Singapore — Genoil said Monday it had carried out an additional successful processing run of IFO 380 marine fuel oil at its feedstock processing facility in Russia, resulting in the production of commercial grade 0.34% LSFO from RMG-380.
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New York-headquartered Genoil has a proprietary technology called the Genoil hydroconversion upgrader, or GHU, which is a desulfurization technology that converts heavy or sour crude oil into much more valuable low sulfur oil, at a low cost.
"The feedstock originally contained a sulfur level of 2.01% by weight and also had possessed a lot of cracked materials. The GHU had a perfect yield of 92%," it said in a statement.
"This time, results were better than last time."
In October, Genoil said it produced LSFO with a sulfur content of 0.39% using a feedstock of RMG 380 HSFO.
Genoil is currently arranging for further processing of additional crude oil and fuel oil for target projects currently being considered, it said.
Genoil's advances with GHU come as the International Maritime Organization's global sulfur limit rule for marine fuels inches closer.
The IMO will cap global sulfur content in marine fuels to 0.5% starting January 1, 2020, from 3.5% currently. This applies outside the designated emission control areas where the limit is already 0.1%. Shipowners will be forced to either switch to cleaner, more expensive fuels or install scrubbers.
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Genoil's LSFO production bodes well for the shipping industry as it could potentially provide a cheaper compliance option to shipowners.
In September, Genoil said: "If we look at just 10,000 mid-sized ships from a world fleet of 58,000 larger international vessels, and assume a conservative non-dynamic price spread of $600 per ton between HFO and MDO from 2020, Genoil's GHU would save fuel costs of $36.8 billion, even with Genoil's charges for the desulphurization process factored in."
Genoil's GHU unit costs between $30 million and $80 million to install 1 million mt/year of capacity, it said in September.
"Based on Genoil's predicted crude prices, which have been reviewed by independent bodies, an initial investment of $30 million could achieve payback in less than three months with current market spreads," it said at the time.
Genoil has also received a supplier and contractor certificate of registration and evaluation from Petroleos Mexicanos, which will allow Genoil to work with the national oil company of Mexico, it said Monday.
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