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CHINA MOVES INTO LOW SULPHUR FUEL PRODUCTION

Wednesday, April 29, 2020 

State-owned Chinese oil producer Sinopec Shengli Petrochemical is reported to have successfully produced its first low sulphur marine fuel, with 5,000t of the blended fuel oil having been delivered to Sinopec's export facility at Longkou Port.

Sinopec holds the largest of China's recently-issued export quotas for LSFO, with 4.29 million tonnes out of a total 10 million tons issued so far by the Chinese Ministry of Commerce. The Shengli refinery began planning LSFO production in early 2020 in order to overcome the downturn in the fuel and diesel markets caused by the Covid-19 pandemic, and produced its first batch of IMO 2020-compliant fuel in mid-April.

Sinopic's  Shengli refinery anticipates the production of 260,000t of LSFO this year. Chinese refineries are said to have a combined total annual capacity to produce about 18 million tonnes of LSFO, and will be able to offer the fuel at a discount over Singapore bunker prices, though it may prove more economical to buy in from other refineries.

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