Neste Oil to Launch New Low-Sulfur Fuel at End of the Year

by Ship & Bunker News Team
Friday November 28, 2014

Finland-based Neste Oil says it will launch a new low-sulfur marine diesel oil (MDO) at the end of the year for Emission Control Area (ECA) compliance. 

The middle distillate-based gas oil is in line with the new sulfur regulations, which will limit sulfur content in marine fuel used in ECAS to 0.10 percent by weight beginning next year. 

Marketing of the new fuel has already been started, according to Neste, who also said that it is confident the company will be able to compete despite initial price differentials between heavy fuel oil (HFO) and MDO. 

“The demand for middle distillates will increase and the markets will become more favorable to us because gas oil is much better suited for our production processes than heavy fuel oil," said Johan Perander, head of business development.

"Our refineries will be able to manufacture ship fuel at a competitive price.” 

Perander estimates that market prices will initially see differentials of $200–300 per ton between low-sulfur gas oil and HFO, but that there is a "significant market for the new low-emission fuels."

Europe is expected to have a total potential market of around 10 million tons per year, he said, while the Baltic Sea markets may total at around 5 million tons.

Neste had originally said earlier this year that much of the production of its new MDO would take place at its refineries in Porvoo and Naantali, Finland.