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Alternative Fuels

Argus Media: LNG discount to methanol renews LNG bunker interest

Premium for LNG compared with grey methanol flipped to a discount in February and maintained it through March, a shift that could restore ship owners’ interest in LNG for bunkering fuel.

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The premium for LNG compared with grey methanol flipped to a discount in February and maintained it through March, a shift that could restore ship owners' interest in LNG for bunkering fuel.

4 April 2023

Some ship owners that had been considering LNG for bunkering shifted their sights to methanol last year after LNG prices soared while grey methanol prices did not have as dramatic an upswing. LNG prices in northwest Europe, Asia-Pacific and the US Gulf coast spiked over $2,100/t very low-sulphur fuel oil equivalent (VLSFOe) in August 2022 as uncertainty around Russian winter natural gas exports to Europe intensified. By comparison, grey methanol last year peaked in March at $1,002/t in Asia-Pacific and below $962/t in northwest Europe and the US Gulf coast.

As the 2022/2023 winter season wound down, European natural gas stockpiles remained high. As a result, LNG prices in northwest Europe, Asia-Pacific and the US Gulf coast fell to under $601/t VLSFOe in March, compared with over $720/t VLSFOe for grey methanol in these regions.

Even though LNG and grey methanol are both sourced from fossil feedstock, their CO2 emissions differ. LNG emissions from combustion and full lifecycle are about 21pc and 28pc lower, respectively, compared with emissions from conventional marine fuels. Grey methanol combustion lowers CO2 emissions by only 7pc compared with conventional marine fuels and grey methanol full lifecycle emissions are higher than conventional bunkers. Despite the higher LNG price volatility, LNG provides ship owners with higher CO2 reduction than grey methanol. Methanol also has lower energy content per volume than LNG, and requires fuel tanks approximately 1.3 times larger than equivalent LNG tanks. A vessel owner interested in methanol could opt out of a smaller tank in exchange for shorter voyages.

But, in addition to lower price volatility, methanol has other advantages. It is a liquid fuel at ambient temperatures, which makes it easier to store and handle on board of a vessel compared with LNG, which has to be maintained at least below -177°F to remain liquid. As a result, methanol's operational costs are lower. Methanol is also biodegradable if spilled into water, while an LNG leak could be flammable and explosive. A newbuild vessel with LNG-burning engine costs about 22pc more to build than conventional marine fuel-burning vessel, while an methanol-burning vessel costs about 10pc more to build. Building a methanol bunkering terminal is cheaper than an LNG terminal.

The typical life of a dry bulk carrier, tanker or container ship is about 25 years. A vessel built this year, would end its service by about 2048. When commissioning a vessel with over 5,000 gross tonnage, ship owners travelling the EU territorial waters should consider a requirement considered by the EU to decrease the greenhouse gas intensity of marine fuels by at least 2pc from 2025, 6pc from 2030, 14.5pc from 2035, 31pc from 2040, 62pc as of 2045, and 80pc by 2050, from a 2020 baseline. The EU also agreed to include maritime shipping in its emissions trading system (ETS). Ships will have to pay for 40pc of their emissions from 2024, 70pc from 2025, and 100pc from 2026.

Bio-LNG is fully interchangeable with LNG derived from fossil feedstock. Similarly, bio-methanol is fully interchangeable with grey methanol. Bio-LNG and bio-methanol could be carbon natural, if produced from sustainable biomass. Ship owners who opt to build LNG-burning vessels could burn a blend of bio-LNG with LNG to meet EU's fuel intensity rule and keep their ETS costs down. Ship owners who opt for methanol-burning vessels could burn a blend of bio-methanol with grey methanol. Global production of both bio-LNG and bio-methanol requires scaling up to meet marine fuel demand. Ship owners who choose methanol would have lower vessel building and operational costs. This is countered by the LNG-grey methanol price discount, when LNG-burning vessels owners would see immediate CO2 emissions reductions at lower price.

To hedge their bio-fuel costs and ensure availabilities, ship owners are inquiring about long-term bio-LNG or bio-methanol offtake agreements, looking into partnering with fuel suppliers, or offering their customers more expensive low-carbon freight rates. For example, Danish ship owner Maersk had entered in eight green methanol production partnerships and by 2025 it plans to source over 730,000t of green methanol.

By Stefka Wechsler

LNG less grey methanol $/t VLSFO-equivalent

LNG less grey methanol $/t VLSFO-equivalent

 

Photo credit and source: Argus Media
Published: 10 April, 2023

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Bunker Fuel

SIBCON 2024: EnterpriseSG to launch new Singapore standard for e-BDN

EnterpriseSG, through the Singapore Standards Council, will launch a new Singapore Standard 709 Specification for Digital Bunkering Supply Chain Documentation.

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SIBCON 2024: New Singapore standard on digital bunkering to be launched

Enterprise Singapore (EnterpriseSG), through the Singapore Standards Council (SSC), will launch a new Singapore Standard (SS) 709 Specification for Digital Bunkering Supply Chain Documentation, according to Maritime and Port Authority of Singapore (MPA) on Wednesday (9 October). 

MPA said the new standard will ensure data consistency and interoperability between digital systems and facilitate smoother transactions through trusted and verifiable digital bunkering documents. 

This comes following Amy Khor, Senior Minister of State for the Ministry of Sustainability and the Environment and the Ministry of Transport, announcing that from 1 April 2025, all bunker suppliers will be required to provide digital bunkering services and issue electronic bunker delivery notes (e-BDNs) as a default.

The move was decided following successful pilots conducted since 1 November 2023 with bunker suppliers, including the top 10 bunker players, in Singapore.

To further enhance transparency and transaction integrity in bunkering operations, MPA will also introduce a centralised e-BDN record verification facility. This enables key stakeholders to verify the e-BDN received against the information transmitted to MPA.

EnterpriseSG has also launched the revised Singapore Standard (SS) 648 Code of Practice for Bunker Mass Flow Metering to include data integrity and transmission requirements in line with this new digital standard.

In the first eight months of 2024, MPA said Singapore saw strong growth of approximately 7% in total bunker sales over the same period last year, reaching over 36 million tonnes. Biofuels and liquefied natural gas bunker sales surpassed 700,00 metric tonnes. 

To support the operationalisation of a higher mix of low-carbon alternative fuels, both EnterpriseSG and MPA are developing the Singapore standards for methanol bunkering and ammonia bunkering by 2024 and 2025 respectively. 

The standards will cover custody transfer requirements, safety procedures and crew competencies, to ensure safe bunkering operations and handling of these fuels.

MPA also announced that three major shipping lines — Hafnia, K-Line, and MOL — are in early discussions to join the Singapore - Port of Los Angeles (LA)- Port of Long Beach (LB) Green and Digital Shipping Corridor (GDSC) initiative.

Each partner would be expected to spearhead a project to advance the corridor’s decarbonisation and digitalisation goals, such as the adoption of net-zero fuels, Just-in-Time route optimisation, and energy efficiency technologies such as wind-assisted ship propulsion. 

The addition of the new partners will significantly strengthen the GDSC’s capacity to drive innovation in sustainable shipping practices and accelerate the adoption of zero/near-zero emission fuels and green technologies along the corridor.

Related: SIBCON 2024: Singapore bunker suppliers must provide e-BDN from 1 April 2025
Related: Singapore: TradeGo becomes fifth whitelisted e-BDN solution provider
Related: Singapore: MoUs on digital bunkering and eBDN signed at TechWaves conference
Related: DNV FuelBoss coverage expands to include conventional bunker fuels, whitelisting by MPA in process
Related: Singapore: MPA adds ADP Clear as whitelisted solution provider for e-BDN
Related: Singapore set to become first port in the world to debut electronic bunker delivery notes
Related: MPA Chief Executive: Port of Singapore begins digital bunkering initiative today
Related: Singapore: MPA publishes guidelines for bunker suppliers in preparation of e-BDN launch
Related: ZeroNorth enables Golden Island to become Singapore’s first 100% digital bunker supplier
Related: Photo essay: e-BDN trial of “One Truth” at Singapore port
Related: Hong Lam Marine ‘fully supportive’ of e-BDN implementation for Singapore bunkering sector
Related: ONE completes e-BDN adoption trial with Shell in Port of Singapore
Related: Singapore: Golden Island switching to 100% e-BDN operations from 1 December
Related: IBIA: International Maritime Organization confirms acceptance for electronic BDNs (update)
Related: IBIA: MEPC 80 confirms acceptance for electronic bunker delivery notes
Related: IBIA: IMO sub-committee accepts use of electronic BDNs after long discussion

 

Photo credit: Maritime and Port Authority of Singapore
Published: 10 October, 2024

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Alternative Fuels

SIBCON 2024: SGMF releases methanol and ammonia bunkering guidelines

SFMF published Bunkering Guidelines for Ammonia and Bunkering Guidelines for Methanol, as well as Emergency Response Guide for Ammonia; also revealed new brand to reflect four key future marine fuels.

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SIBCON 2024: SGMF releases methanol and ammonia bunkering guidelines

SGMF on Wednesday (9 October) announced the release of the Bunkering Guidelines for Ammonia and Bunkering Guidelines for Methanol, as well as the Emergency Response Guide for Ammonia.

During the 23rd Singapore International Bunkering Conference (SIBCON), SGMF also revealed its new brand reflecting the organisation’s current activities in the four key marine fuels for the future: LNG, methanol, ammonia and hydrogen.

SGMF is a membership-based organisation leading safe maritime decarbonisation with members across the full value chain of marine fuels, including suppliers, operators, owners, equipment manufacturers, class societies, port authorities, individuals and training organisations.

While the search for the perfect alternative fuel continues, SGMF said methanol and ammonia are two of the fuels that the global merchant fleet has identified and is looking to implement, emphasising the importance of these guidelines. 

Methanol – With the first vessels already running on methanol, and many more on order, methanol is ahead of the curve in terms of adoption. It has also overtaken regulation, meaning that these early adopters are having to put forward safety solutions that have not yet been documented, and bunker suppliers using existing chemical carriers are trying to second guess what conversion and equipment may be needed to make their vessels physically compatible with the ships being produced. These methanol bunkering guidelines have been published as a first draft to highlight the key safety factors that need to be considered when designing and bunkering a vessel of any type with methanol. 

Ammonia – Despite ammonia (NH3) not yet being commercially available as a marine fuel, this bunkering document provides guidance to all the stakeholders currently investigating and developing the bunkering of ships with fully refrigerated (-33°C) ammonia.

A range of potential hazards are expected with bunkering ammonia and to date there is very limited experience, with only one series of bunkering trials conducted as at March 2024. 

As a result, Bunkering Guidelines for Ammonia draws primarily on the current experience of LNG bunkering, the wider ammonia marine transport industry and the shoreside ammonia production and transport industry experience. 

“The overall aim of these guidelines is therefore to ensure that ammonia-fuelled ships are bunkered safely, reliably, efficiently and in an environmentally responsible way, targeting the avoidance of operational or fugitive emissions of ammonia,” SGMF added. 

These publications have been compiled with extensive input from the SGMF membership, as well as with collaborative support from the Global Centre for Maritime Decarbonisation (GCMD) and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS).

Note: The bunkering guidelines are available in the shop on SGMF portal and the Emergency Response Guide for Ammonia can be downloaded through its free resources section.

 

Photo credit: SGMF
Published: 10 October, 2024

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LNG Bunkering

Bunker One to launch physical LNG bunker fuel supply in January 2025

Firm has established Bunker One LNG BV, which will manage the physical LNG fuel portfolio, including last-mile delivery, and will be headed by Managing Director, Michael Behmerburg.

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Bunker One to launch physical LNG bunker fuel supply in January 2025

Bunker Holding’s physical supply division, Bunker One, on Wednesday (9 October) said it is set to launch LNG bunker supply in northwestern Europe as of January 2025.

Building on its existing successful activities supplying alternative fuels, Bunker One is expanding its current fuels portfolio by adding physical LNG and mass balanced LBM (Liquefied Biomethane). Bunker One expects to be ready to commence first physical LNG deliveries in January 2025.

Bunker One has established a new entity, Bunker One LNG BV, which will manage the physical LNG fuel portfolio including last-mile delivery and will be headed by Managing Director, Michael Behmerburg.

Peter Zachariassen, CEO of Bunker One, said: “We are extremely pleased to be welcoming Michael Behmerburg to steer our Bunker One LNG entity. Michael brings a wealth of experience that is important for us to navigate properly in the upcoming transition.”

Bunker One LNG BV has chartered the 10,000 cbm LNG Bunker Vessel, Coral Fraseri.

Michael Behmerburg, said: “We are working hand in hand with the vessel’s owner Anthony Veder to bring the vessel into operation. The vessel will undergo a regular class renewal at the end of 2024, during which several modifications will be carried out to enhance her capabilities as an LNG bunker vessel.”

The purpose of the modifications is to prepare the vessel for best-in-class service to the majority of seagoing vessels, including tankers, container ships, and car carriers. Bunker One LNG BV is currently in the process of securing bunker permits which will cover key ports in Northwest Europe.

Valerie Ahrens, Senior Director of New Fuels and Carbon Markets at Bunker Holding, said: “We are very excited about this move to include physical supply of LNG and LBM as part of Bunker Holding’s fuel offering, which builds on our successful activities supplying LNG through third parties.”

“Fossil LNG can offer up to 23% in greenhouse gas (GHG) reductions compared to conventional fuels and accompanies shipping’s transition to a multi-fuel future. Hence, we regard LNG as a stepping stone to bio-LNG and e-LNG, which will help the industry achieve the mid-century decarbonisation targets set by the IMO.”

 

Photo credit: Bunker Holding
Published: 10 October, 2024

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