There will be no fuel deficit in Russia, Pavel Sorokin, vice minister of energy, told the audience of the 12th international Transport of Russia conference in Moscow.
‘Russian manufacturers will cope with it. The measures that the government is taking to stimulate and accelerate the transition from heavy fuel oil to low-sulphur fuel, are already bringing effect. There is a potential, and the risks are minimal’, he believes.
According to P.Sorokin, the Russian bunker market is estimated as 13 mn tons, of which some 10 mn tons is heavy fuel oil. And, he said, most manufacturers are capable of producing low-sulphur fuel.
P.Sorokin predicts that by 2021 heavy fuel oil consumption is to decline two-fold. ‘As a result, the cost of low-sulphur fuel will grow considerably. How to administer this, is yet to be decided. Time will show’, he added.
P.Sorokin said that the Ministry of energy will provide special privileges for companies producing low-sulphur fuel in order to stimulate the transition.
‘We will offer a small premium for every ton of low-sulphur fuel in the Baltic and in the Far East basin’, he said. In the Far East this premium will be higher as there additional investment is required to comply with the requirements, he explained.
P.Sorokin also noted that LNG bunkering has a great potential and is the future of the shipping industry. He expects that by 2035 LNG consumption in Russia will reach some 1.5-2 mn tons.
However, provided additional target subsidies are granted to make bunkering in Russian ports attractive for foreign ship owners, the volume of LNG bunkering could reach 3-4 mn tons annually by 2035.