Bunker Fuel

Argus Media: USGC LNG-VLSFO discount to steady itself

Premium for US Gulf coast (USGC) very low-sulphur fuel oil to LNG is expected to linger but not widen this spring, maintaining interest in LNG as a bunkering fuel.

Published

1 year ago

April 24, 2024

Admin

The premium for US Gulf coast (USGC) very low-sulphur fuel oil (VLSFO) to LNG is expected to linger but not widen this spring, maintaining interest in LNG as a bunkering fuel.

24 April 2024

US Gulf coast LNG prices slipped from a premium to a discount to VLSFO in March 2023 and have remained there since. The discount surpassed 200/t VLSFO-equivalent in January (see chart). Both LNG and VLSFO prices are expected to remain under downward pressure due to high inventories, which could keep the current LNG discount steady.

The US winter natural gas withdrawal season ended with 39pc more natural gas in storage compared with the five-year average, according to the US Energy Information Administration (EIA). Henry Hub natural gas monthly average prices dropped below $2/mmBtu in February, for the first time since September 2020, Argus data showed. The EIA expects the US will produce less natural gas on average in the second and third quarter of 2024 compared with the first quarter of 2024. Despite lower production, the US will have the most natural gas in storage on record when the winter withdrawal season begins in November, says the EIA. As a result, the agency forecasts the Henry Hub spot price to average less than $2/mmBtu in the second quarter before “increasing slightly” in the third quarter. EIA’s forecast for all of 2024 averages about $2.20/mmBtu.

US Gulf coast VLSFO is facing downward price pressure as demand falls and increased refinery activity signals a potential supply build. Rising Gulf coast refinery activity was likely behind some of the drop in prices. Gulf coast refinery utilization last week rose to 91.4pc, the highest in 12 weeks and up by 0.9 percentage points from the prior week. US Gulf coast suppliers are also eyeing strong fuel oil price competition from eastern hemisphere ports such as Singapore and Zhoushan, China, importing cheap Russian residual fuel oil.

In general, LNG’s substantial discount to VLSFO has kept interest in LNG for bunkering from ship owners with LNG-burning vessels high. The EIA discontinued publishing US bunker sales statistics with the last data available for 2020. But data from the Singapore Maritime & Port Authority, where the LNG–VLSFO discount widened to over $200/t VLSFOe in February, showed Singapore LNG for bunkering demand increase 11.4 times to 75,900t in the first quarter compared with 6,700t in the first quarter of 2023 and 110,900t for full year 2022.

By Stefka Wechsler

Photo credit and source: Argus Media
Published: 24 April 2024

Related Topics:Bunker fuel - LNG Bunker fuel - VLSFO

Up Next

Methanol Institute: Progress as a marine fuel continues across supply chain (Week 15, 8-14 April 2024)

Don't Miss

ENGINE: East of Suez Bunker Fuel Availability Outlook (23 April 2024)

LNG Bunkering

Singapore: FueLNG achieves 400th LNG bunkering operation milestone

Bunker tanker “FueLNG Bellina” successfully delivered LNG bunker fuel to “BYD Shenzhen”, the world’s largest LNG-fuelled car carrier at Singapore anchorage during its maiden voyage.

Published

2 days ago

May 16, 2025

Admin

Singapore: FueLNG achieves 400th LNG bunkering operation milestone

Singapore’s licensed LNG bunker supplier FueLNG on Thursday (15 May) announced the successful completion of its 400th LNG ship-to-ship (STS) bunkering operation in the republic.

FueLNG, a joint venture between Keppel Offshore & Marine and Shell Eastern Petroleum Pte Ltd, marked the milestone with bunker tanker FueLNG Bellina successfully refuelling BYD Shenzhen, the world’s largest LNG-fuelled car carrier, at Singapore anchorage during its maiden voyage.

“With a capacity of 9,200 vehicles and equipped with dual-fuel LNG propulsion, the BYD SHENZHEN represents the next generation of low-emission maritime transport,” it said in a social media post.

Shell said it supported BYD Shenzhen on its maiden voyage as the supplier of the LNG bunker fuel.

“Like all LNG dual fuel vessels, BYD Shenzhen is on the pathway to net zero emissions. She can take bio-LNG, and in the future e-LNG, in her fuel mix for further emission reduction and regulatory compliance,” it said in a separate social media post.

Photo credit: Shell
Published: 16 May, 2025

Biofuel

Hong Kong: CPN hits new record for China’s largest B24 biofuel bunkering operation

Chimbusco Pan Nation delivered 6,300 mt of B24-VLSFO in Hong Kong to boxship “XIN LOS ANGELES” on 15 May, exceeding its previous record of 5,500 mt delivered in February 2025.

Published

2 days ago

May 16, 2025

Admin

Hong Kong: CPN hits new record for China's largest B24 biofuel bunkering operation

Hong Kong-based bunker supplier Chimbusco Pan Nation Petro-Chemical (CPN) on Friday (16 May) said it has set a record for China’s largest B24 marine biofuel bunkering operation.

CPN said it delivered 6,300 metric tonnes (mt) of B24-VLSFO in Hong Kong to container ship XIN LOS ANGELES on 15 May.

The supply exceeded CPN’s previous record of 5,500 mt delivered to the same ship in February 2025.

“This collaboration reinforces CPN’s ability to execute large-scale marine biofuel bunkering with precision and reliability,” the company said in a social media post.

“By consistently supplying large volumes of B24 marine biofuel, CPN supports reduced carbon emissions and sustainable shipping practices globally.”

Photo credit: Chimbusco Pan Nation Petro-Chemical
Published: 16 May, 2025

Bunker Fuel

Tigonic launches physical bunker fuel supply operations by barge at Khorfakkan

Move enhances Tigonic’s regional supply capabilities with barge-based delivery of VLSFO and MGO along the vital East Coast of UAE; company also supplies bunker fuel at port of Sharjah by trucks.

Published

2 days ago

May 16, 2025

Admin

Tigonic launches physical bunker fuel supply operations by barge at Khorfakkan

Dubai-based energy trading and bunker supply firm Tigonic on Thursday (15 May) said it has launched its physical bunker supply operations at Khorfakkan, UAE by barge and has completed its first successful deliveries of bunker fuel in the past few days.

The company said the move enhances Tigonic’s regional supply capabilities with barge-based delivery of Very Low Sulfur Fuel Oil (VLSFO) and Marine Gas Oil (MGO) along the vital East Coast of the UAE.

Tigonic also supplies bunker fuel at the port of Sharjah in UAE by trucks and may expand into other ports in the region in the foreseeable future.

Tigonic’s operational expansion into physical supply with its dedicated bunker barge enables the company to deliver marine fuels directly at anchorage.

“This launch marks a significant milestone in our service evolution,” said the team at Tigonic.

“With physical supply now live at Khorfakkan, we are elevating our ability to provide fast, flexible, and reliable marine fuel solutions to the global fleet.”

This expansion follows Tigonic’s recent achievement—the successful lifting of multiple cargoes of High-Sulfur Fuel Oil (HSFO) from the SASREF refinery in Jubail, Saudi Arabia, and fuel oil of Bahrain origin for their customers in the Singapore Straits.

Photo credit: Tigonic
Published: 16 May, 2025