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Bunker Fuel

Argus Media viewpoint: HSFO to face continued strain

Supply pressures will continue to elevate European fuel oil prices in 2024 while bunkering hubs outside Europe might grow in prominence; market is predicting lower demand for bunker fuels in Europe in 2024.

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Supply pressures will continue to elevate European fuel oil prices in 2024, with relief coming from hitherto less significant exporters a possibility, while bunkering hubs outside Europe might grow in prominence.

18 December 2023

EU states pivoted away from Russia for their high-sulphur fuel oil (HSFO) imports after sanctions started in 2023. Vortexa data show that after 5 February, half of HSFO departures signalling for European ports — excluding those in Turkey — came from the UAE, Saudi Arabia and Iraq. In contrast, across all of 2022, Russia accounted for nearly 80pc of seaborne HSFO deliveries.

Relying on these middle Eastern countries for HSFO and crude oil supplies in 2024 will probably tighten supplies over the summer, as was the case in 2023, when HSFO discounts to Ice Brent crude futures flipped to a premium for the first time in 30 years.

Further establishing flows between newer exporters will be important to European buyers and refiners in 2024. Venezuela, whose oil industry was sanctioned by the US until October, has been touted as a potential supplier of sour crude and fuel oil to the west in the coming months, which could provide some relief to HSFO undersupply in northwest Europe. Likewise, Venezuelan volumes going to the 

Mediterranean may incentivise transportation of the product within the region, where HSFO paucity has at times disincentivised refiners from paying rising freight costs to move smaller than desired cargoes.

HSFO demand from non-European countries such as China may also draw the attention of large exporters of sour crude and feedstocks. China recently released a new set of import quotas for foreign HSFO after independent refiners reached their crude import limit.

Demand for imported fuel oil from the Chinese refining sector has approached historic highs this year. But some refinery sources in China reckon the government's tax rebate policy will be adjusted to reduce these flows.

Eastern promises

The market is predicting lower demand for marine fuels, largely consisting of very-low sulphur fuel oil (VLSFO), in Europe across 2024, partly because of the marine sector preparing for its greenhouse gas emissions to be incorporated in the EU's emissions trading scheme (ETS).

From January, the ETS will cover CO2 emitted from all large vessels entering EU ports, with shipping companies in 2025 having to surrender emissions allowances for 40pc of those emissions. In the short run this will push vessels to bunker outside EU waters, as the transition to green marine fuels gets underway.

Bunker fuel demand has generally tapered off towards the end of 2023, leading many suppliers to shift large volumes to Singapore, the world's main bunkering hub. Singaporean demand for bunker fuels generally rallied in the last quarter.

VLSFO stocks have also been moved east out of Europe because of the tightness of supply in Singapore in recent months, a knock-on effect of technical disruption at refineries east of Suez. Producers and suppliers in Europe are keeping a weather eye on the state-owned 615,000 b/d al-Zour refinery in 

Kuwait, a potentially huge supplier of VLSFO in the east next year. Al-Zour was hit by many technical disruptions in the latter part of 2023, at one point having to draw operations to a near complete halt

With a consequently reduced output of VLSFO, producers in Europe have been able to capture margins by selling to Singaporean buyers. In 2024, whether KPC can end problems at al-Zour will play a big part in determining whether the 0.5pc sulphur product continues to flow east, and whether pressure on stocks in Europe will rise or fall.

By Bob Wigin

Photo credit and source: Argus Media
Published: 19 December, 2023

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Ammonia

Singapore: EMA, MPA shortlist two consortia for ammonia power generation and bunkering

Chosen consortia are Keppel’s Infrastructure Division and Sembcorp-SLNG, and the bunkering players in these consortia are Itochu Corporation, NYK Line and Sumitomo Corporation.

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The Energy Market Authority (EMA) and the Maritime and Port Authority of Singapore (MPA) on Thursday (25 July) said they have shortlisted two consortia that will proceed to the next round of evaluations of proposals to provide a low- or zero-carbon ammonia solution on Jurong Island for power generation and bunkering. 

The two consortia were selected from a total of six that were earlier shortlisted in 2023 to participate in a restricted Request for Proposal (RFP), following an Expression of Interest (EOI) called in 2022. The bids were assessed based on the technical, safety and commercial aspects of their proposals. 

The two consortium leads are Keppel’s Infrastructure Division and Sembcorp-SLNG, and the bunkering players in these consortia are Itochu Corporation, Nippon Yusen Kabushiki Kaisha (NYK Line) and Sumitomo Corporation. The two consortia will proceed to conduct engineering, safety and emergency response studies for the proposed Project.

At the next phase, we will select one of the two bidders as the lead developer of the project. The lead developer will develop the end-to-end ammonia solution comprising (i) generating 55 to 65 MW of electricity from imported low- or zero-carbon ammonia via direct combustion in a Combined Cycle Gas Turbine; and (ii) facilitating ammonia bunkering at a capacity of at least 0.1 million tons per annum (MTPA), starting with shore-to-ship bunkering followed by ship-to-ship bunkering. 

Given the nascency of the technology and global supply chains, the Government will work closely with the appointed lead developer to implement the Project. We aim to announce the lead developer by Q1 2025.

The project is part of Singapore’s National Hydrogen Strategy launched in 2022, which outlines Singapore’s approach to develop low-carbon hydrogen as a major decarbonisation pathway as part of the nation’s commitment to achieve net zero emissions by 2050.

A key thrust of this strategy is to experiment with the use of advanced hydrogen technologies that are on the cusp of commercial readiness. Ammonia is currently one of the most technologically-ready hydrogen carriers with an established international supply chain for industrial use.

“If successful, the project will position Singapore as one of the first countries in the world to deploy a direct ammonia combustion power plant and support the development of ammonia bunkering for international shipping, EMA and MPA said.

“This will help to unlock the potential of low-carbon ammonia as a low-carbon fuel.”

 

Photo credit: Manifold Times
Published: 25 July 2024

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LNG Bunkering

China: River-sea LNG bunkering vessel named and delivered in Shanghai

The 14,000 cubic metre ship, “Huaihe Nengyuan Qihang”, was independently developed, designed and built by Hudong-Zhonghua Shipbuilding (Group) for Huaihe Energy Holding Group.

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China: River-sea LNG bunkering vessel named and delivered in Shanghai

China’s river-to-sea LNG bunkering vessel, which was built locally, was named and delivered in Shanghai on Monday (19 July), according to the Shanghai Association of Shipbuilding Industry (SASIC). 

The 14,000 cubic metre (cbm) ship, Huaihe Nengyuan Qihang, was independently developed, designed and built by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd for Huaihe Energy Holding Group as part of China’s "Gasification of the Yangtze River” project.

The ship is capable of travelling through the Nanjing Yangtze River Bridge all year round and has been dubbed a “Customised Yangtze River” LNG refuelling and transportation ship.

The ship is equipped with the B-type LNG containment system independently developed by Hudong-Zhonghua and authorised by a national patent.

According to SASIC, this was the first time such a system has been applied to a domestic LNG  refuelling and transportation ship, marking a major breakthrough in the B-type LNG containment system developed by China with independent intellectual property rights.

Related: China’s first river-sea LNG bunkering ship completes inaugural bunkering operation

Disclaimer: The above article published by Manifold Times was sourced from China’s domestic market through a local correspondent. While considerable efforts have been taken to verify its accuracy through a professional translator and processed from sources believed to be reliable, no warranty is made regarding the accuracy, completeness and reliability of any information.

 

Photo credit: Shanghai Shipbuilding Industry Association
Published: 25 July 2024

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Environment

Singapore-flagged tanker “Hafnia Nile” to be moved to safe location for cargo transfer

“Hafnia Nile” and the Sao Tome and Principe-flagged “Ceres I” collided and caught fire about 55km northeast of Pedra Branca on 19 July.

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Singapore-flagged tanker “Hafnia Nile” to be moved to safe location for cargo transfer

Shipowner Hafnia, the operator of Singapore-flagged tanker Hafnia Nile, is in discussion with The Maritime and Port Authority of Singapore (MPA) on a safe location to transfer the ship’s cargo, MPA said on Wednesday (24 July). 

They are also discussing towage plans for repairs to be approved by MPA.

Hafnia Nile and the Sao Tome and Principe-flagged Ceres I collided and caught fire about 55km northeast of Pedra Branca on 19 July.

“An additional tug with deep-sea towing capacity has arrived on site on 23 July 2024, joining four other tugs equipped with oil response and firefighting capabilities,” MPA said. 

In a meeting with MPA on 23 July, Hafnia informed MPA of light oil sheens near Hafnia Nile

“As part of the towage plan, Hafnia will arrange for repairs, containment and clean-up of the assessed localised seepage,” it added.

Reuters reported Hafnia stating that an initial assessment by a team of specialists conducting inspections of damaged areas of the tanker, showed Hafnia Nile's engine room had suffered damage from the fire.

Hafnia also reportedly said a salvage team has boarded the vessel and transferred equipment from one of the attending tugs on site to contain and stop any localised seepage.

Manifold Times previously reported Ceres 1 allegedly leaving the site of the collision as of 20 July and turned off its Automatic Identification System (AIS) but was believed to be in Malaysian waters.

The Malaysian Maritime Enforcement Agency (MMEA) was able to locate Ceres 1 some 28 nautical miles northeast of Pulau Tioman.

Related: “Ceres 1” goes dark after collision with Singapore-flagged tanker, located by MMEA
Related: MPA: Fire breaks out on two ships near Pedra Branca, search and rescue underway

 

Photo credit: Malaysian Maritime Enforcement Agency
Published: 25 July 2024

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