Since our last outlook note, Quadrise Fuels International (LON:QFI) has begun to supply MSAR for extended LONO sea trials, paving the way for commercial adoption from calendar H217 onwards. In August it signed a memorandum of understanding with clients in the Kingdom of Saudi Arabia (KSA), which is a key enabler for progressing the production-to-combustion pilot there. In October it completed a placing and open offer raising a total of £5.25m (gross). This should enable it to transition comfortably to the commercial phase on successful completion of the LONO and KSA trials.
Substantial progress on two key programmes
The extremely positive newsflow regarding the Maersk marine programme indicates that the timetable for commercialisation of a substitute bunker fuel in 2017 is achievable. However, while the news of the MoU in KSA clearly demonstrates that the clients in Saudi are committed to a thorough evaluation of the technology, the commercial scale demonstration has been pushed back by around a year compared with our November 2015 note. We have revised our estimates and valuation to reflect this delay and introduce estimates for FY19.
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