QIL has Joint Development and Royalty Agreements with A.P. Moller - Maersk (“Maersk”) to jointly develop and, on success, commercialise Marine MSAR® fuel oil. Maersk are the world’s largest container shipping organisation and one of the largest purchasers of bunker fuel oil.
The development programme capitalises on QIL’s skills in emulsion fuel application and use in large diesel engines. Maersk contributes their vast shipping industry experience and provide unsurpassed technical expertise relating to naval architecture, machinery systems, fuels, exhaust gas emissions and ship management. Maersk vessels provide excellent testing platforms for new technologies.
A key objective of the programme is the production of a stable emulsion fuel manufactured from different oil refinery heavy residues, with fuel properties that substantially eliminate the need for any marine engine modifications. The project includes marine engine tests on land and sea, third party verification and approvals, and conclusion of agreements with candidate oil refineries for commercial supply to bunker hubs.
Chairman's Comment: “QIL's specialist team are fully engaged on this exciting project which aims to supply Marine MSAR® as an approved lower cost replacement for bunker fuel oil. Bunker fuel oil constitutes approximately one third of the global heavy fuel oil market of 600 million tonnes annually, and is a major operating cost for shipping companies. Marine MSAR® has the potential to reduce the impact of rising oil prices on the global freight market and is a key component of the future Quadrise business mix. The combination of lower cost Marine MSAR® marine fuel and "on-board" scrubbers offers a potentially compelling compliance solution for the marine fuels market. The Maersk relationship is a strong endorsement of the Quadrise management team, our alliance partner AkzoNobel, and MSAR® technology."
Market overview: The international marine fuels market is one of the largest global fuel markets and is facing serious challenges related to compliance with new progressive emissions standards. From 2020 new standards can only be met if the fuel oil sulphur content can be dramatically reduced, or if the ship owners can afford the additional cost of on-board emissions scrubbing. The practical and economic feasibilities of the oil refining industry adapting to produce the large volumes of low sulphur fuel oil or distillates required for this major market is in doubt. The associated cost will have major implications for refining process economics and related oil product costs and prices.
The QIL team has been engaged directly with Saudi refinery owners on a joint study of the technical and economic impact of implementing MSAR® technology at major oil refineries within the Kingdom. Saudi Arabia is a high growth economy that consumes circa 25 million tonnes of oil annually in the form of crude oil, HFO and distillates for thermal power generation, desalination and industrial uses.
Chairman's Comment: "Saudi specialists have completed a thorough scoping study identifying the technical and economic value of implementing MSAR® technology in their refining system. This same team of specialists has visited Europe to inspect our R&D and production facilities and Saudi refinery residue samples have been successfully converted to MSAR® in Sweden. A definitive project programme with supporting commercial agreement terms is moving through the client review and approval process."
Market overview: Saudi Arabia is a high growth economy which is 100% reliant on fossil fuels, and in particular oil-fired power (over 50% of all electricity generated in Saudi is oil-based according to the IEA). Power demand is driven by industrial expansion and human needs for desalinated water and air conditioning. Power demand growth in Saudi Arabia is typically 8% per annum, and the Kingdom is anticipated to increase its installed capacity from a current 38,000MWe today to 60,000MWe by 2025. Oil, being the overwhelmingly dominant indigenous energy source, plays a major role in power generation and there exists a royal decree establishing oil as the mandatory fuel for all new coastal power plants in the Kingdom.
Scoping studies have been completed by Quadrise on a major PEMEX refinery to demonstrate the benefits of MSAR® implementation. In addition, the detailed requirements for a commercial trial have been established. PEMEX refinery residue samples have also been successfully converted to MSAR® in Sweden.
Chairman's Comment: "Commercial agreements are in the final legal review process, in preparation for execution. These include a defined programme to prepare the site and facilities for the installation of an MSAR® manufacturing plant for 'proving trials'. On success, this will lead to commercial production for a number of applications."
Market overview: According to IEA studies in recent years over 80% of Mexican power generation has come from fossil fuels, with 20% supplied by HFO and just under 50% by natural gas (the remainder by coal). HFO consumption typically equates to 14 million tonnes annually.
Quadrise has an MOU with PowerSeraya Ltd, a leading Singapore power utility,to undertake a joint coordinated programme to identify and secure a "manufacturing and supply chain" to deliver Quadrise MSAR® fuel to the PowerSeraya thermal power plant.
Following joint confirmation of commercial viability the MOU should progress to a commercial phase in which Quadrise MSAR® fuel would replace more expensive conventional HFO.
PowerSeraya has experience of the use of emulsion fuels as their plant conversion was originally designed for the use of Venezuelan sourced Orimulsion® fuel which is no longer available.
Chairman's Comment: "This is a key development as it potentially provides an ideal reference plant within the Asia region and prospectively a springboard to further opportunity in this area of rapid economic development. The preliminary scoping of candidate refineries in the region has been completed and confirms a number of viable possibilities. Discussions with several oil majors are now in progress, with a view to undertaking a commercial demonstration prior to commencing term fuel supply."
Market overview: Singapore is hosts a dynamic and highly competitive electricity market, primarily fuelled by natural gas, and to a lesser extent HFO. In 2005 PowerSeraya completed a programme to covert 750MWe of thermal boiler capacity to allow flexible multi-fuel operation, including the installation of state of the art flue gas cleaning systems. Subject to receipt of a competitively priced primary fuel these units can compete against base load capacity, typically in the form of combined cycle gas turbines.
Our mission is to be the world's premier oil-in-water emulsion fuel company, providing first class technology, services and MSAR® fuel products to our customers through our alliance with AkzoNobel. Our management team and board have an unprecedented global track record with commercial emulsion and marine fuels, oil refining, power generation and industrial fuel consumers.