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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 maximum limit of 3.5% to a maximum limit of 0.5% (the limit in emission control areas remains at 0.1%). Regulation 4 of MARPOL Annex VI permits equivalent methods of compliance provided such methods are at least as effective in terms of emissions reductions.
Whilst it is up to individual port state control and flag states to implement and enforce MARPOL Annex VI, the use of Exhaust Gas Cleaning Systems (“Scrubbers”) is widely expected to be a legitimate option as an equivalent method of compliance.
The anticipated key financial benefit for Owners that have invested or are considering in investing in Scrubber-fitted vessels, is that there will be substantial savings in the cost of trading the vessels due to the expected price differential between fuels with a high sulphur content and ‘compliant’ fuels with a low sulphur content. For example, this week press reports suggest that the fuels currently being traded result in a price differential of about $150-$250 per mt between 0.5% sulphur fuels and high sulphur fuels and predict a price differential of over $400 per mt in 2020 (the differential between high sulphur fuels and 0.1% sulphur fuels is greater).1
Owners have various options available to them in terms of benefitting from the expected fuel differential for Scrubber-fitted vessels.
For example, if Owners are spot trading their Scrubber-fitted vessels, typically it is Owners that pay for the fuel so Owners will therefore benefit from the lower costs of burning high sulphur fuels. If Owners are time chartering their vessel, typically under a time charterparty Charterers will pay for the fuel so Charterers will therefore benefit from the lower costs of burning high sulphur fuel. In consideration for providing this benefit under a time charter, Owners may simply demand a higher charter rate or a ‘scrubber premium’ on the market charter rate.
Alternatively, there are a number of creative ways in which Owners and Charterers can share the benefit of the expected or actual fuel savings for Scrubber-fitted vessels. One of these ways is through implementing a fuel profit-sharing scrubber clause (“FPS Scrubber Clause”) into the time charterparty. It has been reported in the press recently that these are being used with good effect by some owners to keep charter rates competitive.2
There are a number of different legal, operational and commercial factors which will have to be considered in negotiating and drafting FPS Scrubber Clauses and so it is unlikely there is a one-size fits all FPS Scrubber Clause that can be applied across the market. By way of example, the ongoing delay to an intended Bimco industry-standard scrubber clause is illustrative of the complexity and competing interests at play. For example, if owners are bearing the majority of the capital risk and operational risk of the Scrubber, then should owners be entitled to the majority of the benefit of the fuel differential? In the event that the Scrubber is not operational for technical or regulatory reasons, who is responsible for providing compliant low sulphur fuel?
An FPS Scrubber Clause is an innovative way for Owners and Charterers to allocate the anticipated risks and benefits of complying with the implementation of MARPOL Annex VI from 1 January 2020 through the use of Scrubbers. James Kennedy and Fanos Theophani have been involved in the negotiation and drafting of FPS Scrubber Clauses and are well placed to advise and assist the market on these issues.
1 “Songa Container pioneers profit-sharing scrubber clause” Tradewinds 30 August 2019
2 “IMO2020: RAI 2020 Marine Fuel Availability Study Re-Boot” Ship and Bunker 3 September 2019, and “IMO2020: Rollercoaster HSFO Prices Send Singapore VLSFO Premiums Under $85/mt” Ship and Bunker 30 August 2019
Source: Clyde&Co
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Sunday, 29 December 19
AUSTRALIA SUFFERS WORST OF CHINA'S COAL CURBS AFTER EARLIER BOOM - BLOOMBERG
Australia is bearing the brunt of China’s year-end coal import restrictions, ceding market share to other exporters including Russia and Mong ...
Saturday, 28 December 19
SUPRAMAX: A 63,000DWT VESSEL, OPEN CIGADING, FIXED A TRIP VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $8,500 - BALTIC BRIEFING
Capesize
The Capesize market this past week has been attempting to recalibrate itself in consideration of weakening freight levels and increasing ...
Saturday, 28 December 19
CHINESE INDUSTRIAL CITY TO FURTHER CUT COAL CONSUMPTION - XINHUA
Harbin, capital city of Heilongjiang Province in China’s northeastern industrial heartland, is planning to further reduce its coal consumptio ...
Friday, 27 December 19
MISERY LOOMS OVER TOP COAL SHIPPERS AS CHINA TO BUY LESS IN 2020 BLOOMBERG
China isn’t cutting back on consumption of the most-polluting fossil fuel just yet, but it is set to reduce imports.
The world ...
Thursday, 26 December 19
REVIEW OF 2019 AND OUTLOOK FOR 2020 - OPEC
Global economic growth slowed in 2019, impacted by a variety of challenges. Trade issues not only led to reduction in global final consumption but ...
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Showing 1221 to 1225 news of total 6871 |
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- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- The University of Queensland
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
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