Total sees no viscosity issues from IMO regulations

Total does not expect shipowners to have difficulty burning low-sulphur fuel oil (LSFO) with low viscosities in the run-up to the International Maritime Organisation (IMO) 2020 regulations capping sulphur levels, with value instead shifting to sulphur content.

Total's customers are generally able to cope with lower viscosity of the new LSFO fuels that are gradually reaching the market as a 1 January 2020 deadline for the IMO's regulations approaches. The regulations have instead driven the market to focus on the sulphur content of marine fuels to meet the new 0.5pc sulphur cap, down from the current 3.5pc.

Placing too many constraints on specifications will involve too many costs for the customer, Total Marine Fuels Global Solutions' managing director Jerome Leprince-Ringuet told Argus. But low-sulphur fuel with a specific viscosity can be produced for buyers that need it, albeit at a premium.

Customers are more concerned about the stability and compatibility of the new fuels instead, Total said.

The vast majority of the global vessel fleet consumes high-sulphur fuel oil (HSFO) with maximum viscosity of 380cst. Container lines and large tankers can also burn fuels with maximum viscosity of 500cst, which can be bought at discounts of a few dollars a tonne to 380cst HSFO. Lower-viscosity 180cst HSFO typically trades at a premium of $30-35/t to 380cst HSFO.

Total has offered LSFO to customers on a trial basis and no issues have been reported so far, even on long-haul voyages. The company previously said the LSFO blends it has tested have viscosity between 100 and 350cst.

A handful of suppliers in Singapore are currently offering 0.5pc sulphur marine fuels with viscosity ranging anywhere from 10-360cst. The new 0.5pc sulphur fuel oil supplies in the market will be comprised of a number of different blends, mostly vacuum gasoil and low-sulphur residue, which is the main reason why the viscosity is closer to gasoil than to fuel oil. The viscosity of LSFO in Singapore has gradually increased over the past months, according to suppliers' specification sheets obtained by Argus.

Total is forecasting a temporary increase in demand for low-sulphur marine gasoil during the initial months of 2020, as some buyers will not trust the quality of LSFO blends. But once the market becomes more familiar with the new fuels, shipowners without a scrubber will likely transition fully to LSFO.