Fujairah Uniper refinery restarts partially, yet marine fuel premiums stay high
German energy trader Uniper’s one of two crude processing units at Fujairah came back online on March 12 after an unexpected outage early in the week ended March 13, a company spokesman told S&P Global Platts.
“We [have] informed our customers that the unit which went into shut down, ramped up again Friday last week,” he said in an email reply March 17.
The outage, which has crimped product availability at the port, has however led marine fuel premium at the port to reach multi-month highs in the recent days.
The premium for Fujairah-delivered marine fuel 0.5%S bunker over FOB Singapore marine fuel 0.5%S cargo surged $17.84/mt on the day at $47.03/mt on March 16, a 13-month high. The premium was last higher on Feb. 11, 2020, when it was assessed at $53/mt, Platts data showed.
In the upstream marine fuel 0.5%S cargo market too, prices of IMO-compliant fuel loading in Fujairah have raced ahead of Singapore in the recent days. Product loading from the Middle Eastern port typically trades at a discount to Singapore.
The spread between FOB Singapore marine fuel 0.5%S and FOB Fujairah marine fuel 0.5%S cargo has progressively narrowed since early last week. After flipping into a negative on March 12, the spread has further widened to minus $13.28/mt on March 16, the highest that marine fuel 0.5%S cargo loading in Fujairah has traded over Singapore in the last 13 months.
Meanwhile, the company’s second unit at Fujairah was expected to restart by the end of the week started March 14, a company source said.
Even if the second unit came back up online as is expected, current tight availability situation was likely to persist going into the week starting March 21, as there was a rather long queue of suppliers waiting to load out product from Uniper, traders said.
“I heard one [unit] is back online and the other is expected this week, but the situation don’t seem to be improving till next week as a lot of loadings are lined up…it’s a long line of people waiting to load,” said a Fujairah-based trader.
Uniper has two 40,000 b/d distillation columns in Fujairah, right alongside Vitol’s 82,000 b/d refinery. These two columns, which together constitute a micro refinery of sorts, have been designed to process low sulfur crude oils to produce low sulfur fuel oil to the tune of about 300,000 mt/month.