EMEA News
INTERVIEW: GPS Bunkers Talks IMO2020 Bunker Supply in Fujairah
Fujairah is one of the world's primary bunkering hubs. With sales in excess of 9 million metric tonnes, only Singapore is meaningfully larger in terms of volume.
It is perhaps no surprise then, that Fujairah has been at the forefront in the supply of IMO2020 grade bunkers and was one of the first markets to have regular spot availability of the new 0.50% sulfur product.
Ship & Bunker recently spoke to GPS Bunkers' General Manager, Gaurav Dwivedi, to get a better idea of how IMO2020 will impact this key bunkering hub and what the supplier's own plans are for 2020.
"Yes, it's true that Fujairah is one of the most important bunker markets however we have seen a change in demand pattern from June 2019, which was fortunately supported by tight supply situations in Singapore," he said.
Despite availability of VLSFO for several months, Dwivedi says spot demand has been low for most of this time, with activity centred around term contracts by initial movers.
As the January 1, 2020 start date draws closer, all bunker markets are now experiencing demand volatility as buyers begin to switch to lifting the new low sulfur products, and Fujairah is no exception.
"In my view the LSFO market will stabilize in Fujairah by March 2020 due to lot of players entering into the Fujairah market's LSFO trade," Dwivedi predicts.
"And I do not see any challenge on availability of LSFO in this market, but my concern would be demand as per historical patterns."
As for its own supply plans, GPS Bunkers completed its first VLSFO supply today. Going forwards, it will continue to offer a full suite of high and low sulfur products going into 2020 to cater to those vessels choosing to use inherently complaint fuel, and for those choosing to use scrubbers + HSFO.
"GPS Bunkers sees IMO2020 as an opportunity as we have done very well in this market since our inception in 2015. Our plan is to operate with three barges in 2020 where two barges will be working on LSFO, and one barge will be supplying HSFO. We will also have LSMGO tanks in each barge," said Dwivedi.
M/T FNSA 11 (6000 Mt LSFO and 200 Mt LSMGO) and M/T FNSA 10 (5200 Mt HSFO and 1000 Mt LSMGO) are already serving customers, while M/T FNSA 12 is in the process of being prepared to commence operations.
"She is a similar capacity of barge to the others and we will use her to supply fully on LSFO. We may also start with a hired vessel for first the few months before adding this vessel in our fleet," Dwivedi added.
Credit & Quality
Much has been written about the cost impact of the new IMO2020 grade fuel, and Ship & Bunker data shows buyers lifting VLSFO this month in Fujairah will have seen their bunker bill rise 23% year-on-year. As such, there is a neutral impact on credit for buyers and suppliers alike.
"Credit is a challenge and for GPS it's a bigger one as we serve most of our direct volume with ship owners and charterers directly. However, this also gives us a better chance to be closer to all information related to our customers, helping to further validate it with all available market tools," Dwivedi explained.
Quality of the new products has also been a concern, and Dwivedi sees this as an area where GPS can set itself apart.
"We are the only supplier in Fujairah with control on the full value chain in bunkering, including leased FO & GO tanks in the GPS-Chemoil storage terminal which is being used for loading our owned barges. Even though we buy cargo ex-wharf in Fujairah we take it in our storage, so we always know what we have loaded in our barge," he said.
"This has given us a super record for not having any single quality claim in the last five years. We will follow the same procedure in 2020 as well and hopefully we will continue to see these same results."
Readers with enquires or are interested in learning can contact GPS Bunkers as follows
Email : marketing@gpsbunkers.com
Phone : +971 92235249
