Proactive4 Mar 2023 14:04
Quadrise Fuels International PLC (AIM:QFI, OTC:QDRSF) opportunity with MSC Shipmanagement could be worth more than double the company’s current market value, that’s according to analysts at Shore Capital.
Earlier this week the AIM-quoted company updated investors on the extensive testing of its bioMSAR fuel ahead of trials with MSC later this year, and highlighted that in separate testing with Wärtsilä Services Switzerland completing optical combustion and engine wear tests with the synthetic biofuel.
The tests were described as a necessary precursor to the commercial-scale vessel trials.
The optical combustion test of MSAR and diesel fuels confirmed bioMSAR to have similar injection and combustion properties as MSAR, Quadrise said, suggesting bioMSAR will behave similarly when used in medium and slow-speed diesel engines. Having also successfully completed extended wear tests over a 250-hour period, the next phase of assessment has been scheduled: hazard identification and operability studies.
Following these tests, commercial vessel testing will begin on the MSC Leandra.
Shore Capital analyst Tom Fraine, in a note today, said the broker remains optimistic regarding the potential scale of Quadrise’s projects.
“The company’s proprietary fuels have the ability to significantly reduce both fuel costs and emissions. bioMSAR and MSAR also make the transportation and handling of fuel easier versus conventional heavy fuel oil and no significant adaptions to equipment are required for their usage,” Fraine said.
“The opportunity with MSC could be worth more than double Quadrise’s current enterprise value in potential annual revenues if only a small percentage of the shipping company’s overall fuel demand was switched to MSAR or bioMSAR.
“MSC currently consumes close to 10m tonnes of fuel oil annually and we believe Quadrise could charge c.$50 per tonne for licensing its technology.”
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