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IMO 2020

Argus Media Viewpoint: Sulphur cap to support 0.5% fuel oil

Delayed exhaust gas scrubber installations will further boost demand for IMO-compliant products.

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Enes Tunagur of global energy and commodity price reporting agency Argus Media on Tuesday (7 January) issued a report highlighting strong demand for 0.5% low sulphur fuel oil (LSFO) supporting refining margins for the product in Europe in the first half of 2020, with sustained Russian levels of production of high-sulphur fuel oil (HSFO) likely to pressure margins as the International Maritime Organisation's (IMO) 2020 sulphur cap comes into force:

IMO 2020-compliant fuel oil became the primary marine fuel option for shipowners as early as November, with sales in Europe's largest bunkering port of Rotterdam reaching 51pc of the total marine pool. Growing storage of 0.5pc fuel oil as well as rising sales of the product suggest it will remain the primary marine fuel in 2020, as demand for 0.1pc sulphur marine gasoil (MGO) stays muted. Delayed exhaust gas scrubber installations, which allow ships to continue burning HSFO, will further boost demand for IMO-compliant products.

New marine fuel regulations will have a major impact on fuel oil trade routes. European IMO-compliant fuel oil may stay in the continent, as European production is likely to be needed to meet demand in regions that have no plans to produce IMO-compliant fuels. Europe previously exported most of its surplus fuel oil to Asia-Pacific and Russian fuel oil also flowed from Rotterdam east of Suez. Trading and refining company Gunvor scrapped plans to produce HSFO at its plants in Rotterdam and Antwerp, opting to produce 0.5pc fuel oil in the second quarter of 2020. Market participants had expected Gunvor to be the main supplier of HSFO in northwest Europe, and lack of domestic supply will increase dependence on Russian HSFO. Additional 0.5pc fuel oil production by Gunvor plants could result in oversupply for northwest Europe, driving exports.

Scandinavian refiners will continue adding to 0.5pc fuel oil supply in northwest Europe, as producers such as Equinor have started shipping most of their fuel to the region, while BP, Shell, ExxonMobil and Total are among major refineries producing 0.5pc fuel oil in the Amsterdam-Rotterdam-Antwerp hub.

Incentivising margins for 0.5pc fuel oil may also boost production of the product, as it has been as profitable as road fuels. European 0.5pc fuel oil margins against Ice Brent crude have averaged a premium of $11/bl since October on a fob basis, compared with benchmark Eurobob gasoline margins at $7.60/bl and French diesel cracks at $17.50/bl.

Traditional European fuel oil exports to Asia-Pacific will probably slow further in the first half of 2020, as the world's largest bunkering hub in Singapore will need less HSFO. Saudi Arabia will become the largest importer of HSFO from Europe and Russia, as the country tries to reduce direct crude burn for power generation. Complex US refineries started buying HSFO from Europe and Russia in the fourth quarter of 2019 amid weakening bunker demand. This trend could continue if HSFO margins remain under pressure, as US refiners look to cheaper dirty products to replace heavy crude flows that have fallen away from traditional suppliers, such as Venezuela and Iran.

Russia will probably remain the largest HSFO supplier for Europe, on the back of sustained output. Russia's largest refiner Rosneft offered up to 21.8mn t of HSFO in its 2020 term tender, up from 19.9mn t in 2019. Rosneft's delayed refinery upgrades will probably keep its fuel oil output at a high level until at least 2023, when most of its upgrades are scheduled for completion. Russian fuel oil output in January-October 2019 reached 39mn t, up by less than 1pc from a year earlier.

Photo credit and source: Argus Media
Published: 9 January, 2020
 

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Port & Regulatory

X-Press Feeders inks MoU with six European ports for green shipping corridors

Firm signed a MoU with Ports of Antwerp Bruges, Tallinn, Helsinki, HaminaKotka, Freeport of Riga and Klaipeda Port to develop infrastructure for provision and bunkering of alternative bunker fuels, among others.

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X-Press Feeders inks MoU with six European ports for green shipping corridors

Singapore-based global maritime container shipping company X-Press Feeders on Friday (5 April) signed of a memorandum of understanding (MoU) with six European ports: Port of Antwerp Bruges (Belgium), Port of Tallinn (Estonia), Port of Helsinki (Finland), Port of HaminaKotka (Finland), Freeport of Riga (Latvia) and Klaipeda Port (Lithuania).

This landmark agreement signifies a joint commitment to accelerate the establishment of green shipping corridors and the broader decarbonisation of the marine sector in Scandinavia and the Baltic Sea. Through this MOU, X-Press Feeders and the participating ports will pool resources and expertise to develop and implement sustainable practices for maritime operations.

Under the MOU:

  • Parties will work together to further develop infrastructure for the provision and bunkering of alternative fuels such as green methanol,
  • Encourage the development of supply chains for fuel that are zero or near to zero in terms of greenhouse gas emissions
  • Provide further training programs for port workers and seafarers with regards to the handling of alternative fuels
  • Leverage digital platforms to enhance port call optimisation
  • Parties will have regular meetings to update and discuss progress on actions for further developing green shipping corridors.

The MOU underscores the collective dedication to broader decarbonisation efforts within the maritime sector.

The collaboration between the parties will begin with the establishment of these two shipping routes:

  • Green Baltic X-PRESS (GBX): Rotterdam > Antwerp Bruges > Klaipeda > Riga > Rotterdam
  • Green Finland X-PRESS (GFX): Rotterdam > Antwerp Bruges > Helsinki > Tallinn > HaminaKotka > Rotterdam

These services are scheduled to commence in Q3 2024, marking a significant step towards more environmentally sustainable shipping services in Europe. This development is significant as these will be the very first scheduled feeder routes in Europe powered by green methanol, an alternative fuel that produces at least 60% less greenhouse gas emissions than conventional marine fuel.

X-Press Feeders’ green methanol is sourced from fuel supplier OCI Global. The green methanol is made from green hydrogen and the decomposition of organic matter, such as waste and residues. 

OCI’s green methanol is independently certified by the International Sustainability and Carbon Certification (ISCC) Association headquartered in Germany. The ISCC system promotes and verifies the sustainable production of biomass, circular and bio-based materials and renewables.

X-Press Feeders’ Chief Operating Officer, Francis Goh, said: “By working together – X-Press Feeders and the six partner ports – aim to efficiently implement green shipping corridors and lead the maritime industry in sustainability. We chose the Nordic and Baltic states as the first markets to deploy our green methanol powered vessels because we found the ports and our customers in these markets to be very receptive.”

“This MoU represents a significant milestone in our commitment to a sustainable future for the maritime industry. By collaborating with these leading European ports, we can collectively drive the adoption of green technologies that accelerate the decarbonisation of our industry.”

Vladas Motiejūnas, Harbor Master of the Port of Klaipėda, said: “In recent years, Klaipeda Port has taken significant strides towards sustainability. This year marks the commencement of construction for green hydrogen production and refuelling stations at the port, along with the implementation of shore-side power supply (OPS) stations for roll-on/roll-off ferries.”

“Furthermore, Klaipeda Port proudly enters 2024 with the Port Environmental Review System (PERS) certification, underscoring our commitment to environmental stewardship. Already, methanol bunkering operations are available at Klaipeda Port.”

“The integration of Klaipeda Port into environmentally sustainable shipping services by X-Press Feeders is a testament to our unwavering dedication to fostering a greener port.”

 

Photo credit: X-Press Feeders
Published: 8 April 2024

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LNG Bunkering

Titan completes successful LNG bunkering op of E&S Tankers ship in Antwerp

Bunker barge “FlexFueler001” delivered 110 mt of LNG bunker fuel to chemical tanker “Liselotte Esberger”, marking a milestone since it was the first time Titan delivered to a vessel of E&S Tankers.

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Titan completes successful LNG bunkering op of E&S Tankers ship in Antwerp

LNG bunker fuel supplier Titan on Monday (19 February) said it executed a successful LNG bunkering operation for E&S Tankers, a joint venture of Essberger Tankers and Stolt Tankers as an operator of chemical tankers within Europe. 

The refuelling operation took place at the port of Antwerp on 15 January. 

“Our vessel, FlexFueler001, flawlessly delivered 110 mt of LNG to the Liselotte Esberger, marking a milestone since it is the first time we deliver to a vessel of E&S Tankers,” it said in a social media post. 

“This operation underscores our dedication to sustainable shipping practices and showcases our commitment to environmentally friendly solutions. We're proud to collaborate with E&S Tankers and look forward to furthering our shared mission.”

Titan completes successful LNG bunkering op of E&S Tankers ship in Antwerp

According to E&S Tankers website, the 7,135 dwt Liselotte Essberger arrived in Hamburg from a shipyard in China on 5 December 2023 and was christened the following day.  

The vessel is first of a total of four newbuildings ordered by the firm that are equipped with LNG dual-fuel engines.

Related: E&S Tankers launches second LNG dual fuel chemical tanker “John T. Essberger”

 

Photo credit: Titan and E&S Tankers
Published: 20 February, 2024

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Shipping Corridor

Report: Korea-US-Japan green shipping corridors can lead to significant environmental impact

Creating green shipping corridors between South Korea, the United States and Japan’s top two busiest routes can reduce up to 41.3 million tCO2 each year, says Korean NPO Solutions for Our Climate.

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Report: Korea-US-Japan green shipping corridors can lead to significant environmental impact

Korea-based non-profit organisation Solutions for Our Climate (SFOC) on Tuesday (13 February) said creating green shipping corridors between South Korea, the United States and Japan's top two busiest routes – Busan-Tokyo and Yokohama; Busan-Los Angeles and Long Beach– can reduce up to 41.3 million tCO2 each year. 

This is equivalent to annual emissions from over 9 million passenger vehicles in the United States.

“We evaluated the anticipated impact of several proposed KoreaUnited States-Japan green shipping corridors involving ports of Busan (KRPUS), Incheon (KRINC), and Gwangyang (KRKAN) —South Korea’s three major container ports,” SFOC said in the report. 

Each of the three South Korean ports will have the most significant environmental impact if connected to ports of Tokyo (JPTYO)/Yokohama (JPYOK) in Japan and ports of Los Angeles (USLAX)/Long Beach (USLGB) in the United States. 

“If container ships that travel KRPUS – JPTYO/ JPYOK and KRPUS – USLAX/USLGB are converted to zero emission ships, we can expect significant reduction in global carbon dioxide emissions, approximately 20.7 million tCO2 and 20.6 million tCO2, respectively,” it added. 

Accordingly, reducing GHG emissions in the global maritime shipping will require coordinated multilateral commitments and actions.

The green shipping corridor initiative is a global effort to align the shipping industry with the 1.5°C trajectory. It aims to:

  • Create maritime routes in which mainly zero-emission ships travel
  • Run ports with 100 percent renewable energy
  • Enforce mandatory use of on-shore power for docked vessels.

“With increasing global shipping emissions, green corridors are key to decarbonising the sector,” SFOC said. 

“Our latest report on green corridors comes on the heels of South Korea and the United States' announcement to work together to implement cross-country green shipping corridors between several of their key ports.”

 

Photo credit: Solutions for Our Climate
Published: 14 February, 2024

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