Business

Argus Media: Emission rules to curb product tanker fleet growth – DIS

There is an industry trend of focusing on debt reduction instead of fleet growth in the absence of any dominant technology to meet IMO regulations, it said.

Published

4 years ago

August 4, 2020

Admin

Nicolas Kyriakoglou of global energy and commodity price reporting agency Argus Media on Monday (3 August) published an article outlining how strategies that shipping companies have adopted to navigate emission regulations are hindering fleet growth:

The product tanker market should get some support from a low newbuild order book in the medium- to long-term, Italy-listed d'Amico International Shipping (DIS) chief financial officer Carlos Balestra di Mottola told Argus.

He said that there is a general industry trend of focusing on debt reduction rather than ordering new tankers, with the absence of a dominant technology that will allow shipowners to meet the International Maritime Organisation (IMO) 2050 emissions-reduction regulations providing perhaps the biggest obstacle to fleet growth.

"For vessels which navigate on more predictable routes, [shipowners] can make some sort of choice, to go for LNG or for dual-fuel ships," di Mottola said. But for shipowners who go to many different, unpredictable ports — such as in Medium Range (MR) tanker segment — vessels "need a lot of flexibility".

"It is very hard today, to know what solution will prevail. There are so many out there. So we are in a wait-and-see mode, also because we have recently completed an important newbuilding program," he said.

DIS has invested more than $750mn in 22 newbuild tankers since 2012, di Mottola said. But further investment is "not a priority" and the focus is now on reducing debt, even after it reported the highest operating profit since the second quarter of 2015 in the March-June period.

He said that other tanker companies seem to be following the same strategy, even though the first half of the year produced strong industry cash flows. This is because of a combination of the uncertainty around Covid-19 and an attempt by traditional banks to reduce their exposure to shipping, particularly in Germany and Scandinavia.

The lack of new orders are a counterbalance to the severe shortfall in demand that has led to a sharp downward correction in freight rates since late May, di Mottola said, although he said that the long-term fundamentals of the product tanker market are still favourable for DIS. He pointed to the low orderbook, the expansion of global refining capacity in the next few years — which will occur largely in regions which are export-oriented such as the Middle East — and government stimulus packages, all of which will help freight rates recover, he said. Also, tanker scrapping could pick up later this year and next year if Covid-19 restrictions that closed many of the shipbreaking yards are lifted.

DIS has a target of 40-60% coverage in the time charter market, which provides "safety, visibility on our earnings", di Mottola said. It has focused on reducing operating costs since 2018.

The company has adopted "condition-based maintenance" on all its eco-design vessels delivered from yards since 2014, entailing use of technologies such as tribology analysis, sensory monitoring of vibrations, video endoscopy and thermal imaging to increase the average lifespan of spare parts and reduce breakdowns. This allowed DIS to reduce its average daily operating costs by more than 11% from the first half of 2018, to $6,679/d in the first half of this year, di Mottola said.

Photo credit and source: Argus Media
Published: 4 August, 2020

Bunker Fuel

China: Zhoushan to host 7th IPEC commodities, bunker conferences on 16 to 17 October

Global marine bunker development will be among main topics of discussion at the 7th International Petroleum and Natural Gas Enterprises Conference (IPEC).

Published

2 days ago

October 11, 2024

Admin

China: Zhoushan to host 7th IPEC commodities, bunker conferences on 16 to 17 October

The 7th International Petroleum and Natural Gas Enterprises Conference (IPEC) is taking place at Zhoushan, Zhejiang province, China between 16 to 17 October.

The agenda, provided by the Zhoushan High-tech Zone Administrative Committee to foreign event media partner Singapore bunkering publication Manifold Times, is as follows:

16 October

Registration and sign-in for participating guests
Meetings between Zhejiang Provincial and Zhoushan Municipal leaders with VIPs

17 October

Morning

Plenary Session of the Conference (Oriental Hall, Zhoushan International Conference Center)

Leader’s speech, guest keynote speech, signing of major projects

Discussion Topics [*17 October, 2pm to 5pm]

Focus Topic Meeting: Global marine bunker development*
Location: Haitian Hall, Haizhongzhou International Hotel, Zhoushan

14:00-14:05 - Opening of the Meeting

14:05-14:15 - Speech by Leaders

14:15-14:30 - Announcement of "Top Ten Global Bunkering Ports" and "Top Ten Global Bunkering Companies"

14:30-14:40 - Announcement of Construction Work of Northeast Asia Bonded Marine Fuel Bunkering Hub

14:40-14:50 – Launch ceremony of Zhoushan "White-list" Bunker Barge Mass Flow Meter System Pilot Certification Programme

14:50-15:10 - Signing Ceremony

15:10-16:10 - Keynote speech

16:10-16:35 - Coffee break

16:35-17:05 - Roundtable forum (Topic: Facing green and low-carbon transformation in global shipping, how do marine fuels change in response to the trend?)

17:05-17:35 - Roundtable forum (Topic: The road to develop high-quality offshore fuel bunkering metering under the new developments)

17:35-17:40 - Moderator’s summary

Utilising financial innovation, futures and spot cooperation to promote the construction of a hub for the allocation of bulk commodity resources*
Location: Putuo Hall, Zhoushan International Conference Center

Open development of global shipping trade*
Location: Donghai Hall, Hilton Zhoushan

International iron ore trade development*
Location: Banquet Hall 1/3, The Westin Zhujiajian Resort, Zhoushan

Development of China's new chemical materials industry during the “15th Five-Year Plan”*
Location: Banquet Hall 1/3, The Westin Zhujiajian Resort, Zhoushan

Development of non-ferrous metal mining industry*
Location: Lianhua Ocean Hall, Hilton Zhoushan

16 and 17 October
International maritime law of the free trade port (zone)
Location: Fortune Hall, Zhoushan CaiFu Hotel

Photo credit: Zhoushan High-tech Zone Administrative Committee
Published: 11 October, 2024

Alternative Fuels

SIBCON 2024: Vitol anticipates securing LNG bunker licence in Singapore

‘It would be unthinkable not to deploy at least one of the three barges Vitol has on order in Singapore,’ says Vitol’s Head of Asia Mike Muller during a panel discussion.

Published

2 days ago

October 11, 2024

Admin

SIBCON 2024: Vitol anticipates securing LNG bunker licence in Singapore

Energy trader Vitol’s Head of Asia Mike Muller on Wednesday (9 October) said the company is anticipating being granted a LNG bunker licence in Singapore soon.

“It would be unthinkable not to deploy at least one of the three barges Vitol has on order in Singapore,” he said.

Mike Muller made the announcement during the Viewing the Energy Transition Through the Lens panel discussion at the 23rd Singapore International Bunkering Conference (SIBCON).

“We expect to see growth in LNG use as a bunker fuel for at least another decade, and probably longer,” he added.

On the increasing uptake of biofuels, he said Vitol is seeing demand for biofuel blended bunkers in Singapore roughly doubling every year at the moment, heading for around 1 million mt this year and maybe 2 million mt next year.

“Demand for 100% biofuel from shipping customers is also starting to pick up as of this year and we have led the way in commissioning new IMO type 2 barges to fulfil this demand - indeed an important Asian customer of ours has taken three deliveries of B100 UCOME biofuel just in recent weeks here in Singapore,” Muller explained.

Manifold Times previously reported Vitol securing three LNG Bunkering Vessels (LNGBV) through its shipping company, Vitol International Shipping Pte Ltd (VIS).

The vessels were secured via a seven to ten year time charter agreement with Avenir LNG Limited (Avenir) and an order for two vessels at the CIMC Sinopacific Offshore & Engineering Co. Ltd shipyard in Nantong, China.

The time charter agreement with Avenir is for one newbuild 20,000m3 LNGBV. The time charter will commence at delivery from the shipyard in China in Q4 2026 and will serve a period of seven years with options to extend up to ten years in total

Vitol also ordered one 12,500 m3 and one 20,000 m3 LNGBV at the CIMC SOE shipyard in China. The vessels will be delivered in Q4 2026 and Q3 2027 respectively.

Photo credit: Vitol
Published: 11 October, 2024

Bunker Fuel

SIBCON 2024: Bunker players sign SCMA pledge to drive progress within Maritime Singapore

Bunker players involved include Consort Bunkers, Equatorial Marine Fuel, Golden Island, Hong Lam Marine, Kenoil Marine Services, Marubeni International Petroleum and Sinopec Fuel Oil.

Published

2 days ago

October 11, 2024

Admin

SIBCON 2024: Bunker players sign SCMA pledge to drive progress within Maritime Singapore

Some 10 bunker players on Tuesday (8 October) signed a pledge with Singapore Chamber of Maritime Arbitration (SCMA) at the 23rd Singapore International Bunkering Conference and Exhibition (SIBCON).

The bunker players involved are Consort Bunkers Pte Ltd, Equatorial Marine Fuel Management Services Pte Ltd, Fratelli Cosulich Bunkers (S) Pte Ltd, Global Energy Trading Pte Ltd, Golden Island Pte Ltd, Hong Lam Marine Pte Ltd, Kenoil Marine Services Pte Ltd, Marubeni International Petroleum (S) Pte Ltd, Sinopec Fuel Oil (Singapore) Pte ltd and Victory Pte Ltd.

SCMA and the pledgees will work together to promote and enhance the capabilities and opportunities within the Maritime Singapore community and ecosystem.

Among the aspirational goals embodied by the SCMA Pledge is that the pledgees give preferential consideration, where appropriate, for the use of the SCMA Arbitration Rules for the resolution of their maritime or international trade disputes.

The bunker players may also use its best endeavours to support the Maritime Singapore community and ecosystem, including contributing to the development and dissemination of best practices as well as providing support and opportunity to young maritime legal and dispute resolution professionals in the form of internships, mentorships, and educational seminars aimed at fostering the next generation of maritime leaders.

SCMA, a specialist arbitration institution, is the only arbitration institution in Singapore focused on maritime and international trade disputes.

It offers the maritime and international trade sectors a set of arbitration rules and guidelines which are flexible and cost effective.

Users of SCMA arbitration include maritime companies, international traders and commodity companies for the resolution of their disputes such as those involving charterparty, bunker, commercial sales, cargo, oil and gas, shipbuilding and ship repair.

Photo credit: Singapore Chamber of Maritime Arbitration
Published: 11 October, 2024