10 Dec 2009 12:21
10 December 2009
Quadrise Fuels International plc
Result of Annual General Meeting and CEO Statement
Quadrise Fuels International plc ("QFI" or "the Company"), the producer of emulsion fuel as a low cost substitute for heavy fuel oil for use in power plants and industrial diesel engines, advises that at its Annual General Meeting held on 10th December 2009, all resolutions were duly passed.
Details of the proxy votes received for the meeting will be available on the Company's website shortly.
At the Annual General Meeting, Bill Howe, Chief Executive made the following statement:
"Since listing the business on AIM in April 2006, the Company has developed a business strategy to accommodate an energy price environment typified by a rising oil price, and its impact on consumers of heavy fuel oil.
A three phase strategy was developed which focused on an initial demonstration of the technology in facilities equipped to handle combustion of emulsion fuels whilst meeting strict environmental standards (Phase 1). QFI's prime targets in this regard were former consumers of Orimulsion who had previously made the minor modifications to their plants to facilitate the use of emulsions and who had installed flue gas desulphurisation facilities.
Phase 2 of the strategy was to parachute the technology, once proven and demonstrated, into growth markets which were receptive to ongoing use of oil as a power generation fuel. These markets were identified through our research as Saudi Arabia, Kuwait and Mexico.
Phase 3 envisaged application of the technology in diesel engine power generation and ships diesel engines.
The Lithuanian project, subject of various previous press releases and operational updates, represented the first opportunity to demonstrate the technology on a large-scale and with all the commercial and contractual ramifications associated with establishing QFI's long term business. Over 20 000 tonnes of MSAR emulsion fuel was successfully manufactured and combusted in the 2008 commercial demonstration, and such was the acceptance of the trial outcome that MSAR was awarded the gold medal for Lithuanian Product of the Year by the Lithuanian Confederation of Industrialists.
The reduction, in the past 12 months, in the spread between light and heavy petroleum product fractions to historically abnormal levels has however impacted MSAR economics. Efforts to convert this major success into a long term contract continue under review, but are, as we announced on 7 December, temporarily on hold pending a return to normality in the oil markets.
The significant success of the Lithuania commercial trial has nevertheless had a very positive impact on our dealings with other major potential clients. In particular it has provided momentum to our Phase 2 and Phase 3 activities, which in terms of the long term future of the Company are far more material than the Lithuanian project.
Our progress in Saudi Arabia continues to be very encouraging. These clients are taking a forward view as to the merits of the technology and basing their evaluations on long term expectations of conditions likely to prevail in the oil markets. Saudi Arabia has a large installed oil-fired power asset base (over 8000MWe) and is a growth economy, currently adding 2000MWe additional power generating capacity each year. It is a highly prospective territory for QFI.
Emulsion fuels are commercially proven in the land based diesel power generation market. In Guatemala, the 150MWe Planta Arizona plant has aggregated over 150 000 operating hours on Orimulsion. For the future we envisage establishing MSAR manufacturing hubs to cover regional markets with high concentrations of diesel power.
The marine diesel market has unusual requirements, not the least being the issue of supply chain logistics for a new fuel. Initial interactions with major counter-parties in this sector provides us encouragement that the technical and logistical hurdles can be overcome however. A further positive is associated with new environmental regulations in respect of marine sulphur emissions. To meet these new regulations will require dozens of the world's oil refiners to install very expensive upgrading equipment with an attendant increase in CO2 emissions, and a substantial increase in the cost of bunker fuel. MSAR, coupled with on board flue gas scrubbing, represents a solution which will be cheaper than both current bunker fuel and the new distillate fuels to be produced by refiners. There thus exists a strong motivation for the marine sector to explore the use of MSAR.
Both the Saudi Arabia and marine diesel markets are moving forward at a pace exceeding our earlier expectations. We anticipate reporting further progress on these prospects during the first quarter of 2010."
Enquiries:
Quadrise Fuels International plc Tel: +44 (0)20 7550 4930
Bill Howe, Chief Executive Officer www.quadrisefuels.com
Fairfax I.S. plc Tel: +44 (0)20 7598 5368
Jeremy Porter
Capital MS&L Tel: +44 (0)20 7307 5330
James Madsen