FUJAIRAH, United Arab Emirates, March 26 (Reuters) -R efiners around the world have invested about $1 billion so farto produce low-sulphur marine fuel to meet new regulationscoming into force in 2020, a BP executive said on Tuesday.
International Maritime Organization (IMO) rules will banships from using fuels with a sulphur content above 0.5 percentfrom 2020, compared with 3.5 percent now, unless they areequipped with so-called scrubbers to clean up sulphur emissions.
Since the deadline for the shift was set in 2016, shippersand refiners have scrambled to prepare for the new standards.
"There's certainly strong supply of compliant fuel oil,particularly in hub locations (like) Rotterdam, Singapore andFujairah," BP's global head of marine fuels, Eddie Gauci, toldthe Fujairah Bunkering and Fuel Oil Forum.
"There's been a huge amount of investment in refineriessince 2015 and (it) will continue beyond 2020," Gauci told thegathering in the United Arab Emirates, saying investment to dealwith the shift had reached an estimated $1 billion.
BP said in March it was set to sell its new very low sulphurfuel oil (VLSFO) globally, echoing announcements by oil majorssuch as Royal Dutch Shell and Exxon Mobil.
In smaller ports lacking adequate fuel storage to hold therange of fuel grades needed, suppliers of compliant marine fuelscould turn to floating storage, as land facilities adapt to theshift.
"We will see some floating storage of high sulphur or lowsulphur for a period of time until the land-based infrastructureestablishes some kind of equilibrium that's in tune with whatgrades of fuel are called for in particular locations," he said.
(Reporting by Roslan KhasawnehEditing by Edmund Blair)