Tanker owner Euronav has bought two fuel oil cargoes this week as it prepares to game the market in advance of the IMO’s incoming sulphur cap.
Sources at the company confirmed the purchase. they said Euronav’s 441,561-dwt ULCC Oceania (built 2003), which can receive clean product shipments, has been moved into position off Malta where it is expected to act as a storage vessel for the cargoes.
The company has recently employed fuel oil trader Rustin Edwards, Macquarie Bank and oil major Chevron to work on the business.
The reason for the purchase is understood to be twofold: Euronav is able to buy the compliant fuel at a low price now and the Belgian tanker owner is in effect taking a bet on where that level will be on 1 January next year.
But also, the company is keen to see that it has a supply of low-sulphur fuel oil (LSFO) of a guaranteed quality.
Last year, Euronav, which burns about one million tonnes of bunkers per year, completed trials of 2020-compliant LSFO on one of its vessels as part of its preparation.
HSFO storage
The UK-based tanker company also owns a sistership to the Oceania and the world's only other remaining ULCC, the Europe (built 2002).
This vessel is also a candidate for high-sulphur fuel oil (HSFO) storage from 1 January, if the price of HSFO falls sufficiently low, as some analysts have predicted it may.
In January, Euronav hinted at its planned storage play in a presentation to investors.
The company detailed that if it fitted 28 exhaust gas emission scrubbers to vessels and filled two ULCCs with six million barrels of HSFO in the first quarter of 2020 it would make gross savings of $142.8m that year.
Euronav said that taking the HSFO storage route would stack up at a total saving of $422.7m in the four-year period from 2020 to 2023, $65.7m more than for an outfit buying the fuel on an ongoing basis where savings would be $357m.
Outgoing chief executive Paddy Rodgers has been a vocal opponent of scrubbers, arguing against them on likely payback time, life expectancy and environmental reasons. But he has not ruled out fitting them.
Rodgers announced earlier this month that he will be leaving Euronav this year, although likely staying in the shipping industry.
This week, talk swept the market that Rodgers is poised to step into a role at a large shipbroking outfit.
But, while he admitted he has received “a few approaches” since news of his resignation broke, he denied taking on anything new, saying he first needs “time for reflection”.
Rodgers added that he also remains very busy in his current role with his “nose to the grindstone 24/7”.
