Quadrise plc (LON:QED) Chief Executive Officer Jason Miles caught up with DirectorsTalk for an exclusive interview to discuss the Valkor project update, what it means for the group, how it fits in with the broader strategy, and the progress of other key projects.
Q1: We’ve seen today’s announcement regarding Valkor, and it’s great to see Valkor will commence drilling next week.
A1: Yes, we’re delighted for Steven Byle and the team. Frankly, they’ve worked tirelessly to bring the partners together, to raise the multi-million dollars that they need by way of funds to drill the first four wells and start the engineering design and planning process for the larger field development t plan as well.
The first well itself should generate up to 40 barrels a day of heavy sweet oil, samples of which will be treated by Valkor and sent to Quadrise for testing in the lab.
The significance I guess for the heavy sweet oil project over there is that the first well will provide the required data that they need to obtain the permit for the larger field development plan, and the production project itself as well.
Q2: Could you elaborate further on what this projects means for the group?
A2: For us, it’s extremely important to get the oil samples to optimise the additive formulation process for both MSAR and bioMSAR production. It also provides us then with a chemical and physical properties of the emulsion fuels to start marketing those products in earnest to end users and start the planning process for commercial supply.
Also important is that we see this as a massive, very positive step anyway for the heavy sweet oil project itself. Them obtaining the site project finance is extremely important and the permit approvals we expect for both of those to be received in the summer.
This in turn should lead to the payment for the site licence agreement and the supply of the equipment to site for which we get paid, importantly, $1.5 million so it’s good commercial revenue for us. There’s then ongoing payments of $75,000 a quarter to assist with the marketing of the fuel as well.
So, this really, we see as the green light for the project now going forward so we’re excited to be part of the next steps.
Q3: How does this project with Valkor fit into your broader strategy of decarbonising the shipping industry?
A3: The marine fuel market is 200 million tonnes per year, plus, of fossil fuel today essentially, and it needs a range of solutions really to decarbonise quickly.
This is a unique opportunity to supply heavy oil using our technology directly to the marine sector by avoiding the expensive and very CO2-intensive step of oil refining. Basically, 15-20% of the carbon burden of a fossil fuel delivered to the marine sector today is actually the refining supply process. So, if you can avoid the refining step, that’s the large portion of that.
Valkor could expect the technology to reduce the already low sulphur content of the heavy oil to virtually zero, and this widens the scope of the application to potentially replace low sulphur gas, oil, and diesel as well as fuel oil.
Finally, once CO2 injection is actually deployed at the site for enhanced oil recovery and sequestration, the resulting MSAR and bioMSAR will be very low in carbon intensity which obviously adds value to the marine sector to decarbonise and reduces emissions as well.
Q4: Just moving on to your other key projects, how are things progressing there?
A4: You probably may have spotted that Quadrise recently raised £2.5 million through a successful placing and oversubscribed open offer which was really nice to see good support from shareholders.
The primary reason for the fundraise was to ensure that we could progress with the MSC vessel trial on bioMSAR which we plan to start in the second half of the year, but we need to commence the project expenditure as soon as agreements are signed with MSC and Cargill. We expected to get those concluded at the end of March but religious holidays and availability of the stakeholders resources over the period has meant that this has taken a little bit longer to conclude but discussions are progressing.
Alongside the marine project, we met with our Moroccan clients this week and there’s now an accelerated plan in place to finalise the agreement that covers a large scale trial at their main site and commence commercial supply discussions as well. So, that’s progressing as we’d expected.
Alongside that, both our projects in Southeast Asia and Americas are at the final stages now of negotiating and finalising the agreements for the trial and then commercial supply thereafter.
In parallel, there’s some further work going on in Q2 that covers testing of bioMSAR, further formulations of that including a net zero project at Aquafuel and accelerating the possibilities of commercial rollout of bioMSAR Zero as well. We’re looking at other applications potentially to fast track that particular rollout of basically a B100 which is a 100% biofuel product as well.
So, there’s a lot going on, obviously it’s going to keep us very active over the period but hopefully, should lead to some good excuses to come back and talk again.
