Quadrise Fuels International PLC (LON:QFI) shares were buoyant on Tuesday after the firm inked an agency agreement with industrial infrastructure firm Redliner to fast-track projects for its MSAR synthetic fuel technology in Mexico.
The AIM-listed firm said under the 18-month agreement it would work with Redliner, which specialises in importing new technology for the oil and gas industry, on an exclusive basis to accelerate MSAR projects into long-term commercial agreements for the production and supply of the technology.
In return, Redliner would be paid success-based commission fees related to the percentage of gross sales received by Quadrise in Mexico from the provision of MSAR technology, services and fuel.
The agreement will also renew automatically after the initial period if neither party decides to terminate.
Mike Kirk, executive chairman of Quadrise, said the timing for deploying MSAR in Mexico was “excellent” and aligned with initiatives of the new Mexican government for the energy sector.
He added that Redliner was “exactly the type” of partner the company needed to progress projects in the country at pace.
Meanwhile, Alejandro Rojas, Redliner’s managing director, said the company’s contribution would rapidly add “significant value” to Mexico and enhance Quadrise’s profile and business in the region.
In a note to clients, analysts at joint ‘house’ broker Shore Capital commented: “This is the seventh agreement or MOU Quadrise has made in the past four months, and the second in a fortnight, following the announcement on 30th June 2019 that Quadrise entered into an MOA in Saudi Arabia with AKHG, a private holding company with a portfolio of 42 industrial companies with 45,000 employees."
They addeed: “To provide context for the scale of Quadrise's opportunity, we note that the NPV for a single notional 750,000 tonne per annum project, at a 15% discount rate, would be c.$80m (c.3p/share).”
In afternoon trading, Quadrise shares were up 10.2% higher at 4.49p.
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