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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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- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Minerals Council of Australia
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- PTC India Limited - India
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- The University of Queensland
- Goldman Sachs - Singapore
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