Maersk group has moved to ensure that it has adequate supplies of low-sulphur fuel after the 0.5% sulphur cap comes into force on 1 January 2020 by announcing plans to set up a major sulphur cap-compliant bunkering facility in the port of Rotterdam with Royal Vopak.
The Danish shipping giant, which has made clear its own preference for a ‘scrubberless’ approach to compliance with the sulphur cap, said the new facility would have capacity to produce about 2.3 million tonnes of sulphur cap-compliant fuel annually.
It would meet about 20% of the low-sulphur fuel requirements of its own fleet worldwide, it said, but would also supply the vessels of other companies trading with and inside Europe.
It indicated, too, that other “interested third parties” could join it and Royal Vopak in the venture.
“We trust that this initiative will put to rest some of the concerns the industry has on fuel availability, as well as secure our continued competitiveness in the market,” said Maersk Oil Trading head Niels Henrik Lindegaard.
The new facility, which is scheduled for completion in the second half of 2019, will be based at Vopak Terminal Europoort. It will be able to blend, store and handle a variety of fuel types, according to Maersk, to ensure that it and other customers are able to comply fully with their sulphur cap obligations.
“With AP Moller-Maersk as anchor customer, Vopak demonstrates the focus to position itself in the 0.5% sulphur fuels bunker market,” said Royal Vopak global oil director Hari Dattatreya.
AP Moller-Maersk, the parent of container shipping company Maersk Line, has made no secret of its preference for the use of low-sulphur fuel rather than the installation of onboard exhaust gas scrubbers to bring its own huge fleet into compliance with the sulphur cap.
Chief executive Soren Skou was recently quoted as saying, “We think the most sensible solution is to have the refineries remove the sulphur from the fuel instead of us having to construct a desulphurising plant on the ship, and these scrubbers are huge. So, we would like to buy clean fuel from the refineries.”
Speaking at the Singapore Maritime Lecture in April, he said he considered that there would be enough low-sulphur fuel to meet demand by the start of 2020 but that, on the basis of existing price differences between low- and high-sulphur fuels, it would cost the shipping industry as a whole USD50–60 billion and container shipping alone USD10 billion.
He indicated that he was by no means hostile to the use of scrubbers but that, given the relatively short time now available before the cap comes into force, the bulk of the shipping industry would have no option but to rely on supplies of low-sulphur fuel.
Maersk explained to IHS Markit that it was essentially playing the role of customer in the project, leasing the tanks it needed from Vopak but owning the fuel that was stored in them. To enable the project to proceed, however, it said it had had to give a commitment with regard to its future use of low-sulphur fuel.
This seems to have fitted in with Maersk’s own plans, since the group was itself looking for a major partner ready to commit to building a facility able to blend fuels compatible with the 2020 sulphur cap.
“By being a founding member,” a company representative said, “we have committed to each other, hopefully ensuring that the necessary infrastructure work will proceed on schedule and meet our requirements.
“We believe that our commitment will encourage other players to follow us … to become Vopak customers and our future counterparts.”
The group declined to say, however, whether or not it planned to set up other comparable facilities in other parts of the world, saying it was not able to share details on future projects at the moment.