Uniper's ULSFO facility in Fujairah sends cargoes to Europe, Asia
DUBAI (Reuters) -- Supplies of ultra-low-sulfur fuel oil (ULSFO) from the United Arab Emirates are becoming commonplace as Uniper ramps up production at its Fujairah facility, commissioned since the start of the year.
The Germany-based energy trader has currently chartered at least one aframax vessel, the Daytona, carrying Emission Control Areas (ECA)-compliant ULSFO from Fujairah to Europe, a trading source with knowledge of the matter told Reuters. He declined to be identified as he is not authorized to speak to the media.
Reuters shipping data shows the Daytona, now sailing through the Mediterranean Sea, loaded its cargo on March 31 in Fujairah and is due to arrive in Gibraltar on April 16.
The UAE, home to the world's second-largest bunker and fuel oil trading hub in Fujairah, is an important producer of fuel oil but typically supplies medium- and high-sulfur grades. Those are in greater supply than ULSFO, which has a sulfur content of up to 0.1%.
Demand for very low-sulfur bunker fuels is set to rise after the International Maritime Organization in October set regulations to cap global sulfur emissions from shippers at 0.5% of fuel content by 2020 versus the current 3.5%.
Uniper's recently commissioned crude processing unit in Fujairah has an ULSFO production capacity of about 300,000 t per month and is set up to produce fuel oil with a maximum sulfur content ranging from 0.1% to 0.5%.
Uniper spokespeople did not respond to requests for comment on the operations of its Fujairah facility.
Two separate trading sources, however, said it was unlikely that the facility was running at full capacity given current estimates of ULSFO export volumes from the Arabian Gulf oil hub.
Uniper has also targeted parts of Asia to meet demand for ECA-compliant bunker fuels and power generation feedstock, another trade source with knowledge of the matter said.
Fuel oil, also known as bunker fuel, is primarily used to power oceangoing marine vessels and in electricity generation.
Reporting by Roslan Khasawneh; Additional reporting by Ahmad Ghaddar in London; Editing by Dale Hudson
Comments