MSAR® is a low viscosity oil-in-water emulsified synthetic HFO. It is manufactured using proprietary technology to mix heavy residual oils with small amounts of specialist chemicals and water to a bespoke formulation. The resulting emulsion contains approximately 30% water and less than 1% chemicals. The emulsion is a low viscosity liquid at room temperature, which makes it easier to handle and reduces the heating costs for storing, transportation and use in comparison to HFOs.
In addition, the hydrocarbon droplets are pre-atomised within the emulsion and are significantly smaller than the droplets formed from atomising HFO; this means that when used MSAR® burns almost completely, leaving virtually no particulate carbon in the exhaust and making it more environmentally friendly.
Quadrise is the licensor of MSAR® technology and offers fully integrated solutions for oil refiners and end users.
MSAR® technology utilises modified emulsion technology that is proven for road applications, to blend the heavy, viscous, low-value residual oil streams with water and small amounts of additives according to proprietary formulations to produce a very stable oil-in-water emulsion fuel (MSAR®) that can be utilised in the same way as heavy fuel oil (“HFO”).
In general the properties of MSAR® are very similar to HFO, although it does have some unique properties being an oil-in-water emulsion; such as 25-30% water. As with HFO it is generally produced in oil refineries, to reduce the complexity and cost of shipping heavy, viscous, residual oil streams at high temperatures. In traditional refineries, these residuals are mixed with light oil products (that could otherwise be sold at a premium to crude oil) to create HFO. MSAR® uses water and additives as the diluent, hence the refinery can improve the yield of these valuable light oil products. MSAR® blending systems are modular, hence MSAR® blending can take place alongside HFO production to match demand.
MSAR® is a fluid liquid at room temperature which makes it easier to handle and reduces the heating costs for storing, transportation and use in comparison to HFO. It also means existing fuel oil infrastructure can be used for MSAR® storage and transport.
In addition, the micron-sized residual oil droplets are pre-atomised in water by the MSAR® process and are much smaller than droplets formed from atomising HFO; this means that MSAR® burns very efficiently, potentially leaving no particulate carbon in the exhaust and reducing harmful emissions, with 20-50% lower NOx (Nitrogen Oxides) emissions.
Conventional emulsion fuel technologies are installed at the point of use and add typically 10% water and sometimes additives to conventional fuels, such as HFO or diesel, to produce a water-in-oil emulsion (where water droplets are suspended in the oil). The main drivers for such systems are emissions reductions and claimed improvements to fuel efficiencies that may offset the system cost installed on the vessel or power plant. Water addition can sometimes lead to increasing fuel viscosity, requiring higher fuel temperatures and pressures as a result.
MSAR® systems are deployed at the point of production, adding 25-30% water and additives to produce an oil-in-water emulsion (where micron-sized oil droplets are suspended in water). The main drivers for MSAR® are to produce a cheaper fuel (per unit energy) than conventional products, with a low viscosity to enhance fuel handling and reduce heating costs, and emissions reductions that are superior to water-in-oil systems.
Quadrise has developed an innovative technology that produces MSAR® fuel, which can be used as an alternative to heavy fuel oil (HFO). HFO is one of the world’s largest fuel markets with around 450m tonnes used per annum.
MSAR® is, with the appropriate residual stream, cheaper to produce than HFO, with lower emissions, providing advantages both to the producer and to the consumer of the fuel. Consequently, MSAR® has the potential to disrupt all sectors currently using HFO with initial projects focusing on the power and marine and markets.
Quadrise can operate in a number of modes, including licensing, toll processing and build, own and operate.
Under the license mode Quadrise will derive commercial revenues from technology license fees, sale of chemicals, engineering and technical support services, and associated sales or leasing of equipment used for the manufacture of MSAR®.
In toll processing (which was how the Cepsa facility was operated), Quadrise owns the equipment and receives a fee per tonne of MSAR® produced from the refiner.
In build own and operate, Quadrise (together with its partner or partners) owns and operates the facility, purchasing residue from a refiner and selling the finished fuel to end users. This is the preferred mode of operation under our arrangements with Freepoint. This mode of operation has the potential to deliver the highest economic returns for Quadrise.
The marine industry consumes around 180 million tonnes of HFO each year. Most of the marine fuel is supplied from a small number of global bunkering hubs. These bunkering hubs are also closely associated with refining hubs. Our strategy is to work with local refiners in these hubs to enable the availability of marine MSAR®.
The forthcoming changes to the marine fuels market, with the implementation of IMO 0.5% sulphur standards from 1st January 2020, are already having a fundamental impact on the fuels markets. The spreads between low sulphur products (both HFO and distillates) and high sulphur HFO is widening and this is expected to continue – which further improves the fundamental economics of MSAR® production and is also driving an acceleration in the adoption of exhaust gas cleaning systems (“EGCS” or “scrubbers”) by ship operators, to enable them to use much cheaper high sulphur fuels (including MSAR®) post 1st January 2020.
Each MMU (MSAR® Manufacturing Unit) has a capacity of around 350,000t per annum (6KBPD) of MSAR®, the system is modular and scalable. Whilst each project will differ, an MMU can be installed and tied-in to the relevant refinery streams and utilities at a total cost of around US$5 million including ancillary equipment and additive storage, within a period of typically 6-12 months. As the systems are modular, it is possible to add other MMU’s relatively easily, enabling production capacity to be increased to meet rising demand – again reducing the risk and upfront capex for refiners.
MSAR® is designed to be sufficiently robust so as to be utilised as and alongside conventional fuels, provided it is handled correctly.
MSAR® can be utilised on 4-stroke Wärtsilä diesel engines, with over 150,000 running hours of experience on a similar fuel (Orimulsion). The Marine Operational Trial was to demonstrate and obtain engine manufacturer approvals for the use of MSAR® in 2-stroke engines, used predominantly for direct propulsion in marine vessels.
The Operational Trial followed on from stationary 2-stroke engine trials and successful “Proof of Concept” testing on two operational Maersk vessels installed with MAN ME and Wärtsilä Flex engines respectively.
The Operational Trial carried out on the Wärtsilä-powered vessel had three primary aims:
- To show that MSAR® can be used on-board a standard vessel (with some modifications to the fuel handling systems) with the existing crew over an extended period.
- To ensure that operating procedures and settings for operation of the electronically injected 2-stroke diesel engine in a variety of conditions can be finalised.
- To enable the engine manufacturer – Wärtsilä – to provide a letter of no objection (LONO) which confirms to engine users that they can be fuelled by MSAR® without any implications to marine insurance, classification society approvals, or engine manufacturers’ warranties.
The trial met most of these primary aims, as borne out by the issuance of the Interim LONO from Wärtsilä and the confirmation from Cepsa and Maersk regarding the performance of MSAR® fuel during the trial.
The limited availability of fuel that is compliant with the new IMO 2020 sulphur regulations, both in terms of volume and location, has resulted in a wide variety of commentators expressing the view that non-compliant > 0.50 %m/m Sulphur HFO plus an Exhaust Gas Cleaning System (EGCS) will be the most cost-effective solution. At current forecasts a newly installed EGCS would be paid back in less than 2 years. MSAR® can be used in the same way as HFO, in conjunction with a scrubber.
With the spread between high sulphur HFO and middle distillates expected to widen significantly post 2020, the driver for refiners to increase their distillate yields becomes even greater. MSAR® technology allows refiners to produce a synthetic fuel oil from heavy refinery residue streams without the addition of high-value distillates (cutter stock). This means that MSAR® can be sold at a discount to HFO on a calorific basis.
Current economic forecasts suggest that, for many, MSAR® fuel alongside EGCS will be the most cost-effective method of compliance with the IMO 2020 sulphur regulations.