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.

By Rieko Suda

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24/12/24

Viewpoint: US Gulf high-octane component prices to rise

Houston, 24 December (Argus) — Cash prices of high-octane gasoline blending components in the US Gulf coast are likely to rise in 2025 after a year of declines as lower refining capacity starts to thin stocks. Alkylate and reformate cash prices and differentials have been lower over the course of 2024, in part from weaker refining margins. The lower margins are reflected in the region's crack spreads, which narrowed to $12.94/USG on 19 December from $18.67/USG a year earlier, as abundant supply in the region met weak demand . Inventories in the region have also been lower over the course of the year. Stocks in the region fell in November by 2pc from a year earlier to an average 29.75mn bl. US Gulf coast crack spreads have been declining steadily since 2022, according to the Energy Information Administration's (EIA) November Short-Term Energy Outlook, brought on by lower overall product demand, especially for gasolin e . But the EIA expects spreads to hold steady next year, even with a decrease in refining capacity, potentially supporting prices for high-octane components. The upcoming year will also bring a significant refinery closure to the region, which should reduce production and raise cash prices of components such as alkylate and reformate. LyondellBasell's closure of its 264,000 b/d Houston, Texas, refinery is scheduled to start in January. The refinery's fluid catalytic cracking unit (FCC), which converts vacuum gasoil primarily into gasoline blendstocks, is expected to be shut in February, followed by a complete end to crude refining by the end of the first quarter. US total refining capacity should fall to 17.9mn b/d by the end of 2025, according to the EIA, 400,000 b/d less than at the end of 2024, with the lower production leading to price increases. Although the LyondellBasell closing should eventually give crack spreads in the region a boost, some in the industry do not expect a return to pre-pandemic levels of refining margins in the immediate future. CVR Energy chief executive David Lamp said in November the company needed "to see additional refining capacity rationalization in both the US and globally" for crack spreads to gain ground. An increase in consumer demand for gasoline would also support a rise in cash prices and differentials for high-octane components. But the EIA in December forecast consumption nationwide would rise in 2025 by only 10,000 b/d, or 0.1pc, to 8.95mn b/d. By Jason Metko Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: European HSFO supply to stay short

24/12/24

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24/12/24

Viewpoint: European HSFO supply to stay short

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Trump-Panama tiff highlights rising transit cost

24/12/24

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24/12/24

Trump-Panama tiff highlights rising transit cost

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The canal's rates are established in a public and transparent manner, taking into account market conditions, Mulino said. "Every square meter of the Panama Canal and its adjacent area is Panama's and will continue to be," Mulino said. "The sovereignty and independence of our country are non-negotiable." By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: US east coast diesel oversupply to linger

23/12/24

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23/12/24

Viewpoint: US east coast diesel oversupply to linger

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Viewpoint: Tight US phosphate supply may ease

23/12/24

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23/12/24

Viewpoint: Tight US phosphate supply may ease

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