Chevron readying IMO-compliant shipping fuel sales

OSLO (Reuters) - Chevron plans to bring an IMO-compliant 0.5% sulfur shipping fuel blend to the market by the end of the third quarter, a company representative said on Wednesday.

FILE PHOTO: An entrance sign at the Chevron refinery, located near the Houston Ship Channel, is seen in Pasadena, Texas, U.S., May 5, 2019. REUTERS/Loren Elliott

Ships will be required to use fuels with a sulfur content of no more than 0.5% from the start of 2020, down from 3.5% currently, under International Maritime Organization (IMO) rules aimed at cutting air pollution.

“If the shipping company is willing to try it out now we can make it available, but not for continuous purchase,” Chevron Fuels Technologist Monique Vermeire told Reuters at an industry conference.

“I think it will be available (for the market) by the end of the third quarter,” she said.

Only ships fitted with sulfur-cleaning devices, known as scrubbers, will be allowed to continue burning high-sulfur fuel, under IMO regulations.

While major fuel bunkering ports such as Singapore, Fujairah in the United Arab Emirates and Rotterdam in the Netherlands are expected to have compliant-fuel supplies, analysts and shipping firms point to concerns over what happens at smaller ports.

Ship owners fear that mixing different batches of very low sulfur fuels risks creating a level of sediment which could damage engines.

With less than seven months until the new rules apply, there is still a lack of certainty about the change, including regarding pricing.

“I would like to see global standard ISO certificated low sulfur fuel oil,” Ivar Myklebust, chief executive of Norwegian shipping firm Hoegh Autoliners, told a panel discussion during a shipping conference in Oslo.

“Yes, we understand we need to pay more, but what is the reference?” he said.

Without a standard certification, shipping counterparts have trouble entering contracts and cannot lock in fuel costs on the futures market.

Oil majors BP and Royal Dutch Shell have also said they are developing very low sulfur fuels to meet the 0.5% requirement.

Editing by Nerijus Adomaitis