Baltimore bridge collapses after ship collision: Update

Market: Coal, Freight, Oil products
26/03/24

Adds details on coal terminals and exports at Baltimore

A bridge across a major trading waterway in the US city of Baltimore, Maryland, has completely collapsed after being hit by a container ship early today, Tuesday.

The Francis Scott Key bridge, which was carrying road traffic at the time, was hit at 01.30 local time (05:30 GMT) by the 2015-built 116,851dwt container vessel Dali, on route from Baltimore to Colombo, Sri Lanka. It was travelling outbound from Baltimore, according to the Baltimore City Fire Department, which is co-ordinating rescue efforts.

The bridge collapsed into the river after the vessel hit one of its support columns, probably blocking the Patapsco river waterway. The Dali is sailing under the Singapore flag, is owned by Grace Ocean and managed by Synergy Marine Group. The fire department said at least seven people — all travelling on the bridge — are missing in the water. No casualties have been reported on the vessel. US governor Wes Moore has declared a state of emergency in the state of Maryland.

The port of Baltimore handled 52.3mn t of ocean-going cargo last year, a record high, and is a major exporter of coal and automobiles. Ship tracker Marine Traffic shows several coastguard ships and tug boats near where the incident occurred, but no significant vessel queues yet. Baltimore port operations will be affected by the collapse, as a number of its terminals are upriver from the bridge. The port authority has yet to reply to a request for comment.

The bridge collapse will have a particularly large effect on coal exports. The Port of Baltimore loaded 2.4mn t of coal in February, up from 2.1mn t a year earlier, according to analytics firm Kpler, mostly exports to India and China, and two of the US Atlantic coast's five coal terminals are in Baltimore. Railroad CSX's Curtis Bay Coal Piers and coal producer Consol Energy's Consol Marine Terminal, which have a combined 30.8mn t of export capacity, are upstream of the bridge, meaning ships will not be able to serve them — or others — until the route reopens. Both terminals take thermal and coking coal from Northern and Central Appalachia. Curtis Bay, which has throughput capacity of around 14mn short tons (st), is only served by CSX. Consol's facility, which has capacity of roughly 20mn (st), is served by CSX and Norfolk Southern, the other major eastern US railroad.

The other three eastern US coal export terminals are at Hampton Roads, Virginia, which will mean increased costs to ship coal to them.

A large northern Appalachian coal supplier said it is assessing the situation.

"[We] don't know for how long it will be blocked," the supplier said, suggesting existing shipments will be delayed. The supplier said there was no update on a potential force majeure following the collapse.

A number of other terminals and vessels may be blocked now. The JY River, the Klara Oldendorff, the Phatra Naree and a number of other vessels are in the estuary, including Trafigura-owned bitumen tanker Palanca Rio. The dry bulk Console Marine Terminal (CNX) and Curtis Bay Terminal (CSX) and a number of containership and other terminals including Rukert, Seagrit, Amports, Dundalk and Sparrows Point are probably blocked too.

Companies including Consol Energy, Peabody and Xcoal use Baltimore's terminals to export coal, according to market participants. If the port is blocked for a significant time, Atlantic Panamax rates could be pushed down further — rates fell last week as demand from Brazilian agricultural exporters dropped because of heavy rains. The Panamax rate on the route from the US Atlantic coast to northwest Europe fell from the local maximum $16.40/t on 19 March to $15.30/t on 25 March.

By Gavin Attridge, Andrey Telegin and Abby Caplan

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21/11/24

Pemex's lean Zama spending undercuts goals

Mexico City, 21 November (Argus) — State-owned oil company Pemex's limited budget for developing one of Mexico's most-promising new oil fields is putting Mexico's crude production and refining goals at risk through 2030. First production from the Zama field will likely not start until at least 2028 instead of late next year, as forecast earlier, based on a timeline in a recent presentation from Pemex. Pemex continues to work on the basic engineering for the Zama field because of the lack of cash, staff of hydrocarbon regulator CNH said last week. The latest delay on Zama echoes criticism from when Pemex took over operating the field in 2022 that it did not have sufficient experience or funds to carry on with the project, said industry sources. "Unfortunately, the Pemex budget is always a shadowy mystery," said a person close to the project who asked not to be named. "There is no transparency or certainty regarding when they do and do not honor payment commitments." Zama is a shallow-water field unified in 2022 between Pemex area AE-152-Uchukil and the discovery made in 2017 by a consortium led by US oil company Talos Energy. Pemex holds 50.4pc of the Zama project while Talos and Slim's subsidiary Grupo Carso have 17.4pc, German company Wintershall Dea 17.4pc and British company Harbour Energy 12.4pc. The state-owned company expects to spend $370.8mn to develop Zama in 2025, 64pc less than the original $1.05bn budget proposed by Pemex for next year, according to data from CNH. The regulator cleared the change last week, but commissioners questioned the CNH staff about the new delays. Pemex's original development plan showed that the company forecast the first crude production by December 2025, with 2,000 b/d and about 4mn cf/d of gas. The original plan forecast Zama hitting peak production of 180,000 b/d in 2029, making it Mexico's second-largest crude producer, only under the Maloob field. President Claudia Sheinbaum and Pemex's new new chief executive Victor Rodriguez flagged the importance of shallow-water field Zama and ultra deep field Trion to support Pemex's oil production target of 1.8mn b/d in the upcoming six years in a presentation last week. Pemex's new plan is focused on feeding its own refining system rather than crude exports. The company expects to increase gasoline, diesel and jet fuel production by 343,000 b/d, according to the plan, but it did not give a timeline. Pemex produced 491,000 b/d of gasoline, diesel and jet fuel in the first nine months of 2024. Mexico's proposed 2025 federal budget also shows lower spending for Zama, at Ps3.1bn ($154mn) for 2025, even less than the figure approved by CNH on 14 November. Neither Pemex not Talos responded to requests for additional comment. "Zama is the story of the triumph of ideology over practicality," said a Pemex source who asked not to be named. The state-owned company is studying how to bring in new investors to the project once congress approves secondary laws to implement recent energy reforms, the source said. But uncertainty over the legal framework and the general deterioration of Mexico's business climate will make this more difficult, the Pemex source added. The involvement of Mexican billionaire Carlos Slim, who acquired 49.9pc of Talos Energy share in Zama last year, brought new hopes that work at Zama could finally accelerate. Instead, Slim's entrance slowed the project, as the new partner had to review the project, a former regulator who asked not to be named said. Talos Energy, the lead operator when the field was discovered over seven years ago, is now "frustrated" by the poor progress of the project. "We have Mexico, a great discovery in Zama, we're seven years into it, and still have not made a final investment decision on it," said Talos Energy interim chief executive Joseph Mills, in a conference call with investors last week. "So a lot of frustration there, as you can imagine." By Édgar Sígler Pemex 2024 crude output, throughput '000 b/d Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cost of government support for fossil fuels still high

21/11/24

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21/11/24

Cost of government support for fossil fuels still high

London, 21 November (Argus) — The cost of government measures to support the consumption and production of fossil fuels dropped by almost third last year as energy prices declined from record highs in 2022, according to a new report published today by the OECD. But the level of fiscal support remained higher than the historical average despite government pledges to reduce carbon emissions. In an analysis of 82 economies, data from the OECD and the IEA found that government support for fossil fuels fell to an estimated $1.1 trillion in 2023 from $1.6 trillion a year earlier. Although energy prices were lower last year than in 2022, countries maintained various fiscal measures to both stimulate fossil fuel production and reduce the burden of high energy costs for consumers, the OECD said. The measures are in the form of direct payments by governments to individual recipients, tax concessions and price support. The latter includes "direct price regulation, pricing formulas, border controls or taxes, and domestic purchase or supply mandates", the OECD said. These government interventions come at a large financial cost and increase carbon emissions, undermining the net-zero transition, the report said. Of the estimated $1.1 trillion of support, direct transfers and tax concessions accounted for $514.1bn, up from $503.7bn in 2022. Transfers amounted to $269.8bn, making them more costly than tax concessions of $244.3bn. Some 90pc of the transfers were to support consumption by households and companies, the rest was to support producers. The residential sector benefited from a 22pc increase from a year earlier, and support to manufacturers and industry increased by 14pc. But the majority of fuel consumption measures are untargeted, and support largely does not land where it is needed, the OECD said. The "under-pricing" of fossil fuels amounted to $616.4bn last year, around half of the 2022 level, the report said. "Benchmark prices (based on energy supply costs) eased, particularly for natural gas, thereby decreasing the difference between the subsidised end-user prices and the benchmark prices," it said. In terms of individual fossil fuels, the fiscal cost of support for coal fell the most, to $27.7bn in 2023 from $43.5bn a year earlier. The cost of support for natural gas has grown steadily in recent years, amounting to $343bn last year compared with $144bn in 2018. The upward trend is explained by its characterisation as a transition fuel and the disruption of Russian pipeline supplies to Europe, the report said. By Alejandro Moreano and Tim van Gardingen Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Talks in Baku torn between mitigation and finance

21/11/24

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21/11/24

Cop: Talks in Baku torn between mitigation and finance

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Cop: EU, four countries commit to 1.5°C climate plans

21/11/24

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21/11/24

Cop: EU, four countries commit to 1.5°C climate plans

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Cop: EU says finance draft text not acceptable

21/11/24

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21/11/24

Cop: EU says finance draft text not acceptable

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