Trader and shipowner Vitol is accelerating its bid to produce bunkers from recycled plastics with a new share sale and trial plans.
The company is working with Oslo-listed Quantafuel, in which it has a small stake.
On Friday, Norway's Quantafuel completed a NOK 602m ($66m) private placement of shares to fund feasibility studies into the building of two large-scale production facilities in Amsterdam and Antwerp.
The two companies want to chemically recycle 100,000 tonnes of waste at each plant per year.
They will produce low carbon synthetic oil products.
The studies will be carried out with Vitol’s partly owned subsidiary VTTI, a tank terminals company.
"Both Amsterdam and Antwerp are key locations for energy handling in Europe where VTTI already operates state-of-the-art logistic facilities and have in-depth knowledge of establishing new process capacity," said Quantafuel chief executive Kjetil Bohn.
Investment decision due in 2021
The studies will start in the fourth quarter.
A final investment decision is expected in the first half of 2021.
The next stage of the project comes after the start of production at the company's Skive plant in Denmark.
Skive reached the milestone of 1,000 litres of oil on its first day.
"We are very pleased with being able to run continuous operations for longer periods and that the product produced is in line with our expectations, but do of course expect that it in the period to come will be variations in both amount and quality produced each day," Bohn added.
Investors cash in
As part of the share deal, existing shareholders have also sold stock worth NOK 175m.
Investor TD Veen AS sold 1m shares, while Bohn offloaded another 900,000 and chairman Oscar Spieler, a former CEO of Golar LNG, sold 300,000. They all retain small stakes.
Last year, Vitol converted $3.25m of Quantafuel debt into stock, giving it 2.9% of the company.
This was followed by an investment by German chemicals giant BASF, which pumped in $22m in the form of new shares and a convertible loan.
Quantafuel then moved up to Oslo's Merkur Market from the over-the-counter board
BASF has a four-year right of first refusal for chemically recycled pyrolysis oil and purified hydrocarbons from the 16,000-tonne-per-year plant in Skive.
Vitol said only 12% to 14% of Europe’s 25m tonnes of plastic waste is recycled each year.
Quantafuel has previously told TradeWinds that the new fuel is suitable for any kind of ship.
Bohn explained that its own catalytic systems turn plastic waste into high-quality diesel that can be utilised by present infrastructure and engines, without modification.
The fuels can be used directly, or to manufacture products ideal for fuel blends at a refinery.
