Traders are bringing in compliant, lighter fuel oil blends to Singapore the world’s top marine fuel hub, says an article published in Lloyd’s List.
What is the issue?
Lighter, compliant, fuel oil blends that are making their way into Singapore’s bunker supply stream are raising serious implications for ships refuelling at the world’s busiest bunker hub.
Compliant fuel oil blends with viscosity closer to MDO
According to bunker industry veteran Simon Neo, several traders have indicated the intent to introduce compliant fuel oil blends with viscosity closer to marine diesel oil in the coming weeks.
This can be deemed as inevitable in light of demand for 3.5% sulphur fuel oil, or high-sulphur fuel oil outstripping supply following steep falls in HSFO cracks last year, as recent research from shipbroker Braemar highlighted.
Compliant fuel oil
Compliant fuel oils are typically derived from blending HSFO with much lighter distillates, usually gas oil or diesel oil to bring the sulphur content down to the 0.5% limit imposed by the International Maritime Organization.
Oil price spread
Industry source suggested that a narrowing of price spread between marine gas oil and 0.5% sulphur fuel oil since the regulatory cap kicked in at the start of this year, may have encouraged refiners and traders to even contemplating supplying vacuum gas oil into the bunker market.
One flip side from increasing use of hydrocracking processes to refine heavier oil products is they may yield waxier diesel fuels.
Warning regarding fuels derived from blends
Douglas Raitt of Lloyd’s Register, has warned that excessive sludging of wax and sediments may arise from burning much lighter compliant fuels derived from blends made up of waxy diesel oil.
“We have encountered this phenomenon especially in fuel blends with viscosity ranging between 20 cSt and 100 cSt,” he said.
If not properly handled, excessive sludge can clog up ship engines and cause engine failures.
Sample tested above 100 cST
Data from the bunkering advisory unit of Lloyd’s Register showed however, that viscosity of compliant fuel oil blends supplied in Singapore has averaged around 148 cSt since January 1, with a majority of samples tested above 100 cSt.
It is understood from one bunker insider that compliant fuel blends of less than 80 cSt have already surfaced at the top marine fuel hub by sales volume.
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Source: LloydsList
