MOA Signed with Saudi Arabian Partner

RNS Number : 5055K

Quadrise Fuels International PLC

22 August 2012

 



22 August 2012

Quadrise Fuels International PLC ("QFI" or "the Company")

Memorandum of Agreement Signed with Saudi Arabian Partner

Quadrise, the emerging supplier of MSAR^®, a low cost alternative to heavy fuel oil in the shipping, refining, and power generation markets, is pleased to announce that Quadrise group subsidiaries have executed a Memorandum of Agreement ("MOA") with M/S Rafid Group for Trading & Contracting ("Rafid") to formalise their relationship in anticipation of contractual commitments for the application of Quadrise MSAR^® technology and fuel in the Kingdom of Saudi Arabia ("KSA").

The MOA commits the parties to an exclusive relationship within KSA. In addition, when contract terms are finalised for the first MSAR^® process installation in a major refinery in KSA, Quadrise and Rafid will form a joint venture company to undertake all further business in KSA in which Rafid will hold an interest of up to 30%.

Recent key milestone events that have resulted in the conclusion of the MOA include:

·        Formal approval by Saudi Aramco for the potential application of Quadrise MSAR^® technology in its refinery portfolio, following reaffirmation of refinery project economics by a cross functional team of Saudi Aramco specialists.

·        Confirmation of the candidate Saudi Aramco refinery selected for the first MSAR^® process installation, which today produces over 25 million barrels (4 million tonnes) of fuel oil per annum.

·        Commercial arrangements currently in discussion with Saudi Aramco for Quadrise specialists to assist with the conversion of KSA based utility clients from crude oil or fuel oil to MSAR^® fuel, to match local market consumption with planned production.

The final detailed definition of the Saudi Aramco project planning and execution process will ultimately determine the MSAR^® implementation timetable. The scope is expected to encompass the first major refinery project, followed by a larger scale programme to process larger quantities of the available heavy residues within KSA to MSAR^®.

The MOA was signed between Quadrise International Limited and Quadrise KSA Limited, both Quadrise group companies, and Rafid. Founded over 25 years ago Rafid is a private, multinational conglomerate made up of more than 20 companies and affiliated businesses that supply a broad range of services to the energy, utilities and infrastructure sectors in KSA.  The principal client of Rafid and its partners is Saudi Aramco.

It is increasingly becoming a requirement for major international suppliers of technology services to Saudi Aramco to form partnerships with local engineering companies to ensure that Saudi nationals gain requisite experience. The agreement executed with Rafid and the intended joint venture company will ensure that Quadrise and Rafid are fully aligned with this guidance.

The conversion of KSA oil fuelled power generators from local and imported fuel to MSAR^® offers major economic benefits at a national level, including the release of middle distillates in the refinery and the related reduction in imports of diesel fuel. There are also many operational benefits for the power plant operators associated with enhanced fuel stability, improved combustion with negligible black carbon (soot), and much reduced NOx emissions.

Commenting on these developments, Chairman of Quadrise, Mr Ian Williams, said:

"We are delighted to have concluded this agreement with Rafid. Their capabilities and reach have proved to be a very good fit with our expertise and technology.

Saudi Arabia is a key market with enormous business potential for Quadrise, especially as the Government seeks to optimise energy resources in the Kingdom. Rafid is a proven partner for the Saudi Aramco programme, and for the many other opportunities evident in this market."

Commenting on the relationship, Chairman of Rafid, Mr Abdul Aziz Al Mandil, said:

"The Rafid Group is an established conglomerate with successful partnerships with major companies such as CNPC, CTCI, China Harbour and Rotary Engineering.  We have a proven track record of winning multi-million dollar contracts with KSA customers such as Saudi Aramco, SABIC, SEC, SWCC and Marafiq.

We have been convinced from the outset of our relationship with Quadrise that MSAR^® technology offers great benefits for both Saudi Aramco and the Kingdom at large.  The recent approval of MSAR^® technology by Saudi Aramco is a major milestone.  It confirms that the commercial basis has been established at the highest level to proceed together with Quadrise, and now for us jointly to secure commitments to commercial applications expediently."

Ian Williams, Executive Chairman Hemant Thanawala, Finance Director Quadrise Fuels International PLC	[phone]
Dr Azhic Basirov / Siobhan Sergeant Nominated Adviser Smith & Williamson Corporate Finance Limited	[phone]
Dermot McKechnie / Petre Norton Broker Westhouse Securities Limited	+ 44 (0)20 7601 6100
Philip Dennis / Nick Lambert / Rollo Crichton-Stuart Public & Investor Relations Pelham Bell Pottinger	[phone]

 

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