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ENGINE: East of Suez Bunker Fuel Availability Outlook

Record wide Singapore Hi5 spread amid tight VLSFO; weather disruptions in Chinese ports; supply to improve with refinery back online in Fujairah.

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The following article regarding regional bunker fuel availability outlook for the East of Suez region has been provided by online marine fuels procurement platform ENGINE for publication on Singapore bunkering publication Manifold Times:

5 July 2022

  • Record wide Singapore Hi5 spread amid tight VLSFO
  • Weather disruptions in Chinese ports
  • Supply to improve with refinery back online in Fujairah

 

Singapore

VLSFO supply has been acutely tight for weeks in Singapore’s bunker market, with high price premiums quoted for prompt delivery dates. Prompt stems have typically been priced $30-50/mt higher than for dates further out, sources say.

Tight VLSFO supply has contributed to widen Singapore’s Hi5 spread to all-time highs of more than $570/mt this week.

Suppliers’ earliest delivery dates vary from 14-17 days out for VLSFO, while their earliest dates for HSFO are slightly shorter at 10-13 days, and much shorter for LSMGO at 5-7 days.

Sources in Singapore’s bunker market point to a lack of incoming VLSFO cargo flows as a reason for the grade being tight. VLSFO supply is set to remain tight through July, one says. Fuel oil inflows in July will “at best” be similar to June, and once it has arrived in Singapore, much of this product will still need to be blended into VLSFO, so any supply relief will not be imminent.

 

East Asia

Suppliers in Hong Kong have been working to clear a bunker backlog this week, while suppliers in Zhoushan face around three days of weather disruptions.

Typhoon Chaba swept across Hong Kong with strong winds and rains on Friday, before making landfall in south China. Bunkering was suspended in several ports in the region, including Hong Kong and Guangzhou, but had resumed by Monday.

Massive delays are expected to put pressure on bunker supply capacity in Hong Kong until at least Wednesday, a source said. VLSFO and LSMGO supply had improved in Hong Kong with replenishment cargoes arriving last week, but prompt availability has tightened somewhat as suppliers work through backlogs.

There are no significant backlogs in Guangzhou, but a supplier is running low on VLSFO and only expects to the resupplied in mid-July, keeping availability tight, a source said.

Suppliers in Zhoushan have been bracing for gale and bunker disruptions from Tuesday until Thursday evening. A lull with less wind on Thursday morning could provide a relief and allow for more bunkering.

VLSFO is tight in Zhoushan and recommended lead times can vary greatly between suppliers, ranging from 7-12 days.

Prompt supply is tight across grades in South Korea, but lead times for fuel oil grades are shorter than in Singapore and Zhoushan. Recommended lead times are around 5-6 days for all grades in both western ports like Incheon and southern ports like Busan.

 

Middle East

Recommended lead times have grown longer in Fujairah this week. Around 10 days is now advised for VLSFO and LSMGO, and eight days for HSFO. Maintenance work at a local refinery has capped production and limited some volumes from streaming to the bunker market recently. Availability could improve as the refinery has come back online and ramps up production.  

The port’s heavy distillate and residual fuel oil stocks rose 8% and to multi-week highs last week, but still averaged lower across June than in May, according to Fujairah Oil Industry Zone and S&P Global data.

 

Photo credit and source: ENGINE
Published: 6 July, 2022

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Biofuel

GCMD concludes its final biofuel blend supply chain trial with Hapag-Lloyd

bp provided the B30 biofuel blend to the “TIHAMA”, a 19,870 TEU container vessel operated by Hapag-Lloyd in final trial; marks the end of a series of trials initiated in July 2022.

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GCMD concludes its final biofuel blend supply chain trial with Hapag-Lloyd

The Global Centre for Maritime Decarbonisation (GCMD) on Thursday (18 July) said it has successfully completed its final supply chain trial for biofuel blended with very low sulphur fuel oil (VLSFO). 

This marks the end of a series of trials initiated in July 2022 as part of a larger pilot to develop a framework to provide quality, quantity and GHG abatement assurances for drop-in fuels.

In this final trial, bp provided the B30 biofuel blend to the TIHAMA, a 19,870 twenty-foot equivalent unit (TEU) container vessel operated by Hapag-Lloyd.

The biofuel component used is certified to the International Sustainability & Carbon Certification (ISCC) standard – a multistakeholder certification scheme for biobased materials. The biofuel component comprised neat Fatty Acid Methyl Ester (FAME) produced from food waste.

Authentix, a tracer solutions provider, supplied and dosed the FAME with an organic-based tracer at the storage terminal outside the Netherlands. The dosed FAME was then transported to the Port of Rotterdam for blending with VLSFO to achieve a B30 blend, before the blend was bunkered onboard the TIHAMA.

Similar to previous trials, GCMD engaged fuel testing company Veritas Petroleum Services (VPS) to witness the operations at all stages – from biofuel cargo transfer to bunkering. VPS also collected and conducted extensive laboratory tests on samples of the biofuel and biofuel blend collected at pre-determined points along the supply chain to assess quality per Standards EN 14214 and ISO 8217.

With well-to-wake emissions of 13.74 gCO2e/MJ, the neat FAME presented a 85.4% emissions reduction compared to the emissions of the fossil marine fuel. The reduced emissions complies with the MEPC 80, which requires a minimum emissions reduction of 65% in order for biofuels to be classified as sustainable.

GCMD and Hapag-Lloyd determined that consumption of the 4,500 MT B30 blend of FAME and VLSFO resulted in 27.9% emissions reduction compared to sailing on VLSFO.

A newly developed tracer deployed with this supply chain

GCMD collaborated with Authentix to develop and deploy a new organic-based tracer to authenticate the origin and verify the amount of FAME present in the blend. The proprietary tracer blended homogeneously with FAME and was detected at expected concentrations at all sampling points along the supply chain.

This trial marks the first deployment of this tracer in a marine fuel supply chain. Previously, similar tracers were used to authenticate and quantify biofuels in road transport and LPG supply chains.

Development of a comprehensive biofuels assurance framework underway

With the completion of this trial, GCMD has deployed a diverse range of tracer technologies, including synthetic DNA and element-based tracers, in addition to the organic-based tracer used in this trial. The trials have also included the development of a chemical fingerprinting methodology and the evaluation of lock-and-seal and automatic identification systems (AIS) as additional solutions to ensure the integrity of the biofuels supply chain.

Learnings on tracer limitations and benefits will be incorporated into a framework that recommends appropriate use to ensure consistent and robust performance. This effort will complement existing ISCC by providing additional supply chain assurance through physical traceability.

The insights from these trials will be shared in a series of reports covering issues, such as traceability, biofuel degradation, supply chain optimisation and abatement costs. These findings will culminate in a comprehensive assurance framework to provide guidance on biofuels use, slated for release in the fourth quarter of 2024.

 

Photo credit: Global Centre for Maritime Decarbonisation
Published: 19 July 2024

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Ammonia

MPA, ITOCHU and partners sign MoU on ammonia-fuelled bulk carriers study

As a government agency, MPA,will review and provide their views to the designs of the ammonia-fuelled ships to ensure their safe operations, says ClassNK.

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RESIZED venti views

Classification society ClassNK on Thursday (18 July) said it signed a Memorandum of Understanding (MoU) with ITOCHU Corporation, Nihon Shipyard Co., Ltd., and Maritime and Port Authority of Singapore (MPA) regarding a joint study for the design and safety specifications of ammonia-fuelled ships which are under development by ITOCHU and partners.

“The discussion for a specification of ammonia-fuelled ships with a governmental body related to their operation is essential for a social implementation of ammonia-fuelled ships,” ClassNK said. 

“As one of parties of the MoU, MPA, a government agency overseeing the world’s busiest bunkering hub, will review and provide their views to the designs of the ammonia-fuelled ships to ensure their safe operations.”

The MoU is based on the premise that 200,000 deadweight ton class bulk carriers will be built by Nihon Shipyard with an ammonia dual-fuelled engine.

“The necessary clarifications of the specification for the ammonia-fueled ship to carry out ammonia bunkering in Singapore will be conducted among parties of this MoU, for the commercialisation of ammonia-fuelled ships,” ClassNK added.

 

Photo credit: Venti Views on Unsplash
Published: 19 July 2024

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Biofuel

“K” Line to use biofuel on three Gram Car Carriers-chartered vessels in Singapore

Biofuel will be supplied to the sister vessels “Viking Ocean”, “Viking Diamond” and “Viking Coral” while bunkering in Singapore, says Gram Car Carriers.

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“K” Line to use biofuel on three Gram Car Carriers-chartered vessels in Singapore

Norwegian transportation firm Gram Car Carriers (GCC) on Thursday (18 July) said Kawasaki Kisen Kaisha (“K” LINE) will use biofuel on three vessels chartered from GCC from July onwards. 

“The biofuel will be supplied to the sister vessels Viking Ocean, Viking Diamond and Viking Coral while bunkering in Singapore, an Asian hub for marine biofuels,” GCC said on its social media. 

“The use of biofuel is a key environmental initiative to reduce emissions across the entire value chain (well-to-exhaust) and an effective way of transitioning to low-carbon marine fuels amid globally tightening environmental regulations.”

“We support the green mobility shift. This means that GCC commit to supporting the transition of both vehicles and their logistic chain towards a zero-emission future in close cooperation with leading customers such as K-Line,” said Georg A. Whist, CEO of GCC.

 

Photo credit: Gram Car Carriers
Published: 19 July 2024

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