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Japanese group explores ammonia as marine fuel

  • Market: Fertilizers, Oil products
  • 01/05/20

A cross-industry consortium of Japanese companies is considering launching ammonia-fuelled commercial vessels, as well as developing ammonia supply infrastructure in Japan, to provide the shipping industry with an alternative marine fuel to reduce greenhouse gas emissions.

Japanese shipbuilder Imabari Shipbuilding, engineering firm Mitsui E&S Machinery, trading house Itochu and its energy trading arm Itochu Enex have agreed to jointly develop commercial vessels equipped with an engine using ammonia as its main fuel. Japanese classification society ClassNK is participating to carry out a third-party safety assessment of such vessels.

Imabari will be responsible for their development and design. It has already been developing vessels fuelled with alternative marine fuels, such as LNG and LPG. The company is currently building an LNG-fuelled car carrier for planned late 2020 delivery. It has also completed concept designs for both LNG- and LPG-fuelled Capesize bulk carriers.

The consortium also includes MAN Energy Solutions, German auto producer Volkswagen's large engines unit, which will play a role in developing an ammonia-fuelled engine for the project. Mitsui E&S Machinery, a wholly-owned subsidiary of Japanese engineering firm Mitsui E&S, will work with MAN to develop the engine.

Itochu plans to jointly develop a facility with Itochu Enex to fuel ammonia for ships, as well as to set up a distribution network. Ammonia will be supplied for the project by Itochu Enex.

Ammonia's potential as an alternative marine fuel has attracted interest from the global shipping industry, which is aiming to reduce GHG emissions in line with the International Maritime Organisation's (IMO) emissions reduction targets. The IMO's strategy to halve the industry's GHG emissions by 2050 includes a 40pc reduction in carbon dioxide emissions by 2030 and a 70pc cut by 2050 compared with 2008 levels.

Norway's state-controlled Equinor earlier this year agreed with shipowner Eidesvik Offshore to modify the LNG-fuelled Viking Energy platform supply vessel to use ammonia as a fuel. The vessel is targeted to begin testing the use of ammonia as its fuel from 2024.

Chinese shipbuilder Dalian Shipbuilding Industry in late 2019 received Lloyd's Register approval in principle for its concept design of an ammonia-fuelled 23,000 TEU container vessel. An international consortium including Malaysian shipowner MISC and South Korean shipbuilder Samsung Heavy Industries is also working to develop an ammonia-fuelled tanker.


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27/12/24

Viewpoint: Brazil urea deals for corn delayed to 2025

Viewpoint: Brazil urea deals for corn delayed to 2025

Sao Paulo, 27 December (Argus) — Brazil is set to enter 2025 with a last-minute surge in demand for nitrogen-based fertilizers, as farmers continue to postpone purchases for the 2024-25 second corn crop. Around 10-15pc of all fertilizer needs have yet to be purchased for the corn crop, whose planting is expected to start by February in central-western Mato Grosso state. Brazilian farmers have been delaying agreements for inputs as they wait for lower fertilizer prices and higher grain prices. The most delayed fertilizer acquisition is urea, with buyers expecting further price drops before committing to volumes. Granular urea prices were at $359/metric tonnes (t) cfr Brazil by 19 December, $39/t above the same period in 2023. The overall pace of input purchases is in line with farmers' buying patterns for the 2023-24 corn crop and 2024-25 soybean crop, when growers also waited until the last minute to secure final volumes. Traditional 4Q buying surged delayed Brazilian buyers used to speed up the pace of fertilizer purchases in the fourth quarter to supply the second corn crop. This would give them time to receive the inputs in time for application, without last-minute logistic concerns. But unexpected changes in fertilizer price trends, combined with changes in the timing of the soybean crop, led farmers to change this buying pattern and wait as long as possible before concluding deals. Farmers' saw this last-minute buying strategy rewarded in early 2024 when urea prices were about $393/t cfr Brazil, below levels seen earlier in October 2023. And a delay in the 2024-25 soybean planting because of unfavorable weather conditions also contributed to postponed fertilizer acquisitions for corn, since the soybean harvest would likely be delayed and force farmers to plant corn outside the ideal period. Those factors are set to again push final urea purchases to January. Some volumes traded in November-December may discharge in ports in January, intensifying deliveries in the first months of the year. Brazil imported 7.6mn t of urea in January-November, 19pc above the same period in 2023. The latest lineup data from 26 December points to around 400,000t to be delivered at ports in December and 422,000t in January, according to maritime agency Unimar. Farmers focused on acquiring ammonium sulphate (amsul) volumes in the past three months, as prices carried a discount considering the nitrogen content compared with urea while also adding sulphur. There is plenty of available compacted/granular amsul, with Chinese producers eyeing Brazil as an outlet for the product. Imports of amsul totaled 5.1mn t in the first 11 months of the year, 18pc above the same period last year. A total of 596,000t and 1.2mn t were set to discharge in ports in December and January, respectively, according to Unimar's lineup data from 26 December. The trend is the same in the domestic market, with purchases advancing slowly. Some cooperatives and retailers bought volumes to guarantee availability when farmers decide to buy. Farmers are most advanced in theirs potash (MOP) acquisitions, as its lower-than-usual price has motivated farmers to buy the fertilizer for 2025-26 corn and soybeans. Market participants estimate that around 50pc of MOP needs in Mato Grosso for the 2025-26 soybean crop were purchased by early December. Demand has been high for the first quarter of 2025, leading to expectations of intense MOP deliveries at ports. This would mean a high flow in the inland market, competing with urea volumes handling in January-February. By Gisele Augusto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: Trump tariffs may inflate midcon fuel costs


27/12/24
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27/12/24

Viewpoint: Trump tariffs may inflate midcon fuel costs

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Shell shuts oil unit at Singapore refinery


27/12/24
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27/12/24

Shell shuts oil unit at Singapore refinery

Singapore, 27 December (Argus) — Shell has shut an oil unit at the 237,000 b/d Pulau Bukom refinery in Singapore to investigate a "suspected leak", said the Maritime and Port Authority of Singapore (MPA) and National Environment Agency (NEA) today. Shell informed the government agencies that they will have to shut one of its "oil processing units" at Pulau Bukom to facilitate investigations into a suspected leak. The exact oil processing unit cannot be confirmed, but it is a unit "used to produce refined oil products such as diesel". This means it is likely a crude distillation unit or a hydrocracking unit. Shell's initial estimates show that a few tonnes of oil products were leaked, together with cooling water discharge. Sea water is typically drawn to aid in the cooling process, according to the media release. This came after the 20 October leak at a pipeline at Pulau Bukom, when 30-40t of "slop" — or a mixture of oil and water — leaked into the sea, according to Shell. The gasoline market has shown little reaction so far with spreads being "stagnant" and "range bound", said a Singapore-based gasoline broker. But this could be because of a lack of market activity, with many traders away for holidays at the end of the year. The gasoil January-February spread last traded at $0.58/bl in backwardation at around 6:30pm Singapore time on 27 December, according to a Singapore-based gasoil broker. This marks a slight increase from an assessment of $0.55/bl in backwardation on 26 December, according to Argus pricing data. By Aldric Chew Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: US naphtha market poised for change


26/12/24
News
26/12/24

Viewpoint: US naphtha market poised for change

Houston, 26 December (Argus) — US Gulf coast naphtha supplies accumulated in the last half of 2024 amid faltering demand, with gasoline blenders representing a higher profile buying sector, but a pending refinery closure is set to tighten the market. Demand for all naphtha grades was much weaker coming into December because of a bearish gasoline outlook and as elevated octane prices dampened naphtha demand. Poor refinery margins encouraged refiners to run minimally, cutting back on refiner demand as well. Gasoline blenders' demand for naphtha dominated in 2024, which highlighted stronger naphtha prices in visible trades. Prices for good quality, low sulphur N+A naphtha into the gasoline blend pool averaged about 10-15¢/USG above generic reformer feedstock naphtha. Naphtha sellers were also keen to export, which moved larger volumes without engaging in volatile domestic spot markets. US naphtha exports this year through mid-December were up by over 50pc to average 272,730 b/d from a year prior, according to Vortexa data. From November to mid-December, naphtha departures from the US were up on the year by 66pc to 312,800 b/d. Despite overall increased exports in 2024, weakened Asia Pacific and European naphtha markets in the latter half of December diminished arbitrage opportunities. Heavy virgin naphtha (HVN) differentials to Nymex RBOB hovered in the mid-to-stronger 30s¢/USG discounts in the first half of December, compared with upper Nymex RBOB -40s¢/USG observed in the same period last year. However, these higher differentials were attributed more to the lower Nymex RBOB pricing basis than market strength. Comparative cash prices hovered around 160¢/USG year on year, despite a 10¢/bl hike in differentials in 2024. Supply, demand changes in store A major supply change in the Gulf coast naphtha market should tighten the ample supply of naphtha by February. LyondellBasell is on schedule to begin a staggered shutdown of its 264,000 b/d refinery in Houston, Texas, in January. The last crude distillation unit (CDU) at the site is expected to shut by February. The refiner is a steady supplier of premium quality HVN with very low sulphur, which is typically sold into the gasoline blending market. Depending on production rates, LyondellBasell, also known as Houston Refining (HRC) in naphtha circles, can load 10-15 barges of the premium quality HVN a month. However, Gulf coast naphtha remains well-supplied. ExxonMobil's third CDU at its 609,000 b/d Beaumont, Texas, refinery started operations in 2023, adding more naphtha production to the region. Naphtha exports were also significant on the demand front in 2024, despite Gulf coast naphtha export opportunities to Venezuela being curbed again on 18 April. US sanctions on oil trades to Venezuela were eased in October 2023, but reimposed by April this year due to fresh political conflict. Naphtha exports to Venezuela are currently restricted to joint-venture partners such as Chevron and Reliance. Some participants hope the incoming administration of president-elect Donald Trump will re-address oil trading with Venezuela, keeping this an item to watch in 2025. US naphtha exports to Venezuela averaged 57,600 b/d in 2024, up from 11,100 b/d during 2023, according to Vortexa, on relaxation of Venezuela sanctions from October 2023 through May 2024. Meanwhile, naphtha exports out of the Gulf coast were still focused on shipments to South America, led by Brazil and Colombia. Exports to Brazil averaged 48,600 b/d in 2024, up by 68pc from 2023 while naphtha arrivals in Colombia averaged 36,600 b/d in 2024, up by 36pc from 2023. Colombia buys light naphtha from the US for use as diluent and sells full-range naphtha out of Mamonal port to the US. By Daphne Tan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: US amsul demand to stretch supply in 1Q


26/12/24
News
26/12/24

Viewpoint: US amsul demand to stretch supply in 1Q

Houston, 26 December (Argus) — US ammonium sulfate (amsul) prices are likely to remain elevated through the first quarter of 2025 because of increased demand, high feedstock costs and more forward purchases as buyers look to avoid the high prices seen last spring. Scarcity seen in the 2023-2024 fertilizer year in the US amsul market has continued into 2024-2025. Strong demand has drained US inventories, despite rising domestic production in the third quarter, which increased by 11pc to 4.8mn short tons (st) compared to the five-year average of 4.25mn st, according to data from The Fertilizer Institute (TFI). But production in the fourth quarter has fallen because of extended plant downtime. Major production facilities such as AdvanSix's 1.75mn st Hopewell, Virginia, plant and Nutrien's 700,000 metric tonne (t) Redwater, Alberta, plant underwent prolonged turnarounds in the fourth quarter, according to sources. The unplanned downtime reduced the availability of pre-pay volumes in the market and caused at least one producer to partly cover their reduced output by purchasing imports. But imports have only provided the US market with limited supply relief. Year-over-year, US imports are lagging by 17pc from July through October. Around 282,700t of amsul entered the US during the period, compared to the 338,600t that arrived in the same period last year. This year's imports are still 11pc greater than the five-year average, illustrating the trend of demand growth in the US. Increasing feedstock costs have also supported amsul prices through the back-half of 2024. Fertilizer producer IOC said higher feedstock costs were the primary driver of its fourth quarter price hike at the start of October. Feedstock ammonia prices are expected to slip or remain stable for January because of seasonal weakness and lower global prices, said sources. Feedstock sulfur market prices on the other hand have risen over the period and may incur a $20-30/st increase because of rising global demand, according to market participants. Amsul's relationship status update Amsul values slipped in December and early January of last year, allowing the market to buy at lower values before the spring season. The opposite is anticipated to occur this year after major producers AdvanSix and IOC increased their offers for first quarter pre-pay delivery in December. Despite the rising price of amsul, buyers have been lining up more forward deliveries this fall than other years, according to sources. In lieu of hand-to-mouth buying and rising prices last spring, buyers are looking to hedge against potential volatility in the back half of the fertilizer year. Bolstered demand has led to additional price strength which is expected to persist through the winter season. Demand for ammonium sulfate arrived earlier than usual but it is unclear whether it will resurface as strong in the spring. Amsul price in the US Corn Belt recently rose to an average of $380/st, 20pc above the average price in December of last year. Amsul prices typically rise in the spring season when applications begin, so amsul values would appreciate even further if that trend occurs this year. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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