Belgian tanker owner Euronav says it has so far procured 420,000 metric tons of low sulphur fuel oil which is storing aboard one of its ultra large crude carriers in preparation of the IMO 2020 fuel regulations.
The company made the disclosure on Thursday along with additional details about its plan to comply with the upcoming low sulphur fuel regulations.
Euronav says the average price paid for the IMO 2020-compliant fuel amounts to $447 per metric ton, compared to the $447 per metric ton average it paid for high sulphur fuel during the same period.
The company said to help it prepare for the January 1 deadline, it has established a dedicated fuel procurement team that will procure, test, and store the new Very Low Sulphur Fuel Oil, or VLSFO, for its own use.
To store the VLSFO it has purchased, Euronav is currently using one of its two Ultra Large Crude Carriers (ULCC), the Oceania, which will reposition to later this month. Euronav’s other ULCC, the Europa, is currently under commercial time charter until the end of 2019.
Finally, Euronav says it has also secured an additional $100 million in financing for fuel procurement.
“The introduction of new Sulphur emissions regulations as part of ‘IMO 2020’ is on of the most progressive and significant developments for all shipping segments over the past fifty years,” says Hugo De Stoop, CEO of Euronav. Reducing shipping’s Sulphur footprint is a critical step forward for all seaborne transportation and Euronav wholeheartedly welcomes the new regulations and looks forward to fully complying with them.
“In summary, Euronav has purchased the equivalent of 420,000 metric ton of compliant fuel and Marine Gasoil at what we believe to be a competitive price. This volume can provide a substantial coverage of our fuel requirements during the initial period of the regulation. Leveraging our balance sheet strength and operational capability to purchase and secure supply of tested compliant product that should provide a natural hedge for Euronav against any lack of fuel oil availability, poor quality compliant fuel or unwanted price spike and help establish strong, direct B2B relationships for future fuel sourcing,” Stoop added.