As SK Innovation has become a strong player in the Asia-Pacific region of the eco-friendly maritime oil market in preparation for the environmental restriction on maritime oil, it is also increasing the social value of its business.
SK Innovation made an announcement on Sept. 3 through SK Trading International (SKTI), a subsidiary that specializes in exporting and trading petroleum products, that it is currently expanding the size of low sulfur oil business.
In 2016, the International Maritime Organization (IMO) finalized a plan to drastically reduce the amount of sulfur oxide applied to offshore fuel oil from 3.5 percent to 0.5 percent.
Therefore, starting from 2020, the offshore fuel oil market will be based on low surfer oil such as low-sulfur fuel oil (LSFO), marine gas oil (MGO) and LNG. However, with the recent increase of interest in the shipping industry, market demand is increasing faster than the time of regulation.
SKTI decided that it would be the right time to pioneer new markets and actively started expanding its low surfer oil business. To that end, SKTI decided to expand 'sea blending business' that is the first and only operating in South Korea.
SKTI has been operating 'sea blending business' that leases super-sized oil tankers from Singapore since 2010 and uses them as a tank for blending and produces low-sulfur fuel oil (LSFO).
Offshore blending is a business that is difficult to produce in the sea, not in the land, in which SK is the only company in Korea that is trying.
To that end, SKTI is supplying 1 million tons of low-surfer fuel oil annually through sea-blending. This year, the company decided to increase the amount of ultra low-sulfur fuel oil (ULSFO) twice this year compared to last year. In addition, it is accelerating its efforts to establish a global sales network of high-quality low surfer oil products.
"By adopting regulations as an opportunity to expand business and expanding sea blending, which is difficult in the industry, we can expand our business. We will also build an offshore logistics trading model connecting Korea, China and Singapore by expanding the Chinese and Singaporean markets whose demands for MGO are expected to soar," a SKTI official said.
