When you’re a little company looking to gain market share, sometimes you have to shout from the rooftops. On Tuesday, shares of Kelso Technologies (TSX: KLS)(NYSE American: KIQ) got a little boost as the company tooted its own horn about the advantages of its crude-by-rail (CBR) equipment. The Vancouver-based company couldn’t name drop, but did say that an “American oil company customer” has proven the economic benefits and effectiveness of Kelso technology after about two years of use.
The anonymous client has been operating two individual unit trains consisting of a total of 214 tank cars for the last couple years, with all the cars equipped with Kelso’s pressure relief valves and one-bolt manways. Further, 10 cars were equipped with Kelso’s vacuum relief valves as part of a field services trial.
Kelso says that the client reported faster loading times and “quantifiable economic advantages at their crude oil loading racks.” The one-bolt manways delivered value via quicker sealing times that equated to an additional unit train every three months. Extrapolating that data results in an additional 276,000 barrels of oil annually per unit train.
The manway also reduced opex because they gaskets only needed to be changed every 18 trips as compared to every six trips for a standard manway. Kelso says that works out to a savings of $85,000 per year per unit train. On top of that, the company says a savings of about $100,000 annually is realized through fewer mainway repair costs related to damaged bolts resulting from excessive wear and over-tightening.
The client added that it also benefited by keeping its cars on the tracks rather than being down for manway repairs.
With these accretive additions to their cars, the client is now putting five bottom outlet valves into service for evaluation in its CBR runs. Kelso’s proprietary technology here is expected to deliver additional benefits, with the trial now expanded into hauling crude oil, molten sulfur and chemicals.
Kelso CEO James Bond says the field use proves the company’s products are the “best available technology” and expects them to lead to a meaningful revenue opportunity, adding that the client demonstrating the safety and monetary benefits “should assist the crude oil industry to better understand Kelso’s value proposition and possibly fuel their acceptance and adoption of the Company’s technologies in the future.”
Toronto-listed shares of Kelso closed Tuesday ahead by 12.96% at 61 cents, while U.S-listed shares advanced 11.36% to 49 cents.
