Latest Updates and Information
Some of the statements on this web page may constitute forward-looking statements under federal securities laws. Please visit the following link for our complete cautionary forward-looking statement: https://www.qsenergy.com/site-info/disclaimer. You should read all updates and press releases in the context of our SEC filings, including our Form 10K filing of April 1, 2019, which can be accessed on our website and at https://ir.qsenergy.com/annual-reports. All updates on this web page are intended as general summaries, current as-of the referenced date. For full context, we urge you to read all referenced updates and press releases.
January 24, 2020: We have had a setback in the recent testing of our AOT demonstration project. As you may recall, re-installation of our modified AOT grid pack (see our December 9, 2019 press release regarding AOT grid pack modifications) was completed the second week of January as reported in our January 9, 2020 web page update below. Due to severe weather forecast at the demonstration site, commissioning was postponed until the following week. On January 16th, during our final commissioning sequence, the equipment presented with an error condition indicating what appears to be an electrical short circuit. After a system review and analysis of data collected during the installation and commissioning process, our engineers have determined the most likely cause of the electrical short circuit is a mechanical failure in the modified AOT grid pack which may have been damaged during the installation and commissioning process. It should be noted that despite the apparent electrical short circuit, tests performed during commissioning indicate the new high-capacity power supply is operating as designed.
Our engineers have prepared a plan to remove, test and visually inspect all components of the modified AOT grid pack. Subject to weather and resource availability (i.e. manpower, crane, etc.), we will use best efforts to remove, test and inspect of the modified AOT grid pack next week. In parallel, we plan to inspect and test the original AOT grid pack (shown in the attached image) which is currently being stored at the demonstration site and should be available for operation subject to inspection and test results.
We believe the best course of action may be to run our next full system test utilizing the original AOT grid pack as this grid pack has been successfully installed without incurring damage and has operated at normal pipeline flow rates under limited test conditions as described in our September 13, 2019 press release. Data collected in these limited tests indicate the original AOT grid pack powered by the new high-capacity power supply could provide significant flow rate improvement.
We will re-assess our demonstration project test plan after completion of the inspection, investigation, and testing procedures described above, but, as you know, we can provide no assurances about the outcome of our investigative and re-assessment efforts. We will continue, as always, to provide progress, plan and schedule updates on this web page.
January 9, 2020: Reconfiguration and repairs to the AOT grid pack are complete, our engineering team is onsite, weather at the demonstration site is clear and re-installation of the reconfigured/repaired AOT grid pack has begun. Re-installation should be completed this afternoon. Due to extreme weather forecast across the Southern United States over the next few days, final commissioning of the AOT equipment will likely be completed next week. Subject to successful commissioning, AOT demonstration test operations will begin shortly thereafter.
January 3, 2020: This is a short update on work currently being performed on the AOT demonstration equipment. For full context, please see the December 31, 2019 and December 6, 2019 updates below.
As reported earlier this week, the internal grid pack of the AOT demonstration unit was recently shipped to a local shop for minor reconfiguration changes and repairs. All parts and supplies were delivered to the shop yesterday (1/2/2020). Work was completed this afternoon (1/3/2020) supervised by our engineering team. Quality assurance and system component testing was initiated this afternoon and should be completed early next week. Assuming successful component testing, the AOT grid pack should be ready for re-installation by the middle of next week.
Our engineers will be onsite next week to oversee transportation and re-installation of the AOT grid pack. Subject to weather constraints (work cannot be performed under certain conditions including lightning, high wind or rain), the AOT grid pack is scheduled to be re-installed on Thursday of next week (1/9/2020) with onsite testing to begin shortly thereafter.
December 31, 2019: Greetings all on this fine New Year’s Eve. Many of you have been anxiously awaiting news regarding test operations at our AOT demonstration site. Though we had planned to re-initiate test operations before the end of 2019, we’ve had to delay operations. We currently plan have AOT demonstration test operations up and running in January.
As noted in our December 6, 2019 update, we completed AOT grid pack modifications and installation in early December. Installation and high-voltage testing of the new power supply was completed in mid-December. After finalizing the power connections, electrical safety and insulation testing was performed on the AOT as part of final commissioning. During these tests, an electrical measurement was made in the AOT indicating an internal system anomaly. After a thorough examination and additional on-site testing, our engineers determined a physical inspection of the internals was required prior to flooding the system with heavy crude oil.
The good news is that the internal inspection revealed relatively minor damage to some internal components which was likely the cause of the anomalous readings. This damage likely occurred during vertical assembly of the system in early December. Once found, our engineers quickly formed a repair plan, including minor configuration changes designed to avoid similar damage during vertical assembly. The AOT grid pack has been shipped to a local shop and parts for these repairs have been ordered and are scheduled to arrive on Thursday, January 2nd. Christopher Gallagher, PhD, Senior Vice President of Product Commercialization and Business Development, and Shannon Rasmussen, Vice President of Engineering, plan to be on-site at the local shop on Thursday to oversee repairs.
If all goes as scheduled, the repaired AOT grid pack will be shipped back to the demonstration site the week of January 6th, and will be installed as soon as required resources (crane and manpower) are available. Assuming no further delays, AOT demonstration project testing should commence in mid-January.
We appreciate your continued patience and support and will continue to provide updates at this web page (qsenergy.com/updates) as this project proceeds.
We look forward to an exciting new year.
Happy New Year to all.
December 6, 2019: As we prepare to resume AOT demonstration testing, we are pleased to provide an update on the status of the upgraded equipment. The new high-capacity power supply and parts for the planned AOT internal grid pack modifications arrived at the demonstration site on schedule in late November. Installation of the modified grid pack was completed earlier this week. Modifications have been completed to the electrical skid and controller cabinets, increasing both electrical and cooling capacity. Final installation of the new power supply in the modified cabinets should be completed next week upon delivery of the final components required to complete the electrical connections and control interface. Assuming these final components are delivered on schedule, we remain on track to complete recommissioning of the AOT unit and resume demonstration testing before the end of this year.
Given the heightened level of activity, we plan to provide more frequent general updates on the status of the AOT Demonstration Project. In addition to our normal press releases and filings with the Securities and Exchange Commission for material developments, we plan to provide interim updates on the Company’s website (https://www.qsenergy.com/updates) and by email (https://ir.stockpr.com/qsenergy/email-alerts). We hope all stakeholders will find this added communication channel helpful during this phase of the demonstration project.