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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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Wednesday, 04 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
For yet another time, the market seems to have its own drivers. After a very disappointing first half, the recent recovery in the shipping market i ...
Tuesday, 20 August 19
NORDEN HAS BEEN AWARDED A 3-YEAR CONTRACT FOR THE TRANSPORTATION OF COAL FROM INDONESIA TO HONG KONG
NORDEN has been awarded a 3-year contract with a power company in Hong Kong for the transportation of coal from Indonesia to Hong Kong.
...
Tuesday, 20 August 19
THE AUGUST 2019 INDONESIAN COAL PRICE REFERENCE POSTS THE FIRST MONTHLY GAIN SINCE AUGUST 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Monday, 19 August 19
INDONESIAN COAL RUNS, A 82,000DWT SHIP WAS FIXED DELIVERY CHINA VIA INDONESIA, REDELIVERY JAPAN, IN THE MID $16,000S - BALTIC BRIEFING
Capesize
The Capesize market was buoyant in both basins this week, posting gains across the board. After bottoming out the previous week, rates ...
Sunday, 11 August 19
ULTRAMAX: A 58,000DWT VESSEL OPEN KEMAMAN FIXED FOR TWO TO THREE LADEN LEGS, REDELIVERY SINGAPORE-JAPAN, AT $12,250 - BALTIC BRIEFING
Capesize
With typhoon Lekima gathering pace, numerous China ports were closed by the end of the week and will likely be for two to three days. ...
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Showing 1346 to 1350 news of total 6871 |
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- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- PTC India Limited - India
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
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