Tethys Supply and Marketing, LLC, recently announced its expansion of the supply of marine distillates to Port Everglades in Fort Lauderdale, FL. The move strengthens Tethys’ presence in South Florida, where the company began supplying marine distillates in the ports of Miami and Palm Beach this past December.
Playing into the company’s expansion in Florida is the impending IMO’s 0.5% global sulfur cap and the demand it will create for compliant fuel. The cap is set to take effect January 1, 2020 and ship operators will only have three options to comply with the cap: burn compliant MGO, fit exhaust gas scrubbers or use an alternative fuel such as Liquefied Natural Gas (LNG).
“The reason we entered into the market focusing on the distillates side is because of the inevitable shift in demand from heavy to lighter bunker fuels,” says Russell Stellman, Vice President of Marine Fuels, Tethys Supply and Marketing, LLC. “The goal is to establish ourselves as a reliable and preferred MGO supplier ahead of 2020. I spend a lot of time speaking to customers/buyers of marine fuels to gauge their view of the market and almost universally I’ve heard that the safest choice in the beginning of the transition will be to pay a premium for a fuel that they know will be available and is safe for their engines in MGO.”
Stellman leads the company’s commercial operations for Port Everglades, Port of Miami, and Port of Palm Beach. “As a whole, Tethys is fortunate to have in house a diverse skillset among our team. We have individuals with experience in product blending (gasoline, distillates such as MGO, etc.), pipeline operations and scheduling, shipping operations, cargo trading, and product hedging. So in the meantime, we will keep our collective ear to the ground and pivot however necessary to accommodate the bunker industry.”
Stellman says that early feedback from bunker buyers and ship operators in Florida has been positive. “Our supply method is much more efficient than other truck suppliers—double the pumping rate of our shore-to-ship competitors—and in ports like Port Everglades, Miami and Palm Beach where laycans are often very short windows of maybe only a few hours, it allows us to reduce the risk of delaying vessels especially on larger volume deliveries. On top of that, our prices are much more competitive for MGO than barge or pipe supplies because of our significantly lower overhead. Hopefully we can replicate the success in other ports before too long,” he adds.