South Korea's S-Oil plans to begin supplying low sulfur bunker fuel in April from its 669,000 b/d Onsan refinery in the country's southeast, a company source said Tuesday.

The refiner is the latest South Korean company to supply bunker fuel with a maximum sulfur content of 1%, after the International Maritime Organization as of August 1, 2012, designated the waters off North America as part of the Emission Control Area -- which means vessels in that area should be using bunker fuel with a maximum sulfur content of 1%.

In June last year, refiners SK Energy and GS Caltex became the first in South Korea to supply low sulfur bunker fuel. Their combined sales volume of low sulfur bunker fuel is currently about 30,000-35,000 mt/month, a trader said Tuesday.

Hyundai Oilbank, meanwhile, plans to start supplying low sulfur bunker fuel in March from its 390,000 b/d Daesan refinery, Platts reported previously.

S-Oil currently sells about 180,000 mt/month of bunker fuel with a maximum sulfur content of 3.5%, the company source said.

The total bunker fuel market in South Korea -- both high sulfur and low sulfur product -- is estimated at about 700,000-750,000 mt/month.

According to traders, low sulfur bunker fuel in South Korea is currently traded at premiums of about $150-155/mt to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessments. In comparison, Platts assessed South Korea 380 CST bunker fuel with a maximum sulfur content of 3.5% at a premium of $24.81/mt to MOPS 380 CST HSFO assessments Monday.

Source: Platts