Bring on the new ECA fuels
1st September 2015 10:40 GMT

Three messages for you all:

  •       1. Ultra low sulphur fuel oil (ULSFO) and other new ECA-compliant fuels can be consumed without any problem.
  •       2. They bring substantial long term cost savings compared to marine gasoil (MGO).
  •       3. (For the bunker suppliers); Please increase avails of these alternative fuels outside the emission control area (ECA) and be prepare to deliver small quantities as well.

In the twelve months before 2015 the bunker industry was searching for solutions and answers in order to comply with the new maximum sulphur cap in ECAs. The industry was full of questions about how to comply. Installing scrubbers, LNG retrofits, consuming expensive gasoil or would there be a new better priced low sulphur fuel? As an end consumer it did give us an uncomfortable feeling. What would the best business-wise solution be?

The positive news for buyers was the steep drop in fuel and gasoil prices. It got better every day. We broke record after record. In St. Petersburg we approached the magical $100 per tonne FOB for regular high sulphur 380 cSt fuel oil.

After five full months consuming and complying with the 0.10% ECA limit, we could conclude that there are no product shortages. The majority of shipowners are complying with MGO, and in addition, other ECA-compliant petroleum-based fuels are, in general, available within the ECA.

In my opinion this is a missed opportunity.

We need to be thankful that refiners and bunker suppliers gave us options other than MGO. Every shipowner should seriously consider consuming them.

With some caution and the correct procedures in place ULSFO and other options can be consumed without any problem. Even for us, as a relatively small consumer (multi-purpose dry cargo vessels in the 2.500-11.000 dwt range) substantial savings can be made by consuming ULSFO instead of MGO. It is sold at $10 and up to $98 per tonne below the MGO price. Calculate your savings per year and every economist will clearly decide to go for these alternative ECA fuels instead of MGO.

Despite the current availability of these new ECA fuels, unfortunately we still consume a lot of MGO in our main engines. This is mainly due to the fact that the majority of bunker suppliers don't have any of the new ECA fuels, or, if they do, will only sell at a minimum delivered quantity which is higher than our requests. The average bunker order for ULSFO or other new ECA fuels is low, due to the fact that the stability and compatibility of these products is low or not proven.

For instance; If a vessel sails from Rotterdam to Istanbul and back, her ULSFO requirement will be to bunker just enough ULSFO in Rotterdam to reach the ECA border. Then in Istanbul she would need to bunker just enough fresh ULSFO to cover the distance from the ECA border to Rotterdam. In this particular case it means a 60 metric tonne (mt) ULSFO enquiry in Rotterdam and a 60 mt ULSFO enquiry in Istanbul. Up to now, we bunker MGO because the minimum ULSFO quantity in Rotterdam is 100 mt and in Istanbul there are no ULSFO avails.

I would like to encourage all ship owners, managers, charterers, bunker traders and suppliers to actively promote, buy, consume, trade and deliver these alternatives to MGO. Even for suppliers that are not located in the ECA, selling ULSFO might be a good option. And for the existing ULSFO suppliers I would encourage them to start delivering smaller stems from 25 mt upwards.

If more owners start consuming these alternatives to MGO, hopefully suppliers will think it attractive to start offering the product in more ports throughout the world.

*Gordon van der Brugge wrote the above for the June 2015 issue of the Bunker Bulletin , the Platts Bunkerworld magazine.


Gordon van der Brugge,
1st September 2015 10:40 GMT

Comments on this Blog
Andrzej Golik - Polska Zegluga Morska PP
2nd September 2015
Not tt fast . We ( owners ) should wait and see . If ultra low sulphur fuel oil (ULSFO) and other new ECA-compliant fuels could be stored on board of the
ship in same tanks used for MGO ( and could be mixed with MGO ) - YES . But it is not a case - NOT yet . Of course tt kind of fuel should be good solution if you operate in ECA only .
Gordon van der Brugge - Flinter Shipping BV
3rd September 2015
Good day Andrzej,

The devil is in the detail indeed.
We avoid mixing (just like the regular ifo's), except the "unpumpables" in the bottom of the ship tank.
I would suggest to appoint dedicated ECA tanks in order to keep complying with the sulphur cap. Try to minimize the unpumpables by lowering pipe line, properly clean the tank from previous hsfo products and your good to go. You can change from ulsfo to mdo to mgo without problems. At least that's our experience so far...
;O)
Good luck!
Brgds,
Gordon
Marco Antonio Costa Tritto - PetrĂ³leo Brasileiro S.A. (Petrobras)
7th September 2015
Good Day, Gordon!
When you say that you change from ULSFO to MDO to MGO without a problem, I understood that you always clean the tank that was using ULFO before supplying with fresh MGO, for example. Is it correct? Or you are mixing both products without a problem?

Cheers!

Marco
Gordon van der Brugge - Flinter Shipping BV
7th September 2015
Hi Marco,

We do not CLEAN the tank every time. We only clean the tank at first use to avoid non compliance on sulphur. We receive and store ECA product in one tank, meaning that the remaining unpumpable volume from the previous ECA product will mix with the fresh product.

Trust the above is clear, if anything pls let me know!
Brgds,
Gordon
Marco Antonio Costa Tritto - PetrĂ³leo Brasileiro S.A. (Petrobras)
7th September 2015
Hi Gordon, tks for the clarification.
Cheers! Marco
Andrzej Golik - Polska Zegluga Morska PP
8th September 2015
Hi Gordon , txs yr comments . We ( for example ) are operating with our ships worldwide , entering ECA's in and out all time , therefore we cannot dedicate separate tank(s ) for ULSFO only . Take care/All the best/Andrew
(-:
Gordon van der Brugge - Flinter Shipping BV
10th September 2015
Good day Andrew,

Our vessels do the same, in and out ECA constantly.
I don't know the details of your ships but in general ships have a lot of tanks. Some of them are ideal to appoint as ECA tank due to limited size (you only need a few days consumption). Or you can split a bigger tank in two smaller ones. Some hassle but in the end a perfect solution.
I wish you succes in making your decision ;o)

Brgds,
Gordon van der Brugge
Charles Harcourt-Groome - Global Vision Bunkers BV
10th September 2015
Hi Andrew and Gordon,

A question to all really. At what quantity / price differential does switching to ULSFO produce real economic savings. Of course, it depends on the energy content of comparative fuels.

But I would be interested to know the maths to be able to advise our clients. Due to avails issues we have for the mostpart been advising that customers stick with LS MGO - due to not having to dedicate or clean tanks (before / after swithching), change lubes etc. if the differential is not significant.

BUT the real question is at what point does it produce savings? MGO usually gives more bang per buck with the current differentials / prices - currently we believe if the differential between the two products is only say $10-20 it is better to burn MGO. At what point does that change?

Can someone give a comprehensive answer on this?

Many thanks & brgds,
Charles
Global Vision Bunkers Group
Gordon van der Brugge - Flinter Shipping BV
16th September 2015
Hi Charles,

Let's try;

- we measure approx 1% less consumption on an average dma in comparison with an average ulsfo (mj/kgs diff)

- cleaning tanks can be done by using a few cbm of mgo outside ECA. This mixture can be consumed in the main engines outside ECA. Tanks with a high unpumpable volume should be cleaned by a professional costing a few k. Would recommend to do this once and keep the tank dedicated ECA 0.1%

- for ulsfo 0.1 versus mgo 0.1 no lub change needed unless full vessel is full time employed in ECA.

Real cost saving depends on consumption per day but if it works with our ships (3.500-11.000 dwt) it will work for most other ships as well.

Hope the above helps you a bit..

Brgds,
Gordon
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3rd September 2016
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3rd September 2016
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