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Argus Media: Singapore scrubber spread widens on supply imbalance

Premium of VLSFO bunkers in Singapore over HSFO grade, also called scrubber, is nearing record-high levels due to shortage of VLSFO and high HSFO supplies, says Argus Media.

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The premium of very-low sulphur fuel oil (VLSFO) bunkers in Singapore over the high-sulphur fuel oil (HSFO) grade, also called the scrubber or Hi-5 spread, is nearing record-high levels because of a shortage of VLSFO and ample HSFO supplies.

27 May, 2022

The scrubber spread on 26 May was assessed at $359/t, or just $11.50/t shy of its all-time high of $370.50/t on 2 January 2020 when the International Maritime Organisation's sulphur cap took effect, according to Argus data.

This spread is a key indicator of scrubber economics, with values above $100/t typically assumed to be high enough to prompt a vessel to install a scrubber. The current high values translate into substantial savings for those shipowners with scrubbers already installed.

Singapore has seen a severe shortage of VLSFO coming into the city-state in May because of a steep backwardation, with prompt prices at a premium to forward values, in Asia making arbitrage flows from west of Suez unviable.

This has resulted in record-high premiums of VLSFO amid high outright prices, with Argus on 26 May assessing the grade at $1,000/t for deliveries before 7 June.

"We are facing skyrocketing prices and difficulty to secure prompt barrels of VLSFO", said one buyer.

HSFO cargoes have been building in Singapore, mainly because of an influx of supplies from the UAE and Iran this month as both countries imported more cheap Russian fuel oil.

This in turn has resulted in falling premiums of HSFO and lower outright prices on some days despite higher crude and paper values

The high premium of VLSFO over HSFO, or rather the steep discount of HSFO over VLSFO, might not actually result in a rush to install scrubbers.

"It is difficult to change the installations on the vessels, with a very long lead time of up to 12 months", remarked another shipowner.

By Sammy Six

 

Photo credit: Argus Media
Published: 30 May, 2022

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LR: Safety and supply crucial for widespread adoption of ammonia bunker fuel

New Lloyd’s Register report highlights that the safe use of ammonia and its surrounding regulatory framework remains a critical factor for its adoption as a marine fuel.

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LR: Safety and supply crucial for widespread adoption of ammonia bunker fuel

A new Lloyd’s Register report published on Thursday (21 March) has highlighted the need for industry-wide understanding of the operational and safety challenges surrounding the use of ammonia as a bunker fuel, for its adoption as part of the maritime energy transition.

Fuel for thought: Ammonia report found that although technology for ammonia as a marine fuel is developing rapidly, gaps in the regulatory framework around its use need to be addressed, alongside resolving the challenges for the production and supply of zero or near-zero emissions ammonia.

The report has identified that by taking steps to develop a framework today, the industry can avoid delays and build on the strong technology case for ammonia adoption. 

For the safe handling and infrastructure, the maritime industry can draw on the extensive experience of transporting ammonia as a cargo throughout the 20th and 21st centuries. There are, however, still concerns around ammonia’s toxicity, crew awareness and training and its overall impact on aquatic, human and environmental health.

The study also found that among the factors to consider for ammonia adoption, social acceptance and scalability are key.

The pricing of renewable electricity, green hydrogen and carbon capture will all impact ammonia’s affordability as a marine fuel. Clean ammonia producers, who are looking to upgrade production to create blue and green ammonia, see potential in increased demand from agriculture and other sectors, as well as shipping, all putting pressure on supply.

Liam Blackmore, Principal Specialist – Decarbonisation at Lloyd’s Register, said: “Fuel for thought: Ammonia, underlines the importance of addressing regulatory gaps, technology application and production hurdles in order to ensure the seamless integration of ammonia into the marine fuel landscape as part of the maritime energy transition.”

“By proactively developing a robust framework today, it is possible to accelerate the adoption of this, whilst mitigating potential risks and hazards. LR is committed to supporting first movers in ammonia and other alternative fuels, drawing upon our extensive experience and expertise in maritime safety and regulation to help deliver innovative solutions that prioritise safety and reliability.”

LR’s is supporting ammonia pioneers in delivering designs and processes that are safe and reliable. In addition to being a founding member of the Castor Initiative, a joint development project for two deep-sea ammonia propelled tankers, LR will class Exmar’s ammonia-fuelled gas carriers currently under design development by Hyundai Mipo Dockyard.

LR has also issued approval in principle for ammonia-fuelled engine designs and technologies and has completed a risk assessment with Yara Marine Technologies and Pilbara Port Authority for ammonia supply and bunkering.

Note: The full ‘Fuel for thought: Ammonia’ report can be found here.

 

Photo credit: Lloyd’s Register
Published: 22 March 2024

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Molgas Group enters German market with first multi-truck-to-ship LNG bunkering op

Car carrier “Auto Achieve” received 100 mt of LNG bunker fuel, supplied by multiple trucks from the Molgas Group at the Port of Cuxhaven in Germany on 17 March.

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Molgas Group enters German market with first multi-truck-to-ship LNG bunkering op

Molgas Group on Wednesday (20 March) announced its entry into the German LNG bunkering market with an inaugural operation conducted in partnership with UECC, a provider of sustainable short sea RoRo transportation in Europe.

During the operation, car carrier Auto Achieve received 100 metric tonnes (mt) of LNG, supplied by multiple trucks from the Molgas Group at the Port of Cuxhaven in Germany on 17 March. 

Johannes Richter, Group Leader Marine at Molgas Group, said: “Germany is of importance for the energy transition in marine, and we are pleased to begin our operations here.’

“We are actively working on expanding our multi-truck-to-ship presence across multiple ports in the North and Baltic Sea to offer flexible supply solutions to the market in combination with our Scandinavian operations of two LNG Bunker Barges, Multi-Truck and Terminal supply.”

Daniel Gent, Energy & Sustainability Manager at UECC, said: “We are very happy to further expand our LNG bunkering network. Supporting the expansion of LNG bunkering infrastructure in Europe is a key ambition of ours and we are delighted to partner with MOLGAS in delivering the first LNG to a car carrier in the port of Cuxhaven.”

 

Photo credit: Molgas Group
Published: 21 March 2024

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TotalEnergies Marine Fuels achieves milestone with first bunkering op at anchorage

Operation saw LNG bunker vessel “Gas Vitality” successfully bunkering the company’s chartered crude oil tanker “Hafnia Languedoc”, at Marseille Fos, in France, on 29 February.

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TotalEnergies Marine Fuels achieves milestone with first bunkering at anchorage

TotalEnergies Marine Fuels’ chartered LNG bunker vessel Gas Vitality successfully achieved a milestone with the completion of the first bunkering operation by its vessel at anchorage at Marseille Fos in France, according to Eric Lepesan, the firm’s bunker operations manager on Friday (15 March).

The operation saw Gas Vitality successfully bunkering the company’s chartered crude oil tanker Hafnia Languedoc, at Marseille Fos, in France, on 29 February.

“By bunkering at anchorage, we provided the Hafnia Languedoc with a more flexible LNG bunkering spot, enhancing operational efficiency and cutting costs without compromising on safety,” Lepesan said. 

“We are proud to enable more flexible solutions and to drive positive change in maritime operations. Bravo to our dedicated teams and partners for making this milestone possible.”

On 24 January, global ship management and marine solutions provider V.Group said the Gas Vitality celebrated the onset of the New Year by successfully conducting its 100th bunkering operation.

Gas Vitality is owned by Mitsui O.S.K. Lines (MOL), chartered by TotalEnergies and managed by V.Ships France. Operational since December 2021, it is based in the Port of Marseille-Fos, Southern France, and serves the Mediterranean region. 

 

Photo credit: TFG Marine
Published: 18 March 2024

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