Quadrise Fuels International PLC (LON:QFI) shares rose on Thursday as the firm told investors it has inked a services agreement with Aleph Commodities Ltd which will provide services to the company in the use of the MSAR technology in the Kingdom of Saudi Arabia (KSA).
As a supplier of the MSAR, an emulsion technology which provides an alternative to heavy fuel oil, Quadrise is working with its partner in KSA, Al Khafrah Holding Group (AKHG).
At the end of May, Quadrise entered into a memorandum of understanding with AKHG with the two companies proposing to progress projects in Saudi Arabia that use Quadrise's MSAR fuel technology.
Today’s deal with Aleph follows a similar agreement between the companies covering Kuwait. Aleph is a recently established group of commodities traders with significant experience in the Middle East.
The arrangement with Aleph comes with an incentive based structure, with certain awards attached to business milestones (from early stage contracting to commercial sales).
Ultimately, the partner will receive royalties from the revenues received by Quadrise in MSAR ventures introduced by Aleph.
“This builds on the work that we are doing with Aleph in Kuwait and provides the structure to deliver a coherent approach in two major markets in the region and increase the efficiency of both our business development and project related activities,” said Mike Kirk, QFI executive chairman.
“As Quadrise shareholders know well, Saudi Arabia is a market in which we have substantial experience and Aleph, together with our new local partner Al Khafrah, will enable us to build on this in a positive way.”
“We look forward to working collaboratively with Aleph and Al Khafrah to progress potentially substantial project opportunities in the Kingdom, and to unlock the near-term value that MSAR® technology can provide for the economy.”
Kirk added: “As was the case with our arrangements with Aleph in Kuwait, the agreements are structured to align all parties to the delivery of near-term substantive project delivery milestones - which will ultimately create significant shareholder value for Quadrise."
Aleph will also receive Quadrise share warrants in step with project milestones.
In afternoon trading, shares in Quadrise were 9.3% higher at 4.51p.
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