New York leads resid power gen boost

Power generators in the US burned 11.80mn bl of residual fuel oil from January to October 2018, up from 8.87mn bl during the same period in 2017. The increase reflected a jump in New York's residual fuel oil demand from 265,752bl in the first ten months of 2017 to 1.56mn bl during the same period in 2018.

Data from the US Energy Information Administration (EIA) showed that New York's demand spiked mainly because of increased demand at the 1,242MW Roseton Generating Station and the 1,522MW Northport Power Station. Roseton's consumption increased from 8,914bl to 439,669bl and Northport's was up from 47,648bl to 353,683bl. Roseton is located north of New York City and owned by energy trading company Castleton Commodities International (CCI). Northport is located on Long Island and is owned by National Grid.

Residual fuel oil in the US northeast is a function of the winter temperature. The bulk of the resid in Northport and Roseton was burned in January 2018.

In the US, the top five residual fuel oil burning states were Hawaii with 7.03mn bl, New York with 1.56mn bl, Florida with 618,848 bl and Massachusetts with 481,318 bl. The top US users of residual fuel oil for power burn in the first ten months of 2018 were: Hawaii Electric - 4.90mn bl, Hawaii's Kalaeloa Partners - 1.32mn bl, New York's National Grid - 449,033bl, New York's Roseton - 448,583bl, Florida Power & Light - 437,441bl and Virginia Electric & Power - 415,423bl.

The sulphur content of the resid burned by Hawaii Electric averaged at 0.32pc. Hawaii Electric purchased the resid on a contract basis from Island Energy Services. Kalaeloa procured its fuel oil from Tesoro on a contract basis. Its sulphur content averaged at 0.17pc. Hawaii's residual fuel oil demand is steady throughout the year.

Castleton Commodities sold residual fuel oil on a spot basis to National Grid and supplied its own plant Roseton. National Grid's fuel oil sulphur content averaged at 0.105pc and Roseton's at 0.233pc. Virginia Electric procured resid with average sulphur content of 0.153pc from Virginia Power Services Energy on a contract basis.

Starting in the fourth quarter of 2019, the US power plants will compete for this low-sulphur residual fuel oil with the shipping industry, because of the January 2020 marine fuel regulation which will cap marine fuel sulphur content at 0.5pc.

Castleton Commodities was the biggest spot residual fuel oil seller for US inland power generation during the first ten months of 2018. The company sold on a spot basis 791,058bl of resid in the state of New York. Freepoint was the second biggest spot seller – with 243,426bl in Maine and 49,365bl in New York. Sprague ranked third with 170,176bl sold in Massachusetts, Maine and New York. Macquarie was the fourth biggest spot supplier with 170,061bl in New Hampshire and Maryland.