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GPCA: IMO2020 to affect Gulf Cooperation Council chemical industry

New IMO regulation may create more losers than winners in challenging market environment, Dr. Abdulwahab Al Sadoun, Secretary General, GPCA shares with Manifold Times.
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The following article is written by Dr. Abdulwahab Al Sadoun, Secretary General, Gulf Petrochemicals & Chemicals Association and shared with Manifold Times:

In recent decades, sustainability has come to play a larger role in influencing global industry regulations. More and more, we see governments and international organizations combine their efforts to reinforce regulations at both regional and global level in line with wide spread targets to mitigate climate change and lower harmful emissions to the environment. One such initiative that carries significant implications for businesses worldwide is the new 2020 IMO sulfur fuel regulation. Due for full implementation by January 2020, the regulation is calling for the reduction of sulfur content in marine bunker fuel from 3.5% to 0.5% or below. The switch to a compliant low-sulfur bunker fuel, considered as “the most disruptive product quality change in decades”, is expected to cost the shipping industry billions of dollars globally, causing freight rates to go up and raising costs for their customers.

As the world prepares to adopt the new regulation, it is important to measure the impact on both sides. In the Arabian Gulf, Saudi Arabia and Kuwait are both signatories to the IMO, and the UAE is yet to sign. As one of the most heavily export-oriented industries in the region, with 83% of chemical output being shipped to over 100 countries worldwide, the GCC chemical industry will be heavily impacted as major pressure would be put on its supply chain costs. Let’s take for example the so-called Emission Control Areas comprising northern Europe and the US. When low-sulfur fuel became compulsory in 2015, Maersk Line introduced “low sulfur surcharges” ranging between USD 15/teu and usd 80/teu, depending on the route. If we take the same scenario for the new IMO regulations, export freight rates for GCC producers could rise by as much as 10% to USD 1,688 on average.

The regional chemical industry has one of the longest and most costly supply chains, and after the increase in freight rates transportation will account for 6% of total chemicals sales, up from 5% previously, warehousing – for 3.5%, and other logistics expenses for 1.5%. Thus, the chemical industry’s supply chain costs will increase to 11% of landed products prices.

Following the upcoming changes in bunker fuel content, across all shipping sectors bunker costs may take up 70-80% of total voyage expenses, with the lion’s share of the increase likely to be absorbed by the customer. Compliance with the new fuel specification will involve significant costs for the refining and shipping industries; it will also influence all shippers, who would face significant compliance costs by having to upgrade equipment or switch to more expensive fuels. By some estimates in a full compliance scenario, shipping costs could rise by up to USD 60 billion annually from 2020 onward.

According to consultancy firm Wood Mackenzie, switching to marine gas oil (MGO) will be a more costly solution, and at 100% adoption would see freight rates go up by around USD 1 a barrel. In any case higher freight rates will influence relative differentials on both the feedstock and product sides of the supply chain, but the effect will vary depending on the dynamics present in each value chain and market.
 

Impact on projects in the GCC
Greenfield upgrading investments from refiners are unlikely to be purely driven by the IMO regulation, and there is a need to look at longer-term rationale and strategic fit of these projects. For refiners choosing not to invest, the focus should be on infrastructure to capture the opportunity from their existing configuration and internal streams.

Changes in refined product spreads will affect crude producers’ sales netbacks, while chemical producers will see the cost of their oil-based feedstocks also change. Market price for crude oil and naphtha feedstocks are likely to rise as the refining system increases crude runs to supply the additional demand for distillate bunker fuels and also “pushes” some volume of high-sulfur fuel oil to the power sector. The gasoline crack spread, and associated naphtha to crude crack spread, is projected to increase, while FCC propylene production is likely to decline. The aromatics and olefins chains are closely connected to the refining chain, and the IMO bunker quality changes are significant enough to substantively move refined product price relationships.

The new IMO specification change will create winners and losers on both sides. The winners will be highly complex refineries and refiners with deep conversion/distillate-oriented configurations. Refiners, particularly in the US and China, will also benefit from the changes by capturing the value of their ULSFO component streams and growing their share of the global bunker market.

Confronted with a more level playing field, GCC chemical producers would need to examine additional opportunities to improve their performance and overall completeness. Companies would need to pursue excellence across functions including manufacturing; marketing and sales; and capital productivity. Manufacturing excellence programs can drive gains in margins through improved variable and fixed costs; they can also help to unlock further production capacity through improvements in plant reliability and throughput.

Marketing and sales excellence can contribute not only to performance-related improvements via higher margins driven by more effective pricing, but also to additional volume growth based on an enhanced and more granular understanding of markets as well as more effective allocation of marketing and sales resources. And finally, capital productivity (CAPEX excellence) will ensure that future investments are fit for purpose and delivered on budget and on time. 

Photo credit: Gulf Petrochemicals & Chemicals Association
Published: 17 August, 2018
 

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Winding up

Singapore: High Court to hear Norvic Shipping Asia winding up application on 31 July

Application for the winding up of Norvic Shipping Asia Pte Ltd was filed by Netherlands-registered Mur Shipping BV on 8 April, according to Government Gazette notice.
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July 22, 2026

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An application for the winding up of Norvic Shipping Asia Pte Ltd was filed by Netherlands-registered Mur Shipping BV on 8 April, according to a Tuesday (21 July) notice on the Government Gazette.

It noted the winding up application is directed to be heard before the Judge sitting in the General Division of the High Court at 10am on 31 July.

Any creditor or contributory of the company desiring to support or oppose the making of an order on the winding up application may appear at the time of hearing by himself or his counsel for that purpose.

A copy of the winding up application will be furnished to any creditor or contributory of the company requiring the copy of the winding up application by the solicitors of the applicant’s, Oon & Bazul LLC, on payment of the regulated charge for the same.

The Applicant’s address is Hiridostraat 5, Gebouw Prismatrium, 1101CW Amsterdam, The Netherlands.

The Applicant’s solicitors are Oon & Bazul LLC of 103 Penang Rd, #04-04/05/06 Singapore 238467. 

Queries on the winding up application may be directed to the following email addresses: [email protected] and [email protected].

 

Photo credit: Manifold Times
Published: 22 July, 2026

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Methanol

World Fuel and partners complete first green methanol bunkering of car carrier in Shanghai

Operation involved the delivery of approximately 2,800 MT of green methanol to “Arctic Tern” via a ship-to-ship transfer using SIPG Energy’s dedicated methanol bunkering vessel “M/V Hai Gang Zhi Yuan”.
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World Fuel and partners complete first green methanol bunkering of car carrier in Shanghai

Marine fuel provider World Fuel on Tuesday (21 July) said it successfully completed the first green methanol bunkering of M/V Arctic Tern, with EUKOR Car Carriers and SIPG Energy at the Port of Shanghai. 

Arctic Tern is the first vessel in the new Shaper Class series of car carriers. 

The operation involved the delivery of approximately 2,800 MT of green methanol to Arctic Tern via a ship-to-ship transfer using SIPG Energy’s dedicated methanol bunkering vessel M/V Hai Gang Zhi Yuan, the largest vessel of its kind in operation. 

The bunkering operation was carried out at Haitong Terminal, Waigaoqiao Port Area, Shanghai Port, with cargo handling operations conducted simultaneously during bunkering.

This marks EUKOR Car Carriers’ first green methanol operation and the first time Arctic Tern has bunkered methanol since its delivery on 9 July. The operation marked the first bunkering at Shanghai Port of green methanol produced locally in Shanghai for an international PCTC operator. 

It also demonstrated the city’s integrated green methanol value chain, spanning local production, storage and bunkering, and established a replicable “Shanghai Model” for green methanol supply.

World Fuel arranged the supply and delivery of the fuel on behalf of EUKOR Car Carriers, working with SIPG Energy as the physical supplier at the Port of Shanghai.

The green methanol supplied was produced from municipal solid waste, ISCC-EU certified, and had a carbon intensity value below 25 gCO₂e/MJ.

Arctic Tern is the first of fourteen Shaper Class vessels ordered by Wallenius Wilhelmsen. With a capacity of 9,300 car equivalent units and methanol dual-fuel capability, the vessel will be operated by EUKOR Car Carriers, jointly owned by Wallenius Wilhelmsen and Hyundai Motor Group. Following her first green methanol bunkering, Arctic Tern will continue her maiden voyage from Asia to Europe.

Xavier Leroi, COO Shipping Services at Wallenius Wilhelmsen and CEO of EUKOR Car Carriers, said: “Completing Arctic Tern’s first green methanol bunkering shortly after delivery is a significant milestone towards our decarbonisation ambition for both EUKOR Car Carriers and Wallenius Wilhelmsen. It demonstrates how investments in next-generation vessel technology and fuel flexibility are being translated into real-world operations. 

“This achievement reflects the strong collaboration between all parties involved. Together, we have shown how partnerships across the maritime value chain can help make lower-emission fuels available and operationally viable at scale.”

Mark Tamsitt, SVP Global Marine Sales at World Fuel, said, “The first bunkering event with a new fuel is a significant moment for any shipowner, and our role is to make it as seamless as possible. By connecting EUKOR Car Carriers with SIPG Energy’s proven green methanol capability at the Port of Shanghai, we were able to deliver on reliable supply, fuel quality, and safe processes. As more of our customers bring methanol dual-fuel tonnage into service, we are committed to being the partner that makes these kinds of operations routine.”

Mr. Zhang Da, General Manager of SIPG Energy, said, “Welcoming Arctic Tern to the Port of Shanghai for her first green methanol bunkering demonstrates the strength and maturity of our supply capability. Building on our well-established methanol ship-to-ship bunkering services for container vessels, we have already extended such services to pure car and truck carriers (PCTCs). This bunkering sets a new record for the largest single SIMOPs green methanol bunkering for PCTCs in China, marking another step in building Shanghai’s position as a global green energy hub for international shipping.”

This operation follows Wallenius Wilhelmsen’s announcement on 9 July that Arctic Tern would complete her first methanol bunkering shortly after delivery. The vessel entered service on routes between Asia and Europe immediately following handover from China Merchants Jinling Shipyard in Nanjing.

 

Photo credit: World Fuel
Published: 22 July, 2026

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Ammonia

HPA and MB Energy develop safety concept for STS ammonia bunkering

HPA says the Port of Hamburg will become “bunker ready” for ammonia, laying the groundwork for safe and reliable ammonia bunkering in the future.
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July 22, 2026

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HPA and MB Energy develop safety concept for STS ammonia bunkering

The Hamburg Port Authority (HPA) and integrated energy company MB Energy on Tuesday (21 July) said they have completed a comprehensive risk analysis and developed a dedicated safety concept for ship-to-ship ammonia bunkering.

MB Energy said the analysis lays the groundwork for the safe introduction of ammonia as a future marine fuel.

“With our planned ammonia import terminal in Hamburg-Blumensand, MB Energy intends to provide the reliable land side supply infrastructure needed to support this transition across northern German ports,” it said in a social media post. 

Mabanaft Group was renamed to MB Energy last year and merged over 50 existing brands under one identity. 

Separately, HPA said the Port of Hamburg will become “bunker ready” for ammonia, laying the groundwork for safe and reliable ammonia bunkering in the future.

“The focus is in particular on container ships, cruise ships as well as RoRo and ConRo (Container/RoRo) ships,” it said. 

“We expect ammonia to establish itself as an alternative marine marine fuel in the coming years. With our preparatory work, we are already creating the conditions to welcome the first ammonia-powered ships in Hamburg and to bunker them safely.:

HPA added that the import terminal for ammonia planned by MB Energy from 2029 will make a decisive contribution to ensuring the reliable availability of ammonia as a bunker fuel in northern German ports in the long term. 

“The use of an ammonia bunker barge is considered a possible addition to the landside infrastructure to enable ship bunkering in the port and beyond in the future,” it said.

Related: Mabanaft Group renames as MB Energy, merging over 50 brands under one identity

 

Photo credit: Hamburg Port Authority
Published: 22 July, 2026

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