The Managing Director of Switzerland-based fuel treatment manufacturer Aderco expects the shipping industry to witness an increase of off-spec marine fuel cases leading up to 2020.
“Fuel laboratories are expecting more problems on the path to 2020 and beyond, and the estimated global demand of 320 million metric tonnes (mt) of 0.5% sulphur fuels will, in turn, bring new risks to the shipping market,” Philippe Lecloux told Manifold Times in an exclusive interview.
“Taking alternative solutions such as the use of liquefied natural gas (LNG) as bunker fuel and the installation of scrubbers out of the picture, the majority of shipowners are left with little choice but to consume either distillate, hybrid fuels, or low sulphur fuel oil (LSFO) to meet compliance.”
The unassured availability of blending components by 2020 and the use of questionable material in bunker blends could further affect fuel compatibility and stability, leading up to higher cat fine content together with an increased risk of off-spec fuels, he adds.
To date, refineries are able to produce a wide variety of hybrid fuels and LSFO material to meet the International Maritime Organization (IMO)’s 0.5% sulphur cap through three typical methods.
These are the employment of hydro-desulphurisation technologies, blending of low-sulphur crudes, and re-blending of oil product with low sulphur components; refineries incur respective extra production cost of $60-100 per mt (pmt), $40-60 pmt, and $15-20 pmt with these options.
“Refineries will often choose the most profitable option to produce 0.5% bunker fuel which is to re-blend the oil,” explains Lecloux who adds “the low sulphur component selection is driven by availability and cost; not necessary quality.”
To illustrate, he further showed Manifold Times refining calculations indicating a lower quality 0.5% sulphur limit bunker blend (using low sulphur slurry) which can be produced at 26% extra profit when compared to a higher quality cat fine-free bunker sample without using slurry.
“Adding another layer of complication are the different formulas used by regional refineries in North America, Asia and Europe to produce compliant fuel by 2020 which affects fuel compatibility and stability when mixed,” he notes.
“Therefore, it does not take much to see why we are already seeing off-spec cases at Houston and Singapore and expect more of these to come as we approach the IMO deadline.
“At the end of the day, it is a question of availability, quality and cost.”
Photo credit: Manifold Times
Published: 14 June, 2018
Based from findings of recent whitepaper ‘Refining bunker barge performance using coriolis meter technology and the Advanced Delivery Platform’.
To raise awareness of ‘significant emerging problem’ for marine fuel in the U.S. Gulf Coast region.
Asian (HSFO) markets have weakened considerably after a summer power generation-fuelled rally for the past few months, against cooling demand and higher exports.
Industry association has studied the European Commission’s “Fit for 55” package and highlights a number of potential consequences and concerns.
Lead times for VLSFO stems have tightened by one day this week in Singapore, now requiring 7-10 days, while LSMGO are more readily available at 4-6 days, it said.
Marine fuels blended by biodiesel, HSFO and distillates may form biofilm and clog up fuel filters, says LuminUltra.
Cash of SGD 4.43 million and USD 243,100, and one piece of 100-gram gold-coloured bar recovered in safe belonging to Abdul Latif Bin Ibrahim kept at Extra Space warehouse storage facility, show court documents.
Program introduces periodic assessments, mass flow metering data analysis, and regular training for relevant key personnel to better handle the MFMS to ensure a high level of continuous operational competency.
U.S. Claims Register Summary recorded a total USD 833 million claim from a total 180 creditors against O.W. Bunker USA, according to the creditor list seen by Singapore bunkering publication Manifold Times.
Glencore purchased fuel through Straits Pinnacle which contracted supply from Unicious Energy. Contaminated HSFO was loaded at Khor Fakkan port and shipped to a FSU in Tanjong Pelepas, Malaysia to be further blended.
Individuals were employees of surveying companies engaged by Shell to inspect the volume of oil loaded onto the vessels which Shell supplied oil to; they allegedly accepted bribes totalling at least USD 213,000.
MPA preliminary investigations revealed that the affected marine fuel was supplied by Glencore Singapore Pte Ltd who later sold part of the same cargo to PetroChina International (Singapore) Pte Ltd.
