A new alternative bunker fuel is being developed by energy and commodities trading firm Vitol, coal mining firm Peabody Energy and London-based technology start-up Arq.
The trio entered an agreement on Wednesday to develop a low-cost mechanical process for treating coal as a micro-particle system to produce Arq Fuel that can be blended directly into oil products without the need for expensive liquefaction.
Vitol will blend Arq Fuel into fuel oil and crude oil and work to position the product as a low-cost blending component with specific customers by targeting consumers of fuel oil such as the shipping industry, while distributing the product globally.
The development saw Arq raise over $50 million of new equity at a valuation of over a half-billion dollars (US), including an initial investment of $10 million from each of Vitol and Peabody; the agreements envisage Vitol and Peabody investing further in Arq over the next three years.
“Arq fuels will be pure hydrocarbons – combining them with fuel or potentially with crude provides the opportunity for refiners and fuel customers alike to diversify into a new and cost-effective source of supply, whilst the production of Arq fuels also has a beneficial environmental impact,” said Mike Muller of Vitol.
“We are pleased to be able to exclusively offer our customers the option of accessing an innovative new fuel component which has the potential to materially improve their competitiveness.”
“It is an interesting technology with good potential. We’ll offer a range of solutions to help our customers comply with IMO 2020. There are many factors which will dictate which method of compliance is adopted,” Muller told Reuters in a report.
It noted Arq CEO Julian McIntyre indicating the new fuel will be able to help the shipping industry to cut costs.
He noted the new fuel will be produced and delivered at less than $10 a barrel of oil equivalent, and could take up for as much as 20 to 25% volume when blended into a barrel of fuel oil.
Photo credit: Peabody Energy
Published: 19 July, 2018
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“In TotalEnergies, we already have projects along the e-Fuel value chain, from green electricity and green / blue hydrogen to e-Fuel production that will be integrated along the marine fuels value chain in time to come,” shares Louise Tricoire.
Buyers can nominate deliveries on platform and plan operations together with suppliers following ‘one single truth’ concept with all players aware of what has been agreed when and by whom, says DNV spokesman.
Rotterdam’s intention to mandate the usage of MFMs goes down well with licensed bunker supplier VT Group; MFM providers supportive of move but stressed continuous monitoring is needed for optimum performance.
Cost of alternative bunker fuels, bunker operations and technology advancement are some considerations to be examined by the maritime industry, says Neo, director of SDE International Pte Ltd.
Kim Hyung Joon and Han Donghoon were planning to join the Singapore entities of Hartree Group - either Hartree Partners Singapore Pte Ltd or Hartree Marine Fuels - in October, discovered management.
