Inventories of low-sulphur fuel oil(LSFO)and low-sulphur blending components are rising in Asia-Pacific ahead of a 2020 sulphur cap on marine fuels.Economics have been viable to store fuels and components compliant with the International Maritime Organisation’s(IMO)regulation-which reduces the sulphur cap in marine fuels to 0.5pc from 3.5pc from the start of 2020-since the third quarter of 2018.But activity has only picked up this year as more companies hold inventories in floating storage around Singapore,the world’s biggest bunker hub.German energy trading firm Uniper has booked floating storage capacity off Singapore for the first time,chartering a 2mn bl very large crude carrier(VLCC),the Jubilee Star,to use as floating storage.Uniper operates a simple crude processing facility at Fujairah in the UAE that has been able to produce LSFO with sulphur content as low as 0.1pc since the start of 2017.It plans to ramp up 0.5pc LSFO production later this year to meet bunker demand for marine fuels compliant with the IMO 2020 requirements.
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