EMEA News
IMO 2020: Gunvor Halts Rotterdam Refinery Upgrades as Shift in Thinking on HSFO Demand Continues
Gunvor Group has halted an already delayed IMO 2020-focused upgrade programme for its Rotterdam refinery that would have allowed it to produce more low sulfur fuel oil.
The move comes amid a growing shift in thinking on post-2020 HSFO demand.
"The price environment and other relevant economics have changed considerably since Gunvor first began exploring the concept a year ago," the company was quoted by Dutch media outlet Het Financieele Dagblad as saying in an internal memo.
The project was already far from certain to happen, with Gunvor saying in January it was "studying several options for how best to respond" to the new global 0.50% sulfur cap for marine fuel that comes into force from January 1, 2020.
The vast majority of vessels are still expected to switch to burning low sulfur distillate fuel or VLSFO bunkers for compliance.
However, in recent months there has been a significant build of interest in scrubber technology that will allow vessels to continue burning the same HSFO bunkers they do today, so much so that analysts have recently lifted their HSFO demand projections.
Whether Gunvor's move marks a real turing point for the industry remains to be seen, but writing for Ship & Bunker last week, Robin Meech, Managing Director, Marine and Energy Consulting Limited, said, "there is every evidence to suggest that not making further significant investment in residue destruction as a result of changing bunker demand patterns may well be right in the longer term."
