Total Marine Fuels gears up for IMO 2020 rule, eyes LNG bunker fuel growth

Global bunker supplier and trader Total Marine Fuels Global Solutions is gearing up for the International Maritime Organization’s 2020 global sulfur cap rule for marine fuels, with LNG emerging as a key bunker fuel solution for some of its customers, Managing Director Olivier Jouny told S&P Global Platts in an interview last week.

He added that “2020 is a real date, and there will be no way to escape it. We believe there is no one solution. It will vary from customer to customer, depending on a variety of factors, including the type of fleet, areas where shipowners are operating, whether they are looking for a solution for newbuilds or existing fleet.”

Total Marine Fuels Global Solutions, for its part, is already working with its other entities — refineries, trading, logistics, research and development — to come up with 2020-compliant marine fuel solutions, Jouny said.

The company will provide three main options — 0.5% sulfur compliant fuels, HSFO with scrubbers and LNG bunkering — to its customers. However, with regards to 0.5% sulfur fuels, it is too early to give an exact recipe, Jouny said.

“Total also has a large track record in adapting its refineries to the evolving fuel oil mix, as illustrated by the very recent upgrade of the Antwerp integrated refining and petrochemicals platform,” Jouny said.

The plethora of blended and new fuel formulations that will emerge, is also likely to lead to issues around stability and compatibility of the fuels.

“Compatibility and stability among the various blends are definitely an area of concern globally. We, along with our R&D centers, are looking at what’s a good blend. We are presently carrying out some laboratory tests; we will go in for trials in 2018 with our key customers to ensure we are prepared for 2020,” Jouny said.


“We want to be a major player in the LNG bunker market. Our market share in the LNG bunker market will be definitely bigger than that in our conventional marine fuel business,” Jouny said, adding that the LNG bunkering market was growing very rapidly.

He estimated that the global demand for LNG as a marine fuel would touch 1 million-1.5 million mt by 2020 and reach about 20 million-30 million mt by 2030, from the current figure of less than 500,000 mt.

LNG bunkering will be particularly attractive for certain segments of the shipping markets — such as newbuilds and for vessels such as ferries, cruise ships and containers which traverse fixed routes, Jouny said, adding that the predominant areas for LNG bunkering will be ports in Asia and Europe, where LNG bunkering infrastructure is either already present or is developing.

Global capital expenditure, financial constraints, access to LNG, and the need for in-depth technical expertise will restrict the number of players in this space.

“We have an advantage, as we are in both bunkering and LNG, and can definitely be a dominant LNG bunker player,” he said.

The company has reached a significant milestone in this regard. Earlier this month, Total announced that it had signed a strategic agreement with CMA CGM to provide LNG to fuel the French shipping group’s nine newbuild ultra-large container vessels.

The new agreement covers the supply of about 300,000 mt/year of LNG for 10 years starting 2020, illustrating a huge uptake in the potential of LNG as a marine fuel.

As part of the agreement, the company also plans to charter an LNG bunker tanker.

“We have entered into a consultation with a number of shipowners and we have to take a decision quite soon,” Jouny told Platts.

Four key elements to consider:

  • the vessel should be 18,000 cu m or more so that LNG bunkering can take place in one stem;
  • it should be highly maneuverable to serve high traffic areas and congested ports;
  • it should meet high safety standards; and
  • it should be in line with environmental standards to ensure there is no gas flaring during routine bunkering operations.

In addition to the CMA CGM deal in July, TMFGS also signed an agreement with Brittany Ferries to supply LNG to its vessel, the Honfleur, in the port of Ouistreham, France.

To address the lack of LNG infrastructure in the ports served by the Honfleur, TMFGS partnered with two other French companies — Dunkerque LNG and Groupe Charles Andre — to implement a supply chain solution using ISO containers for LNG bunkering.

The company also inked a deal with Singapore’s Pavilion Gas to co-operate on LNG bunkering in the city-port. Under the agreement, Pavilion Gas, a wholly owned subsidiary of Pavilion Energy, will supply LNG as a bunker fuel to TMFGS, according to a statement released in April.


While TMFGS is preparing for 2020, it is also cautious about the enforcement of the upcoming rule as 100% compliance will be difficult to achieve, Jouny said.

A report by OPEC in November, for example, said that just 60% of bunker demand will be compliant with the sulfur limit in 2020.

“We do believe that our customers, who are also some of the big names, are going to fulfill the requirements [of the rule]. However, if there is no signal from the market that enforcement is compulsory, smaller shipowners may not comply, meaning that there will no longer be a level playing field,” Jouny said.

“The 2020 global sulfur cap rule is a major change for the industry and it should be respected. Our commitment is to be transparent and we will support any initiative [as a supplier] required to support enforcement,” he added.

In February 2018, the IMO is expected to discuss a proposal made by the International Bunker Industry Association to introduce a ban on the carriage of HSFO as bunkers on ships without scrubbers.

If this proposal is accepted and enforced globally, TMFGS, who is also an IBIA member, will definitely support it, Jouny said.

Source: Platts

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