Market watchers may augur that Singapore’s bunkering hub status could lose some of its lusteras demand shifted to distillates and ultra low sulfur fuel in 2020, but bunker supplier Sentek Marine & Trading is upbeat about growth, and is expanding its fleet to meet demands of shipowners.
Orders for two new barges and two VLCCs had already been placed, Sentek Marine’s general manager Pai Kheng Hian said Thursday.
“There’s a view in the market, that trade flows and Singapore’s bunker sales could be affected by IMO’s global sulfur cap in 2020, but we see healthy demand in Singapore and the region, and this gives us confidence in our future plans,” said Pai.
“The new bunker tankers will allow us to increase our operational efficiency…and ensure that we are well-positioned to service our customers when the new regulations are implemented in 2020,” he added.
The two bunker tankers currently under construction are expected to be completed in the first half of next year, bringing Sentek’s total number of barges to 25.
Earlier in February, the bunker supplier took delivery of the 6,648-dwt Boontek 7, a marine fuel oil barge, increasing the total number of its fuel oil bunker tankers to 12.
Sentek’s two new VLCCs are expected to be completed in the first and second quarter of 2019, and will come installed with scrubbers, Pai said.
“In an environment of uncertainty and low investment, we believe the new VLCCs will be in demand as we move closer to 2020. It’s also part of our long term strategy to service our customers in the port of Singapore,” he said.
The addition of the two new VLCCS will increase Sentek’s VLCC fleet to five next year.
The International Maritime Organization will cap sulfur in marine fuels at 0.5% worldwide from January 1, 2020, from 3.5% currently. This applies outside designated emission control areas where the limit is already 0.1%.
According to trade sources, a number of shipowners were expected, at least initially, to switch to marine gasoil in January 2020 when IMO’s global sulfur limit was implemented because MGO seemed the least cumbersome alternative.
While there was a possibility that some marine fuel demand in Singapore could shift to distillate exporting countries like China, South Korea and India should shipowners decide to lift marine gasoil there, that likelihood had yet to be seen, they added.
TRANSPARENCY GIVES SINGAPORE AN EDGE
For Sentek, Singapore has an edge over other ports because the mandatory use of mass flow meters had made bunker deliveries in the city-port more transparent.
“With mass flow meters, there are fewer quantity disputes. Owner confidence is back, and that’s very important, if not they won’t come to Singapore,” he added.
MFMs measure the flow rate in the pipe, gauging the quantity as well as the mass and density of the fuel.
The Maritime and Port Authority of Singapore mandated the use of mass flow meters for fuel oil deliveries in January 2017, leaving a number of people to think that Singapore’s bunker volumes would be displaced to regional ports.
However, Singapore went on to achieve a record high of 50.6 million mt in bunker sales last year, surpassing the previous record of 48.6 million mt in 2016, thereby dispelling doubts that Singapore’s bunker fuel industry would be affected.
From July next year, the use of MFMs for distillate deliveries will become compulsory, readying the Republic for the implementation of IMO’s 0.5% global sulfur cap from January 1, 2020.
“The bunker market is going to be a mix of low sulfur fuel, distillates and blended fuel. The problem is there is no ISO standard for hybrid fuel,” said Pai.
“However, we are ready and committed to meet the demands of owners. We have dedicated MGO, HSFO barges, and a dedicated ULSFO floating storage and barge to ensure that there is no contamination,” he added.
Sentek Marine & Trading was Singapore’s biggest bunker supplier by volume last year and has been in the top ten for the past four years, MPA data showed. The company currently has 12 MFO bunker tankers, 10 MGO barges, one ULSFO barge and three VLCCs.
Source: PlattsPrevious Next