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SIBCON: Bunker blending activity at Singapore up approaching 2020

04 Oct 2018

Blending operations of various oil components to produce 0.5% sulphur bunker fuel is expected to rise coming 2020, believes the Group Managing Director of Singapore bunker supplier Global Energy International.

“In the Asia bunker hub of Singapore, we expect HSFO (high sulphur fuel oil) to exist due to it being an easier way for owners with scrubbers to comply with IMO 2020,” Loh Hong Leong told delegates at the Singapore International Bunkering Conference and Exhibition (SIBCON) on Wednesday.

“However, the mainstay is definitely compliant bunker fuel. A point to note is the price of this bunker fuel will be the key as low viscosity compliant fuel and high viscosity compliant fuel will definitely have a big variation in price.

“From that perspective I would see a very active blending market to surface where players will find a way to find the best blended fuel at the best price for shipowners.”

Meanwhile, Loh expects the use of liquefied natural gas and other alternative fuels as a marine fuel at Singapore to be a matter of time.

“But it will take some time because the infrastructure is too way behind the hype; there is too much talk but the infrastructure takes time to build and it will be probably another generation of ships, probably hybrid ships, where new marine fuels will be used.”

Moving forward, Loh forecasts Singapore to lose a portion of its future bunker sales volume to Zhoushan.

“As we stand today, Shanghai is world's biggest container port. Singapore is second, Shenzhen is third and Zhoushan-Ningbo port is fourth. Location alone, there are two top five container ports [located close together] so definitely there is demand for bunkers,” he explains.

“And with this factor, bunker suppliers will gradually gravitate towards the marine fuel supply industry at Zhoushan.

“We can definitely see growth in Zhoushan and it will take up some space from Singapore’s bunker sales. Further, Singapore is a transhipment port while the two Chinese ports [Shanghai and Zhoushan] are mostly export-based ports.

“From this base, we know that at the end of the day we may lose some volumes in Singapore market to the China market.”

Photo credit: Manifold Times
Published: 4 October, 2018

 

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