We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 16 December 19
THE OUTLOOK FOR U.S. THERMAL COAL IS INCREASINGLY STRESSED - MOODY'S
- Slowing global economic growth, trade tensions will continue to exert influence
- Coal's secular decline will persist in 2020
...
Thursday, 12 December 19
KOWEPO INVITING BIDS FOR 2.28 MILLION TONS OF MIN.4,400 NCV COAL
COALspot.com: South Korea’s Korea Western Power Co., Ltd. (KOWEPO) has issued an international tender for total 2,280,000 tons of (Sub) Bitum ...
Wednesday, 11 December 19
PANAMAX: THE MARKET REMAINED FIRM IN THE PACIFIC, WITH INCREASED ACTIVITY NOTED IN KEY AREAS, SUCH AS INDONESIA - ALLIED
Capesize – Positive momentum was resumed this past week, with earnings mak-ing some gains once again. This rising pattern was reflected in th ...
Tuesday, 10 December 19
PREPARATIONS INTENSIFY AS IMO 2020 GLOBAL SULPHUR CAP LOOMS - STANDARD CLUB
With less than a month to go for the impending IMO 2020 global sulphur cap, the club has started witnessing dispute cases relating to the measureme ...
Monday, 09 December 19
KOREA SOUTHERN POWER CO LTD IS INVITING OFFERS FOR MIN 3700 NCV COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for 160,000 Tons steam coal.
Acco ...
|
|
|
Showing 1246 to 1250 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Latin American Coal - Colombia
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- MS Steel International - UAE
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- VISA Power Limited - India
- Minerals Council of Australia
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- The University of Queensland
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- White Energy Company Limited
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- PTC India Limited - India
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
|
| |
| |
|
