LNG

Gaztransport and Technigaz (GTT), the French technology firm for designs of systems for the maritime transportation and storage of liquefied natural gas, has acquired Marorka, a smart-shipping company based in Iceland with services sought by the LNG industry.

Pavilion Energy of Singapore and the fuels subsidiary of French major Total have signed a 10-year, fully-termed agreement to jointly develop an LNG bunkering supply chain in the Port of Singapore.

The latest US Government short-term energy outlook addressed issued such as high US natural gas inventories and out put as well as low prices and the impact on refined fuel from the forthcoming International Maritime Organization sulfur cap to reduce pollution in ports.

Teekay Tankers, the oil and products shipping arm of Teekay Corp. and affiliate of Teekay LNG, said the company had made extensive preparations to meet the International Maritime Organization cap on sulfur emissions set to come into force on January 1.

The International Maritime Organization (IMO) meeting at its headquarters in London has condemned six attacks on ships in the Strait of Hormuz and the Sea of Oman, two main transit routes for LNG carriers and oil tankers, with IMO Secretary-General Kitack Lim calling the threats to shipping “intolerable”.

The statement came at the end of an IMO Council meeting from July 15-19 at which the Arab Gulf incidents were debated.

After debate, the IMO Council decided to condemn the attacks and expressed its concern over the grave danger to life and the serious risks to navigational safety.

“Threats to ships and their crews, peaceably going about their business in any part of the world, are intolerable,” said the Secretary-General.

US sanctions on Iran because of its nuclear policies have raised tensions in the region and around the narrow Strait of Hormuz, through which LNG exports from Qatar and the UAE must pass.

The IMO Council emphasised the need for flag States and shipowners and operators to review the maritime security plans for their ships and implement necessary measures to address the heighted security risks.

“I strongly urge all Member States to redouble their efforts and to work together to find a long lasting solution to ensure the safety and security of international shipping around the globe and the protection of the marine environment,” said Lim.

“We owe it to our industry, which is indispensable to the world, and to our seafarers,” he added.

The attacks include one of 12 May 2019 on the Saudi Arabian-flagged vessels “Amjad” and “Al Marzoqah” and the Norwegian-flagged vessel “Andrea Victory”.

The UAE-flagged vessel “A. Michel” was then attacked off the coast near the UAE port of Fujairah and suffered sabotage damage and on 13 June, the Marshall Islands-flag “Front Altair” and Panama-flag “Kokuka Courageous” were attacked, suffering hull damage and fire, while located in the Sea of Oman near the Strait of Hormuz.

The Council is the executive body of the IMO, a United Nations agency, and consists of 40 member states elected by the IMO Assembly.

The Baltic Exchange in London has opted to keep its benchmark shipping indices unchanged, even as some market players had called for the inclusion of exhaust-cleaning systems that vessels can fit due to the International Maritime Organization ban on ships using fuels with a sulfur content above 0.5 percent from 2020.

In one of the biggest changes in the oil and shipping markets in decades, only ships fitted with exhaust-cleaning systems, known as scrubbers, will be allowed to continue burning high-sulfur fuel.

The Baltic Exchange, whose indexes for global shipping rates are also used in the derivatives market, said that after extensive consultation with members and market participants its indices would show “non-scrubber fitted” vessels in its descriptions.

As preparations for the changes  advance, many operators expect that there will be enough low-sulfur fuel readily available to avoid the need to fit the exhaust-cleaners.

However, some ship owners have been switching to LNG propulsion, though this is a slower process in meeting the IMO curbs and other future anti-pollution measures because new ships have to be built.

The Baltic Exchange was acquired in 2016 by the Singapore Exchange and has been looking for new areas to develop such as introducing LNG charter indices.

In its latest ruling the Baltic Index Council (BIC) announced its decision on the implications of the IMO 2020 sulfur cap for the Baltic Exchange’s time charter indices.

“As formally announced to the Baltic Exchange members, the Baltic will be adding clarificatory wording to its Capesize, Panamax, Supramax and Handysize vessel descriptions to confirm that the index vessels are not scrubber-fitted,” said the Exchange in its short statement.

Explaining the consultative decision-making process, BIC Chairman Stefan Albertijn said it was presented with extensive submissions and views from across the market.

“Our unanimous decision to clarify the vessel descriptions as a response to the IMO 2020 change in sulfur limits, involved careful examination of all the data and feedback received from the consultation process,” he explained.

“We are confident that it is the right decision and one which best meets the needs of the shipping markets we serve,” stated Albertijn.

The Exchange said that the clarified vessel descriptions will be applied from 1 April 2019.

“This was a lengthy and rigorous process that underscored the robustness of the Baltic’s IOSCO-based index administrative practices,” said Baltic Exchange Chief Executive Mark Jackson.

“It was essential for us to take the time to gather the necessary evidence and collective feedback, ensuring that our diverse membership and the wider market was properly consulted and provided with an opportunity to be heard,” added Jackson.

Stena Bulk, the Swedish shipping line with 107 vessels in its fleet including three LNG carriers, has made a major investment in exhaust-cleaning technology to help meet the International Maritime Organization sulfur cap by 2020.

Jiangnan Shipyard Group, one of China's largest shipbuilders, said it was set to sign an agreement to construct five 15,000 TEU, or twenty-foot equivalent unit, dual-fuel container ships with LNG propulsion capabilities.

China has followed Singapore and banned the use of open-loop exhaust-cleaners from its ports as the International Maritime Organization sulfur cap for fuel comes into force in less than a year, forcing shipowners to adopt cleaner fuel such as LNG or to use the abatement technology.

Shipping companies are currently making preparations to comply with the IMO regulations to reduce air pollution in ports by using cleaner fuel with a lower sulfur content of 0.5 percent compared with the current 3.5 percent limit.

Analysts had said that between 2,500 and 4,500 ships were likely to install an exhaust-gas cleaning system, known as a scrubber, to meet the regulations instead of buying the more expensive low-sulfur fuel or switching to LNG.

Singapore is one of the main transit routes for LNG carriers and is the main Asian proponent of LNG as a bunkering fuel.

The Maritime and Port Authority of Singapore banned open-loop emission cleaners in December 2018 with the aim of protecting the marine environment.

That’s because open-loop scrubbers use seawater to clean the exhaust. Seawater is supplied through a pipe and while carbon-dioxide dissolves into the water, it creates polluting carbonic acid, and bicarbonate or carbonate ions.

To ensure that the port waters are clean, the discharge of wash water from open-loop exhaust-gas scrubbers in Singapore port waters will be prohibited and now the same rules will apply in the main Chinese ports.

Ships fitted with only open-loop scrubbers calling at the ports will be required to use compliant fuel.

China has adopted the same rules as Singapore and will require ships with hybrid scrubbers to switch to the closed-loop mode of operation when in port.

The Chinese have had three designated Emission Control Areas (ECAs) since 2015. They are the Pearl River and Yangtze River Deltas in southern and eastern china and the Bohai Sea area of northern China.

In these port areas the Chinese authorities have brought in a gradual implementation of the new requirements concerning emissions of air pollutants from ships.

The Chinese Ministry of Transport has now banned open-loop scrubbers from that ECAs that now cover most of China’s coastline.

The latest ship emission regulation document released by the Chinese Ministry of Transport said it had banned ships from discharging wastewater and burning residue from open-loop scrubbers in the coastal and river ECAs, while ships are required to record the details of wastewater and residue disposal.

China has already brought in its own sulfur caps in the main ports on the Yangtze River Delta around Shanghai, southern Jiangsu province and northern Zhejiang province. 

Under the Chinese rules, for the Yangtze River Delta ships must switch to compliant fuel with a sulfur content not exceeding 0.5 percent within one hour of arriving at their berth and burn compliant fuel until not more than one hour prior to departure.

The International Maritime Organization committee overseeing the sulfur cap for shipping from 2020 that is encouraging the change-over to LNG and alternative ship fuels with lower emissions is set to meet in London from October 22-26 to decide a final action programme.