Gunvor to start producing IMO-compliant fuel oil mid-2020

LONDON (Reuters) - Gunvor Group [GGL.UL] will overhaul its refinery in Rotterdam in March next year and reconfigure the plant to produce some low sulfur fuel oil that complies with new, global shipping rules, its chief executive officer said.

New regulations from the International Maritime Organization (IMO) will require shippers to reduce the sulfur content to a maximum of 0.5% in fuels, down from 3.5%, starting from Jan. 1, 2020, and one way to do that is to switch to low-sulphur gasoil.

The industry has been gearing up as the switch approaches. Fuel suppliers are stocking up Very Low Sulphur Fuel Oil at key ports and refineries are also favoring heavy sweet crudes that yield higher volumes of compliant fuel oil.

Ships could also opt for more expensive diesel or continue using high sulfur fuel oil if they install units that remove sulfur, known as scrubbers.

Torbjorn Tornqvist said he expects to produce some compliant fuel oil by the middle of next year.

“I think refineries will be capable of making low sulfur without compromising distillates. We found ways to do so without actually changing much, not even the crude oil, to produce some low sulfur fuel oil. If we can do it, then others can as well,” Tornqvist said.

He said that the firm has planned an overhaul of its 88,000 barrel-per-day refinery in Rotterdam, the Netherlands, in March next year that will allow the refinery to then produce some compliant fuel.

“We will still produce high sulfur fuel oil but we will be able to produce both,” Tornqvist said.

Gunvor dropped plans last year to add an expensive coking unit to the refinery.

(This story corrects sixth paragraph to read ‘compromising distillates’ not ‘comprising gasoline’)

Editing by Louise Heavens