Singapore — The International Maritime Organization's global sulfur limit rule for marine fuels is set to usher in a multi-fuel future where fuel quality will be paramount and compliance to the rule will be high, Luca Volta, marine fuels venture manager at ExxonMobil, said on Wednesday.
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By 2020 more than 95% of the industry will require 0.5% sulfur bunker fuels as the use of scrubbers will be fairly limited, Volta told S&P Global Platts, on the sidelines of the 20th Singapore International Bunkering Conference and Exhibition.
"We've had a good discussion with our customers around the requirements of their fleet as well as the fuel mix," Volta said, adding that it was important that the company's products were "fit for use".
Exxonmobil, on Wednesday, announced that all its International Maritime Organization compliant 0.5% sulfur bunker fuels developed to date are residual grades.
The specifications will range from RMD 80 to RMG 380, with a density of between 900 and 970 at 15 degrees Celsius, it said, adding that catalytic fine content will meet the level set out in ISO 8217:2017.
Its 2020 compliant fuels announced on Wednesday will be compatible with each other, provided best practice guidance for bunkering, handling and storage is followed, he said.
However, he generally cautioned against co-mingling fuels as this could lead to precipitation of asphaltenes causing equipment damage in a vessel, Volta said.
He was also less certain whether so many new fuels from different suppliers were going to be compatible with each other around the world as they come from very different refineries and refinery streams.
ExxonMobil also sees LNG bunkering accelerating post 2020.
LNG as a marine fuel is another "elegant solution" to comply with the IMO 2020 rule, Volta said.
Its uptake requires a dedicated and cost effective chain while its cryogenic nature and concerns regarding safety of operations while bunkering have also deterred its widespread adoption so far.
However, it helps to curb not only SOx emissions but also tackles NOx and particulate matter.
"LNG's use for bunkering is starting out from a low base but it will likely see a lot of growth in the future as infrastructure and bunkering standards develop", Volta said, adding that ExxonMobil expects LNG to account for about 10% of the total bunker fuel mix by 2040.
Meanwhile, ExxonMobil is also preparing its refineries worldwide as IMO 2020 inches closer.
ExxonMobil is considering significant upgrades at its UK Fawley plant while also proposing a multi-billion dollar expansion at its integrated manufacturing facility in Singapore to produce higher-value products and expand its lubricant base stocks production to meet growing demand.
SINGAPORE TO STAY DOMINANT BUNKER HUB
Singapore will continue to be one of the world's largest ship refueling destination going into 2020 and beyond, Volta said.
With an expectation that a fair share of marine fuels would originate from the distillate part of the barrel going into 2020, there has been some speculation that countries long middle distillates, would be at an advantage to cater to this potential demand.
"The top 10 ports worldwide account for over 50% of the global bunker market with the next ten contributing only about 5%. So the biggest ports will still be preferred as they are also large trading hubs," Volta said.
Singapore, for its part, will continue to be a key port for bunkering due to its efficiency, transparency and infrastructural advantage, he said.
Strict enforcement of rules by the Maritime and Port Authority of Singapore including its successful implementation of the mass flow meters mandate for fuel oil deliveries, also hold it in good stead as a leading bunker hub, he said.
They have also advanced the development of LNG bunkering significantly, which is positive, he added.
Meanwhile, Volta said he expected compliance to the IMO 2020 rule to be quite high in the initial years after 2020.
Large and reputable companies will not see non-compliance as an option, Volta added.
A level playing field is necessary for the success implementation of this rule, he said.
In this regard, ExxonMobil, a member of the International Petroleum Industry Environmental Conservation Association, or IPIECA, supported the move to ban the use and carriage of marine fuel above 0.5% sulfur content on ships without appropriate abatement technology, Volta added.
--Surabhi Sahu, firstname.lastname@example.org
--Edited by Liz Thang,email@example.com