Sri Lanka's Hambantota port starts MGO bunkering to essay strategic role

Sri Lanka's Hambantota International Port has expanded its services by commencing marine gasoil bunkering operations as it aspires to become a key regional marine fuel hub.

The oil tanker Sunny Bay carrying 15,000 mt MGO called at HIP Jan. 23 and was the first to discharge the bunker fuel for storage at the port's tank farm, the HIP posted on its website Jan. 26.

HIP said it is now ready to utilize the storage facility allocated for MGO and marine diesel oil, with the tank farm along with its oil jetties fully refurbished and Fitness for Service certified for safety by the Lloyd's Register.

"The MGO supplied by the port is of very high quality, compliant with ISO 8271 standard and can also be provided to overseas locations such as the Maldives," it said.

The port, located on Sri Lanka's southern coast, is within 10 nautical miles of the main Asia-Europe shipping route and is in a strategic position on China's Maritime Silk Road.

In June, Ceylon Petroleum Corp. had signed an agreement with HIPG to develop the Hambantota Port as a strategic energy center in Sri Lanka.

HIP, with its global partner Sinopec, also launched bunkering operations for very low sulfur fuel oil last year.

The port received its first cruise ship call for refueling of marine fuel 0.5%S bunker Aug. 5, 2021, since the relaunch of 0.5%S VLSFO by Lanka Marine Services in March 2021.

Hambantota's growth aspirations

"With our location in the Indian Ocean rim, where 50% of the world's maritime oil is traded, our oil fuel bunker, LPG and future LNG operations, we are securing the Hambantota Port's rightful place as a global maritime location," CEO of HIPG Johnson Liu said.

HIP has also set up a state-of-the-art Petroleum Testing laboratory in partnership with global independent inspection service provider Intertek Lanka to provide assurance, testing, inspection and certification services for bunker fuels, LPG, LNG and other petrochemicals products, it said.

The laboratory, located within the port's premise, is capable of testing IMO 2020 global sulfur protocol, it said.

"The port's dedicated professional team ensures safe operations of the oil tank network, ancillary pipelines, oil berth jetties, and control systems, which are on par with international standards," it said.

"All supporting facilities for operational safety are in place, such as a wholly functional firefighting system and wastewater treatment facility," it added.

While HIP has commenced MGO bunkering, it is still at a nascent stage as most of the loadings from there pertain to low sulfur fuel oil, a Colombo-based bunker trader said Jan. 27.

However, the number of inquiries at Hambantota so far has increased compared to the same period last year as the port gains traction, the trader said, adding that currently monthly inquiries stand at 3,000-5,000 mt on an average.

The port is likely to see increased bunker fuel sales as prices become more competitive to other ports in the country, such as Colombo, sources said.

The spread between delivered MF 0.5% sulfur bunker between the two ports has already narrowed so far this year compared with December 2021. The Hambantota-Colombo price differential for the grade was $22.95/mt in December compared with $7.64/mt Jan. 1-26, S&P Global Platts data showed.