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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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Friday, 27 September 19
LOWDOWN ON INCOTERMS 2020 OVERHAUL - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
This ninth revision of Incoterms is changed in style and substance. The revisions improve certain aspects of Incoterms 20 ...
Thursday, 26 September 19
INDIA INCREASES ITS ANNUAL COAL PRODUCTION BY 2.7% PER YEAR FROM 850 MILLION SHORT TONS IN 2018 TO 2 BILLION SHORT TONS BY 2050 - EIA
Worldwide coal production holds steady at about 8 billion short tons, or 160 quadrillion British thermal units (Btu), per year through 2040. Inc ...
Wednesday, 25 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
In the past five months there has been significant activity in the asset market with the dry bulk segment being by far the most volatile in terms o ...
Tuesday, 24 September 19
9TH ANNUAL SUPPLY CHAIN INNOVATION SUMMIT 2019 ASIA PACIFIC
Summit: 9th Annual Supply Chain Innovation Summit 2019 Asia Pacific
Host: Ace Events
Website: http: ...
Monday, 23 September 19
SUPRAMAX: THE ASIAN ARENA IT WAS A SLOW START, BUT DEMAND INCREASED AS THE WEEK WENT ON - BALTIC BRIEFING
Capesize
The market trended down over this past week, breaking the market out of its upward trending range. While the market traded sideways at ...
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Showing 1326 to 1330 news of total 6871 |
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- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- ICICI Bank Limited - India
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