Quadrise plc (LON:QED) Chief Executive officer Jason Miles caught up with DirectorsTalk for an exclusive interview to discuss the recent agreement with Cargill and MAC2, what’s needed to commence the MSC vessel trial, updates on the projects in Utah & Morocco, and what investors should be looking out for.
Q1: Jason, let’s start with the recent agreement with Cargill and MAC2. Could you bring us up to speed?
A1: The collaboration agreement that we have with announced this morning with Cargill and MAC2 relates to our marine decarbonisation projects to trial our emulsion fuels at a commercial scale with MSC Ship Management.
They manage the largest container ship fleet globally so to complete the trial that we’re planning to take on the MSC Leandra, requires basically a Quadrise blending system to be deployed near a bunker hub to supply the MSC vessel. We also need a reliable supplier of quality feedstocks to manufacture the fuels.
So, we started discussions with the European division of Cargill over a year ago now regarding the potential supply of glycerine for bioMSAR supply to MSC. As well as obviously being one of the largest suppliers of food globally, Cargill are also a major supplier of biofuels and derivatives such as glycerine. Hence, they can understand the bioMSAR opportunity and what we were looking to do in terms of our single marine fuel programme. Cargill also operate, obviously , a very sizeable marine fleet themselves, so they understand the sector very well.
Cargill very kindly introduced us to MAC2 in this process and they operate a terminal in the port of Antwerp, Bruges, and also are interested in widening their business portfolio from what they’re doing today to also include the supply of sustainable marine fuels in the future, to decarbonise shipping obviously. MAC2 are part of the larger Machiels Group and they also have interest in the renewable energy sector as well as environmental services, so a very good fit.
This agreement therefore brings together three parties with complementary interest really in supporting the MSC bioMSAR initiative from vessel trials all the way through to commercial supply upon success. So, we are very excited about collaborating with these reputable players in the space, rankly.
Q2: What more is required to commence the MSC vessel trial in Q2?
A2: The first is an operating permit, and to support this MAC2 have very kindly been progressing the permit process for the supply, production and supply of Quadrise fuels in parallel by submitting an application last year that is expected to be included in the coming months.
A similar three-way agreement to the one announced today is also being progressed with MSC and Cargill, together then with further detailed agreements that we alluded to in the announcement relating to the toll manufacture of emulsion fuels by Quadrise and the supply of these fuels to MSC.
Q3: Just moving on to the company’s other projects in Utah and Morocco, do you have any updates that you can share?
A3: Our low carbon low sulphur fuel project in the US is with Valkor. Since AGM back in November, they’ve since inked agreements with a couple of listed entities Ecotech of Norway and Trio Petroleum in the US to progress their oil sands and drilling initiatives respectively.
So, our current expectations are that the drilling permits will be approved in the next few months to allow them to commence drilling in Q2, and we also expect that they’ll be raising the project finance required for at least one of their projects to kick start the site license and supply agreement that we have already in place with them during the second quarter of this year.
In terms of our trials in Morocco last year, we submitted the technical report to the client at the end of 2023 and that was well received, and we are now progressing an agreement covering the wider testing of our emulsion fuels at their main industrial sites throughout Morocco and commercial supply for their site B where we successfully completed the trial last year.
The client is now planning to visit our facilities during the next few months for reference purposes and to progress obviously the agreement that we need in place before we start.
Q4: What are the next project milestones that investors should be looking out for?
A4: As mentioned, further agreements will be announced obviously relating to the sustainable marine fuel project with MSC and Cargill to enable the vessel trials to commence in Q2 as planned. In parallel, project activities in Utah and Morocco should provide a good source of news flow as activities basically progress and agreements are signed.
We’ve been quite prudent with our cash during this period whilst minimising any scheduled delays, hence our project expenditures are well below the original budget that we prepared earlier in the year, or earlier in our financial year rather.
I should also mention the pioneering work that’s ongoing at our research facility at QRF as well, to manufacture sustainable biofuel feedstocks into bioMSAR using both water and oil soluble biofuel products. We’re doing that together with an increasing number of biofuel suppliers following obviously today’s announcement with Cargill.
Ultimately, we’re planning to supply a lower cost net zero biofuel that’s tailored for the decarbonisation of the marine fuel market so it’s going to be unique in that regard. This sector today consumes over 250 million tonnes of fossil fuel and produces nearly 3% of greenhouse gas emissions so it’s quite a large producer of greenhouse gases which obviously are there to reduce that.
So, this environmental challenge keeps us all at Quadrise motivated, frankly, and provides us with a great sustainable business if we continue to meet our targets so we think we are perfectly positioned to make a material difference in a vital market at exactly the right time.
