

Our trial vessel better not be going anywhere near that region 😂. Oh, I jest, but we've not had the best of luck over the years. Best not tempt fate.

Yes, bioMSAR Zero has already been validated in the lab, and the 2030 target is about commercial supply. And Jason has repeatedly said they are able to beat that timeline.

I think it's mostly a matter of demand, regulatory requirements, and availability of sufficient residual biofeedstocks. The technology works.

bioMSAR Zero uses large amounts of residual bio inputs that are still ramping up in production/processing as the supply chain matures. So you wouldn't be able to supply your entire fleet today with MSAR Zero because there aren't enough calories available (nor methanol, ethanol, ammonia, etc).

However, an operator could easily adopt MSAR or bioMSAR and incrementally increase the proportion of low-carbon bio component over time as regulations require fleet GHGs to come down. MSAR, bioMSAR, and MSAR Zero are all the same platform, so they have complete flexibility between 0% to 100%.

He's busy flooding the boards over on ALL at the moment.

Glad you're still on board DPE.

After posting, it occurs to me that the planned volumes for the POC could have changed. Certainly, the last updates I can find still explicitly state 1,000 MT per POC, but a lot of time has passed so I don't know whether the plan has been altered (don't we all know that!).

I believe you're talking about slightly different things.

It will take only a short amount of 'engine time' to burn the fuel once the POC begins. It's only 1,000 MT of fuel per POC.

But, MSC + Quadrise will be testing a tonne of stuff as part of their programme, including fuel switching, so they won't be using MSAR the whole time. Hence, the real-world timelines will be much longer, even though you could probably burn 1,000MT of MSAR in 14 days if you were running non-stop with Leandra.

AIUI, the 3 month period also includes installation, commissioning, mobilisation, training, etc. As you all no doubt recall, the decision was made not to install the MMU at Mac2 until the agreement is signed to avoid unnecessary terminal fees.

Anyway, here's the verbatim question and answer:

Q: The Interim Results tell us that the LONO for the MSC Trial will last approximately 6-8 months. Could you please tell us how long the POC will take from start to finish (including reporting etc) i.e. How long do you expect it will it take from the start of the POC to the start of the LONO.

A: Depending on the route of the vessel we expect the POC may take up to 3 months for both fuels (up to 6 weeks each). It is difficult to predict the time for reporting at this point as this involves 3rd parties.

Many thanks to Laurie for his long service to the company and being a key conduit between retail shareholders and the company, including in the era when most companies only spoke to institutional investors and almost completely ignored retail.

Welcome to Michael Covington. He has an extremely impressive CV. His experience in non-dilutive financing will be useful should we establish a successful commercial agreement with MSC after the POC. For example, if we need to acquire a large number of MMUs, etc.

1) They were hypothetical examples, which I made clear by saying "hypothetical MSC 100 vessels". I did not put a timeframe on any of this.

2) You are misunderstanding. I did not say that 100 vessels would use 1 million tonnes of fuel. That is an independent list of examples of business development topics that the company would need to plan for as they scale up over time. The numbers are hypothetical to give an idea of the scale.

3) The Quadrise team has mentioned several times they are working with MAN to determine an approved process to start using fuel. MAN makes up most of the market.

4) WinGD X engines are extremely similar to Wartsila/WinGD Flex RT engines. The team believes there should be a low-friction process to get approval once we've gathered the latest-and-greatest data from the MSAR POC.

A vessel like Leandra uses about 70 tpd when slow steaming (from my conversations with Jason). 280 sailing days per year is a reasonable estimate from looking at online sources[1]. 70*280 = 19,600 tonnes per annum of fuel oil equivalent. Tweak variables to your preference.

You're talking around 45-50 vessels of Leandra's size for 1 million tonnes fuel oil equivalent [2]. She's a modest sized vessel by today's standards.

The numbers we arrive at will depend on many variables like...

- How large the vessels MSC choose to convert first are (i.e. if they are mega sized ships, it'll be more usage; smaller ships much less). Just can't answer that sensibly at this point.

- Routes those vessels are on (i.e if they spend a lot of time in port, it'll be less).

- Speed of vessel (i.e. faster = a lot more fuel). I'm guessing fast steaming is not on the cards given the high prices of fuel and pressure to keep emissions down.

[1] https://www.researchgate.net/figure/The-annually-service-time-on-container-ships_tbl5_299600017

[2] Adjust the numbers for real MSAR emulsion fuel volumes, but the pricing is per joule/per calorie, so it doesn't actually matter.

I suspect it's more of a result of the horrible bid-ask spread today (again); the SP was up a few percent before the last trade. 18-20% spreads most of the day. MMs will be making an absolute killing from Bed & ISA punters... It seems excessively wide, but what do I know. Presumably the MMs are concerned there may be high volatility, hence the extremely high spread.

If, post MSAR PoC, MSC made clear their intent to roll out MSAR to even 10% of this huge fleet, it would be utterly transformative for Quadrise. This is the "the big challenge ahead" that Peter refers to in the IMC. How do you secure enough resid in a timely fashion at the right price (for all parties).

Naturally, as shareholders we're simply concerned about getting this flipping trial signed and under way.

But, I am glad that Peter is thinking ahead as to the how we might supply 1 million tonnes of MSAR (fast); how do we convert a hypothetical MSC 100 vessels as rapidly as possible but with high quality and adequate training; how do we ensure consistent and robust quality of fuel, given the QRF guys won't be 100% hands-on at that scale, etc.

Like everyone else, I'm tired of waiting!

Another quick thought I had after posting this. AIUI, very high complexity refineries might only produce about 5-10% residuals. Depending on the nature of the feedstock, there could also be fairly high metal contents (chromium, vanadium, etc). I recall Jason saying ages ago that due to better combustion that the resulting ash is rich in those metals, easy to extract, and they potentially have commercial value — I'm a tad sceptical about that, but who knows.

"Strong synergies with metals recovery from ash - including vanadium, a critical component for the manufacture and deployment of renewable energy storage batteries" - https://wp-quadrise-fuels-2020.s3.eu-west-2.amazonaws.com/media/2023/02/White-Paper-Middle-East.pdf see P2

More complex refineries tend to produce a smaller amount of nastier residue. More concentrated with asphaltenes, etc. It has a lower value due to how difficult it is to handle.

I guess the question would be whether such a refinery would produce enough of this super-heavy refinery residue to be interesting to Quadrise in those earlier phases of marine deployment, and whether the additional discount it may offer would be worth the extra chemicals, etc.

No doubt a topic for analysis by our in-house refining economics expert, Matt Hyde. There are undoubtedly many factors to consider, such as logistics, chemicals costs, residue properties, etc.

Sorry, that was supposed to say 'dual fuel' not 'duel fuel'. Typo on my part; please, no sword fighting or throwing down of white gloves! Have a good weekend, all.

Hope Peter has something nice for us this month.

WinGD now has full ownership of the former Wartsila the 2-stroke slow speed marine diesel business. Previously it was a partnership between Wartsila and WinGD.

The WinGD X series is a modernised version of the Wartsila Flex series. Ergo, the data collected on Flex engines is highly relevant to X engines. A good number of the new ships that MSC have bought in recent years use WinGD X engines (not exclusively). Perhaps one small complication is that many are duel fuel models (DF), so there might be some additional verification required.

I get the sense that with increasing prevalence of alternative fuels, the industry is becoming more flexible about testing new fuels (insurance, flag states, operators, classification societies, OEMs, etc). Until now, it was very easy for everyone to be bottlenecked by OEM testing capacity.

Instead, once a baseline of data has been established on a given fuel, there seems to be an appetite to find a no-objection process that is not as time-consuming, resource intensive, and costly as a full LONO (TBD...). Hopefully we can benefit from these changes, as they will provide faster routes to market for MSAR with MAN (and various engine models that may be distinct enough to require separate testing). This is a topic that Peter is working on with OEMs, as I understand it.

I don't know what the specific solution will be, but I imagine it will involve digital twins/simulations, static testbeds, lab testing, etc.

If we can establish a process that is rigorous enough that all parties are confident in safety and efficacy, it would be a massive improvement. That is especially important for bioMSAR which supports diverse feedstocks (even blended together). It would never be practical to do a full LONO for bioMSAR variant, let alone blends.

@46Gillingham I meant in aggregate. You've talked many times over the years about purchasing large chunks of Quadrise shares. I was assuming by now you were getting near the threshold. It doesn't take many 5 million buys to hit ~60 million over the years.

Hopefully we're nearing an inflection point where the company can prove there's real substance to the positive updates.

@46Gillingham do you anticipate appearing on the 3% significant holders list?

Shockingly huge spread, ISA fillers being taken for a ride.