BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil

Germany's Uniper aims to boost LSFO spot sales as traders eye storage play

Bunker Fuel | Electric Power | LNG | Crude Oil | Steel | Tankers

Market Movers Europe, Jun 17–21: Tensions rise in Middle East; Mozambique LNG decision expected

Oil

Platts Rigs and Drilling Analytical Report (RADAR)

Oil | Refined Products | Fuel Oil | Shipping | Dry Freight | Marine Fuels | Tankers

Mediterranean Bunker Fuel Conference, 8th Annual

Oil | Crude Oil | Refined Products

La refinería de Curazao, cerca de quebrar por la falta de crudo de PDVSA

Germany's Uniper aims to boost LSFO spot sales as traders eye storage play

Dubai β€” German commodities trader and refiner Uniper says it expects to sell more volumes of low sulfur fuel oil on the spot market during 2019 amid favorable market conditions.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"We see demand increasing significantly, both in the 0.1% market, and now we are having active conversations on the 0.5% market for delivery through the end of the year," Chris Wood, managing director of Uniper Energy DMCC in Dubai, told Platts in an interview. "The market is in a bit of contango through the end of the year, so there's a storage play that some of the traders and bunker companies are looking at [to] buy now and save until the end of the year."

So far, Uniper has sold around 1.2 million mt of LSFO in 2019, increasing volumes as the world gears up to implement new shipping regulations from the International Maritime Organization next year. The new regulations will necessitate that fuel oil for maritime use has a sulfur content of 0.5% or less, down from 3.5% currently.

"Clearly this year we may take a slightly different ratio on contracted versus spot, because the uncertainties in the market will provide opportunities in the spot market," Wood said.

The news comes as Uniper sells the largest shipment of LSFO in history, with 152,000 mt of the fuel on its way to Singapore and scheduled to arrive on May 16. The Minerva Symphony's 0.2% low sulfur fuel is being sold to multiple buyers, both on contract and some on the spot market, Wood added.

As interest in the LSFO market grows, Wood said Uniper was receiving around 10 new inquiries per week for the fuel, with all of its capacity of 3 million mt/year still up for sale for next year.

"Right now, both sides are a bit nervous about trying to lock in a contract just yet for next year, for various reasons such as quality specifications, but also pricing," Wood said. "There's no clear new price reference with liquidity in the market, so everything?s priced against gasoil."

Wood said that, once there is more liquidity in new price references, there will be increased comfort levels for both buyers and sellers to do long-term deals and hedge their exposure.

Uniper sources its crude to make LSFO from South Sudan and Chad, buying volumes on a monthly auction basis to meet company demand. But the company is in talks with buyers about securing long-term crude supply.

"One of the projects we are looking at is changing our crude diet to take in a wider range of crude oil into our system," Wood told Platts.

At the moment, Uniper?s LSFO has a viscosity of around 100 CST, but the viscosity composition may change once the company decides to take on new crude grades.

Uniper's refinery is located in Fujairah, one of the biggest bunkering hubs in the world. As IMO 2020 is implemented, demand for LSFO at the port will skyrocket, and Uniper's refinery is set to undergo a debottlenecking process which will increase capacity and flexibility at the facility ahead of the new regulations.

The company is reviewing two plans: one which will carry out the works in a phased operation, carrying out efficiency works in parts and shutting down units only for days at a time. The other plan would carry out all the works at the same time, meaning the refinery could be offline for longer periods at a time, but the work may be shorter in duration.

FEED work on the refinery expansion has already started and will take a total of six weeks to complete, according to Wood. Platts previously reported that the debottlenecking process was scheduled to take place in August, but Wood told Platts the project start-date may be brought forward earlier if possible.

--Miriam Malek, miriam.malek@spglobal.com

--Claudia Carpenter, claudia.carpenter@spglobal.com

--Edited by James Leech, james.leech@spglobal.com