March 15, 2021 [Bunkerspot] – Bunkerspot speaks to Patrik Petersson, Stena Oil’s Vice President for Business Development, to hear how the Swedish company’s new facility – expected to be operational after the summer – will support a robust bunker market in northern Denmark.
In 2018, Bunkerspot reported on Stena Oil’s plans to develop a marine fuel terminal in the Danish port of Frederikshavn. The 74,400-cbm facility, which will be able to handle all grades of marine fuel – as well as slops and sludge – will be the largest of its kind in Denmark. The project had been scheduled for completion in 2020 but the advent of COVID-19 pushed this date back, and the fuel terminal will now be commissioned after the summer.
According to Patrik Petersson, the facility’s start-up will be timely. While the combination of the IMO 2020 regulation and the pandemic has put pressure on global bunker companies in other regions – Petersson estimates demand to, in some places, have fallen between 20% and 40% over the last 18 months – the Skaw/Gothenburg region, in contrast, has witnessed growth. Among the key factors, he says, is its close proximity to low sulphur fuel refining capacity.
‘We are in a unique position where you have a narrow waterway [and] we have plenty of barges and infrastructure to support [demand].’
With the construction of the new Frederikshavn terminal, Stena Oil is seeking to capitalise on a further strategic advantage. According to Petersson, northern Denmark has become ‘a very important place’ for shipowners.
‘For us it makes sense to have a storage terminal which is half an hour off the bunkering position there [in Frederikshavn],’ explains Petersson. Without the terminal, Stena Oil must ship out product from its 93,000 cbm-capacity Gothenburg storage terminal to the Danish bunkering hub, which now takes around six hours to reach from the terminal in Gothenburg.
‘Frederikshavn is doing a really big port expansion and is investing a lot of money there to bring in new services like recycling of oil rigs and ships of the future. The whole maritime market there is really growing,’ says Petersson, who highlights the quality of supply, barging availability and low number of delays and fuel quality claims.
‘The prices are very competitive, so that is attracting a lot of new business. It’s not just the oil, it’s everything around there, too, like supplies, crew changes and storage provisions, spare parts – everything,’ he says. ‘And that is something we’re going to develop much more once we get the terminal up and running.’
When operational, the terminal will be served by Stena Oil’s latest addition to its bunker barge fleet, the 5,600 DWT MT Vingaren. The vessel, which is designed to carry five grades of marine fuel, carried out its first operation earlier this month and the company expects it to be kept busy. One of the reasons for this relates to an expansion of the company’s product offering, triggered by increasingly stringent fuel regulations over the last 16 years.
‘The new [0.50%] sulphur regulation has really boosted our market quite a lot, so [Vingaren] is a very good addition. It’s a good foundation to work on and provide for the growth,’ says Petersson.
The latest vessel in Stena Oil’s six-strong fleet can expect demand to come from a range of vessel segments which will pass through region on their way to and from the Baltic Sea. The company’s Skaw/Gothenburg region bunkering operation was first established in 2005 following the introduction of the 1.50% sulphur emission control area (SECA). Restrictions were tightened further to 0.10% in 2015.
‘Skaw was just at the borderline of the first SECA area and since then the spot market has developed tremendously. All segments of shipping come by our shores. There are tankers, Ro-Ro vessels, bulkers, gas carriers, fishing vessels. It is hard to say that there is a real dominance, it’s both dry and wet cargo.’
In 2019, Stena Oil began supplying its 0.50% very sulphur fuel oil (VLSFO) and by November of the same year, shipowners had begun to purchase larger stems in anticipation of the 1 January IMO 2020 deadline. As a company operating in a region which falls within the 0.10% SECA, and which offers ultra-low sulphur fuel oil, VLSFO, two grades of marine gasoil (MGO) and high sulphur fuel oil (HSFO) for scrubber-equipped vessels, it underscored the importance of having bunker barges with increased tank segregation and improved pumping rates. In particular, says Petersson, demand for HSFO is showing good signs of recovery after suffering the consequences of falling oil prices 12 months ago.
‘There is a steady demand [for HSFO] but it’s not what it used to be, of course. Scrubber uptake is growing and there is definitely a good market for it,’ says Petersson.
‘Now the spread is back again, [as of 8 March] it is $270 between fuel oil and gasoil, so I think we are going to see a growing demand for new installations for scrubbers.’
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