Demand for alternative marine fuels in Latin America is expected to pick up in 2024 and fuel suppliers and shipping companies are responding with a slew of new zero-carbon fuel projects, as the sector continues to shift away from conventional marine fuels.
Danish fuel trader and supplier Monjasa is planning to offer 5,000-7,000 metric tonnes (t)/month of B20 and B30 blends of marine biofuels in Cartagena, Colombia. B20 biofuel has 20pc of fatty acid methyl ester (FAME) mixed with 80pc of very low sulphur-fuel oil (VLSFO). The B30 blend has 30pc FAME and 70pc VLSFO.
The biofuels operation is based in Cartagena, but the company will be able to export the product to other countries such as Panama, Monjasa said. The company blends the biofuel products and has local storage capacity in Cartagena.
US shipping company Crowley will launch an LNG bunkering operation in Panama this year. The company will offer ship-to-ship LNG bunkering on Panama's Pacific coast.
Canadian marine services company Seaspan has signed an agreement with US energy company AES to provide LNG bunkering services for vessels traveling through Panama. This deal is a part of an LNG terminal that AES will build near the Panama Canal. Seaspan will have a 10,000m³ ship at the site that will supply the LNG. This terminal is expected to have a storage capacity of 180,000m³.
Drought to continue to tighten bunker demand
Latin American bunker demand for conventional marine fuels will likely remain tight for a number of months, as drought conditions caused by the El Nino weather phenomenon are expected to cap bunkering activity.
El Nino will likely continue until at least April, according to the UN's World Meteorological Organisation (WMO). El Nino is expected to bring higher-than-average rainfall in the Parana basin, which runs through parts of Brazil, Argentina, Uruguay and Paraguay, and lower rainfall in the northern section of South America, the WMO said.
The extreme weather forecast will also affect bunkering hubs such as Panama and Ecuador.
The Panama Canal Authority (ACP) reduced vessel transits through the canal to 22 bookings/d in December, down from 38 bookings/d previously, to account for low water levels at Gatun Lake, which feeds into the canal. ACP, which oversees the waterway, had planned to drop transits further to 18 bookings/d in February. But because of increased rainfall in November the authority now plans to increase daily transits to 24 bookings/d on 16 January.
Rainfall in Gatun Lake fell by 41pc in October, making it the driest month in 73 years, ACP said.
Bunker sales in Panama were on track to decline in 2023 in response to the reduced vessel transits. Sales were down by 7.5pc to 381,648t in November and by 5pc to 4.51mn t for the first 11 months of 2023.
More residual fuel oil supplies have been redirected for power generation in Ecuador because of an ongoing drought that has reduced hydropower generation. Fuel oil for electricity jumped to 558,768 bl in October 2023 compared with 386,794 bl for the same month last year, according to the most recent data from state-owned Petroecuador.
