Dubai-based Earth Wealth Energy plans to build a 360,000 cu m fuel oil storage and treatment facility at the port of Fujairah in readiness for International Maritime Organization’s 0.5% cap on sulfur content in bunker fuels from 3.5% currently from January 1, 2020, the company said.

It plans to build 12-15 storage tanks and a facility to treat up to 12,000 b/d of fuel oil to reduce the sulfur content, it added.

Earth Wealth Energy has contracted Singapore-based Rotary Engineering to carry out the engineering study and aims to make a final investment decision on project and start work this year. The storage facility is expected to be ready by the end of 2019 or latest by the second quarter of 2020, it said.

Several companies have planned to invest in new storage facilities ahead of the IMO’s 0.5% global sulfur cap for marine fuels.

It is expected to spur demand for bulk storage for liquids, particularly for blending activity, industry sources said.

Low sulfur fuel oil is one among the many options being considered to comply with the IMO 2020 rule. Marine gasoil, which has a maximum sulfur content of 1.5%, can be blended with MGO with a maximum sulfur content of 0.1%. Even 15 ppm ULSGO can be blended with heavy fuel oil to lower its sulfur content.

However, one of the problems with LSFO is that it is unstable and will require blending, necessitating more storage and labs onshore to do this and also check for fuel quality, they said.

Additionally, there is the issue of whether LSFO bought from a refiner in Singapore is compatible with that from another refiner, for instance, in Rotterdam. So, this will require segregation of the fuel in tanks and potentially more storage, the sources added.