As part of its preparations for the upcoming 2020 sulphur cap, Belgian shipping company Euronav announced it has purchased the equivalent of 420,000 metric ton of compliant fuel and Marine Gasoil and has hired a dedicated fuel oils specialist team to procure, thoroughly test and store new compliant fuels.
This comes as the company announced last month it took a loan to better-prepare for the regulation entering into force on 1st January.
The company said that the majority of their procurement activity has been on a new compliant fuel of 0.5% sulphur content and not a blended product.
Euronav expects the volume purchased can provide a substantial coverage of its fuel requirements during the initial period of the regulation.
We believe that after a period where the markets will adapt to the new regulations, there will be ample and sufficient compliant fuel available to the shipping industry.
Euronav has also hired a dedicated fuel oils specialist team to procure, thoroughly test and store new compliant fuels for their own use.
The ULCC Oceania (2003 – 441,585 dwt) has been used to store this inventory because of its size and related economies of scale.
Euronav has taken this proactive approach to fuel oil procurement primarily in order to protect our business in terms of the availability of compliant fuel in sufficient quantity, adequate quality and compatibility with our fleet and operations from Q1 2020 onwards.
Regarding scrubbers, the company said it continues to assess the potential retrofitting of part of its fleet and specifically the non-eco VLCCs.
However, it believes it can still fully capture the potential benefits of an investment in scrubbers after the start of the regulation.
At that time, the derivatives market of LSFO should have developed in size and in volume which allow Euronav to fully lock in the benefits of the spread at the time of making the investment. This should even provide Euronav with a “second mover advantage” in learning the flaws of the first round of installations and take a decision based on facts without having to speculate,
…the company explained.
