Singapore — Singapore's Equatorial Marine Fuel Management Services is readying itself for changes the International Maritime Organization's lower global sulfur limit rule for marine fuels will bring, while aiming to maintain its growth momentum in 2019, executive director Zhen Mao Choong said.
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"We are preparing ourselves for 2020...to meet with the varied and changing demands from our customers, we will have to repurpose our vessels accordingly for 2020," Choong told S&P Global Platts in an interview.
"Even though optimizing fleet capacity is paramount to our business, it is also equally important to properly manage fuel quality and provide assurance for the exact requirements from our customers" Choong said.
The company, which accounts for around 9% of Singapore's total marine fuels sales volumes, owns 16 bunker barges, Choong said. It was recently ranked as the fourth largest accredited bunker supplier by marine fuel sales volumes for 2018 by the Maritime and Port Authority of Singapore.
"At the moment, LSFO appears to be the main marine fuel choice to comply with 2020. Even so, it is still unclear what variant of LSFO will be the mainstay," Choong said.
Another challenge IMO 2020 brings is the potential reduction in the turnaround time for barges, which will eventually translate into higher bunkering costs, Choong said.
"We are currently doing a study to understand how to better utilize our bunker barges. Some LSFO specs are likely to be similar. So, the same barge could be used for them," Choong said.
"However, a lot of products will vary different in viscosity and specifications and different barges will be required."
In this context, it becomes imperative to understand the consistency of products coming from different suppliers, he said.
Singapore is the world's largest bunkering port. Although Singapore's bunker fuel sales volumes declined 1.6% in 2018 to 49.8 million mt, industry sources expected marine fuel consumption in the world's top bunkering port by volume to rebound because of an anticipated growth in demand for cleaner fuels.
"This year, we will try to maintain our marine fuel sales volumes," Choong said.
In Singapore, of the 16 bunker barges it has, seven are for fuel oil deliveries, seven for marine gasoil, and the remainder are ocean-going vessels meant for cargo deliveries.
"Moving forward, we might go in for chartered bunker barges," Choong said, adding the company has not ruled out opportunistic acquisitions to expand its fleet.
As a physical supplier, Singapore will continue to remain the company's core focus, Choong said.
"We have strong faith in the bunker demand prospects for Singapore," Choong said, adding the company's geographical location, port services, technology advances in bunkering and infrastructure made it a key growth market.
Equatorial Marine has benefited from the mass flow meters mandate for fuel oil deliveries as it ensures a level playing field for all players, Choong said.
On January 1, 2017, Singapore became the first country to require the MFM mandate for fuel oil bunker deliveries. MFMs measure the flow rate in the pipe, gauging the quantity as well as the mass and density of the fuel.
The Maritime and Port Authority of Singapore is scheduled to mandate the use of MFMs for delivery of distillates at the Port of Singapore from July 1, 2019.
"We are educating customers while also readying our bunker barges by installing MFMs...the transition towards MFMs for MGO deliveries will likely be easier this time around as there has been enough experience with MFMs for fuel deliveries since they were first mandated," Choong said.
Meanwhile, Equatorial Marine is also looking to expand its trading activities to other parts of Asia, Choong said, without elaborating further.
--Surabhi Sahu, firstname.lastname@example.org
--Edited by Dan Lalor, email@example.com