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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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Sunday, 26 May 19
SUPRAMAX: A LIMITED ACTIVITY WAS REPORTED, WITH THE UPCOMING INDONESIAN HOLIDAYS SLOWING COAL MOVEMENTS - BALTIC BRIEFING
Capesize
The past week marked one of the busier periods for Capesizes this year. With a subdued start due to a public holiday in Singapore on M ...
Wednesday, 22 May 19
SHIPPING MARKET INSIGHT - INTERMODAL
The ship repair sector is showing a constant and gradual increase on the workload throughout the past months, with almost all the shipyards worldwi ...
Saturday, 18 May 19
SUPRAMAX: 56,000DWT OPEN PANJANG FIXING AT $10,500 FOR A TRIP VIA INDONESIA, AND REDELIVERY CHINA - BALTIC EXCHANGE
Capesize
The market continues to ebb and flow with a generally positive up trend. The Capesize 5TC opened with upward momentum from last week&r ...
Friday, 17 May 19
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 16 May 19
SUPRAMAX: INDO/CHINA COAL RV TRADING AROUND US$ 9,000 BSS S.CHINA DELIVERY - FEARNLEYS
Capesize
This volatile segment is trying to find a clear direction from the present US$ 12,000/day earnings for standard units says Fearnleys W ...
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Showing 1396 to 1400 news of total 6871 |
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- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Sical Logistics Limited - India
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
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