(Bloomberg) -- A Euronav NV-owned supertanker anchored along Asia’s busiest shipping route is set to become a refueling hub as the company seeks to secure cheaper fuel for its fleet ahead of new industry rules.
The Oceania, one of the world’s biggest oil carriers, will serve as a floating storage and distribution center for marine fuel in waters off Kuala Linggi International Port on Malaysia’s west coast. The port will be Euronav’s hub for low-sulfur fuel and marine services in the region, according to an agreement signed Tuesday with T.A.G. Marine Sdn Bhd., the port operator.
The ultra-large crude carrier with capacity of about 3 million barrels arrived off Malaysia in late-September laden with low-sulfur fuel after beginning her 12,400-mile (19,955-kilometer) journey from the Mediterranean Sea in August. Her presence in Asia will provide Euronav’s fleet with a ready supply of shipping fuel ahead of the new IMO 2020 standards that take effect Jan. 1, which could prompt a scramble for low-sulfur barrels and push up prices.
While refueling activities are typically carried out from onshore terminals and tanks in bunker ports across Singapore, Malaysia and China, the Oceania will serve as a floating storage hub. The tanker has anchored off the port with 3 million barrels of 0.2% and 0.5% low-sulfur fuel oil, T.A.G. Marine said in a statement. Euronav also has another ULCC tanker, Europe, that’s been at the anchorage area since 2013.
The port operator’s agreement with Euronav is a shot in the arm for Kuala Linggi port, known as Sungai Linggi, as most vessels traversing the Malacca Strait typically choose to refuel in Singapore or Port Klang in Malaysia.
©2019 Bloomberg L.P.
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