A top engineering manager for ExxonMobil has laid out a rationale for a future where blended fuels will supersede distillates and said shipowners should be ready to face a “whole host of new challenges”.
The company's marine fuels and lubricants spokesman Iain White told an industry crowd at the SulphurCap2020 conference in Amsterdam the supply chain from refinery to end user would dictate a future full of fuel blends.
“Whereas all of the fuel that is supplied into the marine industry today comes from a refinery somewhere, it is very often not the refiner who is selling the finished marine fuel. There is a supply chain with intermediaries along the way,” he said.
Mr White used Singapore – where more than 40M tonnes of fuel are sold annually – as an example.
“95% of the fuel that is sold in Singapore today is not refined in Singapore. It comes into that market, so there is an awful lot of blending going on there.”
Pricing, availability and access will also play a role in blends beating out distillates, according to Mr White.
With only 2% of the current fuel market composed of fuels that comply with the 0.5% limit imposed by the impending IMO sulphur regulations, he used the expected drop in price on the remaining 98% of high-sulphur fuels as an argument for the likelihood of blending.
“Come January 2020 … if you are a blender of fuel, you will have very low-cost access to high-sulphur fuel oil.
“Sulphur is a linear blend, and if you are blending with a typical distillate – an ECA [emissions control area compliant] fuel at 0.1% sulphur content – it takes about 80–85% high-sulphur fuel to 15% low-sulphur fuel ratio … and you can make a compliant fuel out of that,” he said.
Mr White closed his argument on the matter with an estimation that blended fuels would cost 10-15% less than straight distillate fuels.
He speculated that current industry practices see charterers making the majority of fuel purchases – and that charterers would choose their preferred fuel product on a US$0.50 price differential.
“So, the blended fuel, on a price basis, is going to win. That is why we are not facing a 100% distillate world going forward,” he said.
The challenges with blended fuel products
Mr White said that the prevalence of blended fuels and distillates would create difficulties for shipowners.
He cited the abundance of 55°C flashpoint for distillate fuels in inland markets in Europe and worried about the impact of even a small amount of the fuel entering the marine fuel supply.
“It only takes a tiny bit of low-flash fuel going into the bunker supply and the whole lot is off-spec, and you cannot correct it,” he said, noting differences in distillate fuels’ pour points (relating to fluidity of fuel at different temperatures and indicating a high level of paraffin content in crude oil) could also create difficulties for owners and operators.
The problem Mr White focused on most heavily, however, was catalyst fines, or cat fines, for short.
In mid-2017, ExxonMobil released a finding based on data analysis of 400,000 oil samples that indicated some 43% of the shipping industry fleet have a potentially catastrophic issue with cat fines, the hard aluminium and silicon oxide particles present in heavy fuel oils.
Shipowners, Mr White said, should be very concerned about cat fines.
“The challenge going forward is that the blend streams coming out of refineries using cat cracker residues always have low sulphur. So, therefore, they will be attractive to the guys who blend fuel. So, cat fines levels in fuel being supplied is very likely to go back up to the kind of levels we saw before with the 1% [sulphur content] ECA blend, except you will be seeing it everywhere.”
Mr White said the only thing shipowners could do to protect themselves from cat fines at the point of purchase was to ensure the only type of fuel they bought met the latest ISO fuel specification.
“More than 50% of the fuel bought today is bought against the  ISO 8217 spec. That is madness,” he said.
“If you have any sway against fuel buying in your operation, you should buy against the latest ISO spec. The [ISO] specs are there to help you, the buyer. Don’t let a supplier push you into a 2005 spec, because it will have a cat fines limit of 80 [parts per million (ppm)], whereas you could have a cat fines limit of 60 [ppm].”
However, even purchasing fuel with cat fines limit “anywhere near 60” ppm meant shipowners have a big problem, he said.
The solutions to that problem, according to Mr White was for owners and operators to ensure their crews were well trained on the fuel purifying operations on board their vessels … and to ensure the vessels’ tanks were cleaned during spells when the vessel went into drydock.
“Because nobody does any tank cleaning in drydocks anymore,” he said, “the cat fines level always builds up in the tanks. And then you go into bad weather, and then you get the problem.”