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Proman Stena Bulk welcomes newbuild methanol-fuelled tanker “Stena Pro Patria”

“Stena Pro Patria” the first of three methanol-fuelled vessels delivered in 2022; a further three newbuilds are due for delivery between now and 2024.

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Proman Stena Bulk Ltd formally named its first state-of-the-art newbuild IMOIIMeMAX methanol-fuelled 49,900 DWT vessel Stena Pro Patria in a ceremony hosted in Trinidad and Tobago on 23rd November 2022.

Stena Pro Patria is the first of three methanol-fuelled vessels delivered in 2022 to the joint venture between tanker company Stena Bulk and methanol producer Proman, with a further three newbuilds due for delivery between now and 2024.

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First methanol-fuelled newbuild naming ceremony in T&T

The naming ceremony was the first for a methanol-fuelled newbuild in Trinidad and Tobago, and was attended by Trinidad and Tobago’s Prime Minister, Dr. the Honourable Keith Rowley, as well as the Minister of Energy and Energy Industries the Honourable Stuart Young.

During the visit, Stena’s leadership, including William Olsson, Chairman of Stena Sessan AB and Board Member Stena AB; Erik Hånell, President & CEO Stena Bulk AB; and Markus Lindbom, CEO Stena Rederi AB, had an opportunity to visit Proman’s fourteen petrochemical production facilities in the Point Lisas Industrial Estate, as part of a plant tour led by Proman’s Chief Executive David Cassidy.

Proman is the largest investor and employer in the Point Lisas Industrial Estate, which is home to Trinidad and Tobago’s downstream petrochemicals sector. Proman’s facilities include the world-scale M5000 methanol plant, which produces industry-leading low-carbon methanol by recycling CO2 produced from nearby ammonia plants. Since 2006, almost 24 million tonnes of CO2 have been captured from both Proman’s own and neighbouring ammonia plants and re-used.

Proman Stena Bulk welcomes newbuild methanol-fuelled tanker “Stena Pro Patria”

IMOIIMeMax: setting a new benchmark for energy efficiency

Stena Pro Patria was delivered in June 2022 and has demonstrated an unprecedently low EEDI (Energy Efficiency Design Index) value while running on methanol. The IMOIIMeMax vessel series benefits from industry-leading design improvements and technologies to maximise energy efficiency, resulting in an EEDI 11% below the 2025 Phase 3 requirements – setting a new benchmark for methanol-fuelled tankers and further proving the operational viability of methanol as a marine fuel.

Stena Pro Patria will use approximately 12,500 tonnes of methanol as fuel per year, which will significantly reduce the volume of greenhouse gas emissions resulting from the vessel’s commercial operations compared to conventional marine fuels.

Proman Stena Bulk welcomes newbuild methanol-fuelled tanker “Stena Pro Patria”

During his feature address, Dr. The Honourable Keith Rowley, Prime Minister of Trinidad and Tobago outlined the potential for bunkering in Trinidad and Tobago to be a significant part of the country’s economic development, saying: “We are one of the largest producers and exporters of methanol in the world, and we happen geographically to be on a place at the tip of South America, East of the Panama Canal where all these vessels are being encouraged to change their fuel consumption from the dirty fuel to clean fuel – and that fuel is available in Trinidad and Tobago. What we are aiming to do is to make Trinidad and Tobago a major refuelling hub for oceangoing vessels that can be refuelled by clean fuel.”

Erik Hånell, President and CEO of Stena Bulk, said: "This naming ceremony for Stena Pro Patria in Trinidad and Tobago is another important milestone for Proman Stena Bulk.

“Every step our joint venture takes proves the viability of methanol as a marine fuel and underlines that it is technically feasible, with the right knowledge and backing, to be used in-operation today. We are honoured to lead methanol's development and scaling within the industry and to be working closely with Proman on our shared vision for methanol.

“Finally, we must also recognise the role that Trinidad and Tobago has played in making this naming ceremony a reality. As an important methanol shipping hub, there was no better place to hold this important event for Stena Pro Patria and our joint venture.”

David Cassidy, Chief Executive of Proman, added: “We were delighted to welcome our Stena partners to Trinidad and Tobago. We share a commitment to accelerating the clean shipping transition, via our methanol-fuelled newbuilds and other initiatives, so it was particularly valuable to tour our methanol production facilities and reaffirm the low-carbon pathway for the maritime market.

"Stena Pro Patria is a very special vessel, as the first tanker in our joint venture with Stena Bulk and due to her deeper connection to the Proman family. It was a pleasure to bring everyone together, from Stena to our wider partners and employees here in Trinidad and Tobago, to give Stena Pro Patria the naming ceremony that she deserves.”

The naming ceremony was held in Trinidad and Tobago to honour Stena Pro Patria’s connection to Dennis Patrick, the late Chief Executive of Proman’s subsidiary Methanol Holdings (Trinidad) Limited (MHTL), for whom the vessel is named. Dennis was a deeply valued colleague and longstanding member of the Proman family. Mrs. Cassandra Patrick is the Godmother of Stena Pro Patria.

Related: South Korea completes first methanol bunkering operation at Ulsan Port
Related: Proman Stena Bulk takes delivery of second methanol-fuelled tanker “Stena Pro Marine”
Related: First methanol-powered newbuild “Stena Pro Patria” delivered to Proman Stena Bulk
Related: First Chinese-built methanol-propelled vessel “Stena Pro Patria” starts sea trials
Related: Proman Stena Bulk launches first methanol dual-fuelled vessel “Stena Pro Patria”
Related: Proman and Stena to develop a retrofit and supply solution for methanol bunkering
Related: Steel cutting begins on Stena Bulk-Proman joint venture methanol fuelled tanker

 

Photo credit: Stena Proman
Published: 28 November, 2022

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LNG Bunkering

Titan completes first STS LNG bunkering operation in Cuxhaven

Port of Cuxhaven in Germany had previously only seen LNG operations conducted via truck and currently only permits LNG bunkering at one berth, says Titan.

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Titan completes first STS LNG bunkering operation in Cuxhaven

LNG bunker fuel supplier Titan on Thursday (11 July) said it completed the first-ever LNG bunkering operation by ship in the port of Cuxhaven.

Titan’s bunker vessel Optimus successfully delivered LNG to dredger Vox Ariane operated by its long-term client Van Oord. 

“Our ship-to-ship bunkering in Cuxhaven represents a pioneering step in the region's LNG infrastructure development, as the port had previously only seen LNG operations conducted via truck and currently only permits LNG bunkering at one berth,” it said in a social media post. 

“LNG infrastructure development is part of a broader trend, with more ports across Germany adopting LNG operations to support shipping’s clean fuels transition.”

Titan added the improved LNG bunkering capabilities in Cuxhaven, a Niedersachsen Ports GmbH & Co. KG port, also opened up the pathway to maritime decarbonisation via liquified biomethane (LBM) and then renewable e-methane going forward.

 

Photo credit: Titan
Published: 12 July, 2024

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LNG Bunkering

UECC “Auto Achieve” receives first LNG bunker fuel delivery by barge in home country

Firm said it received the first ever supply of LNG by barge to their multi-fuel LNG battery hybrid car carrier in the Port of Drammen, Norway.

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UECC “Auto Achieve” receives first LNG bunker fuel delivery by barge in home country

Norwegian roll-on/roll-off shipping line United European Car Carriers (UECC) on Wednesday (10 July) said it received the first ever supply of LNG by barge to their multi-fuel LNG battery hybrid car carrier Auto Achieve in the Port of Drammen on 4 July.

The firm said this was the first time UECC received LNG by barge to any of their vessels in their home country Norway. 

“We also believe that it was the first time LNG was delivered by barge to any vessel in Drammen, and most likely the entire Oslofjord,” UECC said in a social media post.

The LNG was supplied by the Molgas Energy Holding vessel Pioneer Knutsen, owned by Knutsen Group OAS.

“UECC is very pleased to see the expansion of the LNG barge network in Norway,” it said. 

 

Photo credit: UECC
Published: 12 July, 2024

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FuelEU

OceanScore reveals ship segments set to feel EUR 1.3 billion sting of FuelEU penalties

Container segment will bear the brunt of FuelEU costs, accounting for 29% of gross penalties, followed by RoPax on 14% with tankers and bulkers each on 13%, says firm.

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OceanScore Managing Director Albrecht Grell

Hamburg-based technology platform OceanScore on Tuesday (9 July) said the financial impact of FuelEU Maritime is focusing the minds of shipping companies as they face potential penalties for non-compliance with greenhouse gas (GHG) intensity reduction targets - and OceanScore has identified those segments set to be hit hardest.

The following is an article by OceanScore elaborating on the matter:

Vessels in the passenger/cruise, container, RoPax, bulker and tanker segments will have significant cost exposure from the complex regulation due to be implemented from 1 January next year, despite a relatively modest initial target of a 2% cut in GHG intensity, according to OceanScore.

The firm’s data analytics team has calculated that shipping will rack up total FuelEU penalties of €1.345 billion in 2025 through analysis of the 13,000 vessels over 5000gt trading within and into the EU/EEA that are subject to the regulation. This is based on data on trading patterns and fuel mix from 2022 - the last full year currently available.

Containers bear burden

The team has been able to determine FuelEU compliance balances and resulting penalties for each vessel using OceanScore’s proprietary data modelling incorporating AIS data, Thetis emissions data, bunker intelligence and advanced analytics/AI. It has factored in the likely fuel mix for each vessel between EU ports and to/from the EU, as well as in ports.

Vessels will be hit with a penalty of €2400 per tonne of VLSFO-equivalent for failing to meet the initial 2% reduction target relative to a 2020 baseline for average well-to-wake GHG intensity from fleet energy consumption of 91.16 gCO2e per megajoule (MJ) - or emissions per energy unit. The GHG intensity requirement applies to 100% of energy used on voyages and port calls within the EU/EEA and 50% of voyages into and out of the bloc.

As with the EU Emissions Trading System (EU ETS), it is the container segment that will bear the brunt of FuelEU costs, accounting for 29% of gross penalties, followed by RoPax on 14% with tankers and bulkers each on 13%.

“It is critical for shipping companies to determine a baseline for expected FuelEU costs to secure proper planning and budgeting processes to compare different mitigation options, as well as to decide what to do with outstanding compliance balances,” says OceanScore Managing Director Albrecht Grell.

“This will require, to a higher degree than the EU ETS, a corporate strategy to determine how to reduce the compliance balance/deficit, how to commercialise a surplus and deal with deficits that remain.”

Wide spread of vessel liabilities

OceanScore has found that liabilities per vessel will differ widely across the various segments due to increasingly diversified fuel choices, including greater uptake of biofuels and LNG. Passenger vessels will be penalised the most with an average of €520,000 per vessel annually, followed by RoPax at €480,000 and RoRo at €314,000, with an average penalty for container ships of only €214,000, according to OceanScore.

Grell points out there are also massive discrepancies between vessels within these segments, with a number of ships in the passenger and RoPax segments exposed to penalties of between €1.8m and €2.5m, and payment obligations for some container ships approaching €1m. This is driven by higher energy consumption simply due to vessel size and trading profile.

While penalties will arise from so-called compliance deficits for vessels using conventional fuels, surpluses totalling an estimated €669m will be generated mainly by vessels fuelled by LNG and LPG with significantly lower carbon intensity.

LNG carriers will account for 78% of the total market surplus and gas carriers 8%, while a further 8% will be generated by container ships that have seen a modest uptake in alternative fuels in recent years.

Pooling can halve costs for the industry

Taking into account this estimated compliance surplus, the net cost of FuelEU penalties for shipping from 2025 would be €680m, which indicates that pooling of vessels can roughly halve the gross burden for the industry.

Penalties will, in segments typically using conventional fuels with comparable carbon intensities such as HFO, LFO or MDO, be roughly proportional to the overall fuel consumption, thus correlating with the EU ETS cost.

Initial costs of FuelEU for most conventionally fuelled vessels, prior to pooling, will be around one-third of those associated with the EU ETS next year when the latter regulation will have 70% phase-in. But ultimately FuelEU is likely to prove a much more costly affair as the requirement for GHG intensity cuts rises to 6% by 2030 and then accelerates to reach 80% by 2050.

“It is therefore incumbent on shipowners to define their strategies not only towards fuel choices and the use of onshore power but also towards handling of residual compliance balances such as pooling, banking and borrowing of balances, to mitigate the financial impact of FuelEU. However, pooling will also come at a cost, while banking and borrowing will incur interest costs and only push liabilities into the future,” Grell explains.

‘Sound administrative processes’

He further points out that pooling compensations paid between different shipping companies will effectively divert cash flow away from the EU that it would otherwise have earned from FuelEU penalties – but that this effect is intended by the regulator to “reward” early adopters of clean fuels.

Another factor that will curb potential income for the EU from this regulation is that the compliance gap has been reduced to only 1.6% by 2022, as average GHG intensity from shipping has come down by 0.4% to 90.82 gCO2e per MJ, mainly due to increased LNG carrier calls to Europe after gas supplies via pipelines from Russia were halted when the latter invaded Ukraine. Given this trend and increasing adoption of biofuels, the 2% compliance gap will probably be closed before the first tightening of reduction targets in 2030.

Grell says the priority for shipping companies, especially at this early stage while cost exposure is relatively low, is to get to grips with the complexity of the regulation and tackle the risks arising from the fact the party liable for penalties - the DoC holder, or possibly shipowner - is not the one responsible for emissions, which is typically the charterer.

“As well as having costs oversight, companies require reliable monitoring and reporting mechanisms with high-quality emissions data. They must also have in place complex contractual arrangements and sound administrative processes to manage compliance and mitigate the financial consequences of the new regulation,” Grell concludes.

Related: FuelEU: New regulation leaves DoC holder with fuel liabilities risk, says OceanScore
Related: ‘Big opportunity’ for bunker traders, suppliers on upcoming FuelEU regulation, forecasts OceanScore

 

Photo credit: OceanScore
Published: 12 July, 2024

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