Connect with us

Business

KPI OceanConnect: What the global bunkering industry should expect in 2021

Søren Høll, CEO at KPI OceanConnect, shares how marine energy procurement strategies need to adapt to prepare for the future.

Admin

Published

on

Screen Shot 2021 02 17 at 2.57.41 PM

Søren Høll, the Chief Executive Officer at KPI OceanConnect, on Monday (16 February) published an article on his company website sharing how marine energy procurement strategies need to adapt to prepare for the future:

This time last year VLSFO prices stood at highs not seen in many years. There were more than a couple of industry experts who believed that the IMO’s global sulphur cap might have enduringly created large HSFO-VLSFO spreads. If that wasn’t enough, rumours about quality management, fuel incompatibility, and adequate availability – mainly concerning low sulphur blends – heightened the industry’s nerves during those first two months in 2020.

This economic blow created by Covid-19 dominated the entire shipping industry, but no two bunkering hubs experienced it exactly the same. An example of this can be seen in Panama which has seen VLSFO sales increase since October 2020, but it hadn’t yet reached the pre-pandemic levels seen in January 2020. Whereas Singapore remains the world’s top bunkering port with sales amounting to just under 50 million tonnes in 2020 – its biggest gain in the last four years.

Expectations for 2021 and beyond

There were concerns that some regions wouldn’t have the capacity to supply enough distillate fuels to meet both domestic and maritime demand when IMO 2020 was first introduced. However, there’s been plenty of compliant fuels, as many of the usual major consumers of distillates on land suffered huge demand drops due to Covid-19.

Within OPEC+ there’s no reliable consensus over oil production. We therefore believe latent supply is likely to exceed actual demand for some time to come. In addition, numerous major oil producers, such as Venezuela, Iran, and Libya, remain functionally offline. Some agreements have now been made to reign in oil production – including Saudi Arabia’s planned 1m bpd cut – but we’re unlikely to see three-figure Brent prices soon.

Nevertheless, it’s becoming increasingly important for the industry to prepare for some of the risks highlighted back in 2019, which may surface in the coming months. Although we believe the severest predictions from those early weeks in 2020 are unlikely to come to pass, there will be consequences if oil prices climb. Many financial institutions have already predicted this situation, and with the huge volatility in bunker prices last year, we’re already seeing prices gradually rise. For example, VLSFO dropped to $150 per tonne in May 2020, but has since risen to the $400s and continues to increase.

There have been fewer quality issues than many analysts predicted, but this may have been partly masked by the pandemic and the depressed oil price. These challenges may rear their head once the world starts to recover from Covid-19, distillate demand increases in other industries, and if unscrupulous suppliers start using cheaper components for blending. As we saw in early 2018 from ships bunkering in Houston, these fuels might be ISO 8217 compliant, but they can still cause mechanical and safety issues.

Accelerating decarbonisation with consolidation

Our industry’s being presented with multiple pathways towards decarbonisation – all of which have unique challenges. What we do know is that over the next few decades, the marine energy supply chain will transform immensely. The shift towards future fuels and alternative sources is growing, and KPI OceanConnect will be alongside its partners during the transition, and ready to provide the industry with the energy it needs to run its fleets sustainably.

However, the transition won’t be easy. In 2020, we saw the increased costs of the new VLSFO blends, with smaller firms’ credit lines often struggling to cope with the higher costs. Although many predicted that IMO 2020 would drive a wave of consolidation, so far this is only part way, but there’s no shortage of M&A rumours.

At a structural level, the industry has also seen a decline in capital availability for all but the strongest players. Primarily this is due to many large banks, such as ABN AMRO and BNP Paribas, pulling out of commodity trade finance altogether. This has created additional costs, liquidity and transaction complexities for shipowners, as well as bunkering companies.

The role of the broker and trader is well placed here to help facilitate the marine energy transition. As traders, we provide not just fuels but also solutions and intelligence and we have a responsibility to help guide our partners through the transition to sustainable shipping and all associated challenges along the way. Implementing a comprehensive bunker procurement strategy to manage risks is crucial as we continue to endure price volatility in the immediate, if not long term.


Photo credit and source:
KPI OceanConnect
Published: 17 February, 2021

Continue Reading

Alternative Fuels

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

Admin

Published

on

By

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

Continue Reading

Alternative Fuels

LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Admin

Published

on

By

LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

Continue Reading

Alternative Fuels

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

Admin

Published

on

By

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

Continue Reading
Advertisement

OUR INDUSTRY PARTNERS



Trending