Quantafuel Dubai Announcement – Broker Comments

This morning, Quantafuel announced that they have signed a FEED agreement with DUBAL Holding and BASF for chemical recycling of waste plastics in Dubai. The project, consisting  of an 80,000 tons per year facility, moves into the FEED stage after a six-month feasibility study, with a potential FID date targeted for early next year. Positive to see progress and that BASF is involved.

As a reminder, the company next reports at the end of this month, which has historically represented a sizeable trigger for the share price.

Pareto Securities Comment

QFUEL – Quantafuel just announced that the announced pipeline project in Dubai has completed its feasibility study and is moving forward with FEED towards FID. An eventual FID for the project is scheduled for early 2023. We have assumed that the Dubai project would come on stream during Q1’25, and given a construction timeline of 18-24 months, an FID in early 2023 gives comfort to our estimates. The size of the plastic-to-liquid plant will be 80,000 tons per year, in line with our estimate assumptions. The size is four times that of Skive, underpinning that Quantafuel’s ambitious growth plans are on track. TP NOK 19, BUY

Arctic Securities Comment

Quantafuel ASA: Signs FEED agreement for plastic recycling in Dubai

Quantafuel announced today that an agreement with DUBAL Holding and BASF has been signed for the FEED stage on the plant for chemical recycling of waste plastics in Dubai. BASF will act as a partner, sharing the costs of the FEED stage while Saipem has been chosen as the service provider. The FEED for the development will be done in 2022 with a potential expected final investment decision made early 2023.

Nordea Securities Comment

Quantafuel – FEED agreement signed for plastic recycling in Dubai
 
This morning, Quantafuel announced that they have signed a FEED agreement with DUBAL Holding and BASF for chemical recycling of waste plastics in Dubai. The project, consisting  of an 80,000 tons per year facility, moves into the FEED stage after a six-month feasibility study, with a potential FID date targeted for early next year.

We see this latest news as a positive step for Quantafuel, which represents progress on the chemical recycling side of things (which is where Quantafuel’s proprietary technology lies) and could result in a share price uplift today.

The company also notes that this project could represent pole position in the company’s project portfolio (an FID in early 2023 implies potential first oil in 2024).

Whilst positive, we do highlight that production ramp-up at Skive this year should be a key focus point, with a successful ramp-up showing robustness of the company’s technology over a period of time. Furthermore, we note that in order to unlock their facility rollout we anticipate the company requiring a return to the capital markets (H1 2023 in our model). As a reminder, the company next reports at the end of this month, which has historically represented a sizeable trigger for the share price.

ABG Sundal Collier Comment

QFUEL (B): Progress in Dubai – BASF gets involved

Quantafuel (B) just announced that the plastic recycling plant in Dubai has entered the FEED (front end engineering and design) phase after site and feedstock has been secured, and a  six month feasibility study has been concluded. In addition to its local partners, BASF has joined. Final investment decision is targeted for early ’23 and the capacity is set at 80.000 tonnes per year. Saipem has been chosen as FEED service provider and is a likely candidate in our view for the EPC scope. It is positive to see progress in this project which can lead to several more plants down the road, and we consider it positive that BASF is now part of this consortium.

Sparebank comment

Quantafuel – QFUEL, Dubal Holding and BASF has kicked off the FEED (front-end engineering and design) phase for the 80.000 tpd plastic recycling plant in Dubai. Expected FID early ’23 as site and feedstock has been secured. Saipem has been chosen as EPC contractor. Positive to see progress and that BASF is involved.

OUr top ideas for Q3 published yesterday

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Disclosure: 

The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.

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