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How the structure of the marine fuels market is changing: From Marine Fuel Oil to LNG

‘Distillates will become an alternative to fuel oil, but they will be gradually replaced by new grades of low-sulfur fuel,’ said CEO of Gazpromneft Marine Bunker.




Alexei Medvedev Gazpromnneft Marine Bunker CEO

Disclaimer: An online translation service was used in the production of the current editorial piece.

Russian oil producer Gazprom Neft on Wednesday (29 July) shared an interview between its CEO Alexei Medvedev and Russian non-profit maritime magazine Marine Fleet (Морской флот) about how the bunker fuel landscape has changed since the dramatic events of 2020 and how GazpromNeft Marine Bunker plans to strategise its business activities for the future: 

The first half of 2020 was marked by several challenges for the shipping and related industries at once: from January 1, new environmental requirements of the international MARPOL convention came into force, following oil prices, the cost of marine fuels decreased, and the COVID-19 pandemic had a significant impact on passenger and cargo transportation. Alexei Medvedev, General Director of Gazpromneft Marine Bunker, told Marine Fleet magazine how the architecture of the marine fuel market has changed over the past six months, how bunkering companies operate in new economic conditions, and how soon LNG will become an alternative to traditional oil products.


- Alexey Alexandrovich, tell us about the work of the company, in which regions do you work, what were the volumes of supplies last year? What kind of fleet do you have?

- Gazpromneft Marine Bunker was established in 2007 as an independent enterprise and operator of the bunkering business of Gazprom Neft. Today we are one of the three largest bunkering companies in the country. At the end of 2019, the total sales of Gazpromneft Marine Bunker marine fuels reached 3 million tonnes.

Our clients include over 200 Russian and foreign shipping companies. Thanks to the developed infrastructure, consisting of fuel terminals and our own bunkering operators, we provide our partners with a range of bunkering services in all key domestic ports - from the Baltic to the Far East, as well as abroad - in Tallinn (Estonia) and Constanta (Romania).

In addition to 10 bunkering vessels, our fleet includes vessels involved in the Arctic logistics of Gazprom Neft, including two high-tech icebreaking support vessels - Andrey Vilkitsky and Alexander Sannikov.

- What products do you offer?

- The company's portfolio includes almost all types of petroleum products that are currently in demand on the market: low-sulfur with a sulfur content of less than 0.5% and ultra-low-sulfur, with a sulfur content below 0.1%, low-viscosity marine fuel.

The fuel that we sell is produced at Gazprom Neft's refineries in Moscow and Omsk, and some of it is produced by blending at our terminal assets. The product portfolio also includes dark oil products that are used on ships equipped with scrubbers. The share of this fuel in the Gazpromneft Marine Bunker basket will steadily decline due to MARPOL-2020 requirements and an increase in demand for more environmentally friendly grades, as well as the cessation of fuel oil production at our refineries by 2024.

- Today, 2020, is unique in its way for a number of reasons. Tell us, have macroeconomic factors influenced the work of your company? And have the conditions for working with clients changed?

- The beginning of 2020 can be safely called a period of challenges that had a significant impact on the sales structure and the capacity of the marine fuels market. On the one hand, the new environmental requirements of MARPOL-2020 came into force, on the other, there was a decrease in demand and oil prices, which led to a decrease in prices for bunker fuel and an increase in the growth of differentials for European ports.

In addition, restrictive measures were introduced due to the COVID-19 pandemic. But the new realities affected everyone - both ship owners and fuel suppliers, and the stability of the business largely depends on how effectively the processes are built in the companies, how the management decisions are made promptly.

As for us, we were able to quickly adapt to new conditions. They began to work more point-wise, actively and with flexible pricing. As a result, at the end of the first quarter, they increased their market share and increased retail sales by 5% compared to the same period in 2019.

- You have already mentioned the new environmental requirements of MARPOL2020. What should shipping companies prepare for?

“The new environmental requirements were announced long before they came into force, so all market participants had time to prepare for them. Shipowners have to decide to switch to low-sulfur fuel or equip their fleet with scrubbers. For bunkering companies - to ensure the production and supply of marine fuel with a sulfur content of no more than 0.5%.

In its long-term development strategy, Gazprom Neft stakes on environmentally friendly marine fuels - they have a high market potential and they minimize the impact on the environment.

Thanks to the large-scale modernization of oil refineries and the development of terminal assets, the company has in advance ensured the possibility of producing marine fuel that fully meets the increased environmental requirements.

The new fuel with our unique recipe is produced by the  Omsk Refinery . In addition, we launched the production of a  blended product  with high environmental characteristics at the fuel terminals in St. Petersburg and Novorossiysk, and already in October 2019 we carried out the first bunkering of marine fuel with a sulfur content of less than 0.5%. By the time MARPOL2020 entered into force, they had already accumulated expertise and extensive experience in working with new brands of oil products, which strengthened our status as a reliable and technologically advanced supplier of marine fuel.

As for the situation on the marine fuels market, it is stable both in terms of the availability of necessary products and in the rhythmic supply of oil products to ports.

- Will the market conditions in terms of fuel grades and participating companies change due to MARPOL-2020 restrictions?

- According to expert estimates, new environmental requirements will significantly change the structure of the marine fuels market. If earlier the share of dark oil products was about 70%, then in the coming years it will decrease to approximately  15–20%.

Distillates will become an alternative to fuel oil, but they will be gradually replaced by new grades of low-sulfur fuels. In addition, LNG will take an increasing share of the product basket of bunkering companies.

In the medium term, provided the necessary infrastructure is developed, NGV fuel has great potential.

- How did the shipowners react to the new global environmental requirements? Have they changed the way they do business?

- It is hardly possible to be mistaken, assuming that every manager these days relies on improving business efficiency. This applies to shipowners in full. Market participants strive to improve logistics, conserve resources, and care about energy efficiency. In this regard, the new restrictions of MARPOL-2020 have become very indicative.

One of the possible strategic decisions for shipowners was the installation of scrubbers to clean exhaust gases - this allows the continued use of cheaper dark fuels. At some point, this path even seemed the most attractive, because the price of scrubbers has dropped significantly. But the cost of equipment maintenance and expensive waste disposal, as well as possible new restrictions on nitrogen compounds emissions, actually offset these savings in the long term. Therefore, many ship owners chose another, slightly more costly, but environmentally friendly option and switched to using fuels with a sulfur content of no more than 0.5%.

I am confident that with the development of onshore and bunkering infrastructure, shipowners, assessing the advantages of LNG, will make a choice in favor of NGV fuel in the medium term.

- The efficiency and stability of the business depends, among other things, on the implementation of new investment projects. What are the main development vectors currently relevant for Gazpromneft Marine Bunker?

- We pay great attention to the implementation of our own LNG bunkering project - we plan to start gas bunkering next year. In addition, an important strategic task is the modernization and development of production assets - bunker terminals and the fleet.

- How do you assess our SRH, what quality of service they provide, has anything changed for the better here?

- Our specialized subsidiary, Gazpromneft Shipping, has many years of experience in partnership with both domestic and foreign shipyards. If we compare Russian and foreign ship repair companies, then they all have their advantages. So, foreign companies, due to the promptness of the supply of imported spare parts, can provide shorter repair times. In turn, Russian shipyards, due to their geographical proximity and simple logistics, provide ship repair services at more competitive prices.

- Tell us about your work in the area of ​​industry standards. Are you participating at the Bunkering Association or Chamber of Shipping level in improving the regulations that govern shipping and bunkering activities? How successful is this work?

- We are conducting this work both at the Russian and international levels. In particular, Gazpromneft Marine Bunker takes part in the work of the International Maritime Organization (IMO) on environmental issues of shipping, including special requirements for the quality of marine fuel. Now, with the participation of our consultants, a new edition of MARPOL-2020 is being developed, which is planned to include requirements for the use of marine fuel in the Arctic.

Gazpromneft Marine Bunker is implementing a number of initiatives necessary for the development of the Russian bunkering industry as a whole. In 2018, we introduced into the practice of Russian shipping the  international standard ISO 20519: 2017  “Ships and marine technologies. Requirements for bunkering of ships using liquefied natural gas as fuel. " In fact, this became the starting point for the precise creation of the regulatory framework for a new fuel segment - LNG bunkering.

In addition, our specialists are involved in the work on changing the excise taxation of operations with middle distillates. So, last year, dark marine fuel was excluded from the list of excisable goods, and now it is subject to excise duty as a middle distillate.

- What is the current vector of development for the company and what can be expected in the mid-term?

“We all perfectly understand the role of sea transport in the global economy. If the freight turnover between the countries continues to grow, the demand for the services of shipping companies will increase, and with it the demand for environmentally friendly marine fuel.

Our task is to develop in the common fairway and act ahead of dynamically changing market conditions. We were one of the first to present a new ecological type of fuel demanded by shipowners with a sulfur content of less than 0.5%. In 2021, we will start bunkering ships with LNG fuel. Both now and in the long term, we closely monitor the market situation, effectively cooperate with partners and provide our customers with a service that meets international quality standards.

Photo credit and source:
Published: 30 July, 2020

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Interview: Malaysia bunker supplier PSP Marine shares commercial expansion plans

‘IMO 2020 has produced several business opportunities which we are keen to explore as part of efforts to support shipping’s decarbonisation,’ Managing Director tells Manifold Times.





PSP Grace MT

Malaysian bunker supplier PSP Marine (M) Sdn Bhd, established at Port Klang since 2012, is planning to expand its marine fuels business within the coming years, learned Manifold Times.

The company, which currently supplies marine gas oil (MGO), its low sulphur variant (LS MGO), and lubricant oil to vessels calling Peninsula Malaysia ports (including Sabah and Sarawak), is actively looking at market opportunities, says its Managing Director.

“We have stood the test of time and proven ourselves in this industry since our inception,” Soon Thian Fong told the bunkering publication.

“In order for our group to grow, become more resilient, and to tackle more complex and intricate challengers, we are expanding our bunkering business to other ports in Malaysia.

“We have successfully expanded to the Port of Tanjung Pelepas, Pasir Gudang Port, Melaka Sungai Udang Port, and Kuantan Port.

“Moreover, we aim to diversify into international petroleum cargo trading. Our target markets are Asian countries with growth and scarce energy supplies such as Taiwan, Singapore, and Indonesia.”

PSP bunkering collage

Bunker deliveries from PSP Marine are currently supported by three Malaysia-flagged bunker tankers namely PSP Grace (755 dwt, IMO 9056466), PSP Glory (737 dwt, IMO 8403038), and PSP Golden (1,198 dwt, IMO 9079652).

Moving forward, Mr Soon highlights the company to be looking at barge acquisition opportunities and a product portfolio expansion to offer Very Low Sulphur Fuel Oil (VLSFO).

“The next two years will be interesting times for our company as we look to execute the expansion plans. IMO 2020 has produced several business opportunities which we are keen to explore as part of efforts to support shipping’s decarbonisation,” shared Mr Soon who noted, “opening of an office in Singapore is also within our sights.”

PSP Group supply locations

Contact details for enquiries are as follows:

Mr. Soon Thian Fong (AZ Soon)
Managing Director
+60 12 699 4488
[email protected]

Jane Ong
Sales Manager
+60 14 609 4488
[email protected]

Marine fuel enquiries
Email: [email protected]

Bunkering locations (West Malaysia)


Bunkering locations (East Malaysia)



Photo credit: PSP Marine
Published: 24 June 2024


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VPS launches Maress Summer Campaign Dashboard to track progress of vessels

Dashboard will enable the maritime industry to follow the development of its maritime emissions saving campaign, Maress Summer Campaign 2024, which is aimed at saving 15,000 tons of CO2.





VPS launches Maress Summer Campaign Dashboard to track progress of vessels

Marine fuels testing company VPS on Thursday (20 June) said it launched its Maress Campaign Dashboard to enable the maritime industry to follow the development of its maritime emissions saving campaign for this year.

It said the Maress Summer Campaign 2024, which started on 1 June and will run for 90 days, is ongoing and is aimed at achieving the goal of saving 15,000 tons of CO2.

“Since our last update, the number of participating vessels has increased from 278 to 303. This is more than doubling of the vessels that participated in the campaign last year,” VPS said in a social media post.

“The industry-wide effort to drive decarbonisation is showing fantastic results, with innovative initiatives and remarkable engagement from vessels across the board.”

It added the main purpose of the campaign is to create collaboration and awareness around emission reductions. 

“This industry-first tool is now open for everyone in the industry to track the collective progress. Updated daily, it provides a transparent and exciting view of the leaders in each category, showcasing the close race towards efficiency gains,” VPS said on the dashboard.

Note: The new dashboard by VPS for the Maress Summer Campaign 2024 can be found here.

Related: VPS to organise Maress Decarbonisation Campaign in 2024
Related: VPS wins OSJ Annual Environment Award 2024 for Maress Summer Campaign
Related: VPS records 10,000 tonnes of CO2 emission cut from campaign with top OSV players
Related: VPS Decarbonisation to kickstart summer campaign to reduce shipping emissions


Photo credit: VPS
Published: 21 June, 2024

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UECC reduces emissions in 2023 by more than doubling bio bunker fuel use

UECC boosted the use of ISCC-certified sustainable biofuel B100 on both owned and time-chartered ships to 14,000 mt last year, up from 6,500 mt in 2022.






United European Car Carriers (UECC) recently announced its progress of using alternative bunker fuels and said it was on track to exceed its goal of a 45% emissions reduction by 2030 after more than doubling biofuel usage across its fleet last year.

UECC boosted the use of ISCC-certified sustainable biofuel B100 on both owned and time-chartered ships to 14,000 metric tonnes (mt) last year, up from 6,500 mt in 2022.

The company achieved a total tank-to-wake emissions reduction of over 60,000 tonnes across its 14-vessel fleet in 2023, of which it is estimated increased biofuel use accounted for 40,000 tonnes, with the remainder coming from LNG. This was a near-250% increase on the emissions cut of 24,200 tonnes achieved in 2022.

TheEuropean sustainable shortsea carrier said it has made significant strides in decarbonisation of its fleet of pure car and truck carriers (PCTCs) with the addition of five LNG-fuelled newbuilds and the increased rollout of biofuels in recent years - and this is now showing commercial payback for clients in the light of new green regulations, according to Energy and Sustainability Manager Daniel Gent.

“Consequently, we are well on the way to reach or exceed our 45% emissions reduction target by 2030. This clearly has a positive impact for those bio-supportive cargo owners in terms of reducing costs related to the EU Emissions Trading System (EU ETS),” Gent said.

“Furthermore, 85% of the vessels in our fleet achieved a C-rating last year with the IMO’s Carbon Intensity Indicator (CII) and this year we expect all our ships to achieve this rating or above.”

Gent also pointed out the UECC fleet is already in surplus in relation to the requirement for an average 14.5% reduction in GHG intensity by 2035 under the FuelEU Maritime regulation due to be implemented next year.

The environmental performance of UECC’s current fleet of nine owned and five time-chartered PCTCs has been enhanced through delivery over the past seven years of five eco-friendly newbuilds - a pair of dual-fuelled LNG vessels and trio of multi-fuel LNG battery hybrid units.

The use of LNG reduces emissions of CO2 by around 25%, SOx and particulate matter by 90% and NOx by 85%, while the latest battery hybrid newbuilds exceed the IMO target to reduce carbon intensity by at least 40% from 2008 levels by 2030.

UECC is now looking at sourcing alternative carbon-neutral fuels such as bio-LNG and e-LNG for these vessels to further improve their green performance, according to Gent.

UECC’s adoption of alternative fuels has expanded exponentially since the programme was launched in 2020 with piloting the use of biofuel on its vessel Autosky, bolstered by valuable support from owners of its time-chartered vessels, clients such as BMW, fuel suppliers like GoodFuels, industry partners, and parent companies NYK and Wallenius Lines.

“We are now in the fifth year of running our biofuels programme and it has gone from strength to strength. UECC has sought to take a leading role through early-stage analysis of new biofuels to evaluate their potential in terms of technical suitability, sustainability and commercial viability, both  to deliver the best solution for our customers and give the sector a blueprint for assessment and adoption of such fuels based on these three pillars,” Gent explained.

He added that, in terms of sustainability criteria, the company looks for biofuels with the biggest environmental impact, with a typical minimum 90% reduction in GHG intensity from well-to-wake compared with conventional marine fuels. 

UECC has steadily expanded the use of green fuels to cover 30% of its fleet in 2023, up from 18% in 2022, and is on track to achieve 50% coverage this year towards the goal of 80% by 2030, though Gent is confident of surpassing this figure.

He said being proactive in trialling new alternative fuels has also promoted engagement with fuel providers, which has led to UECC’s latest initiative together with biofuel supplier ACT Group as part of an industry collaboration to test the Cashew Nut Shell Liquid (CNSL)-based biofuel FS.100 that he believes has “great potential for sustainable shipping”.

“Increasing the pool of sustainable drop-in fuels offers a pathway for shipping to achieve rapid emissions cuts on existing vessels. Combining alternative fuels with energy efficiency measures such as hull cleaning and electrification with shore power can further accelerate decarbonisation,” Gent said.

“By progressively advancing the use of alternative fuels, we are reducing emissions exposure for our clients and securing regulatory compliance long into the future, while also promoting industry efforts to reach the net-zero goal,” he concluded.


Photo credit: United European Car Carriers
Published: 21 June, 2024

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