Quadrise’s collaboration agreement with Cargill and MAC2 Solutions for its upcoming alternative ship fuel trials is "highly encouraging", says house ShoreCap.
Cargill is a global US$177bn revenue business and this update is a significant step in Quadrise’s journey to commercialising its fuels, said the broker.
“We believe Cargill is a very attractive partner for Quadrise, which could lead to future opportunities, given that Cargill has a fleet of more than 500 vessels and has considerable scale in global markets".
ShoreCap reiterated that the opportunity in the marine sector with shipping group MSC alone could be worth a multiple of Quadrise’s current enterprise value in potential annual revenues.
And this is if only a small percentage of the shipping company’s overall fuel demand was switched to Quadrise’s MSAR or bioMSAR alternatives, added the broker.
Heads of major shipping companies recently called for an end date to fossil-fuel-only powered newbuild vessels, notes Shorecap, and urged the IMO to create the regulatory conditions to accelerate the transition to green fuels at COP 28.
“We believe progress in making such regulatory changes could be highly supportive for Quadrise.”
VSA Capital added that the trial is a major milestone for QED and if it is successful, as expected, then this would demonstrate the Proof of Concept and enable a Letter of No Objection (LONO) to be produced.
“As previously highlighted, the LONO is an important derisking step in enabling long-term commercial arrangements to be agreed between MSC and QED.”
The timing is subject to permitting to be received by MAC2 and the remaining agreements being formalised, VSA noted.
Shares in Quadrise rose 31% to 2.74p.