Fuel switch to hit chemical tankers - analyst

28 March 2008 22:23  [Source: ICIS news]

NEW YORK (ICIS news)--Chemical tankers may be especially hard hit by proposed requirements for ships to burn low-sulphur fuels, a maritime analyst said on Friday.

A bill that would require large ships to switch to more expensive low-sulphur fuels from bunker fuels would affect the overall cost of shipping freight, a trade group said on Thursday.

However, the proposed changes could particularly affect chemical tanker shipping costs, said Margaret Doyle, senior tanker analyst for Marsoft.

Most chemical tankers use hydraulic pump power systems that need to run on auxiliary engines or ship service generators while in port, and crude carrier pumps are often steam driven, Doyle said.

“This may result in chemical tankers having to consume much more of the low sulphur distillates,” said Doyle.

Large ships generally use what is called bunkers or bunker fuel. Bunkers costs around $460-490/tonne (€290-308/tonne), but low-sulphur marine diesel fuel costs $790-860/tonne.

The UN’s International Maritime Organization, the US Senate and the International Association of Independent Tanker Owners are some of the groups calling for at least the partial adoption of low sulphur ship fuels in response to pollution concerns.

“Some in the oil industry estimate that it will cost $120bn [€77bn] to build the additional refining capacity if a switch is mandated,” Doyle said.

($1 = €0.63)

(For more on the state of shipping and pollution, please read the 14 April issue of ICIS Chemical Business)

By: Ivan Lerner
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