IMO2020: The Brutal Facts of Blending the New 0.5%S Bunker Fuels

Fuels will be produced by blending with a 0% S component. File Image / Pixabay

For the last 65+ years the fuel of choice for large marine engines has been IF380 and IF180.  These fuels are comprised of predominantly atmospheric residue or vacuum residue (VR) plus small amounts of low viscosity, low density components to meet the specification requirements for viscosity and/or density.  Once these specs were met all other parameters fell into place.  The residues themselves were not altered in any way, i.e., they are not refined products but rather by-products of the distillation process and so were priced accordingly, at a discount to the crude from which they were made.

This world will be upended with the introduction of the 0.5% S specification for marine fuel.  Sulfur will become the controlling spec parameter for marine fuels, and S blends linearly on a mass % basis.  Therefore one ton of a 1.0%S fuel will require blending with one ton of ~0% S (i.e. ULSD) fuel to produce two tons of 0.5% S fuel.  The generalized formula for calculating the required percent of low S cutter stock to meet the specification % S is as follows:

Where:

• HS% is the % S in the high S component
• Spec % S is the IMO Spec, 0.5% in 2020
• LS% is the %S in the low S component

If the low %S component is ULSD (i.e., 10 – 15 ppm S) the equation simplifies to:

If the LS% is 0.1% S the % low S blend stock increases to 55.6%; @ 0.2% S the low S blend stock increases to 62.5%.  This almost makes it imperative to blend with ULSD (10 – 15 ppm S).  These are the brutal facts regarding a blending option for meeting the new 0.5% S spec.  Blended fuels will not be produced by desulfurizing the high S component, but rather by blending with a 0% S component.  This is an example of "solution by dilution".  There are many potential pitfalls in this solution.

While the fuels will be blended or produced to meet the S spec, all the other parameters may be expected to vary widely, especially Density and Viscosity.

While there are several very sweet crudes (<0.25% S) that have VR's (preferred by refiners) that meet the 0.5% requirement, these crudes sell at a premium, and generally are very light (high API) hence have low yields of VR.

The "bottom of the barrel" will no longer be acceptable as a marine fuel (unless the vessel is equipped with a scrubber).  Instead a more highly refined, and more expensive, prime product will be required.  There is little mystery in how the "bottom of the barrel" will be up-graded.  There have long been two routes to up-grading residues, i.e. 

1. Carbon rejection or
2. Hydrogen addition

Both increase the H/C ratio, and in doing so change (favorably) all other traditional IFO parameters.  It should also be noted that a 0.5% compliant diesel fuel has been available for many decades.  It was/and is called Marine Gas Oil.  The new products, whatever they are, are not likely to be based on new, revolutionary technology but rather tweaking already well-known processes.

The two unanswered questions, in my view, are:

1. what the price difference between 0.5% S spec fuel and high S residual fuel will settle to.  Right now the most likely range is in the 200 – 400 $/Ton range, at a crude price of ~70$/BBL (~525$/MeT, Brent) and
2. the range of all other quality parameters.