COALspot.com keeps you connected across the coal world
  • SEPTEMBER 2019 INDONESIAN COAL PRICE REFERENCE FOR EXPORTS AND DOMESTIC BUYERS INCLUDING POWER PRODUCERS FIXED AT US$ 65.79 A TON
  • SHARE YOUR CORPORATE COAL & SHIPPING NEWS WITH US - NEWS@COALSPOT.COM
  • WE WELCOME ARTICLE SUBMISSIONS FROM EXPERTS IN THE AREAS OF COAL, MINING, SHIPPING, ETC.

Submit Your Articles
We welcome article submissions from experts in the areas of coal, mining, shipping, etc.

To Submit your article please click here.

International Energy Events


WTI Crude Oil

BRENT Crude Oil

Search News
Latest CoalNews Headlines
Wednesday, 29 August 18
IMPACT ON CHARTERPARTIES - TIME TO ACT NOW : NORTH P&I CLUB
North P&IKNOWLEDGE TO ELEVATE

The challenges introduced by the global sulphur cap are not exclusively technical. The new limits are likely to impact contracts and charterparties. Forward planning now could help to avoid painful disputes in the future.
 
Time charterparties will require particularly close attention, with more challenges anticipated for vessels already in long-term charterparties that span the enforcement date of 1 January 2020. Unfortunately, there is no single “magic” charterparty clause to deal with all of the issues that might arise. All bunker clauses will almost certainly need to be reviewed but other clauses might also need to be considered, depending upon the chosen method of compliance. Below, we look at some of the issues that we anticipate will more commonly arise.
 
Carriage of non-compliant fuel
It is likely that a prohibition on the carriage of non-compliant fuels will come into force on 1 March 2020 for vessels not fitted with Exhaust Gas Cleaning Systems (“EGCS” or “scrubbers”). Non-compliant fuels will have to be removed to avoid fines or the vessel being detained. Assuming such fuel is not consumed before 01.01.2020, who is obliged to arrange or pay for the removal of such fuel will depend upon the wording of the charterparty, so it will be important for this to be considered at the drafting stage. There may be significant logistical difficulties in removing non-compliant fuel and it is likely that the re-sale value will be less than the original purchase price. Issues might also arise over who owns the non-compliant fuel and who therefore has the right to remove it.
 
Definition of ‘high sulphur’ and low sulphur’
At the moment, vessels burn either ‘low sulphur’ (0.1%S max) fuel in ECAs or ‘high sulphur’ (3.5%S max) fuel outside ECAs. In 2020, there will be three sulphur types (<0.1%S, <0.5%S and >0.5%S). This raises the question: what will ‘low sulphur’ mean in 2020? Will it be <0.1% or <0.5%? It is therefore advisable to move away from the use of terms such as ‘high’ and ‘low’ sulphur but instead to specify the exact sulphur limit of fuel e.g. <0.5% sulphur content; <0.1% sulphur content etc.
 
Bunkers on redelivery (“BOR”)
When a vessel is redelivered by a time charterer, the charterparty usually requires that the vessel is redelivered with approximately the same quantities of ‘high sulphur’ and ‘low sulphur’ fuel as on board at delivery. The owner will usually be required to buy this fuel back at a certain price (often the same price as at delivery). ‘High sulphur’ fuel bought from the charterer at redelivery will have little value to the owner unless the vessel is fitted with scrubbers. BOR requirements in the charterparty might mean that the charterer can redeliver the vessel with insufficient compliant fuel on board to reach a bunker port. Therefore, Owners might want to ensure that BOR clauses are adjusted accordingly.
 
Bunker quality clause
Some bunker quality clauses require the charterer to provide fuel that complies with the international quality standard ISO 8217. However, not all fuels are covered by ISO 8217 (e.g. hybrids) so the bunker quality clause might need to be amended to ensure that the charterer is obliged to provide fuel of the correct specification, which is safe and suitable for the vessel, and in compliance with MARPOL and any other relevant regulations.
 
Fuel availability
Although it is anticipated that there will be enough compliant fuel available to meet demand, it may be geographically fragmented. So a vessel might trade in areas where compliant fuel cannot be supplied or even be unable to trade in such areas, such that trading limit clauses might need to be reviewed. The same is likely to be true for new hybrids/blends, and LNG is already known to have limited availability.
 
Bunker tank cleaning
Bunker tank cleaning will be needed if switching from heavy fuels to hybrid/blends/ distillates. Tank cleaning might also be needed before switching between different products, depending upon the advice given by the relevant fuel provider. Cleaning products will be needed, waste will need to be disposed of and time might be lost during the cleaning. Responsibility for all of this will depend upon the charterparty wording.
 
Performance warranties
Different fuels have different calorific values and energy densities. The performance of the vessel could be affected by any of the chosen compliance methods so the performance warranties might need to be amended. Owners should check with engine manufacturers.
 
Costs of installing an EGCS
It is unlikely that existing charterparties will expressly say who is to pay for a vessel to have an EGCS installed. If the charterer is likely to benefit in fuel cost savings then there may be scope for a commercial agreement as to who will pay.
 
Can owners be compelled to install an EGCS?
The Court of Appeal considered this type of issue in the Elli and the Frixos [2008] 2 Lloyd’s Rep. 119. In 2005, new MARPOL regulations came into force, which made it unlawful for any ship to carry fuel oil as cargo unless it was either double-hulled or double-sided. Expensive modifications would be required to the ships in question to allow them to comply with the new regulations. The Court found that the owners were in breach of certain clauses in the particular charterparties for not having carried out the necessary modifications, namely; a warranty relating to compliance with MARPOL and a clause requiring the vessel to have on board documents required by any applicable law to allow the vessels to trade. Installation of an EGCS is only one option for compliance and, as things currently stand, it will be possible to meet the new sulphur requirements without installing an EGCS. Therefore, the absence of an EGCS on a vessel will not necessarily put the vessel or its owner in breach of MARPOL or impact on the vessel’s documentation. Hence it seems likely that the Elli and the Frixos will not apply but it will depend on the facts of the individual case.
 
Fines for non-compliance
In the first instance, the owner will be responsible for paying any incurred penalties but they might be entitled to be indemnified by the charterer depending upon the charterparty terms. It might be less clear who will be responsible for lost time and costs if the vessel is detained by port state control.
 
Looking ahead
Early consideration of the above issues will be key to avoiding future headaches. The solutions will not be the same in every case and will be best considered in the context of the trade that the vessel is going to perform. Additional issues could arise as technologies develop and as we get an idea about availability of compliant fuels etc, which might necessitate further review of charterparties from time to time.
Source: North P&I Club


If you believe an article violates your rights or the rights of others, please contact us.

Recent News

Monday, 16 September 19
THE COAL-D SHOULDER? - BALTIC EXCHANGE
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity&rsquo ...


Monday, 16 September 19
SCRUBBERS AND FUEL PROFIT SHARE CLAUSES - CLYDE&CO
From 1 January 2020, Regulation 14 of MARPOL Annex VI provides that the sulphur content in fuel oil used on board ships shall be reduced from a max ...


Monday, 16 September 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR MAX 1,290,000 METRIC TONS OF STEAMING COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for total 1,290,000 Metric Tons steam coal. ...


Sunday, 15 September 19
SUPRAMAX / ULTRAMAX: MORE STEMS WERE NOTICED GOING TO VIETNAM FROM INDONESIA - BALTIC BRIEFING
Capesize Overall it was a negative week for the Capesize market, with many routes losing ground.  A limited amount of time charter appeare ...


Wednesday, 11 September 19
THE INDONESIAN COAL PRICE REFERENCE FELL HEAVILY IN SEPTEMBER
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...


   1 2 3 4 5   
Showing 6 to 10 news of total 5538
News by Category
Popular News
 
Total Members : 26,487
Member
Panelist
User ID
Password
Remember Me
By logging on you accept our TERMS OF USE.
Free
Register
Forgot Password
 
Our Members Are From ...

  • The Treasury - Australian Government
  • Credit Suisse - India
  • Central Electricity Authority - India
  • Thailand Anthracite
  • Sinarmas Energy and Mining - Indonesia
  • GB Group - China
  • Ceylon Electricity Board - Sri Lanka
  • Riau Bara Harum - Indonesia
  • Holcim Trading Pte Ltd - Singapore
  • Clarksons - UK
  • Gupta Coal India Ltd
  • Inspectorate - India
  • Xindia Steels Limited - India
  • Merrill Lynch Commodities Europe
  • Medco Energi Mining Internasional
  • India Bulls Power Limited - India
  • Kaltim Prima Coal - Indonesia
  • SGS (Thailand) Limited
  • ANZ Bank - Australia
  • Gujarat Mineral Development Corp Ltd - India
  • Jorong Barutama Greston.PT - Indonesia
  • Lafarge - France
  • Bukit Baiduri Energy - Indonesia
  • KOWEPO - South Korea
  • Gujarat Electricity Regulatory Commission - India
  • Ind-Barath Power Infra Limited - India
  • Sical Logistics Limited - India
  • Oldendorff Carriers - Singapore
  • Salva Resources Pvt Ltd - India
  • Tamil Nadu electricity Board
  • Thriveni
  • Lanco Infratech Ltd - India
  • Cemex - Philippines
  • TANGEDCO India
  • Marubeni Corporation - India
  • Sree Jayajothi Cements Limited - India
  • Australian Coal Association
  • Eastern Coal Council - USA
  • Ince & co LLP
  • IMC Shipping - Singapore
  • Power Finance Corporation Ltd., India
  • Altura Mining Limited, Indonesia
  • Formosa Plastics Group - Taiwan
  • London Commodity Brokers - England
  • Tata Chemicals Ltd - India
  • Maheswari Brothers Coal Limited - India
  • Africa Commodities Group - South Africa
  • Indian Oil Corporation Limited
  • Kohat Cement Company Ltd. - Pakistan
  • Trasteel International SA, Italy
  • SUEK AG - Indonesia
  • Rashtriya Ispat Nigam Limited - India
  • Ministry of Finance - Indonesia
  • Star Paper Mills Limited - India
  • Asmin Koalindo Tuhup - Indonesia
  • Humpuss - Indonesia
  • Permata Bank - Indonesia
  • Indika Energy - Indonesia
  • TNB Fuel Sdn Bhd - Malaysia
  • Intertek Mineral Services - Indonesia
  • Samsung - South Korea
  • GNFC Limited - India
  • Makarim & Taira - Indonesia
  • GMR Energy Limited - India
  • Coalindo Energy - Indonesia
  • ASAPP Information Group - India
  • South Luzon Thermal Energy Corporation
  • Orica Mining Services - Indonesia
  • Enel Italy
  • CoalTek, United States
  • Essar Steel Hazira Ltd - India
  • Panama Canal Authority
  • Georgia Ports Authority, United States
  • Savvy Resources Ltd - HongKong
  • Bhoruka Overseas - Indonesia
  • Siam City Cement PLC, Thailand
  • Coeclerici Indonesia
  • GVK Power & Infra Limited - India
  • Grasim Industreis Ltd - India
  • Shree Cement - India
  • Freeport Indonesia
  • Coal and Oil Company - UAE
  • Coaltrans Conferences
  • PNOC Exploration Corporation - Philippines
  • Renaissance Capital - South Africa
  • Bank of Tokyo Mitsubishi UFJ Ltd
  • McConnell Dowell - Australia
  • Total Coal South Africa
  • Russian Coal LLC
  • LBH Netherlands Bv - Netherlands
  • Jindal Steel & Power Ltd - India
  • Australian Commodity Traders Exchange
  • Directorate Of Revenue Intelligence - India
  • Planning Commission, India
  • Kideco Jaya Agung - Indonesia
  • Noble Europe Ltd - UK
  • Mechel - Russia
  • Aditya Birla Group - India
  • Sindya Power Generating Company Private Ltd
  • Bangladesh Power Developement Board
  • Global Coal Blending Company Limited - Australia
  • Interocean Group of Companies - India
  • Thai Mozambique Logistica
  • Larsen & Toubro Limited - India
  • Petrosea - Indonesia
  • Fearnleys - India
  • Thomson Reuters GRC
  • New Zealand Coal & Carbon
  • Arch Coal - USA
  • Tata Power - India
  • Energy Link Ltd, New Zealand
  • Eastern Energy - Thailand
  • Chettinad Cement Corporation Ltd - India
  • Goldman Sachs - Singapore
  • Kapuas Tunggal Persada - Indonesia
  • Rio Tinto Coal - Australia
  • SASOL - South Africa
  • Pendopo Energi Batubara - Indonesia
  • Britmindo - Indonesia
  • SRK Consulting
  • Edison Trading Spa - Italy
  • Ministry of Mines - Canada
  • Independent Power Producers Association of India
  • Standard Chartered Bank - UAE
  • Leighton Contractors Pty Ltd - Australia
  • Romanian Commodities Exchange
  • Bharathi Cement Corporation - India
  • Coastal Gujarat Power Limited - India
  • Indogreen Group - Indonesia
  • APGENCO India
  • JPower - Japan
  • International Coal Ventures Pvt Ltd - India
  • CCIC - Indonesia
  • Reliance Power - India
  • Deutsche Bank - India
  • European Bulk Services B.V. - Netherlands
  • Krishnapatnam Port Company Ltd. - India
  • Mintek Dendrill Indonesia
  • Metalloyd Limited - United Kingdom
  • PLN - Indonesia
  • The India Cements Ltd
  • Runge Indonesia
  • Bhushan Steel Limited - India
  • Adaro Indonesia
  • Geoservices-GeoAssay Lab
  • HSBC - Hong Kong
  • KEPCO - South Korea
  • IBC Asia (S) Pte Ltd
  • Central Java Power - Indonesia
  • Japan Coal Energy Center
  • Bank of China, Malaysia
  • Vizag Seaport Private Limited - India
  • CNBM International Corporation - China
  • Indonesia Power. PT
  • Carbofer General Trading SA - India
  • Malabar Cements Ltd - India
  • U S Energy Resources
  • NTPC Limited - India
  • WorleyParsons
  • Filglen & Citicon Mining (HK) Ltd - Hong Kong
  • VISA Power Limited - India
  • Minerals Council of Australia
  • Uttam Galva Steels Limited - India
  • Vedanta Resources Plc - India
  • EMO - The Netherlands
  • Surastha Cement
  • Miang Besar Coal Terminal - Indonesia
  • OCBC - Singapore
  • Maersk Broker
  • DBS Bank - Singapore
  • Moodys - Singapore
  • Borneo Indobara - Indonesia
  • Infraline Energy - India
  • UBS Singapore
  • Orica Australia Pty. Ltd.
  • Mjunction Services Limited - India
  • Bukit Makmur.PT - Indonesia
  • Thiess Contractors Indonesia
  • Bulk Trading Sa - Switzerland
  • Attock Cement Pakistan Limited
  • McKinsey & Co - India
  • Kobexindo Tractors - Indoneisa
  • TNPL - India
  • CIMB Investment Bank - Malaysia
  • Toyota Tsusho Corporation, Japan
  • Petrochimia International Co. Ltd.- Taiwan
  • Jatenergy - Australia
  • BNP Paribas - Singapore
  • Globalindo Alam Lestari - Indonesia
  • Mercuria Energy - Indonesia
  • Samtan Co., Ltd - South Korea
  • Wilmar Investment Holdings
  • Barasentosa Lestari - Indonesia
  • Anglo American - United Kingdom
  • Sucofindo - Indonesia
  • Karaikal Port Pvt Ltd - India
  • RBS Sempra - UK
  • Simpson Spence & Young - Indonesia
  • Vitol - Bahrain
  • Electricity Generating Authority of Thailand
  • PTC India Limited - India
  • Billiton Holdings Pty Ltd - Australia
  • Straits Asia Resources Limited - Singapore
  • Barclays Capital - USA
  • Argus Media - Singapore
  • Offshore Bulk Terminal Pte Ltd, Singapore
  • IOL Indonesia
  • Antam Resourcindo - Indonesia
  • Platts
  • Economic Council, Georgia
  • Jaiprakash Power Ventures ltd
  • Idemitsu - Japan
  • Adani Power Ltd - India
  • Dr Ramakrishna Prasad Power Pvt Ltd - India
  • Gujarat Sidhee Cement - India
  • Alfred C Toepfer International GmbH - Germany
  • Wood Mackenzie - Singapore
  • Truba Alam Manunggal Engineering.Tbk - Indonesia
  • Manunggal Multi Energi - Indonesia
  • Neyveli Lignite Corporation Ltd, - India
  • JPMorgan - India
  • J M Baxi & Co - India
  • PetroVietnam Power Coal Import and Supply Company
  • KPMG - USA
  • Heidelberg Cement - Germany
  • Thermax Limited - India
  • Bayan Resources Tbk. - Indonesia
  • Cosco
  • PLN Batubara - Indonesia
  • Berau Coal - Indonesia
  • Merrill Lynch Bank
  • Rudhra Energy - India
  • Cargill India Pvt Ltd
  • Cement Manufacturers Association - India
  • Binh Thuan Hamico - Vietnam
  • Mitra SK Pvt Ltd - India
  • Ambuja Cements Ltd - India
  • Bahari Cakrawala Sebuku - Indonesia
  • GHCL Limited - India
  • ING Bank NV - Singapore
  • Chamber of Mines of South Africa
  • GAC Shipping (India) Pvt Ltd
  • Arutmin Indonesia
  • Banpu Public Company Limited - Thailand
  • Mitsubishi Corporation
  • Peabody Energy - USA
  • SMG Consultants - Indonesia
  • Cardiff University - UK
  • Vale Mozambique
  • Timah Investasi Mineral - Indoneisa
  • MEC Coal - Indonesia
  • EIA - United States
  • Madhucon Powers Ltd - India
  • PowerSource Philippines DevCo
  • Coal India Limited
  • ACC Limited - India
  • Indo Tambangraya Megah - Indonesia
  • MS Steel International - UAE
  • Directorate General of MIneral and Coal - Indonesia
  • TeaM Sual Corporation - Philippines
  • Sakthi Sugars Limited - India
  • ICICI Bank Limited - India
  • bp singapore
  • Aboitiz Power Corporation - Philippines
  • IHS Mccloskey Coal Group - USA
  • Maharashtra Electricity Regulatory Commission - India
  • Kumho Petrochemical, South Korea
  • Malco - India
  • Asian Development Bank
  • Coal Orbis AG
  • Singapore Mercantile Exchange
  • Agrawal Coal Company - India
  • Parry Sugars Refinery, India
  • Qatrana Cement - Jordan
  • Asia Cement - Taiwan
  • Shenhua Group - China
  • Kobe Steel Ltd - Japan
  • Maybank - Singapore
  • Ministry of Transport, Egypt
  • World Coal - UK
  • Maruti Cements - India
  • Dalmia Cement Bharat India
  • World Bank
  • Kartika Selabumi Mining - Indonesia
  • Gresik Semen - Indonesia
  • Glencore India Pvt. Ltd
  • Meenaskhi Energy Private Limited - India
  • Ernst & Young Pvt. Ltd.
  • Price Waterhouse Coopers - Russia
  • Bhatia International Limited - India
  • PetroVietnam
  • Bank of America
  • The University of Queensland
  • Platou - Singapore
  • globalCOAL - UK
  • Parliament of New Zealand
  • BRS Brokers - Singapore
  • Commonwealth Bank - Australia
  • Pinang Coal Indonesia
  • Port Waratah Coal Services - Australia
  • Core Mineral Indonesia
  • Cigading International Bulk Terminal - Indonesia
  • Inco-Indonesia
  • Sojitz Corporation - Japan
  • Karbindo Abesyapradhi - Indoneisa
  • CESC Limited - India
  • Mercator Lines Limited - India
  • ETA - Dubai
  • Posco Energy - South Korea
  • Indorama - Singapore
  • Latin American Coal - Colombia
  • Siam City Cement - Thailand
  • Tanito Harum - Indonesia
  • Bukit Asam (Persero) Tbk - Indonesia
  • Mitsui
  • OPG Power Generation Pvt Ltd - India
  • UOB Asia (HK) Ltd
  • IEA Clean Coal Centre - UK
  • Bangkok Bank PCL
  • Kalimantan Lumbung Energi - Indonesia
  • White Energy Company Limited
  • Vijayanagar Sugar Pvt Ltd - India
  • KPCL - India
  • The State Trading Corporation of India Ltd
  • NALCO India
  • Indian School of Mines
  • Indonesian Coal Mining Association
  • Deloitte Consulting - India
  • Dong Bac Coal Mineral Investment Coporation - Vietnam
  • Videocon Industries ltd - India
  • Xstrata Coal