Oceania; Image Courtesy: EuronavThe company said that the fuel was purchased “at what we believe to be a competitive price,” adding that this volume can provide a substantial coverage of its fuel requirements during the initial period of the regulation, that comes into force as of January next year.
The 441,585 dwt ultra large crude carrier (ULCC) Oceania, built in 2003, has been used to store this inventory because of its size and related economies of scale.
Euronav’s ULCC is repositioning to Singapore area later this month. The company’s second ULCC is currently under commercial time charter with a third party until the end of 2019.
In line with Euronav’s strategy, a new USD 100 million revolving loan facility has been secured with a club of banks in order to assist funding of the compliant fuel inventory on the Oceania.
“We believe this proactive approach will deliver security of supply of quality tested fuels in sufficient quantity for the initial 6-9 months of 2020 and we are working on additional fuel saving and procurement initiatives based on the experience built up over the past nine months.”
In aggregate the purchase value of very low sulphur fuel oil (VLSFO) has been at USD 447 per metric ton compared to a bunker price (HFO-3.5% sulphur content) of USD 400 per metric ton over the same procurement period.
“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 spikes and help establish strong, direct B2B relationships for future fuel sourcing,” Hugo De Stoop, CEO of Euronav, said.
Additionally, the company hired a dedicated fuel oils specialist team to procure, thoroughly test and store new compliant fuels. Euronav also invested in the necessary accounting and financial tools required to assist in the management and procurement of all of its fuel oil needs.
Furthermore, the company said it continues to assess the potential retrofitting of part of its fleet with scrubbers, specifically the non-eco VLCCs.
“Euronav believes that it can still fully capture the potential benefits of an investment in scrubbers after the start of the regulation. At that time, the derivatives market of LSFO should have developed in size and in volume which allow Euronav to fully lock in the benefits of the spread at the time of making the investment. This should even provide Euronav with a “second mover advantage” in learning the flaws of the first round of installations and take a decision based on facts without having to speculate.”
Source: World Maritime News
