October 11, 2019 / 12:01 PM / 2 months ago

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

(Corrects sixth paragraph to read ‘compromising distillates’ not ‘comprising gasoline’)

By Julia Payne

LONDON, Oct 11 (Reuters) - Gunvor Group will overhaul its refinery in Rotterdam in March next year and reconfigure the plant to produce some low sulphur 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 sulphur 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 favouring heavy sweet crudes that yield higher volumes of compliant fuel oil.

Ships could also opt for more expensive diesel or continue using high sulphur fuel oil if they install units that remove sulphur, 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 sulphur without compromising distillates. We found ways to do so without actually changing much, not even the crude oil, to produce some low sulphur 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 sulphur 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. (Editing by Louise Heavens)

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