March 09, 2020 [S&P Global Platts] – Minerva Bunkering, the world’s largest physical supplier of bunker fuels, has started operations at the port of Fujairah on the eastern coast of the UAE following its acquisition last year of Aegean Marine Petroleum Network.

As part of Minerva’s April 2019 acquisition, Minerva Bunkering has taken over the license of Aegean (Fujairah) Bunkering SA, becoming the 13th active licensed bunker supplier at the port, according to Tyler Baron, CEO of Minerva Bunkering in Geneva.

Minerva, a subsidiary of the Swiss trading giant Mercuria Energy Group, has two bunker tankers to supply marine gasoil and low sulfur fuel oil to vessels at Fujairah. It also owns a terminal, currently full, capable of storing 465,000 cubic meters of fuel.

“We have a very strong portfolio of assets in the region. Between our bunker tankers and the storage terminal we think we’re logistically well positioned,” Baron said Tuesday in an interview with S&P Global Platts.

“Minerva’s presence in the big hubs is important to our customers because we can provide them optionality where they can shift volume to Singapore where we can supply them, shift it to Fujairah, shift it to Amsterdam-Rotterdam-Antwerp, or shift it to the Mediterranean. We can supply them wherever it’s most cost-effective and efficient for them to take bunkers.”

Minerva’s Fujairah terminal can accommodate clean products (marine gasoil) with half of its capacity and dirty products (0.5% low sulfur oil), the other half, Baron said. Minerva intends to import product from Northwest Europe and buy fuel from Fujairah’s local sources, such as two local topping units operated by Uniper and VTTI, he said.

Fujairah has attracted large stockpiles of fuel oils after being one of the most expensive bunkering markets in the world. But the coronavirus “caused demand to drop off quite a bit,” Baron said. “The Fujairah market is as we speak in a significant period of adjustment given all the fairly high cost oil that was brought in over a short period of time right before demand and pricing fell off.”

Asked how long it will take to balance the market, Baron said: “You’d have to tell me what’s going to happen with coronavirus. It’s having a material impact on trade and as a derivative on bunker consumption. We hedge all of our molecules but many of the players in Fujairah do not. So given what’s happened in both premiums and the flat price and a lot of unhedged operators in Fujairah, the market is having to readjust quite significantly.”

Fujairah is one of the world’s leading ship refueling destinations with estimated bunker fuel sales of 650,000-700,000 mt/month, prior to the coronavirus outbreak. Saudi Aramco opened up a trading office in the emirate last year and the UAE’s Abu Dhabi National Oil Co. took a 10% stake in Vitol’s part-owned energy storage and refining operation, VTTI. ADNOC is also planning to store crude in underground caverns in the mountains of Fujairah. BP, PetroChina and VTTI are also licensed bunker suppliers providing compliant fuels there.

Minerva has physical operations at 30 ports and 24-hour trading covering 150 ports. It owns 40 vessels and operates 1.9 million cubic meters of storage on the bunkering side.

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