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Cosmo Oil stockpiles LSFO ahead of IMO 2020
PROJECTS & COMPANIES
JAPANESE refiner Cosmo Oil has begun stock- piling low-sulphur fuel oil (LSFO) produced at its Chiba refinery ahead of a new global maritime fuel standard set to come into force in January. The company could supply the Japanese marine fuel market from October, Cosmo Oil president Shunichi Tanaka told Reuters on September 8.
“We still have some spare capacity at our res- idue desulphuriser [RDS] so we can produce more [LSFO] to supply to the bunker market,” Tanaka said.
The International Maritime Organization’s (IMO) new emissions rule, which comes into effect on January 1, will limit the sulphur content in maritime fuel to 0.5% from the current 3.5%. This, in turn, will require the shipping industry to drop high-sulphur fuel oil (HSFO) in favour of cleaner fuels.
South Korean refineries are already under- stood to have started testing the LSFO market, exporting some cargoes earlier this year. Refin- eries are thought to be redirecting low-sulphur feedstocks, normally processed into gasoline, towards the production of LSFO.
Reuters quoted Tanaka as saying that the LSFO stock building would reduce his company’s surplus gasoil production, which used to be exported.
However, while demand for HSFO is set to decline, there will still be a market for it. Tanaka said Cosmo Oil had fitted half of its six long-term chartered oil tankers with scrubbers, allowing them to continue using HSFO. The company expects to begin switching to LSFO in the other three from October.
“IMO 2020 will have a tangible and signif- icant impact and [the] oil market has already been responding to it,” Cosmo Oil’s general manager of crude oil and tanker department, Mitsuyasu Kawaguchi, said during a September 10 presentation at the Asia-Pacific Petroleum Conference (APPEC). He noted, however, that declining global heavy crude supplies and an uptick in scrubber installations would limit the impact of IMO 2020.
He said 2,800-4,000 scrubber installa- tions were anticipated before January, as they remained the most economic option over a five- year time frame.™
Buru welcomes WA fracking changes
OCEANIA
POLICY
BURU Energy has welcomed Western Austral- ia’s decision to lift its state-wide moratorium on hydraulic fracturing.
The Perth government officially amended the ban on September 6, allowing fracking to take place on existing petroleum licences. The mor- atorium remains in place over 98% of the state.
The amendment came almost exactly two years after the state announced on September 5, 2017 a 12-month independent scientific panel inquiry into fracking. The panel of experts found that the drilling practice was low-risk if carried
out safely and made 44 recommendations to tighten regulations.
Buru noted that it had fracked three wells in the Canning Basin prior to the moratorium’s introduction, all without incident. It said the drilling work had had no detectable impact on the environment.
It said that it had worked with the govern- ment over its designation of the Dampier Pen- insula as a “frack free zone” and had agreed that the Broome township and water supply areas in its existing petroleum titles would form part of
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w w w . N E W S B A S E . c o m Week 36 11•September•2019