A.P. Moller – Maersk and PBF Logistics LP (PBFX) announced an agreement for Maersk to source and PBFX to process crude oil at CPI Operations LLC, a PBF Logistics LP terminal facility in New Jersey, United States.
The agreement enables Maersk Oil Trading to supply IMO 2020-compliant 0.5% marine fuel to its customers on the US East Coast. Annual production will be around 1.25 million metric tonnes (mt), the equivalent of approx. 10% of A.P. Moller – Maersk’s annual fuel demand.
“This processing agreement forms a cornerstone in Maersk’s fuel sourcing strategy for the IMO 2020 sulphur cap,” says Niels Henrik Lindegaard, Head of Maersk Oil Trading. “The vast majority of our fleet will comply with the regulation through the use of compliant low sulfur fuels. With the capability to produce and store compliant low sulfur fuel on the U.S. East Coast we take control of the fuel supply in a key maritime hub for us. We will continue our drive to ensure compliance in all geographies come 2020.“
PBF Logistics acquired CPI Operations LLC from Crown Point International on October 1st, 2018. Assets include crude processing and storage located on the Delaware River south of Philadelphia, Pennsylvania.
”This processing agreement with Maersk delivers on our plans for the CPI acquisition to deliver accretive growth for the Partnership,” notes Matt Lucey, PBF Logistics Executive Vice President. ”We will repurpose a portion of the existing idled asphalt facility to process an average of approximately 25 thousand barrels per day of crude for Maersk as part of their overall IMO fuel sourcing strategy. This processing arrangement is a prime example of how we will maximize the potential of our assets through strategic commercial opportunities and valuable partnerships.”
Additionally, in August 2018, Maersk and Vopak announced a leasing agreement for storage of 2.3 million mt 0.5% compliant fuel, equivalent of approx. 20% of Maersk’s annual fuel demand, at the Vopak Europoort Terminal in Rotterdam.