Shell and bulk-handling company HES International are planning to restart an oil refinery in Germany to produce low-sulphur bunker fuel ahead of new regulations going into force next year, Kallanish Energy learns.
The International Maritime Organization (IMO) approved the ban on high sulphur fuel oil (Hsfo) for vessels beginning in 2020. The International Energy Agency (IEA) expects a shake-up in the industry, as demand for Hsfo will fall from 3.5 million barrels per day (Mmbpd), to 1.4 Mmbpd.
HES is reinstalling the vacuum distillation unit (VDU) at Wilhelmshaven Tank Terminal, in order to produce low-sulphur bunker fuels to distribute as an alternative to Hsfo. Reuters reported they reached an agreement with Shell, under which the oil company provides the feedstock and receives the final product.
The terminal is located on Germany’s North Sea coast and is the largest independent liquid bunker terminal in the country. It has a 45-million-cubic-foot capacity and it holds several products, such as crude oil or liquefied petroleum gas.
Shell and HES said via email they aren’t commenting on the project.