Euronav buys fuel oil cargoes for ULCC

Belgium-based shipping company Euronav bought at least two straight-run fuel oil cargoes and a cracked fuel oil cargo for delivery to its Ultra Large Crude Carrier (ULCC)in the central Mediterranean, as part of its strategy to store compliant marine fuels ahead of the sulphur cap in 2020.

Italian refinery Iplom sold at least one low-sulphur straight-run fuel oil cargo to Euronav, while the shipping company purchased another low-sulphur straight run cargo from a different source. Euronav also purchased a cracked fuel oil cargo from a different company for delivery to their 442,000t ULCC Oceania off Malta. Counterparties of these deals were not available for comment. The cargoes Euronav bought were all around 30,000-35,000t. The shipping company will use these products for its own consumption in 2020, chief executive Paddy Rogers told Argus last month. Euronav's fleet of two ULCCs, 43 Very Large Crude Carriers (VLCC), 25 Suezmax tankers and two Floating Storage and Offloading (FSO) units consume around 1mn t of marine fuel per year.

Euronav will likely use these products for blending purposes in order to create a compliant marine fuel ahead of 2020, when the International Maritime Organization's (IMO) sulphur cap will come into force. Oceania has been off Malta in the Mediterranean since mid-January, ship tracking showed.

Rogers said that he expected low-sulphur straight-run fuel oil to become one of the major marine fuels in 2020. But most market participants expect 0.1-0.5pc sulphur marine gasoil (MGO) and 0.5pc fuel oil to become the major compliant marine fuels next year.