South Korean utility switches to cleaner fuel oil grade after stricter regulations

SINGAPORE/SEOUL,  (Reuters) - Korea East-West Power Co Ltd (EWP), one of South Korea's state-run utilities, is seeking cleaner burning fuel oil for its power plants for the first time in five years to comply with stricter emissions regulations, according to two industry sources.

EWP issued a tender on Tuesday seeking to import 30,000 tonnes of low-sulphur fuel oil (LSFO) with a maximum sulphur content of 0.3 percent for late July arrival, according to the utility's website.

"We are seeking to buy low sulphur fuel oil preemptively to meet the government's emission standards and would keep buying low-sulphur fuel oil," said an EWP source who declined to be identified as he was not authorized to speak to the media.

EWP plans to buy a total of 80,000 tonnes of low-sulphur fuel oil in August, the source added.

EWP typically imports high-sulphur fuel oil (HSFO) with a maximum sulphur content of 2.5 percent. It last imported LSFO cargoes in 2012 and 2013, the source said.

The utility last purchased a cargo of HSFO in early-April. The latest LSFO import requirement is occurring amid increased cooling demand during the summer.

Korea Western Power Co, which also runs a fuel oil power plant, has no plans so far to lower the specifications for their fuel oil purchases or to issue a new fuel oil tender, said a source at the utility who asked not to be named since they are not authorized to talk to the media.

South Korea mainly generates electricity with coal and nuclear power and fuel oil supplies only a small fraction of the country's total electricity needs. (Reporting by Roslan Khasawneh in SINGAPORE and Jane Chung in SEOUL; Editing by Christian Schmollinger)

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