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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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Tuesday, 17 September 19
THE DRY BULK FREIGHT MARKET IS ALREADY ON A DOWNWARD CORRECTION - ALLIED
Here we are again, just a breath before the final quarter of the year. Under typical circumstances and on the basis of what we have seen during the ...
Monday, 16 September 19
COLOMBIAN COAL PRODUCTION TO FALL 5% THIS YEAR, MINING GROUP SAYS - REUTERS
Colombia’s coal production will decline to around 80 million tonnes in 2019, nearly 5% below last year’s, because of low prices and dro ...
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
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 ...
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Showing 1336 to 1340 news of total 6871 |
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- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Renaissance Capital - South Africa
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
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