Germany's Uniper eyeing more biofuel sales to Middle East shipowners

German energy company Uniper is eyeing selling more biofuels to shipowners in the Middle East amid high demand for cleaner fuels, a company official told S&P Global Platts Dec. 8, as countries race to cut emissions and implement their net-zero emissions pledges.

Uniper, in partnership with Dubai-based Neutral Fuels, started this year supplying biofuels to shipowners from the UAE made from biodiesel that is blended with very low sulfur fuel oil, Emanuele Gallone, business development manager at Uniper Energy DMCC, said in an interview on the sidelines of Middle East Executive Petroleum Conference in Dubai.

"We expect much more supply for next year," said Gallone. "We have established a process to load biofuels into ships from various ports around the UAE."

Uniper's refinery in the eastern emirate of Fujairah can produce as much as 5 million mt/year of marine fuels with sulfur content of 0.1%

"We have lined up all sorts of tests of biofuel blends with our production," said Gallone. "We have extended the tests to ship engines and fuel oil blending and we can say it's compatible and it doesn't alter the specs of the fuel that shipowners are using."

The shipping industry is gearing up for lowering its emissions, with the International Maritime Organization targeting a 50% cut in emissions from the global fleet by 2050 compared with 2008 levels.

Meanwhile, countries in the Middle East have started making net-zero emissions pledges, starting with the UAE's 2050 target and followed by Saudi Arabia and Bahrain in 2060.

Hydrogen projects

Uniper's refinery in Fujairah is running at nameplate capacity and all its production is being sold locally thanks to cost advantages and proximity reasons, Gallone said.

Previously, half of the Fujairah refinery production was being exported to Singapore.

"Starting with mid-2020 to late 2020, we saw a demand shift from Singapore to Fujairah," he added.

Uniper is still eyeing more hydrogen projects in the Middle East and North Africa region besides a project in Oman, he said.

Uniper is joining Oman's Hyport Duqm renewable hydrogen project to provide engineering services and negotiate an exclusive offtake agreement for green ammonia from the facility, it said July 19.

Hyport Duqm is owned by shareholders DEME Concessions and Omani state investment company OQ Alternative Energy.

In a first phase, Hyport Duqm will develop a 250-500 MW renewable hydrogen plant in the Special Economic Zone at Duqm, due to start operations in 2026, with conversion facilities to produce ammonia for export. The project could scale up in future phases.

The plant will be powered by up to 1.3 GW of solar and wind, and will be connected to the Port of Duqm's export terminal and storage facilities.