Business

2020: Bunker Holding forecasts credit tightness

Christoffer Berg Lassen explains to Manifold Times why he forecasts credit to be a major issue in 2020, and Bunker Holding’s plans to prepare for the major switchover.

Published

6 years ago

April 4, 2018

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Middelfart-based Bunker Holding, the parent company of 43 international subsidiaries specialising in the supply of marine fuel, believes the bunkering industry will experience a reduction in the availability of credit from banks by 2020.

“2020 is something we have a very sharp focus on,” Christoffer Berg Lassen, the new Chief Commercial Officer at Bunker Holding, told Manifold Times in an interview.

“One important thing is as a bunker trader and physical supplier you need to be able to provide credit when it comes to 2020.”

Most vessels will have to use varieties of low sulphur marine fuels such as low sulphur fuel oil (LSFO) or marine gas oil (MGO) by 2020 in order to meet the 0.5% sulphur limit cap mandated by the International Maritime Organization (IMO).

“The switch to distillates or low sulphur heavy fuel [by 2020] will most likely mean that the bunker cost for our clients will be much higher,” Lassen explains.

“The shipowners will need more credit for same amount of volume they face today because by 2020 they are going to burn the same amount of tonnage but it’s going to be more expensive.

“So, we are working to make sure we have the right credit facilities in place for our clients who may suddenly need as much as 30% more credit to do the same volume.

“I think it’s very important that people focus on having the right amount of credit ready by 2020.”

Lassen, meanwhile, expects bunker prices to increase between 15 to 35% by 2020; Bunker Holding currently has substantial credit facilities available with the banks.

“And we are even looking to scale that up even further.”

Moving forward, Lassen notes Bunker Holding to be in the process of securing 2020 compliant bunker avails for future deliveries; a project which he is working hand-in-hand with Carlos G. Torres, the former head of Marine Fuels at BP, who is now employed at Bunker Holding.

“Carlos is going to run most of the 2020 strategy in cooperation with me and we are going to take us [Bunker Holding] to 2020 in a safe manner,” he says.

“We are focusing a lot on the supply side to make sure that we get the right parcels in the right places.

“[Even] If we have to switch to LSFO, we need to get the best parcel and the most parcels; because there is some evidence that there is not going to be enough LSFO to start with and some people will have switch to distillates – which is going to be more expensive.

“At Bunker Holding, we are always striving to become and maintain the position as number one in the world in terms of bunkers; our goal is to be the biggest and most preferred bunker supplier in the world for our clients.”

Photo credit: Bunker Holding
Published: 4 April, 2018

Vessel Arrest

Malaysia: MMEA detains tanker for illegal anchoring in East Johor waters

Panama-registered vessel was operated by 17 crew members, aged between 21 to 58 years, from Pakistan, India and Bangladesh.

Published

6 hours ago

November 29, 2023

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Malaysia: MMEA detains tanker for illegal anchoring in East Johor waters

The Malaysian Maritime Enforcement Agency (MMEA) on Tuesday (28 November) said a Panama-registered tanker has been detained for illegally anchoring in East Johor waters on 27 November.

MMEA Tanjung Sedili Zone acting director Maritime Cmdr Mohd Najib Sam said the tanker was detained by a patrol boat at 11am at 15.8 nautical miles northeast of Tanjung Penawar.

The captain of the vessel failed to produce any documents that permission had been obtained to anchor in Malaysian waters.

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The vessel was operated by 17 crew members, aged between 21 to 58 years, from Pakistan, India and Bangladesh.

The case will be investigated under Section 491B(1)(L) of the Merchant Shipping Ordinance 1952 for anchoring without permission. If found guilty, individuals may be fined not exceeding MYR 100,000 or face an imprisonment term of not more than two years, or both.

Manifold Times previously reported law firm Oon & Bazul LLP sharing on steps shipowners should keep in mind before anchoring and conducting STS operations in Malaysian waters to avoid detention.

Photo credit: Malaysian Maritime Enforcement Agency
Published: 29 November, 2023

Alternative Fuels

DNV paper outlines bunkering of alternative marine fuels for boxships

Third edition of its paper series focuses on LNG, methanol and ammonia as alternative bunker fuel options for containerships; explores bunkering aspects for LNG and methanol.

Published

6 hours ago

November 29, 2023

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DNV paper outlines bunkering of alternative marine fuels for boxships

Classification society DNV recently released the third edition of its paper series Alternative fuels for containerships, focused on LNG, methanol and ammonia as alternative bunker fuel options for containerships.

In its updated paper series, DNV examined the different alternative marine fuel options and provided an overview of the most important technical and commercial considerations for the containership sector.

It explored the bunkering technology for LNG, bunkering infrastructure for methanol, and availability and infrastructure of ammonia.

Building on the foundation laid in the second edition, which focused on the most important aspects of methanol as a fuel, this latest third edition delves deeper – exploring the technical intricacies and commercial considerations associated with adopting methanol as an alternative fuel for containerships.

Furthermore, it provides an overview of crucial aspects related to ammonia and discusses its potential as an alternative fuel for containerships.

Amongst others, the new edition of the paper looks at the following aspects:

Technical design considerations for methanol
Commercial implications of adopting methanol as an alternative fuel
Ammonia's potential as an alternative fuel
Availability, infrastructure and ship fuel technology for ammonia
Major updates based on the latest IMO GHG strategy decisions at the MEPC 80 meeting

Note: The third edition of DNV’s full paper titled Alternative Fuels for Containerships can be found here.

Photo credit: DNV
Published: 29 November, 2023

Alternative Fuels

EDF, LR and Arup launch tool scoring ports’ potential to produce and bunker electrofuels

Tool is also applied to three different port scenarios, including ports exploring fuel production and bunkering, ports exploring fuel exports, and ports exploring fuel imports and bunkering.

Published

6 hours ago

November 29, 2023

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EDF, LR and Arup launch tool scoring ports’ potential to produce and bunker electrofuels

Lloyd’s Register (LR) Maritime Decarbonisation Hub and Environmental Defense Fund (EDF), in collaboration with Arup, on Tuesday (28 November) introduced the Sustainable First Movers Initiative Identification Tool, a system to help shipping stakeholders align investment decisions that support the maritime energy transition away from fossil fuels.

The tool, which is presented in a preliminary findings report – The Potential of Ports in Developing Sustainable First Movers Initiatives – scores a port’s potential to produce and bunker electrofuels while delivering local environmental and community benefits in alignment with the global temperature target of 1.5 degrees Celsius set by the Paris Agreement.

“Ports can play an important role in kickstarting shipping’s decarbonisation process even before global policies are established,” said Marie Cabbia Hubatova, Director, Global Shipping at Environmental Defense Fund.

“By considering the impact sustainable first mover initiatives can have on port-side communities, climate, environment and economies, resources can be better directed to locations where these initiatives will make the biggest difference.”

With close to two billion people living near coastal zones globally, the role of, and impacts on local port communities must be intentionally considered as the sector decarbonises globally. Ports can play a crucial role in ensuring shipping decarbonisation efforts are done in a way that has positive impacts on port communities.

The preliminary phase of the Sustainable First Movers Initiative Identification Tool analyses 108 ports in the Indo-Pacific region according to five criteria including land suitability, air quality, renewable energy surplus, economic resilience and ship traffic.

It is also applied to three different port scenarios, including ports exploring fuel production and bunkering, ports exploring fuel exports, and ports exploring fuel imports and bunkering. The combined criteria and scenario evaluation determines which ports have the greatest potential (high potential) for sustainable first mover initiatives to lead to significant emissions reductions and positive impacts in nearby communities, such as improved air quality and economic resilience.

“The transition to clean energy supply for shipping can be achieved only if stakeholders act together. Identifying potential port locations is the first step in this process,” said Dr Carlo Raucci, Consultant at Lloyd’s Register Maritime Decarbonisation Hub. “This approach sets the base for a regional sustainable transition that considers the impacts on port-side communities and the need to avoid regions in the Global South lagging behind.”

Regions in the Global South are fundamental in driving the decarbonisation of shipping. To make this transition effective, the rate at which different countries adopt and scale up electrofuels must be proportional to the difference in capital resources globally to avoid additional costs being passed on to local communities. Sustainable first mover initiatives can play an important role in making this happen by ensuring the sector’s decarbonisation is inclusive of all regions and by engaging all shipping stakeholders, including port-side communities.

“There’s a huge opportunity for early adopter shipping decarbonisation initiatives to unlock benefits for people and planet – shaping the way for a more equitable transition in the 2030s,” said Mark Button, Associate, Arup. “Our collective approach shows that taking a holistic view of shipping traffic, fuel production potential and port communities could help prioritise action at ports with the greatest near-term potential.”

The tool can be customised according to stakeholders’ needs and goals and is dependent on scenario desirability. The next phase of this work will include the selection and detailed assessment of 10 ports to help better understand local needs and maximise the value offered by sustainable first mover initiatives.

LR and EDF carried out a joint study on ammonia as shipping fuel, and LR and Arup have collaborated on The Resilience Shift study focused on fuel demand for early adopters in green corridors, ports, and energy systems, amongst many other projects.

Photo credit: Lloyd’s Register
Published: 29 November, 2023