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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Huge Independent Refiner Prepares For Revolution In Markets

Europoort

One of the world’s largest independent oil traders, Gunvor Group, plans to revamp its refinery in Rotterdam to adapt it to produce low-sulfur fuel oil that would be compliant with the new regulations on shipping fuel, Gunvor’s chief executive Torbjörn Törnqvist told Reuters

Gunvor plans to reconfigure its 88,000 barrels per day refinery in Rotterdam, in the Netherlands, in March next year, so that it could start producing the low-sulfur fuel oil (LSFO).

“We will still produce high sulphur fuel oil but we will be able to produce both,” Tornqvist told Reuters.

According to Gunvor’s chief executive, refineries will be able to produce LSFO without compromising gasoline production and without changing the refinery’s configuration too much.  

According to the new rules by the International Maritime Organization (IMO), only 0.5-percent or lower sulfur fuel oil should be used on ships beginning January 1, 2020, unless said ships have installed the so-called scrubbers—systems that remove sulfur from exhaust gas emitted by bunkers.

The International Energy Agency (IEA) estimates that demand for high-sulfur fuel oil (HSFO) will drop from 3.5 million bpd to 1.4 million bpd in just one year. By the end of 2020, an estimated 4,000 vessels—out of a global fleet of around 90,000—will have scrubbers installed which will consume some 700,000 bpd of fuel oil.

So the shipping industry is preparing for a disruption of the types of fuels it will be using as of the beginning of 2020, but the oil and fuels market, as well as refiners, are also getting ready for the impact.

Some experts and media have dubbed the new shipping fuel rules as the “single largest oil market disruptor” set to send shockwaves through the entire supply chain in the shipping industry—from crude oil producers, to refiners, to traders, to shippers, to end-consumers of everything traded on ships.

By Tsvetana Paraskova for Oilprice.com

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  • Ronald Wagner on October 12 2019 said:
    The unanswered question is what the price will be for low sulfur diesel. Natural gas is already much less expensive than diesel and is ready to fuel any engine that can burn diesel. The engines just need conversion. Natural gas is cleaner than diesel that is low sulfur because it has virtually no particulates compared to diesel.
  • Binkley North on October 12 2019 said:
    So we take the sulfur out of the fuel and the world warms up - coincidence right - and then the climate boffins propose dumping sulfur into the upper atmosphere to raise the albedo. What!?

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