Distillate blending in VLSFO raises concerns

Blending jet and road fuels into the marine fuel pool could lead to a lower flash point, increasing cleaning costs and risking engine damage, ship testing data has shown.

The practice is understood not to be widespread in Europe, but has been a greater concern in Asia-Pacific bunker markets.

Fuel testing company Veritas Petroleum Services (VPS) told Argus that density and viscosity values of 0.5pc fuel oil (VLSFO) around the world have become lower as the year has progressed. This suggests lighter fuels, such as road and aviation fuels, have been blended into the VLSFO pool, VPS said. The firm said 46pc of the 37 bunker alerts it has issued this year have been for low flash points with all marine fuel types affected.

"We believe these [transport fuels] may have been blended into marine fuels and being more volatile, this blending has lowered the flash point. In addition, viscosities and densities of VLSFOs have been wide ranging since their introduction," group commercial director at VPS Steve Bee said.

The impact of Covid-19 on jet and transport fuel demand has led to a surplus of these fuels at relatively lower costs. The strength of marine fuel prices over jet fuel prompted some blending of straight-run kerosine to produce VLSFO in Singapore, the world's largest bunkering hub. VLSFO has held a premium to jet fuel traded in Singapore since the end of August, averaging $10/t in September. In Europe, VLSFO averaged a discount of $30/t to jet during the same period. Comparatively, jet fuel averaged a $66/t premium to VLSFO in Singapore and $130/t in Europe in September 2019.

Market participants confirmed that the blending of distillates in to the marine pool is not happening on a significant scale in Europe.

But blending of jet and road fuels in to VLSFO has caused concern. Too much straight-run kerosine has the potential to lower the temperature at which fuels ignite, known as the flash point, posing a dangerous risk to ship engines. The minimum flash point for A1 jet fuel is 38°C compared with a minimum for VLSFO of 60°C.

These blending practices could also result in fuel instability and lead to asphaltene precipitation in tanks and ship engines resulting in the formation of sludge. This has the potential to block pipes, filters and centrifuges and result in higher cleaning costs for tank and ship owners.

Marine lubricant performance could be impacted by higher asphaltene precipitation. Lubricants could struggle to keep a higher asphaltene content in suspension. The deposition of sludge in ship engines can lead to loss of fuel economy and, at worst, irreversible engine damage.

UK-based testing firm Bureau Veritas has previously warned that "extreme caution" should be used when blending jet fuel with bunker fuel.

Efforts to keep distillate blending within marine fuel specifications would minimise the risk of adverse effects. "The amount of jet fuel that eventually can be blended into marine fuel is certainly restricted by the minimum flashpoint requirement for marine fuels of 60°C," Monique Vermeire, fuels technologist at Chevron, said. There is also the requirement that "all delivered fuels shall be stable, meaning asphaltenes kept in solution which is covered by the potential total sediment limit of 0.1pc maximum," she said. Vermeire is also the convenor of the ISO working group responsible for marine fuels standard ISO 8217.

By George Collard and Catherine Caulfield