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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, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
...
Friday, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
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Showing 16 to 20 news of total 6846 |
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- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- PTC India Limited - India
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Planning Commission, India
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
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