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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, 17 September 19
THE DRY BULK FREIGHT MARKET IS ALREADY ON A DOWNWARD CORRECTION - ALLIED
Here we are again, just a breath before the final quarter of the year. Under typical circumstances and on the basis of what we have seen during the ...
Monday, 16 September 19
COLOMBIAN COAL PRODUCTION TO FALL 5% THIS YEAR, MINING GROUP SAYS - REUTERS
Colombia’s coal production will decline to around 80 million tonnes in 2019, nearly 5% below last year’s, because of low prices and dro ...
Monday, 16 September 19
THE COAL-D SHOULDER? - BALTIC EXCHANGE
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity&rsquo ...
Monday, 16 September 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR MAX 1,290,000 METRIC TONS OF STEAMING COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for total 1,290,000 Metric Tons steam coal.
...
Sunday, 15 September 19
SUPRAMAX / ULTRAMAX: MORE STEMS WERE NOTICED GOING TO VIETNAM FROM INDONESIA - BALTIC BRIEFING
Capesize
Overall it was a negative week for the Capesize market, with many routes losing ground. A limited amount of time charter appeare ...
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Showing 1336 to 1340 news of total 6871 |
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- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Australian Coal Association
- Planning Commission, India
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Economic Council, Georgia
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