In light of the upcoming 2020 Sulphur cap, the shipping industry along with the oil and gas sector are preparing for the future changes; Thus, Reuters presents a summary of how the top global refiners are getting ready for the fuel switch.
The IMO has announced that from January 1 2020, ships will use fuels containing up to 0.5% sulphur, in comparison to the existent measure of 3.5%, unless they are equipped with exhaust gas cleaning systems.
Top Global Refiners:
China
Sinopec Corp. has already begun very low-sulfur fuel oil (VLSFO) output at 10 refineries in China, including Zhenhai Refining and Chemicals Co, Jinling Petrochemical Co and Hainan Petrochemical Co.
The company aims to reach the 10 million tonnes VLSFO capacity per year by 2020.
PetroChina aims to a 4 million tonnes of VLSFO in 2020, to be produced from its Jinzhou, Jinxi and Dalian refineries in China’s northeast, and Guangxi refinery in the south.
China Marine Bunker secured minimum 4 million tonnes of VLSFO for the fourth quarter of 2019 and the first two quarters of 2020, while it also began supplying all major Chinese ports from bonded storage.
North Asia
SK Energy, the first of South Korea’s refiner, started supplying MGO from October, aiming to produce up to 27,000 bpd of marine gasoil.
Additionally, the company is constructing a vacuum residue desulphurisation (VRDS) unit that can produce 40,000 bpd of LSFO, which will come into force in March or April 2020. SK Trading International, its affiliate, inked six-month contracts with some shippers in order to supply VLSFO, beginning from Q4.
Hyundai Oilbank noted that it will sell VLSFO from November.
In Japan, Fuji Oil Co Ltd, Cosmo Energy Holdings Co Ltd and Idemitsu Kosan Co Ltd began shipping IMO-compliant fuels in October.
Idemitsu is already shipping sulphur-compliant fuel from five locations, and has plans for fuel from another site in December.
Singapore/Southeast Asia
Royal Dutch Shell loaded its first VLSFO cargo from its Pulau Bukom refinery in September.
Singapore Refining Company (SRC), a joint venture of Chevron Corp and Singapore Petroleum Co , supplied its first VLSFO cargo in October.
Chevron reported that it expects its VLSFO and MGO supply to double in Asia in the next one to two years.
Vitol is building a 30,000 bpd crude processing unit, located in Malaysia, which will begin supplying VLAFO in May 2020.
IRPC Pcl announced that it will produce 52,000 tonnes of VLSFO in November, making it Thailand’s first refinery to produce IMO-compliant fuel.
Indian Oil Corporation Ltd has started supplying IMO-compliant fuel in India.
Middle East
Uniper Energy DMCC is responsible for two crude units in Fujairah, which produce on an annual basis 3.6 million tonnes of VLSFO, 0.1% sulfur fuel used in regional Emission Control Areas.
Brooge Petroleum and Gas Investment Co (BPGIC) reported that it plans a 250,000-bpd refinery in Fujairah to produce low-sulfur fuel.
Qatar Petroleum began supplying VLSFO at its ports in October.
Europe
Peninsula Petroleum aims to double its VLSFO deliveries to 60,000 tonnes by year-end in Europe and the US.
Gunvor Group will amend its refinery in Rotterdam in March to produce LSFO.
United States
The majority of US Gulf Coast refiners are already processing heavy crudes to make IMO-compliant marine fuels.
Motive Enterprises updated its Port Arthur, Texas, refinery this year so it can produce compliant fuels.
PBF Energy restarted a coker at its Chalmette, Louisiana, refinery that had been idled nine years.
