SK Energy ceases bunker fuel supply at South Korea’s western ports
South Korea’s top refiner SK Energy has stopped the supply of bunker fuel at the country’s western ports following the expiration of its tank terminal lease from Hyundai Oilbank in December, a company official said this week.
“We have stopped offering in the west as our contract to lease the tank terminals has expired. We will be focusing our supply at the southern ports,” the official said.
SK Energy has been importing high sulfur fuel oil cargoes from Singapore and storing the fuel at its terminals in Yosu in the south and Pyongtaek in the west. Come 2020, it will stop imports of HSFO and produce the compliant low sulfur fuel oil out of its own refinery.
The International Maritime Organization’s global sulfur cap of 0.5% for bunker fuels, down from the current limit of 3.5%, will come into effect on January 1, 2020.
SK Energy will start commercial production at its 40,000 b/d desulfurization unit in March next year to supply low sulfur marine fuels that are compliant with the IMO 2020 mandate.
“There will not be a need for another terminal to store HSFO come 2020,” the official said.
SK Energy, a refining subsidiary of SK Innovation, runs five crude distillation units at Ulsan with an overall capacity of 840,000 b/d. Its affiliate SK Incheon Petroleum runs two CDUs with a total capacity of 275,000 b/d and a 100,000 b/d condensate splitter at Incheon complex on the west coast.
The total volume supplied at South Korea’s Western ports remains unchanged as Hyundai Oilbank will be taking over SK Energy’s previous supply volumes, market sources said.