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.
|
|
Wednesday, 04 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
For yet another time, the market seems to have its own drivers. After a very disappointing first half, the recent recovery in the shipping market i ...
Tuesday, 20 August 19
NORDEN HAS BEEN AWARDED A 3-YEAR CONTRACT FOR THE TRANSPORTATION OF COAL FROM INDONESIA TO HONG KONG
NORDEN has been awarded a 3-year contract with a power company in Hong Kong for the transportation of coal from Indonesia to Hong Kong.
...
Tuesday, 20 August 19
THE AUGUST 2019 INDONESIAN COAL PRICE REFERENCE POSTS THE FIRST MONTHLY GAIN SINCE AUGUST 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Monday, 19 August 19
INDONESIAN COAL RUNS, A 82,000DWT SHIP WAS FIXED DELIVERY CHINA VIA INDONESIA, REDELIVERY JAPAN, IN THE MID $16,000S - BALTIC BRIEFING
Capesize
The Capesize market was buoyant in both basins this week, posting gains across the board. After bottoming out the previous week, rates ...
Sunday, 11 August 19
ULTRAMAX: A 58,000DWT VESSEL OPEN KEMAMAN FIXED FOR TWO TO THREE LADEN LEGS, REDELIVERY SINGAPORE-JAPAN, AT $12,250 - BALTIC BRIEFING
Capesize
With typhoon Lekima gathering pace, numerous China ports were closed by the end of the week and will likely be for two to three days. ...
|
|
|
Showing 1346 to 1350 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Economic Council, Georgia
- Planning Commission, India
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- White Energy Company Limited
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- The University of Queensland
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
|
| |
| |
|
