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Friday, December 15, 2017

Large Buyer News

Russian Grain Exporters Resume Trade with Turkey

Russian grain exporters have resumed deals with Turkish buyers after a short break caused by a deterioration in relations between the two countries, traders and analysts said. Russia, one of the world's largest wheat exporters, and Turkey, one of the biggest buyers of Russian wheat, have been locked in a dispute since Turkey shot down a Russian warplane near the Syrian-Turkish border in late November. For several weeks after that, Russian and Turkish traders held back from signing new contracts, fearing Moscow could suspend grain exports to Turkey or Ankara could curb purchases, the traders and analysts said. But no such measures have been imposed and business has returned to normal, they added.

Sovcomflot Launches LNG-Powered Ships

Photo: PAO Sovcomflot

Russia’s biggest tanker operator will launch four new vessels in 2018 that will run on liquefied natural gas (LNG), Bloomberg reported. Sovcomflot’s Aframax ships, capable of carrying 600,000 barrels of oil through the Baltic Sea to the port of Rotterdam, will be the first tankers run on LNG. Royal Dutch Shell Plc and other energy companies that have invested more than $700 billion in LNG projects over the past decade are going to be benefitted by this project. While ships won’t transform the market,  Energy Aspects Ltd.

West Africa's August Crude Exports to Asia to Slip

West African crude oil exports to Asia were expected to fall to 1.84 million barrels per day (bpd) in August, Reuters data and a survey of traders showed. Slower buying by Indian independent refiners such as Reliance was the primary factor behind the overall decline of 13 percent from July, highlighting the fickle nature of buyers in an oversupplied market. Indian refiners have used the steep drop in crude prices and ample global availability as an opportunity to expand their crude slates and experiment with new grades, traders said. "India, and Reliance in particular, took fewer West African (cargoes)," one trader said. Reliance booked as few as two cargoes for August loading, compared to at least seven for July loading.

World’s Biggest LNG Buyer Becomes Seller

Photo:  JERA Co., Inc.

EDF Trading, a wholly-owned subsidiary of French power giant EDF, has signed an LNG sales and purchase agreement with Japanese LNG aggregator Jera Co Inc, one of the world’s largest buyers of liquefied natural gas. Jera, a joint venture between Tokyo Electric Power Co. and Chubu Electric Power Co., will sell as much as 1.5 million metric tons of LNG between June 2018 and December 2020. According to Bloomberg, Jera’s debut as a seller to Europe underscores how the oversupplied market has challenged traditional exporters…

ShipServ Launches Monitoring, Analytics Tool

Photo: ShipServ

ShipServ has launched of the ‘Supplier Performance Report’, the latest addition to its monitoring and analytics tools. The Supplier Performance Report provides shipowners and managers using ShipServ with a host of key data on the procurement performance of every supplier that they use, enabling them to analyze trends, and identify where improvements can be made, so that relationships with suppliers can be enhanced and fully optimized. The Supplier Performance Report brings together…

China Stops Issuing Import Permits for US Distillers Grains

China has stopped issuing permits for imports of distillers dried grains (DDGs) from top exporter the United States on concerns they might contain an unapproved genetically-modified organism (GMO), traders said, sending U.S. prices tumbling. Quarantine authorities have also asked buyers to re-export earlier shipments that contained MIR 162, a GMO strain developed by Syngenta AG that has not been approved for import by China's agriculture ministry. Qingdao, China's largest port for DDGs, stopped issuing new permits for shipments last month to any buyers who had still not shipped out any cargoes previously denied entry by quarantine authorities. "Now it is countrywide. Quarantine authorities stopped issuing import permits last Friday," said one trading manager with a major buyer.

Japan in Race for Asian LNG Hub

Photo: LNG Japan Corporation

Japan, the world’s largest buyer of liquefied natural gas is aiming to establish an international liquefied natural gas (LNG)  trading hub by the early 2020s, according to a statement by Japanese Ministry of Economy, Trade and Industry (METI) . In an attempt to play a role in creating a global LNG market, Japan will open access to receiving terminal and beef up large-scale LNG storage facilities to make active LNG trading possible. Many Japanese utilities are planning for not only marginal increases in LNG purchases over the next decade but also a growing sphere of LNG activities.

GS Caltex Buys Rare West African Crude Cargo

GS Caltex to buy 920,000 barrels of West African crude; first West African shipment in almost a year. South Korea's GS Caltex Corp is set to receive its first shipment of West African crude in almost a year as the country looks to diversify supply away from the Middle East. The purchase will help soak up a glut of supply among West African producers, who have been hit as the U.S. shale oil boom curbs demand in what was once their main market and as OPEC Gulf states boost supply. Middle Eastern producers have raised their selling prices to Asia in recent months following solid demand in that region, prompting some buyers to try to broaden their sources of supply, with GS Caltex already turning to Mexico for crude.

S. Korea Boosting Condensate Imports from Iran

South Korea, Asia's largest buyer of condensate, will step up purchases of the ultra light oil from Iran by more than 50 percent in June, two sources said, as competitive pricing squeezes out rival oil from Qatar. Expected June shipments of condensate from Iran may reach at least six million barrels, or 200,000 barrels per day (bpd), said the sources. This would be a record level of imports, four times that in January when sanctions on Tehran were lifted, according to data from Korea National Oil Corp. In contrast, condensate imports from Qatar in April have fallen to 5.32 million barrels, down 19 percent from January, KNOC data showed.

Indian LNG Import Tax Halved

Indian Finance Minister Arun Jaitley. Photo: PIB, Govt of India

India, the world’s fourth-largest buyer of liquefied natural gas (LNG), has announced plans to halve its basic customs duty on imports of the chilled fuel. Indian Finance Minister Arun Jaitley presenting the Budget for 2017-18 in Parliament halved the import duty on LNG to 2.5 per cent, a move that will help cut cost of power and fertiliser production. "Considering the wide range of use of LNG as fuel as well as feed stock for petro-chemicals sector, I propose to reduce the basic customs duty on LNG from 5 per cent to 2.5 per cent," he said.

S.Korea Backs US Shale Gas Imports, Investment

South Korea stepped up a push on Friday to encourage its oil and gas companies to invest in U.S. shale gas projects, amid expectations that more opportunities will arise under a Trump administration. Asia's fourth-largest economy is the world's second-largest buyer of liquefied natural gas (LNG) after Japan, importing about 30 million tonnes a year through state-run Korea Gas Corp (KOGAS). In a meeting with the heads of Korean gas companies, energy minister Joo Hyung-hwan stressed the need to strengthen bilateral cooperation in the gas sector, with the first Korean imports of U.S. shale gas due to start next year, according to the ministry statement.

Rosneft Ships First Oil From Chayvo Field

First tanker carrying Sokol-grade crude leaving port on November 21.

Rosneft commenced shipment of crude oil extracted at the Northern Tip of Chayvo license off the coast of Sakhalin, with the first tanker carrying Sokol-grade crude leaving port on November 21. The tanker was loaded at the Sokol single-point oil terminal located 5.7 km east of DeKastri Terminal, Khabarovsk Krai. DeKastri is the first terminal in Russia to ship crude oil year round amid the harsh environment of the Arctic. Another export batch is scheduled to ship before the year’s end.

Forties Pipeline Outage Benefits U.S. Exporters

File Image (CREDIT: AdobeStock / (c) Jose Gill)

The shutdown of Britain's largest crude oil pipeline is an early Christmas gift to U.S. exporters shipping to Asia, and a complication for Middle Eastern and African producers seeking to maintain market share in the world's top importing region. The Forties Pipeline System, which carries about 450,000 barrels per day (bpd) from the North Sea to Scotland, may be closed for several weeks for unscheduled repair work, operator Ineos said on Monday. Forties crude is the largest of the five North Sea crudes that make up the dated Brent price benchmark.

Chemoil joins OceanConnect

OceanConnect has attracted the largest independent fuel supplier as a new equity partner. OceanConnect President Thomas Reilly announced that Chemoil Corporation has acquired an equity stake and is using OceanConnect as its exclusive online system for buying and selling fuels. Chemoil Group is the world's largest independent fuel supplier, selling over 12 million tons of fuel annually through complete bunkering services in the ports of Los Angeles, San Francisco, Houston, New Orleans, New York, Antwerp, Rotterdam and Singapore. "OceanConnect's traditional brokers provide the information and reliability that's vital in the marine industry, while their unique technology finds the best possible deal for buyers and suppliers alike.

LNG Shipping Under Threat from Cargo Diversions

Graph: Drewry  LNG Forecaster report

If Asian buyers continue to divert their contracted supply from the US towards Europe and Latin America, it will reduce demand for LNG vessels in the long term by cutting down on long-haul trade, according to the latest edition of the LNG Forecaster report published by global shipping consultancy Drewry. Drewry has been maintaining a bullish long-term outlook for LNG shipping for quite some time and expects rates to improve substantially from 2018 onwards. One of the major reasons for this outlook is the expansion in US LNG supply.

European Owners Lead in Buying Up Secondhand Tonnage

Graph: Clarkson Research Services

With European owners leading the pack in buying up vessels, the sale and purchase market appears to have been notably active in recent years, reveals Clarkson Research Services Limited. While Europe has been the main buyer region, the picture between owner countries in each region remains mixed. Greek owners have been the key European buyers, while Chinese and Japanese owners have taken very different approaches to S&P activity. The sale and purchase market has seen firm activity since the start of 2014, with 3,313 vessels of a combined 117.7m GT reported sold during this time.

Shell: Short Term LNG Contracts Will Be the Norm

Shell Gas & Power said on Tuesday short-term liquefied natural gas (LNG) contracts will become common within the next decade. Shell Gas & Power President Peter de Wit said that because of the heavy cost of building the fixed infrastructure needed to deliver LNG, almost all contracts are long-term at present, but buyers are seeking flexibility. "We could see 25 percent of contracts over time will probably become short-term contracts," de Wit said. De Wit, who is also the director of Shell's Asia-Pacific gas business, said short-term contracts, which may last a few months up to a few years, could be common in 5-10 years time. Buyers like Korea Gas Corp (KOGAS) - the world's single largest LNG importer - want the flexibility, de Wit said.

Navy Shipbuilding: U.S. GAO on Getting Things Right

LCS Sea Trial: Image courtesy of USN

A recent report US Government Audit Office (GAO) report, mandated by the House, discussed amongst other issues:  (1) quality problems in constructing recently delivered ships and Navy actions to improve quality and (2) key practices employed by leading commercial ship buyers and shipbuilders to ensure quality and how these compared with Navy practices. The Navy has experienced significant quality problems with several ship classes over the past several years. It has focused on reducing the number of serious deficiencies at the time of delivery…

Arctech Helsinki Shipyard Looks for New Investor as Sanctions Bite

Arctech Helsinki shipyard (Photo: Eric Haun)

Russian state-owned United Shipbuilding Corporation (USC) is looking for a new owner for its Arctech Helsinki shipyard as sanctions against the holding company hamper business, the head of the shipyard said on Tuesday. The shipyard is the world’s biggest builder of vessels that can navigate ice-covered waters, and it has expected more orders as melting sea ice opens the Arctic to more shipping, mining and oil drilling. However, following the Ukraine crisis and back-to-back East-West sanctions, Russian ownership has complicated the shipyard’s access to finance.

G E Shipping Contracts to Sell a VLGC

Visual from GE Shipping

The Great Eastern Shipping Co Ltd. (G E Shipping) has signed a contract to sell “Jag Vidhi”, a Very Large Gas Carrier. The 1990 built vessel of about 49,701 dwt will be delivered to the buyers in the second half of 2014-15. On 21st May this year the company had delivered its 1996 built Medium Range Product Tanker “Jag Padma” (47,172 dwt) to the buyers. Excluding “Jag Vidhi”, the Company’s fleet stands at 28 vessels, comprising 20 tankers (8 crude carriers, 12 product carriers) and 8 dry bulk carriers (1 Capesize…

Bidders Circle $4b Daewoo Ship Deal

Despite a sliding stock market, bidders for 's Daewoo Shipbuilding may have to pay a hefty premium and large fees to snap up the coveted $4 billion asset amid upbeat prospects for the sector. Slow progress in the bidding process due to union protests and delays in selecting a lead manager, which coincided with a retreat in global stocks and a decision to exclude foreign bidders, has benefited potential buyers by reducing competition and the value of the deal by $2 billion from a year ago. But a global credit squeeze and recent warnings from Korean regulators against debt-financed buyouts mean a successful buyer will have to give up some of their assets or pay hefty fees to win the world's third-largest shipbuilder.

Kvaerner Makes Commitment to Philadelphia Shipyard

Even if Kvaerner Group is unsuccessful in selling its Philadelphia operation, Europe's largest shipbuilder does not plan to leave the shipyard high and dry. The firm announced it will sell or close its 13 shipyards around the world due to low profits, but would try to find a buyer for the Philadelphia shipyard. If a buyer is not found, "then Kvaerner must continue," said Harald Rafdal, CEO of Kvaerner Philadelphia Inc., sending a signal the shipping giant would not abandon the Philadelphia operation. The company was to be the prime tenant of a shipyard revitalization that would receive $430 million in state, city and federal subsidies, in return for an estimated 1,000 shipbuilding jobs and up to a total of 8,000 new jobs over time, including jobs created by suppliers.

Sale Of Stena Line Possible

The chairman of Swedish international shipping operator Stena Line AB told press he can imagine selling the loss-making ferry group. However, said Dan Sten Olsson, "it has to be a serious buyer who is not just out to shop up the company." Stena Line - which also operates the English Channel with British shipping operator P&O under the P&O Stena Line company - posted a loss after financial items of $57.15 million for 1999. The group has cut costs to meet changes following the end of tax-free shopping in Europe. Olsson said he expected the loss-making group to break even in 2001. He said there were several buyers who may be interested in the Swedish group, one of the world's largest shipping operators.

Maritime Reporter Magazine Cover Dec 2017 - The Great Ships of 2017

Maritime Reporter and Engineering News’ first edition was published in New York City in 1883 and became our flagship publication in 1939. It is the world’s largest audited circulation magazine serving the global maritime industry, delivering more insightful editorial and news to more industry decision makers than any other source.

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