EMEA News
Swedish, US Players Announce Low Sulfur Bunker Venture
Swedish fuel giant Preem and U.S.-based Beowulf Energy LLC (Beowulf) today announced the signing of a cooperation agreement that aims to develop a residue hydrocracker design in order to make low sulfur fuels for, primarily, the bunker markets.
"One of the driving forces behind studying this type of project is the new rules for sulphur content in bunker fuel, which will reduce the market for heavy oil," the companies said.
A parallel process of obtaining the necessary permits for the new residue hydrocracker plant in Lysekil will also take place.
With a 0.10 percent sulfur cap for bunkers already in place within Emissions Control Areas (ECAs), and a global 0.50 percent global sulfur cap expected in 2020 or 2025, only vessels equipped with scrubbers will be able to continue to burn HFO bunkers - a situation expected to dramatically lower demand for residual product.
"The analysis, detailing and permitting process is estimated to take 2 to 3 years, and if it is confirmed attractive this would be an important strategic investment opportunity in line with Preem's efforts to utilize the raw material in the best way possible and minimize environmental impact," said Preem CEO Petter Holland.
"It would also make us more flexible and competitive in the future. This is a complex project and a potentially very important competitive improvement, so we have chosen to go forward together with Beowulf Energy, which has a unique mix of skills and expertise in the energy sector as well as experience with project implementation and financing of this type of project."
Paul B. Prager, Chairman and CEO of Beowulf Energy, commented: "This is an important and environmentally progressive development that addresses fuel market and generates significant economic benefits for Lysekil, Sweden and the region."
Last month Marine and Energy Consulting Limited's Robin Meech, who is also the Chairman for the International Bunker Industry Association (IBIA), told Ship & Bunker that the 2020 date for a global 0.50 percent sulfur cap is now considered to be the more likely of the two.
