Singapore’s Equatorial Marine boosts storage, barge fleet ahead of IMO change
Singapore bunker supplier Equatorial Marine Fuel Management Services Pte Ltd has boosted its storage capacity ahead of the International Maritime Organization’s sulfur cap mandate by adding a second floating storage unit, executive director Choong Zhen Mao told S&P Global Platts.
•EMF readies with second floating storage unit
•Acquires two recently auctioned Brightoil tankers
•EMF exploring new markets including China to grow trading arm
“The latest addition will allow us to participate in a broader segment of the supply chain as well as enhance value to our customers in terms of accountability and quality control,” Choong said.
This comes after the company repurposed EM Splendour, a 20-year-old, 280,000-dwt, VLCC into a fully operational FSU recently. The FSU is also installed with heating equipment to facilitate oil blending operations as the IMO 2020 rule is set to usher in a variety of new fuel grades and blends, Choong said.
Both the FSUs are stationed off Malaysia, Choong said.
The parcel size of cargoes, mostly LSFO, that will come in will likely be smaller, while blending components will be drawn from different parts of the world, requiring greater attention during storage and handling, Choong said.
Limited storage capacity in the region and the reduced net effective utilization makes storage a very valuable aspect in the future, Choong said.
EMF, which accounts for around 9% of Singapore’s total marine fuel sales volume, owns 18 bunker barges of which two are oceangoing tankers, Choong said.
These include two vessels formerly owned by Brightoil that were purchased by EMF recently during an auction.
The company has also chartered five barges, of which two are on long-term basis and three on short-term basis, to enable a smoother transition.
EMF was ranked as the fourth-largest accredited bunker supplier by marine fuel sales volumes for 2018 by the Maritime and Port Authority of Singapore.
Singapore is the world’s largest bunkering port. Its bunker fuel sales in 2018 stood at 49.8 million mt, MPA data showed.
While the implementation of the new IMO 2020 regulation poses a hurdle for storage, the barging landscape will also be challenging as the industry faces a potential drop in barge utilization as tanks will have to be segregated to avoid comingling and contamination of bunker fuels, Choong said.
“Barging fees have risen in part due to various conversions [on barges], tank cleaning, and mass flow meter calibrations taking place,” Choong said.
Equatorial, for its part, will supply all three products — MGO, LSFO and HSFO — Choong said, adding that it has already made arrangements to meet rising demand for LSFO.
“By catering to the different market segments, we do feel that efficiency of barges is somewhat reduced,” Choong said.
Choong also said that while IMO 2020 is a drastic change, Singapore’s bunker industry remains resilient and well-equipped to transition to the new regulatory environment as the 2020 deadline draws closer.
“There is much more information in the market now, suppliers are also disclosing the fuel specifications that they will supply, while many shipowners have conducted successful trials of LSFO,” Choong said.
Amid the changing bunker landscape, EMF aims to maintain its bunker sales volume in Singapore in 2020, while also exploring new markets such as China to grow its trading operations.
“The biggest challenge for players like us will be to identify, preserve or even create a space for ourselves in this market, where you can present value to your customers and this in itself is also a great opportunity,” he said.
Featured on Bunker World on Oct 7th, 2019.