Home > Corporate News > Contents

On October 17th, 2018, GL INFO hosted a parallel forum on “Changes and Development of Marine Fuels Industry under 2020 Sulphur Cap” at IPEC 2018

On 17 October 2018, the 2nd International Petroleum and Natural Gas Enterprises Conference (IPEC 2018) opened in Zhoushan, east China’s Zhejiang province. Ms. Liao Na, executive vice president of GL INFO, was invited to host a parallel forum on "Changes and Development of Marine Fuels Industry under 2020 Sulphur Cap". Ms. Liao carried out brainstorms with government officials, manufacturers, oil and gas traders, ship owners, and think tanks for industry development paths in the era of revolution.

China has the largest port handling capacity in the world, boasting eight of the world’s top 10 ports based on container throughput. However, market size of China’s bonded bunker fuel is less than 10m tonnes at present. Is the 2020 global sulphur limit to bring opportunities or challenges to China? Can China play a vital role in low-sulphur bunker fuel supply to implement the new rules? What changes will take place in the world's fuel oil supply structure and trade flows? What choices and considerations are suppliers, ship owners, traders and governments facing? The forum conducted multidimensional communication and discussions on hot topics in the market.

As the host of IPEC 2018, Ms. Wei Xiaohong, director of the Zhoushan Port Free Trade Zone Administrative Committee, announced the achievements of Zhoushan. Since the establishment of the Zhejiang Free Trade Zone, Zhoushan port has become the largest bunkering port in China in less than two years. Its supply volume of bunker fuel doubled in the first three quarters of 2018, as compared with the same period last year. The volume is expected to reach 3m tonnes in the whole year. Policywise, Zhoushan is currently the only Chinese city that has the right to grant permissions for bonded bunkering business; Three enterprises in the Zhoushan Free Trade Zone have been granted the right to import crude under non-state operated category. In addition, Zhoushan has made a historic breakthrough in liberating blending business of bonded fuels with different tariff codes. In terms of bunkering operation, Zhoushan has applied many innovative measures compared to other domestic ports. For example, one single bunkering ship to meet bonded fuel demand from a number of ships in one single operation; one bunker fuel storage for varied ships; cross-customs direct-supply; “one-stop” civil service and other measures of port supervision to enhance efficiency and convenience.

Ms. Wei also put forward 10 new measures, including the launch of the 2020 action plan of low sulphur fuel oil, the expansion of pilot schemes for bonded fuel blending, the kick-off of construction on an international marine LNG bunkering hub and the nationwide application of mass flowmeter system (MFM). These measures are introduced with the aim to establish a regional bunkering hub in northeast Asia featured by the lowest bunker fuel prices, the highest operation efficiency and the optimal service environment.

The world's largest oil refiner Sinopec announced, at the forum, its schedule and roadmap for low-sulphur fuel oil supply. The oil giant is set to sign long-term contracts with key customers during the fourth quarter of 2018 and the second quarter of 2019. It is also set to start the replacement of bunker fuel at key Chinese ports in the fourth quarter of 2019. Starting from 1 January 2019, Sinopec will start to supply low-sulphur heavy bunker fuel measuring up to quality standards and green economy in all of China’s coastal ports. Faced with challenges in the “low-sulphur fuel era”, Mr. Liu Zurong, general manager of Sinopec Fuel Oil Sales Co, pointed out that Sinopec not only meets fuel demand from the domestic market, but also has the ability to serve overseas markets.

Low-sulphur fuel oil is the main fuel for international vessels after the 2020 sulphur cap come into effect, Peter Beekhuis, Asia Pacific and Middle East regional president of Maersk Oil Trading, and Carlos Torres, global supply director of Bunker Holding, articulated in their addresses to IPEC 2018. There are still many restrictions and immaturities in the use of desulfurizers and LNG, they pointed out. The early stage of the fuel replacement is a transitional period when gasoil and high-sulphur fuel oil are still available. The world’s bunkering hub is likely to move eastward to Asia in the future, as the production capacity of low-sulphur fuel oil clusters in the East while the Western world mainly produces high-sulphur fuel oil.

During the panel discussions, Mr. Sun Hougang, general manager of China Marine Bunker (PetroChina) Co - China's largest marine fuel supplier – pointed out that policy is a key factor influencing the development of the bunker fuel industry in Zhoushan and even in China. Specifically, it is the policy on converting bunker fuel from internal trade to bonded trade. "Only through this policy can Zhoushan eventually become the bunkering hub in northeast Asia and achieve the goal of raising China’s bonded fuel volume to 30m tonnes by 2030,” said Mr. Sun.  

Finally, Ms. Liao's concluded the forum: “at present, changes take place not only in the marine fuel market, but also in the entire energy ecology. This is an era of interconnection, cross-border subversion and the co-existence of “black swan” and “grey rhino”. Open-mindedness, specialty division, and close cooperation are requirements and challenges for enterprises, managers in the entire industry.

Themed on "Vision and Actions on Promoting Open, Inclusive and Win-win Oil and Gas Cooperation with Belt and Road Countries”, IPEC 2018 brought together more than 800 representatives of 233 enterprises from 34 countries and regions, including those from 57 Fortune Global 500 companies and 97 well-known domestic enterprises. Mr. Liu Xiang, general manager of GL INFO and Ms. Liao Na, the company’s executive vice president, attended the conference.