1 / 11

IMO Sulfur Regulations Impact on the Bunker Fuel Supply

IMO Sulfur Regulations Impact on the Bunker Fuel Supply. October 25-27, 2009 2009 Energy Buyers Conference Miami Beach, Florida. © Poten & Partners 2009 . Global & Regional Marine Fuel Regulations. HISTORICAL . 2005, May 19 IMO Global cap – 4.5%S

veata
Download Presentation

IMO Sulfur Regulations Impact on the Bunker Fuel Supply

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. IMO Sulfur Regulations Impact on the Bunker Fuel Supply October 25-27, 2009 2009 Energy Buyers Conference Miami Beach, Florida © Poten & Partners 2009

  2. Global & Regional Marine Fuel Regulations HISTORICAL 2005, May 19 IMO Global cap – 4.5%S 2006, May 19 IMO Baltic Sea ECA – 1.5%S 2006 Aug 11 EU EU passenger ships 1.5%S 2006, Aug 11 EU EU ports - 1.5%S MDO & 0.2%S MGO 2007, Jan 1 CARB California, auxiliary engines - 1.5%S MGO & 0.5%s MDO 2007, Nov 22 IMO North Sea/English Channel ECA - 1.5%S 2009, Jul 1 CARB California, 24 nm off coast - 1.5%S MGO & 0.5%S MDO FUTURE 2010, Jan 1 EU EU waterways & 2 hrs+ ships at berth – 0.1%S 2010, Jan 1 CARB California, auxiliary engines – 0.1%S MGO 2010, Jul 1 IMO Existing ECAs – 1.0%S 2012, Jan 1 IMO Global cap – 3.5%S 2012, Jan 1 CARB California, 24 nm off coast - 0.1%S MGO 2012, Aug 1 IMO U.S. & Canada ECA – 1.0%S (200 nm off coast) 2015, Jan 1 IMO Existing ECAs – 0.1%S 2020/25, Jan 1 IMO Global cap – 0.5%S

  3. California Marine Fuel Stance • July 2009 California banned residual bunker fuel burn 24 nm off its coast and imposed burning of 1.5%S MGO & 0.5%S MDO • Market response: Los Angeles MDO/MGO price jump compared to other major bunkering ports • Possibility of oil spill from a ship whose engine fails while switching fuel

  4. International Bunker Fuel Sales Overview *Europe excludes Former Soviet Union republics.

  5. July 2010 ECA 1.0%S Marine Fuel Switch:Nothing to Panic About • In NW Europe & the Baltic Sea, domestic residual bunker sales account for 9% of total heavy bunker sales • In the U.S. and Canada, domestic residual bunker sales account for 4% of total heavy bunker sales • The existing Europe and the future North America ECAs’ domestic heavy bunker sales are a mere 1% of global heavy bunker sales

  6. January 2015 - ECA 0.1%S Marine Fuel Switch • In 5 years, SECAs would reduce bunker fuel sulfur content from current 1.5%S to 0.1%S • 0.1%S bunker fuel cannot be achieved by desulfurizing residual fuel oil; switching to marine gasoil required • Generally refiners look to invest in resid destruction capacity and produce transportation fuels • Judging from 2008 gasoil/diesel net balance in the existing ECA and future North America ECA, MDO/MGO availability would not be an issue • Depending on MDO/MGO cost, vessel exhaust scrubbing technology could be a feasible option for shipowners

  7. Global Marine Fuel Cap In January 2012, global marine fuel sulfur content would be capped at 3.5%S. Since average global sulfur content is 2.7%, this sulfur limit is generally symbolic

  8. Global Marine Fuel Cap - Continued • In 2020/2025, global marine fuel sulfur would be reduced to 0.5%S from 3.5%S (ECAs would be already limited to burning 0.1%S marine fuel) • Global marine fuel demand (HFO & MDO/MGO), which in 2008 accounted for about 240 million mt, could increase by 10-15% by year 2020/2025 • Global production of gasoil/diesel would not be sufficient to meet the surge in world 0.5%S MDO/MGO demand • To speculate – unless scrubbers become commercially viable, refiners will need price incentives to desulfurize HFO. A combination of both may occur.

  9. Talked About Future ECAs • Mexico is considering joining the U.S. and Canada North America ECA initiative • Mexico’s domestic marine fuel burn (HFO and MDO/MGO) is about 1 million mt and projected to grow by 2015. • Mexico is net short diesel/gasoil, so as a prospective ECA member it would turn to MDO/MGO imports to meet demand. • Countries in the Mediterranean region (in Europe, the Middle East and Africa) would likely not agree on an ECA by 2020. • Mediterranean countries’ marine fuel burn (HFO and MDO/MGO) is about 2.5 million mt and projected to decline by 2015 • Mediterranean sea countries are net short diesel/gasoil, so prospective ECA would call for MDO/MGO imports.

  10. Near-Term Tanker Shipping Expectations Marine Fuel Regulations 2010-2025 What the Future Holds for the International Shipping Industry • Still bullish on China and India • Lower than ‘expected’ GDP growth assessments do not necessarily denote low growth • Cash injections by certain governments will help support shipping industry in certain markets, particularly in the East • Demand in OECD markets expected to recover slowly through the remainder of 2009 bolstering tanker demand • Economic recovery will be largely dictated by policy • Banking sector regulation • Stimulus and deficit • Taxes • Likelihood of the ‘double-dip’ recession A Focused Analysis and Outlook on the Marine Fuels Market - Overview of Marine Fuel Historical and Future Regulations - Residual Bunker Fuel and Marine Gasoil/Diesel (2007-2008) Demand by Region - ECA 1.0%S Marine Fuel Limit (July 2010) - Impact of Future North America ECA (2012) - ECA 0.1%S Marine Fuel Limit (January 2015) - Global 0.5%S Bunker Limit (2020/2025) - Future Marine Fuel Pricing Implications to be published December 2009

  11. 805 THIRD AVENUE WEBSITE: www.poten.comNEW YORK, NY 10022 TEL: +1 (212) 230-2087USA EMAIL: fueloil@poten.com 805 THIRD AVENUE TEL: +1 (212) 230-2000NEW YORK, NY 10022 FAX: +1 (212) 355-0295USA EMAIL:MarineProjects@poten.com

More Related