Bunker Energy receives first VLSFO batch in Augusta

Aims to start offering 0.5% fuel by end of Q3 - or sooner for contract clients.

Image credit: Bunker Energy S.p.A

Updated on 05 Jul 2019 14:43 GMT

Bunker Energy S.p.A. has confirmed that last week it brought in its first batch of very low-sulphur fuel oil (VLSFO) to its facilities in Augusta.

The parcel is described as being straight-run from a refinery located in the north of Italy, and now that the fuel has been transported to Augusta, the supplier says next it will have to "clean up [and] flush" to prevent cross-contamination before deciding on pricing.

Preparations and start date

The latest development is a key step for Bunker Energy towards the commercialization of IMO 2020-compliant fuel oil, but the Italian firm stresses that VLSFO will not be made available to customers in the immediate future as preparations continue.

Tommaso Panzeri, CRM and New Projects, noted that part of the process of incorporating VLSFO into its delivery operation will involve properly flushing lines and pumps to avoid any contamination from other higher-sulphur fuels.

Additionally, the seller says it is in the process of finalizing barging and terminal logistics to ensure consistency of availability so that deliveries of compliant fuels can commence well before January 1, 2020.

Genoa-based Bunker Energy intends to start offering sulphur cap-compliant fuels by the end of the third quarter of 2019 - or earlier for clients that agree contractual terms.

Availability and specifications

Bunker Energy states that it will ensure there are "regular avails" of straight-run 0.5 percent product, and that blended fuels will be supplied in lieu only when no other product can be sourced.

At the same time, high-sulphur fuel oil (HSFO) will continue to be sold in order to meet the needs of scrubber-fitted ships, whilst marine gas oil (MGO) will also be made available to clients that opt for distillates.

In terms of product specifications, Bunker Energy notes that its VLSFO will meet the ISO 8217:2017 standard.


According to Panzeri, Bunker Energy is currently in the process of deciding on its pricing structure.

Panzeri indicated that he expects the firm's VLSFO stock to be priced at a premium of more than $198 on the 3.5 percent fuel oil hedged by Belship last week. He also observed that there had been market interest in VLSFO contracts, which he sees continuing "for a while" as the January 1 sulphur cap implementation date draws closer.

Comparing pricing in the company's two key Italian supply locations, Civitavecchia and Augusta, Panzeri explained that Civitavecchia prices were easier to calculate due to the local nature of vessel traffic, which was mainly regular and scheduled well in advance. Augusta, meanwhile, was said to be "a bit more challenging" due to there being a higher number of spot charters calling at the Sicilian port.

"We do have some live contracts in place which will either shift to VLSFO or go on gasoil," he added.

Aiming to drive demand in Augusta and Civitavecchia

Bunker Energy says it is looking to promote Augusta as a key bunkering hub for ships sailing across the Mediterranean, and that part of its strategy entails targeting clients that have recently opted to refuel in alternative locations.

"Augusta is no big deal of a deviation for vessels that are sailing through the Mediterranean. Bunker Energy['s] operation is such that major players opt for ... Augusta not only for the sheltered bunkering area but also for the high level of service they receive: we are fully in control of all stages of the delivery, from the moment we buy the product to when it gets on board the ships," Panzeri declared.

Similar steps are being taken in Civitavecchia, where the tankage volume is close to that of Augusta: around 50,000 cubic metres (cbm), versus 57,000 cbm in Sicily.

"We expect a much higher demand due to the traffic mainly of roro-pax and cruise ships calling [at] the Roman port," Panzeri commented.

Supply locations

Bunker Energy is a physical supplier in both Augusta and Civitavecchia.

In Augusta, the company handles all the port's bunker volume, supplying IFO 380, other intermediate fuels and MGO. Delivery is carried out by barge within port limits and at the inner anchorage. Santa Panagia and Catania are also served from Augusta.

In Civitavecchia, Bunker Energy is the sole supplier and has facilities at the SODECO Depot. The company supplies high- and low-sulphur IFO 380 and MGO by barge.

Bunker Energy is also a contract supplier at the ports of Abidjan (Ivory Coast), Dakar (Senegal), Douala (Cameroon), Hamburg (Germany), Libreville (Gabon), Limbe (Cameroon) and Port Gentil (Gabon), plus in the main ports of Algeria, Morocco and Tunisia.