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, 15 May 19
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
Modern warfare - Trade wars & sanctions
As of May 1st, the U.S. has ended waivers to the sanctions that had allowed the top buyers of Irani ...
Monday, 13 May 19
INDONESIAN COAL PRICE REFERENCE CONTINUES TO FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Monday, 13 May 19
SUPRAMAX: SOUTHEAST ASIA THE MARKET SAW BETTER DEMAND - BALTIC BRIEFING
Cape
The market continued its rollercoaster ride last week opening with negative sentiment, but turning around in dramatic fashion by the week& ...
Thursday, 09 May 19
DEEP OFFSHORE SOUTHEAST ASIA CONGRESS 2019
Deep Offshore Southeast Asia Congress 2019
Event Date:2-3th July. 2019t
Location: Jakarta, Indonesia
Sarawak Shell Berhad (S ...
Thursday, 09 May 19
OFFSHORE CARIBBEAN CONGRESS 2019
Offshore Caribbean Congress 2019
Event Date: 4-5th July. 2019t
Location: Georgetown, Guyana
Hess announced a new d ...
|
|
|
Showing 1401 to 1405 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- PTC India Limited - India
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
|
| |
| |
|
