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Saturday, 15 December 18
COMING CHANGES IN MARINE FUEL SULFUR LIMITS WILL AFFECT GLOBAL OIL MARKETS - EIA
 International regulations limiting sulfur in fuels for ocean-going vessels, set to take effect in January 2020, have implications for vessel operators, refiners, and global oil markets. Stakeholders will respond to these regulations in different ways, increasing uncertainty for crude oil and petroleum product price formation in both the short and long term.
When burned, the sulfur in marine fuel produces sulfur dioxide, a precursor to acid rain. The sulfur content of transportation fuels has been declining for many years because of increasingly stringent regulations implemented by individual countries or groups of countries. In the United States, federal and state regulations limit the amount of sulfur present in motor gasoline, diesel fuel, and heating oil.
The upcoming 2020 rules apply across multiple countries’ jurisdictions to fuels used in the open ocean, representing the largest portion of the approximately 3.9 million barrel per day global marine fuel market, according to the International Energy Agency.
The International Maritime Organization (IMO), the 171-member state United Nations agency that sets standards for shipping, is set to reduce the maximum amount of sulfur content (by percent weight) in marine fuels used on the open seas from 3.5% to 0.5% by 2020. These regulations are intended to reduce sulfur dioxide, nitrogen oxides, and other pollutants from global ship exhaust.
The 2020 reduction in sulfur limits follows a series of similar reductions in marine fuel sulfur limits, such as those that reduced sulfur content of marine fuels in IMO-designated Emission Control Areas from 1.0% to 0.1% in 2015. Other areas around ports in Europe and parts of China have adopted similar sulfur restrictions.
Vessel operators have several choices for compliance with the new IMO sulfur limits. One option is to switch to a lower-sulfur fuel compliant with the new IMO rules. However, the cost, widespread availability, and specifications of a new fuel for use in marine engines is still uncertain.
Another option is to use scrubbers to remove pollutants from ships’ exhaust, allowing them to continue to use higher-sulfur fuels. However, the process of installing scrubbers can be costly and can increase a ship’s operating costs. A small portion of existing marine vessels has already installed scrubbers, and that portion is not expected to increase greatly before 2020 because of time constraints and limited installation capacity. Even if scrubbers become widely adopted, which would allow the continued use of fuels with higher-sulfur content, the price and availability of higher-sulfur fuels after 2020 remains uncertain.
Ships also have the option to switch to nonpetroleum-based fuels. Some newer ships and some currently being built have dual-fuel engines that would allow them to use nonpetroleum-based fuels such as liquefied natural gas (LNG) after minimal modifications. However, the infrastructure to support use of LNG as a shipping fuel is currently limited in both scale and availability.
The upcoming IMO regulations pose a significant challenge for global petroleum refineries: how to increase the supply of low sulfur products for use in marine applications and minimize the output of high sulfur oils.
Residual oil—the long-chain hydrocarbons remaining after lighter and shorter hydrocarbons such as gasoline and diesel have been separated from crude oil—currently makes up the largest component of marine fuels used by large ocean-going vessels, also known as bunker fuel. Removing sulfur from residual oils or upgrading them to more valuable lighter products such as diesel and gasoline can be an expensive and capital-intensive process.
The choice of compliance path for vessels also introduces a risk to refiners: if scrubbers become widely adopted, higher-sulfur residual oils might still be used, potentially reducing the value of existing and new refining units capable of upgrading the residual oils.
One approach refineries could pursue is to divert more low sulfur distillate fuel into the bunker fuel market, which would mean ocean-going ships would be competing with trucks, heavy equipment, trains, and planes for supplies of distillate fuels at a time when global demand for distillate is already high. To respond to added demand for distillate fuels, refineries can increase the rate they process crude oil or invest and build more refinery capacity to produce distillate fuels. Both options would increase demand for crude oil.
Refineries might also choose to process crude oils that are lower in sulfur, yield a greater amount of distillates, and yield lower amounts of residual oils. Changes in the types of crude oil refineries purchase would then change how different crude oils are priced relative to each other and crude prices overall.
The decisions refiners and shippers make in response to the IMO 2020 rules heavily influence one another, adding to uncertainty and complexity. In January 2019, EIA will release the first Short-Term Energy Outlook that includes monthly projections through December 2020. This report will discuss short-term implications and uncertainties surrounding the IMO regulations. Later that month, the Annual Energy Outlook 2019 will describe potential long-term implications of the regulations.
Principal contributor: Mason Hamilton
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Sunday, 20 January 19
OIL MARKET REPORT: A MARATHON, NOT A SPRINT - IEA
Last month, we asked if there was a floor under prices following the signing of a new Vienna Agreement that aims to re-balance the oil market. Foll ...
Thursday, 17 January 19
EIA ESTIMATES THAT U.S. COAL EXPORTS WERE 116 MMST IN 2018, 20% HIGHER THAN THE AMOUNT EXPORTED IN 2017
Coal Supply
EIA estimates that coal production declined by 20 million short tons (MMst) (3%) in 2018, despite a 19 MMst increase in U.S. coal e ...
Thursday, 17 January 19
U.S COAL OUTPUT IS EXPECTED TO FALL BY 3 PER CENT IN 2019 - EIA
EIA forecasts that U.S. coal production will total 729 million short tons (MMst) in 2019, down by 25 MMst (3%) from 2018.
Acco ...
Wednesday, 16 January 19
SHIPPING MARKET INSIGHT - INTERMODAL
As we go through the first days of the year and just a few weeks before the Chinese New Year, the ship repair sector is witnessing a big difference ...
Monday, 14 January 19
KOREA SOUTHERN POWER INVITES BIDS FOR 320,000 MT OF MIN 3,800 NCV COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 3,800 kcal/kg NCV coal for ...
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- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- CNBM International Corporation - China
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- PTC India Limited - India
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