Wasabi Energy, which has signed a global licensing agreement with FLSmidth for the use of Kalina Cycle technology in the cement and lime industries, is also in talks with groups in the steel and petrochemical sectors.
NASDAQ-listed FLSmidth supplies engineering, procurement and construction services to the cement and mineral industries. The two companies are already working together on an 8.6MW Kalina Cycle power plant in Pakistan and FLSmidth is well placed to roll out the technology in other countries. Four initial projects have already been identified.
Wasabi’s house broker, Cenkos, believes there is likely to be an upfront fee of around $2 million. It also estimates that Wasabi could receive technology royalties in the order of $50,000-$150,000/MW. The plants are expected to be at least 8MW each.
The Kalina Cycle process uses ammonia mixed with water to achieve a lower boiling point. The technology can be used to create power from geothermal sources or from waste heat derived from cement plants and other industrial sites where the amount of waste heat is significant. This means that between 10% and 50% more power can be generated from the same heat input as traditional technologies.
At the end of 2008, Wasabi issued a licence for the Kalina Cycle technology to Shanghai Shenghe New Energy Resources Science and Technology on similar terms to the FLSmidth licence. The Chinese government-backed organisation, which has built a laboratory and testing facility in Shanghai, intends to roll out the technology to cement plants and other businesses where waste heat can be utilised.
Wasabi also has agreements to build and operate Kalina Cycle power plants in Germany and Iceland.
The company’s results for the year to June 2011 should be published on 14 September.
Market: AIM/ASX
Symbol: WAS
Price: 2.1p
Market cap: £46m
12-month high/low: 3.08p/1.85p
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