Synthetic Fuel Company "On Cusp" of Entering Bunker Market

Quadrise says its synthetic fuel could replace conventional fuel oil

Synthetic fuel oil (SFO) maker Quadrise Fuels International plc [LON:QFI] (Quadrise) said it is "well positioned to achieve several key breakthroughs in 2013," including the first stage of commercial production of its MSAR emulsion fuel.

The comments came in its interim report for the six months ended December 31, 2012, in which it also reported a loss of £3.35 million ($5.05 million) for the second half of 2012, compared with £1.60 million ($2.41 million) in the same period of 2011.

However, with £4.02 million ($6.07 million) in cash reserves, the firm says it has "sufficient to progress to early stage commercial operations and sustainable revenues," and is "cautiously confident that it is now on the cusp of commercial entry" into the bunker market.

Global Bunker Market

Quadrise puts the global marine bunker market at 180 million tonnes per annum and said its market entry would be assisted by the fact that most major shipping companies lift their fuel at five major "supply hubs."

In January the company reported that recently completed sea trials performed by Maersk had demonstrated the fuel's ability to run on a marine diesel engine.

Executive Chairman Ian Williams says if things move as planned, the company will need to begin production by mid-2013 to supply early commercial volumes in the second half of the year for a program that will again involve cooperation with Maersk.

Full commercial roll-out is scheduled for early 2014.

Quadrise say that by using its MSAR product buyers can reduce their energy costs "substantially," as well as gaining "important environmental benefits," compared with traditional fuel oil, however the company says it has also been following the emergence of Liquefied Natural Gas (LNG) as a marine fuel.

But the company believes that the specialised storage and handing requirements of LNG will limit its use in mainstream shipping operations, whereas its product is designed as a direct replacement for marine fuel oil.

A study last year by Lloyd’s Register concluded that the uptake of LNG as a marine fuel would depend on price, however Canadian West Coast ferry operator BC Ferries said in November last year that switching to LNG could cut its bunker bills in half.