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UK marine gas oil (MGO) supplier Geos Group has reminded the shipping community of the upcoming change in marine fuel sulphur content legislation for vessels operating in Sulphur Emission Control Areas (SECAs) and the impact this could have on the supply and demand of MGO.

Geos said: "In just 7 months time, the level of sulphur allowed in shipping fuel in EU Sulphur Emission Control Areas (SECAs) will reduce considerably from 1% to 0.1%. To comply with the new rules, companies operating ships at sea in SECAs will need to switch to low-sulphur (0.1%) fuel such as 1000ppm marine gas oil (MGO), which could result in a significant shortage of stock. So how are fuel suppliers and ship operators going to react?

"One option available for meeting the shortfall is increasing refining capacity – however this will be difficult because oil refineries are set up to produce certain grades of fuel, and to change the product mix is not straightforward. Blending ultra low sulphur fuel oil with MGO is another option, but the process is difficult and there may not be any cost saving against straight run MGO. It is likely that imports of marine gas oil will increase from 2015, but large-scale imports are limited by high costs and limited storage space in the UK.

"Some operators may choose to burn 10ppm fuel in SECAs – however the flashpoint (the lowest temperature at which fuel can vaporize to form an ignitable mixture in air) for vessels at sea must be a minimum of 60°C, and the flashpoint of 10ppm fuel is usually lower than that. Another alternative to switching to 1000ppm MGO is to remove the sulphur from heavy fuel oil, but the technology used for this is unproven and unlikely to be widely used due to the high cost. Operators could also opt to switch to liquefied natural gas (LNG) – a possibility for new builds but impractical for most existing vessels.

"At the present time we can only speculate on how fuel suppliers and ship operators will react to the changes in MGO supply and demand when the new sulphur regulations come into effect in January 2015."

To contact Geos Group in order to discuss your supply options in 2015, the telephone number is +44 (0) 1491 845474, or you can email the company at commercial@geosgroup.com.