Shipowners are looking to use certain heavy-sweet crudes as IMO2020 grade bunker fuel, reports Ship&Bunker.
EnQuest sells North Sea Kraken crude
EnQuest, a UK-based petroleum exploration and production company, says it has already sold its North Sea Kraken crude for this purpose.
Russell Wall, a commercial and marketing manager at EnQuest said, “A cargo has already been sold to a ship owner and thus we remain very optimistic regarding Kraken’s utility in this market.“
“We have received positive market feedback,“ he added.
IMO2020 spec bunker fuel
Data from oil analytics firm Vortexa reported via Argus in August indicated that Euronav was the buyer in question, with its ULCC Oceania having loaded 70,000 tonnes of Kraken.
Kraken typically has a sulfur content very close to the 0.50% limit required by the upcoming IMO2020 rule, meaning it needs very little blending to make it into an IMO2020 spec bunker fuel.
EnQuest’s says its first Kraken oil was delivered in June 2017, with the field development plan completed around the end of the first quarter of this year.
Sweet crudes occupies considerable market
Similar heavy-sweet crudes suitable to use as marine fuel only make up a small proportion of the market, with crudes from West Africa, Australia, and Brazil also fitting the bill as being low enough in sulfur content to use as IMO2020 grade fuel.
With HSFO demand set to crater come 2020, these crudes are also attractive as refinery feedstocks and are attracting a healthy premium. Australian grades, for example, are reported to have been trading this year at a premium to Brent of over $10/bbl.
With pricing for IMO2020 grade fuel far from certain, it remains to be seen how widespread the practice of burning crude for fuel will be.
“You can do it,” says industry veteran Rudy Kassinger. “It’s all going to be a question of economics.”
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Source: Ship&Bunker
