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ENGINE: Europe & Africa Bunker Fuel Availability Outlook (6 Dec 2023)

Bunker fuel availability normal in the ARA; prompt bunker supply tight in Malta and Piraeus; LSMGO tight in Durban and Richards Bay.

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RESIZED ENGINE Europe and Africa

The following article regarding Europe and Africa bunker fuel availability has been provided by online marine fuel procurement platform ENGINE for post on Singapore bunkering publication Manifold Times:

  • Bunker fuel availability normal in the ARA
  • Prompt bunker supply tight in Malta and Piraeus
  • LSMGO tight in Durban and Richards Bay

Northwest Europe

VLSFO availability is said to be normal in the ARA bunkering hub. Lead times of 5-7 days are generally recommended for VLSFO deliveries there to ensure full coverage from suppliers, a source says. However, some suppliers can offer deliveries with shorter lead times.

HSFO and LSMGO availability is also normal in the ARA, the source adds. Recommended lead times for HSFO are 5-7 days, while LSMGO requires a shorter lead time of 3-5 days. 

The ARA’s independently held fuel oil stocks averaged 15% higher in November than across October, according to Insights Global data.

The ARA's fuel oil stocks in November increased to their highest monthly level since August. The region imported 210,000 b/d of fuel oil in November, down from 243,000 b/d imported in October, according to cargo tracker Vortexa.

The UK became the biggest fuel oil import source for the ARA hub, accounting for 20% of the region's total fuel oil imports in November, followed by Turkey (17%) and Lithuania (8%). Other import sources were Sweden and Poland, both accounting for 6%. 

Meanwhile, the ARA hub’s independent gasoil inventories — which include gasoil and heating oil — fell by 4% in November despite a rise in gasoil imports.

HSFO supply remains tight for delivery off Skaw. Lead times of 7-10 days are recommended for delivery there, a trader says. Meanwhile, availability of VLSFO and LSMGO grades is relatively better, requiring shorter lead times of 5-7 days.

Bunker fuel availability is said to be good in the German port of Hamburg. A trader recommends lead times of 3-5 days for optimal coverage from suppliers there.  

Mediterranean

Availability of all bunker fuel grades is said to be normal in Gibraltar.  LSMGO and VLSFO grades are available for prompt delivery dates, with recommended lead times of 3-5 days for both grades, a source says. For HSFO, shorter lead times of 2-4 days are recommended.  

Adverse weather conditions have prevailed in Gibraltar intermittently over the last week. Strong wind gusts of 20 knots are forecast to hit the port on Wednesday evening. Rough weather conditions are forecast on Friday as well, which could hamper smooth bunker deliveries there.

Bunkering remains limited off Malta due to adverse weather conditions. Bunker operations remained limited to less weather-prone bunkering area four out of the total six bunkering areas on Wednesday, according to the port agent MH Bland. Moreover, availability of all bunker fuel grades is said to be tight there and weather disruptions can cause more delays, a trader says.

Meanwhile, bunker fuel availability is normal across all grades in Istanbul, a source says.

Bunker fuel supply is also normal in the Greek port of Piraeus. But securing prompt deliveries can be slightly difficult there, a trader says.

Bunkering is progressing normally in the Portuguese ports of Lisbon and Sines, where supply of VLSFO and LSMGO grades is normal.

Africa

In South Africa's Durban and Richards Bay, VLSFO availability is said to be normal. Lead times of 5-7 days are recommended for both grades, a source says.

LSMGO availability, however, remains tight in both ports. The grade's deliveries are subject to enquiries there, the source adds.

Offshore bunkering in Algoa Bay has been suspended for three months now. Offshore deliveries there came to a halt in September after the South African Revenue Service (SARS) detained bunker barges over import duty disputes.

Negotiations between offshore bunker suppliers and authorities are underway. A decision is likely to be announced by mid-January, a port agent told ENGINE. However, bunker supply is available in the adjacent Port Elizabeth, where only one supplier is offering deliveries.

Meanwhile, availability of HSFO and LSMGO grades is good in Mozambique's Nacala port, a source says. VLSFO supply is said to be tight there.

Prompt VLSFO supply has been tight in Maputo since last week, while LSMGO is more readily available there.

By Manjula Nair

Photo credit and source: ENGINE
Published: 7 December, 2023

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Wind-assisted

Singapore: EPS orders its first wind-assisted propulsion system for tanker

Firm signed a contract for its first ever wind-assisted propulsion system, partnering with bound4blue to install three 22-metre eSAILs® onboard “Pacific Sentinel”.

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Singapore: EPS orders its first wind-assisted propulsion system for tanker

Singapore-based Eastern Pacific Shipping (EPS) on Thursday (22 February) said it signed a contract for its first ever wind-assisted propulsion system, partnering with bound4blue to install three 22-metre eSAILs® onboard the Pacific Sentinel

The turnkey ‘suction sail’ technology, which drags air across an aerodynamic surface to generate exceptional propulsive efficiency, will be fitted later this year, helping the 183-metre, 50,000 DWT oil and chemical tanker reduce overall energy consumption by approximately 10%, depending on vessel routing.

Suitable for both newbuilds and retrofit projects, the system delivers energy efficiency and cost savings for a broad range of vessels, regardless of their size and age.

Singapore: EPS orders its first wind-assisted propulsion system for tanker

José Miguel Bermudez, CEO and co-founder at bound4blue, said: “Signing an agreement with an industry player of the scale and reputation of EPS not only highlights the growing recognition of wind-assisted propulsion as a vital solution for maximising both environmental and commercial benefits, but also underscores the confidence industry leaders have in our proven technology.”

“It’s exciting to secure our first contract in Singapore, particularly with EPS, a company known for both its business success and its environmental commitment.”

“We see the company as a role model for shipping in that respect. As such this is a milestone development, one that we hope will pave the way for future installations across EPS’ fleet, further solidifying our presence in the region.”

Cyril Ducau, Chief Executive Officer at EPS, said: “EPS is committed to exploring and implementing innovative solutions that improve energy efficiency and reduce emissions across our fleet.” 

“Over the past six years, our investments in projects including dual fuel vessels, carbon capture, biofuels, voyage optimisation technology and more have allowed us to reduce our emissions intensity by 30% and achieve an Annual Efficiency Ratio (AER) of 3.6 CO2g/dwt-mile in 2023, outperforming our emission intensity targets ahead of schedule. The addition of the bound4blue groundbreaking wind assisted propulsion will enhance our efforts on this path to decarbonise.”

“With this project, we are confident that the emission reductions gained through eSAILs® on Pacific Sentinel will help us better evaluate the GHG reduction potential of wind assisted propulsion on our fleet in the long run.”

Pacific Sentinel will achieve a ‘wind assisted’ notation from class society ABS once the eSAILs® are installed. 

 

Photo credit: Eastern Pacific Shipping
Published: 23 February, 2024

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VLSFO

Integr8: European VLSFO bunker fuel prices are worth watching

Research contributor Steve Christy explains what is behind the steep rise in European VLSFO prices relative to markets elsewhere in the world and where the Rotterdam VLSFO price may go in the coming weeks.

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Integr8: European VLSFO bunker fuel prices are worth watching

By Steve Christy, Research Contributor, Integr8 Fuels
[email protected]  

22 February 2024       

Recent uptick in oil prices; but for temporary reasons

There are mixed signals driving the absolute price of oil at the moment, with a slightly more bullish push over the past two weeks. But, to put it in context, this recent uptick followed a sharp drop in prices at the end of January and into the first few days of February, when Brent crude fell from $82/bbl to $77/bbl. The ‘bullish’ push in the past two weeks has only brought Brent back to $82/bbl.

Looking at very low sulphur fuel oil (VLSFO) prices in Singapore and Fujairah, these have traded in a narrow $25/mt range so far this month and are still lower than their end January levels (and $35-40/mt lower than average November prices). This is not the case in Rotterdam.

Integr8: European VLSFO bunker fuel prices are worth watching

Behind these price movements there have been some temporary bullish factors in the oil industry so far this year. Arctic weather conditions in North America shut in around 0.9 million b/d of oil production and halted around 1.7 million b/d refinery operations. At the same time, there have been planned, heavy maintenance programs in the Atlantic Basin refining industry running through January and into February. This again has restricted product availabilities and led to lower stock levels. But these are temporary issues!

On the bearish side, in recent reports we have focused on the weak prospects for oil demand this year, and this is still in play, especially when you look at the International Energy Agency’s (IEA) latest forecast for 2024. Also, gains in non-OPEC production look as though they will be high this year, and the recent cuts in OPEC+ production have been limited to only 0.2-0.3 million b/d from December levels. Therefore, the fundamentals for this year would indicate a ‘lid’ on prices. This, plus the ability of the industry to work around the attacks on Red Sea shipping, has so far superseded the heightened political events and risks in the Middle East region.

European VLSFO prices are ‘more exposed’

From the chart above, Rotterdam VLSFO prices have risen more steeply than in Singapore and Fujairah over the past two weeks. Rotterdam VLSFO prices are around $50/mt higher than in early February, and unlike the other major bunkering hubs, Rotterdam prices are higher than we have seen so far this year, and some $10/mt above their November average.

Back in November, Rotterdam VLSFO was priced at around $580/mt and Singapore at around $680/mt, i.e. a differential of $100/mt. Between then and now Singapore prices have fallen by $40, but Rotterdam prices have gone in the opposite direction and are around $10 higher. The net result is that the differential between the two markets has narrowed from $100- to $50/mt.

 

 

 

 

 

 

 

 

graph 2 (1)

VLSFO pricing related to middle distillate pricing

The nature of VLSFO means supply and price movements are closely related to what is happening in other products. The chart below shows the close relationship between Rotterdam VLSFO and NW European diesel prices.

graph 3 (2)

The European VLSFO market looks like it will only get tighter

Europe is naturally short in the middle distillates of jet, diesel, and gasoil and so highly dependent on imports. The European sector had already been under pressure since the embargo on Russian supplies. However, the situation has tightened even further with the attacks on shipping in the Red Sea. These latest developments have hit diesel and jet shipments from the Middle East and India to Europe, with a leap in freight costs, longer voyage times via the Cape of Good Hope and tighter market conditions in Europe.

This loss of these supplies from east to west has partly been made up by an increase in diesel exports from the US to Europe. However, this may be short-lived as US refinery turnarounds in the first quarter cut availabilities and potentially limit diesel exports. Hence, European diesel (and so VLSFO) prices are likely to rise relative to VLSFO markets elsewhere in the world.

To compound this even more, Ukraine drone attacks on Russian refineries may have affected operations and so diesel exports from the country. Although this will not have a direct impact on the European diesel position, there is an indirect consequence, with other buyers of Russian products left short and having to source supplies from elsewhere, which will be in direct competition with European buyers.

Add to this a number of major European refineries going into turnaround in the north and Med regions, and the market is potentially even tighter!

If this isn’t enough, then there is a further layer to add to the argument; and that is the current exceptionally low distillate stock levels in Europe. The graph below shows the five year high/low range for middle distillate stocks in Europe, and that for the past two years stocks have been well below their five year average. More importantly, over the past three months stocks have been below their previous five year lows, and this is at a stage when we expect the market to tighten even further.

graph 4 (1)

Whatever happens, Rotterdam VLSFO prices are likely to be relatively high

All else being equal (it never is!), the fundamentals point towards a more bearish oil market, but with this relative strengthening in European VLSFO prices.

Beyond the fundamentals, the geopolitical risks at the moment clearly lie in the Israel/Gaza position and developments surrounding Iran. But there are also a number of elections this year that will contribute to more uncertainty, not least in the US.

However, as things pan out, the European distillate market does look tight going forward and this would mean relatively higher VLSFO prices in Rotterdam, and Europe generally.

 

Photo credit: Integr8 Fuels
Published: 23 February, 2024

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LNG Bunkering

Galveston LNG Bunker Port joins SEA-LNG coalition

SEA-LNG said move will further enhance its LNG supply infrastructure expertise and global reach, while giving GLBP access to the latest LNG pathway research and networking opportunities.

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Galveston LNG Bunker Port joins SEA-LNG coalition

Galveston LNG Bunker Port (GLBP), a joint-venture between Seapath Group, one of the maritime subsidiaries of the Libra Group, and Pilot LNG, LLC (Pilot), a Houston-based clean energy solutions company, has joined SEA-LNG, according to the latter on Wednesday (21 February). 

SEA-LNG said the move will further enhance its LNG supply infrastructure expertise and global reach, while giving GLBP access to the latest LNG pathway research and networking opportunities.

GLBP was announced in September 2023 and will develop, construct and operate the US Gulf Coast’s first dedicated facility supporting the fuelling of LNG-powered vessels, expected to be operational late-2026.

The shore-based LNG liquefaction facility will be located on Shoal Point in Texas City, part of the greater Houston-Galveston port complex, one of the busiest ports in the USA. This is a strategic location for cruise ship LNG bunkering in US waters, as well as for international ship-to-ship bunkering and cool-down services. GLBP will offer cost-effective turn-key LNG supply solutions to meet growing demand for the cleaner fuel in the USA and Gulf of Mexico.

Jonathan Cook, Pilot CEO, said: “With an initial investment of approximately $180 million, our LNG bunkering facility will supply a vital global and U.S. trade corridor with cleaner marine fuel. We recognise that SEA-LNG is a leading partner and a key piece of the LNG bunkering sector, and will give us access to insights and expertise across the entire LNG supply chain.

“LNG supports environmental goals and human health by offering ship operators immediate reductions in CO2 emissions and virtually eliminating harmful local emissions of sulphur oxides (SOx), nitrogen oxides (NOx) and particulate matter.”

President of Seapath, Joshua Lubarsky, said: “We are very pleased to be supporting the decarbonization of the maritime industry through strategic, and much needed, investments into the supply of alternative fuels.  We are also happy to be a part of SEA-LNG which has done a wonderful job in advocating for advancements in technology in this vital sector.”

Chairman of SEA-LNG Peter Keller, said: “We’re proud to welcome another leading LNG supplier to the coalition and are looking forward to a mutually beneficial relationship. With every investment in supply infrastructure in the US and worldwide, the LNG pathway’s head start increases. Global availability, alongside bio-LNG and e-LNG development, makes LNG the practical and realistic route to maritime decarbonisation.

“All alternative fuels exist on a pathway from grey, fossil-based fuels to green, bio or renewable fuels. Green fuels represent a scarce resource and many have scalability issues, so we must start our net-zero journey today with grey fuels. LNG is the only grey fuel that reduces greenhouse gas emissions, well-to-wake, so you need less green fuel than alternatives to improve emissions performance.”

 

Photo credit: SEA-LNG
Published: 23 February, 2024

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