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Ecuador eyes 0.5pc sulphur bunkers shortage in 2020

08 Jun 2017 22:05 (+01:00 GMT)
Ecuador eyes 0.5pc sulphur bunkers shortage in 2020

Correction: Adds that Transfuel also has an import permit for Ecuador.

New York, 8 June (Argus) — Ecuador may not be prepared to accommodate demand for 0.5pc sulphur marine fuel starting in January 2020.

An International Maritime Organization marine fuel regulation will cap the sulphur content of marine fuel burned in international waters from 3.5pc down to 0.5pc beginning in January 2020. The sulphur content of residual fuel oil produced from the state-owned refiner PetroEcuador is about 1.5-1.8pc. Ecuador is long residual fuel oil, but short diesel, which can be used to blend down the resid to meet the 0.5pc regulation. This could weigh on availability of marine fuel in Ecuador's main bunkering ports – Guayaquil and la Libertad starting in 2020.

Ecuador meets the bulk of its diesel demand via imports. The country produced 1.69mn bl of diesel and consumed 7.40mn bl during the first quarter, data from PetroEcuador showed. Data from the US Energy Information Administration showed that Ecuador imported 2.71mn bl from the US in the first quarter.

PetroEcuador marine distillate sales increased to 538,843bl in the first quarter of 2017 up from 473,056bl in first quarter of 2016. But the refiner's sales of heavy fuel oil for bunkering decreased dramatically by 71pc to 148,997bl in the first quarter this year from 535,117bl the same period in 2016.

PetroEcuador's heavy bunker fuel sales declined because of a 16pc drop in its residual fuel oil production to 5.93mn bl in the first quarter of 2017, and a 7pc increase in its fuel oil exports to 2.8mn bl. In the first quarter of this year, PetroEcuador also sold 1.14mn bl of resid for utilities power generation and 555,324bl of resid for industrial power generation.

PetroEcuador does not sell marine fuel directly to shipowners. The company sells bunkers to four marine fuel suppliers in Ecuador – Transfuel, Oceanbat, Marzam and Corpetrolsa. Given the spotty availabilities of heavy bunker fuel from Ecuador's sole refiner, Corpetrolsa, has been importing fuel oil to meet Ecuadorian bunker demand. Transfuel also has had an import permit for two years. Marzam recently acquired one and will use it when PetroEcuador's fuel oil availabilities dry out.

PetroEcuador operates three refineries in Ecuador – the 110,000 b/d Esmeraldas, the 45,000 b/d La Libertad and the 20,000 b/d Amazonas refining complex. The Esmeraldas refinery produced 4.2mn bl of residual fuel oil in the first quarter of 2017, La Libertad produced 783,757bl and the Amazonas complex produced 975,712bl.