China’s Sinopec Corp plans to build a line of 100 barges over the next three years to produce marine fuel compliant with new global emission standards, mentioned a Chinese transport executive with direct knowledge of the matter.
In what can be one of many top Asian refiner’s largest delivery investments, Sinopec hopes the line would serve its stated ambition to become a top regional provider of shallow sulfur fuel oil (VLSFO).
Burning VLSFO is among the options for shipowners when they have to modify to fuel that comprises 0.5% sulfur from the present 3.5% in January under a decree by the International Maritime Organization (IMO).
The fleet would come with new orders of 50 vessels of 8,000 to 10,000 deadweight tonne (DWT) each and chartering another 50 smaller vessels every of 3,000-4,000 DWT, stated the delegate, who refused to be named as he’s not authorized to speak to the press.
The cost of buying the 50 new vessels can be around 4 billion yuan ($571.91 million), stated the shipping government, adding that each one the barges shall be built in Chinese shipyards.
Shihua Nanjing Tanker Co, a joint venture between Sinopec Fuel Oil Firm and state-run shipping agency Nanjing Tanker Co, would operate the line. It currently operates ten barges.
Owning vessels will offer the security of operations while chartering a part of the fleet provides the firm flexibility to deal with market fluctuations, stated a second delegate, a Sinopec executive accustomed to the agency’s marine fuel strategy.
Sinopec has selected ten subsidiary refineries along coastal China to supply VLSFO, including Zhenhai Refining and Chemical, Jinling Petrochemical, and Hainan refinery, most of which are outfitted with desulphurization units prepared to make the new fuel.