Petrobras raises low-sulfur fuel oil supply in Singapore for IMO 2020
Brazil’s Petrobras has raised its low-sulfur fuel oil supply from the country to Singapore to prepare for new IMO 2020 regulations that kick in on January 1, a company official said this week.
“Petrobras is currently exporting more than 500,000 mt of LSFO to several destinations, including Singapore. Our fuel oil is available in the major hubs in the market such as Singapore, Arab Gulf, ARA, Mediterranean, USGC, Panama and Caribs,” said a company official at Petrobras this week.
“It is fair to say that Petrobras has a regular flow of LSFO to Far East, mainly Singapore,” the company official added.
About 400,000-500,000 mt/month of low-sulfur fuel oil cargoes have been coming to the Singapore region in the fourth quarter of this year, while the volume was 100,000-200,000 mt/month before that, fuel oil traders said this week.
Meanwhile, “we hold a long term storage contract in Singapore that Petrobras uses to blend its product into IMO-complaint bunker to sell it in ex-wharf basis,” the official said.
Petrobras has leased a 240,000-mt storage capacity at Horizon Terminal in Singapore to blend and store the imported fuel oil, the official added.
With regards to the specifications of cargoes from Brazil, the official said, “Petrobras exports different types of LSFO, but mostly our LSFO has higher viscosity up to 800 CST, sulfur between 0.47% and 0.7%, density between 960 kg/cubic meter to 1020 kg/cm and metals between 20 ppm and 150 ppm.”
The International Maritime Organization has mandated that bunker fuel sulfur be cut from 3.5% to 0.5% starting January 1.
Asia is expected to be short of low sulfur fuel oil cargoes going into 2020, market sources said.
Singapore, the world’s largest bunkering hub, used to receive 6 million mt/month of high-sulfur fuel oil until the first half of 2019.
But as it is unlikely for Asia to replace all the 6 million mt of high-sulfur fuel oil with low sulfur, shipping companies loading bunker fuel in Singapore are expected to switch to marine gasoil to some extent, market sources said.