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UK-based Quadrise Fuels International Plc. (QFI) has reported narrowing after-tax losses of GBP 1.87 million for the six month period from July to December 2009, down from GBP 2.42 million the previous year.

QFI had cash reserves of GBP 2.27 million and no debt as at 31 December 2009, down from GBP 4.24 million a year earlier. Cash burn excluding project costs remains at GBP 1.5 million per annum.

The company is reported to have said that it is pleased to be making progress in the marine fuel sector following its recent agreement with Danish shipping group Maersk to jointly develop a marine version of QFI's MSAR emulsion bunker fuel.

Chief executive Bill Howe commented: "Our business strategy of selectively targeting a limited number of highly prospective elements of the 500 million tonne per annum heavy fuel oil market for substitution by lower cost MSAR continues to yield results.”

The development programme with Maersk will aim to capitalise on QFI's skills in emulsion fuel application and use in large diesel engines.

QFI currently produces an emulsion fuel, MSAR®; (Multiphase Superfine Atomised Residue), which is a direct substitute for conventional heavy fuel oil (HFO) for use in diesel engines, power generation and steam raising.

The technology utilises the least valuable elements of the oil barrel resulting in a fuel that is said to be lower in cost than HFO and competitive with natural gas.

Maersk will contribute its vast shipping industry knowledge and provide technical expertise relating to fuels, exhaust gas emissions, machinery systems and technical ship management.

Speaking earlier this month Howe said, 'This co-operative development is a very exciting opportunity for QFI. The diesel engine application of MSAR represents a market sector with limited inter-fuels competition.

"Bunker fuel, driven by expansion in international trade, is a long-term growth market and comprises 150 million tons per annum, approximately 30% of the global heavy fuel oil market."