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Prompt HSFO availability at Indian ports to boost demand amid expansions: sources

Hindustan Petroleum Corp.’s foray into supplying high sulfur fuel oil bunkers has expanded beyond Mumbai and Kandla ports and ensured prompt availability, industry sources told S&P Global Commodity Insights April 12.

The development comes amid expectations that HSFO would comprise a larger share of marine fuel sales.

“HSFO stockpiles are ample for prompt bunker delivery, and the expansion strategy is targeted at attracting demand from container liners,” a source familiar with HPCL operations said, adding that the company is supplying to ports along the western and eastern coasts of India as viable alternative supply ports.

More recently, HPCL began HSFO bunker supply at the port of Kochi along the western coast of India since March 3, selling close to 3,000 mt during its first month of operations, industry sources said.

According to Mumbai-based sources, HPCL is the second supplier after Indian Oil Corp., which initially supplied mainly to Mumbai and Kandla ports.

“Demand has been fairly good with an average of one [HSFO] inquiry every three days. Fuel quality have been getting good response from domestic as well as international shipping companies,” the source familiar with HPCL operations said.

HPCL has reportedly sold a monthly average of 10,000 mt of HSFO bunker across the ports of Mumbai, Kandla, Vizag, and Kochi, according to the above mentioned source.

HPCL’s Vizag refinery supplies straight-run HSFO to Kochi and the port of Vizag, according to sources, whereas the Mumbai refinery supplies to ports of Mumbai and Kandla both.

A recent Vizag Refinery Modernization Project, or VRMP, which sources said was completed around early-March, aimed to expand the refinery’s annual capacity from 8.3 million mt to 15 million mt. The enhancements comprises the addition of a new crude unit and residue upgradation facility, according to HPCL’s website.

Meanwhile, the Mumbai refinery has a crude oil refining capacity of around 7.5 million mt per annum, as per the website.
Source: Platts

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