Quadrise Executive Chairman Mike Kirk
London-listed Quadrise Fuels International plc (Quadrise) [LON:QFI] today said the timetable for trials and commercialisation of its "MSAR" emulsion bunker fuel product will likely see further setbacks.
The announcement follows news that Maersk Line A/S (Maersk Line) looks set to favour the use of inherently compliant fuel to meet the requirements of a global 0.50 percent sulfur cap on bunkers from 2020, rather the opting to install scrubbers and continue to burn higher sulfur HFO.
As Ship & Bunker has previously reported, Maersk Line partnered with Quadrise to trial its Multiphase Superfine Atomized Residue (MSAR) emulsion bunker fuel, and while Quadrise's technology is capable of making 0.50 percent compliant product, the bunkers being trialled by Maersk were higher in sulfur and being burned as part of a scrubber-based solution.
it is now expected that the timetable for continuation of the trial in Q4 2017 and commercialisation of Marine MSAR ... will be impacted
"Whilst the Board of the Company has not yet been able to fully assess the effects of Maersk's anticipated policy decision, it is now expected that the timetable for continuation of the trial in Q4 2017 and commercialisation of Marine MSAR, as originally envisaged to commence with Maersk later this year, will be impacted," said Quadrise.
Today's news is the second blow in as many months for the trials that were originally intended to conclude in the summer.
Last month it was revealed trials had to be suspended until at least 4Q 2017 due to the test vessel being redeployed.
Shares in Quadrise Friday closed down almost 33 percent.
Scrubbers and HFO
Despite the setbacks, Executive Chairman Mike Kirk remained upbeat over the firm's future prospects in the marine market.
"We understand Maersk's likely decision to adopt an approach to 2020 compliance that minimises its capex commitments in the short-term. However, there remain significant challenges for the bunker industry to ensure that there will be the required quantity and quality of compliant fuel available from the refining industry for the operators," said Kirk.
Mike Kirk, Executive Chairman, Quadrise
QFI, like many in the industry, continues to believe that the use of Scrubbers and high sulphur fuel will be the lowest cost option for marine operators
"QFI, like many in the industry, continues to believe that the use of Scrubbers and high sulphur fuel will be the lowest cost option for marine operators and we will continue our efforts to commercialise MSAR for the global marine industry."
Last month, Quadrise confirmed the trial of its MSAR emulsion bunker fuel with Maersk to date had been successful, and today reiterated the various parties involved were still working towards issuing a letter of no objection (LONO).
"Maersk has reaffirmed that the MSAR trial has been successful to date and it will continue to work with Wärtsilä to ensure that a detailed interim inspection report is prepared following the recent inspection and that following this an "Interim LONO" will be issued - which is expected to confirm that Marine MSAR fuel is safe and suitable for Wärtsilä 2-stroke engines," said Quadrise.
"Maersk has further confirmed that it wishes to continue to work with Quadrise to explore the wider commercial options for Marine MSAR after the issuance of the Interim LONO."
Kirk said the company has also been working with Cepsa, who had been producing the trial's MSAR fuel, to review new opportunities for utilising the spare production capacity at its facility for new customers in both the marine and power sectors.
"These discussions are progressing well," he said.
Ship & Bunker recently spoke Kirk to explore the economics of its marine MSAR product, and whether such bunkers really can make commercial sense to bunker buyers and/or sellers.