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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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Wednesday, 12 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
This year’s tanker S&P activity keeps edging higher compared to the same period in 2018. Year to date we have seen some 143 ships, rangin ...
Tuesday, 11 June 19
INDONESIAN COAL PRICE REFERENCE SET AT $81.48 PER TON IN JUNE, DOWN 15.66 PERCENT YEAR-ON-YEAR
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 10 June 19
CONSECUTIVE OWNERS OF CARGO: WHO HOLDS TITLE AND THE RIGHT TO SUE? - COLIN BIGGERS & PAISLEY
KNOWLEDGE TO ELEVATE
In Tritton Resources Pty Ltd v Ever Rock Navigation S.A. [2019] FCA 276, the Federal Court considered the application of ...
Monday, 10 June 19
KOSPO INVITES BIDS FOR 1,305,000 MT OF MIN 5600 KCAL/KG NCV COAL FOR SEPT 2019 TO DEC 2021
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 435,000 MT (per year) of max 5,600 kcal/kg N ...
Sunday, 09 June 19
SUPRAMAX: ASIA LOST GROUND; THE INDIAN OCEAN SAW SLOWER ACTIVITY - BALTIC BRIEFING
Capesize
The market continued in an unusually steady ascent last week. With no major news in the market, each day improved on the last, breakin ...
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Showing 1386 to 1390 news of total 6871 |
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- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
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