Backgroud

In February 2018, the international maritime organization (IMO), the United Nations agency responsible for regulating global shipping, issued new regulations, requiring global ships to ban the use of any bunker oil with sulfur content of more than 0.5 percent (currently 3.5 percent) from January 1, 2020.

United Arab Emirates’ Brooge Petroleum and Gas Investment Co (BPGIC) announced plans to set up an oil refinery to produce bunker fuel with a capacity of 250,000 barrel per day (bpd) in the Emirate of Fujairah.

The company said the facility will be the first of its kind in the Middle East and North Africa to comply with the new regulations of the International Maritime Organisation (IMO) 2020 by capping sulphur content in shipping fuels.

The first phase of the planned refinery will be completed by Q1 2020, Nicolaas Paardenkooper, BPGIC CEO said, according to a statement on WAM.

"The new facility will contribute to bolstering the growing status of the Emirate of Fujairah in the Oil & Gas industry and help meet the growing demand for shipping fuel that complies with the new international laws on capping sulphur content in shipping fuels," he added.

"It falls in line with the company's expansion strategy and its growing contribution to the development of the Oil & Gas industry in the UAE by injecting more investments into this essential sector," he said.

He said the listing of the company on Nasdaq Stock Exchange in April was a success and supports building investor confidence in the company and its expansion plans.

New regulations of IMO will require ships to use fuels with a sulphur content below 0.5 per cent beginning in 2020. Current shipping fuel is much dirtier, with a higher sulphur content.

The new regulation aims to reduce emissions of sulfur oxides from ships to improve air quality and protect the environment.

Brief Introduction

In mid - 2018, United Arab Emirates’ Brooge Petroleum and Gas Investment Co (BPGIC) and the Sahara Energy Resources DMCC Company decided to build a new refinery in the oil industry park of Fujairah Emirates of the United Arab Emirates to produce marine fuel oil in accordance with the new international law. The produced marine fuel oil will be stored in the oil depot of the park and then used for export.

In October 2018, Sharjah MUC Oil ＆ Gas Company won the FEED contract for the refinery construction project. By the end of May 2019, it is known that the relevant work has been basically completed.

On May 23, 2019, a joint venture between Brooge Petroleum and Gas Investment Co (BPGIC) and the Sahara Energy Resources DMCC Company of the United Arab Emirates planned to tender for an EPC contract for the refinery construction project in the near future (possibly in the second week of June), based on the exclusive information of MEED. 

Company behavior

FEED：MUC Oil ＆ Gas Company.