Taiwan's Maritime and Port Bureau is to lift a 17-year ban on ships refueling outside Kaohsiung's harbor in hopes of increasing its share of the bunkering market, Taiwanese media reported this week.
Kaohsiung port is located along regional Asian shipping routes as well as ocean-going routes to markets like the US. Re-opening the market for refueling outside of Kaohsiung port is expected to boost fuel sales by 1.5 million mt/year of fuel sales, triple the amount of about 500,000 mt sold last year, the port bureau said. The additional volumes would also generate about T$20 billion ($656 million) each year.
The port bureau plans to allow refueling in external anchorage areas, with port authorities reviewing the proposed anchorages as well as planned management processes, a procedure which they expect will be completed within this year, according to the media reports.
Media reports also said that so far, companies such as Taiwan's CPC Corporation, Formosa Plastics Marine Corporation, Winson Oil and others have expressed interest in the project as physical suppliers. At the moment, CPC and Formosa have their own storage tanks at the Kaohsiung area, but Kaohsiung port authorities are planning to convert a container yard into an oil storage area.
Taiwan's Maritime and Port Bureau did not respond to requests for comment this week.
North Asian bunker fuel traders this week had a largely muted reaction to the news, with most saying that it would be difficult to tell at the moment what the impact would be on other regional ports. But some sources did say that competition for the bunkering business would intensify, especially for Hong Kong.
"There's a lot of things about the new development that are not decided or final yet as it is still very early stages now," an industry source said Thursday.
"Bunker fuel pricing details have not been discussed yet, but I think it would [be] close to Hong Kong or regional bunker prices in order to compete effectively, otherwise it would be hard to attract business," the source added.
At the moment, Taiwan's bunker fuel prices are based on CPC's posted prices, with spot MF-380 prices listed at $502/mt at the ports of Kaohsiung, Taichung and Keelung, and at $516/mt at the ports of Hualien and Suao, the company's website showed Friday.
At the Asian close Thursday, S&P Global Platts assessed 380 CST bunker fuel for delivery Hong Kong at $474/mt.
