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Gas-related abbreviations can be a bit confusing. Here’s our quick guide to Gasum gas products for maritime transport.
We have gathered some information for you in a guide about cleaner maritime transports. You will see what influences shipping to reduce emissions, including regulations, market demands and trends.
If we are to fight climate change, emissions from the use of conventional fuels such as heavy fuel oil in maritime transport need to be reduced. Rapidly becoming more common as a cost-effective alternative, liquefied natural gas (LNG) is the cleanest marine fuel available. Compared with heavy fuel oil, LNG has significantly lower CO2 emissions, and almost nonexistent particle emissions.
LNG is a safe and proven technology that offers higher energy content and lower operational and maintenance costs. It is suitable for all vessel types, including ferries, passenger ships, tankers, bulk carriers, supply and containerships.
As a premium provider of LNG, Gasum is a trustworthy partner for both experienced buyers and for customers that are switching from conventional fuels to LNG. Our wide variety of sustainable yet efficient services and solutions support our customers in optimising their operations for a more sustainable future.
Maritime traffic generates 3 percent of the world’s total greenhouse gas emissions such as carbon dioxide. This contributes to global warming and extreme weather conditions. CO2 is emitted by ships using petroleum-based fuels to power main and auxiliary engines. Through the International Maritime Organization (IMO) the world’s shipping industry is constantly working to reduce CO2 emissions.
LNG as a marine fuel meets all the current and forthcoming IMO and EU regulations. Switching to LNG means complete removal of Sox and particles, and reduction of Nox emissions of up to 85 percent. LNG reduces CO2 emissions by at least 20 percent.
As a fuel, LNG is interchangeable with renewable LBG (liquefied biogas), as they both consist mainly of methane. This means that the two gases can be mixed. Using both LNG and LBG is one of the concrete actions that will take us towards a low-carbon society of the future.
Contact our sales team to discuss more about gas as a solution for cleaner maritime transport.
Towards cleaner maritime transport
Risavika LNG has dropped a significant 6.7 % week on week to 88.75 EUR/MWh following stronger LNG supplies to the market. Europe has been the top destination for US LNG cargoes, according to Reuters, outpacing exports to Asia for the second month in a row. Warmer than expected weather in Asia and healthy stockpiles last months helped swing LNG cargoes to Europe, where supply has been tight due to lower pipeline flows from Russia and low natural gas inventory levels. Warmer weather in Europe and higher renewable power production contribute to current bearish sentiment, however, the sentiment can change with weather forecast change closer to March.
Benchmark oil prices remained strong for the last week with Brent crude keeping the level above 90 USD/BBL, despite the decision of the Organization of the Petroleum Exporting Countries and its allies to continue with the plan to boost global production by another 400 000 BBL/D in March. However, member states have been unable to produce oil at their assigned quota levels, which will not alleviate the global supply-demand deficit. In Europe, record-high natural gas prices have led refiners to reduce production in Europe to save on cost, leading to tightened inventories and impacting the prices. Fuel oil 3.5 (FO 3.5) price was up 2.7 % to 500.72 USD/t, low sulphur oil (MFO 0.5) gained 4.5 % to 643.93 USD/t and marine gasoil (MGO 0.1) was higher by 5.4 % to 796.48 USD/t week on week.
|
Front Month Price index |
||||||
|
LNG Risavika* |
LBG blend Risavika** |
FO 3.5 FOB Rdam |
MFO 0.5 FOB Rdam |
MGO 0.1 FOB ARA |
ULSD FOB ARA |
Unit |
|
88.75 |
91.75 |
35.90 |
44.21 |
54.68 |
59.04 |
EUR/MWh |
|
1503.48 |
1554.30 |
500.72 |
643.93 |
796.48 |
823.41 |
USD/t |
LNG Risavika - LNG FOB Risavika
LBG Risavika 10 % - 10 % blend of Liquified Biogas
FO 3.5 FOB Rdam – European 3.5% Fuel Oil Barges FOB Rdam (Platts) Futures Quotes
MFO 0.5 FOB Rdam - European FOB Rdam Marine Fuel 0.5% Barges (Platts) Futures Quotes
MGO 0.1 FOB ARA - Gasoil 0.1% Barges FOB ARA (Platts) Futures Quotes
ULSD FOB ARA - European Diesel 10 ppm Barges FOB ARA (Platts) Futures Quotes
Source: CME Group, Gasum, Reuters, OilPrice
*An estimate for LNG FOB Risavika
** An estimate for 10 % LBG blend FOB Risavika
Natural gas markets in Europe have been extremely volatile for the past two months. The Dutch TTF front-month-ahead gas price reached a historic high of 146.50 EUR/MWh in December 2021, leading to LNG cargoes changing their course and heading towards Europe. Northwest Europe LNG prices remain at a premium to the JKM price, increasing supply into Europe. However, persistent lower pipeline supplies from Russia and low inventory levels keep the price floor high. Risavika LNG index is at 94.67 EUR/MWh for March contracts.
Benchmark oil prices has been supported by geopolitical risks and short-term fuel switching, rather than by more sustainable demand increases. Four incidents threatened oil supplies only in January. Protests in Kazakhstan, pipeline outage in Iraq, attacks in the UAE and ongoing tensions between Russia and Ukraine led to Brent reaching over 90 USD/BBL. On top of that, about 80% of all European refineries depend on natural gas to power their plants, with refineries located in the big oil refining centers like Northwest Europe's Amsterdam-Rotterdam-Antwerp getting virtually all their power from natural gas. With natural gas prices staying elevated, there is a possibility for worsening cracking margins for refineries in Europe and tighter oil products supply as a consequence. Fuel oil 3.5 (FO 3.5) price is at 487.44 USD/t, low sulphur oil (MFO 0.5) is at 614.93 USD/t and marine gasoil (MGO 0.1) was trading at 753.58 USD/t for March contracts.
|
Front Month Price index |
||||||
|
LNG Risavika* |
LBG blend Risavika** |
FO 3.5 FOB Rdam |
MFO 0.5 FOB Rdam |
MGO 0.1 FOB ARA |
ULSD FOB ARA |
Unit |
|
94.67 |
97.67 |
34.95 |
42.22 |
51.74 |
56.14 |
EUR/MWh |
|
1603.77 |
1654.59 |
487.44 |
614.93 |
753.58 |
783.03 |
USD/t |
LNG Risavika - LNG FOB Risavika
LBG Risavika 10 % - 10 % blend of Liquified Biogas
FO 3.5 FOB Rdam – European 3.5% Fuel Oil Barges FOB Rdam (Platts) Futures Quotes
MFO 0.5 FOB Rdam - European FOB Rdam Marine Fuel 0.5% Barges (Platts) Futures Quotes
MGO 0.1 FOB ARA - Gasoil 0.1% Barges FOB ARA (Platts) Futures Quotes
ULSD FOB ARA - European Diesel 10 ppm Barges FOB ARA (Platts) Futures Quotes
Source: CME Group, Gasum, Argus Media, S&P Global Platts
*An estimate for LNG FOB Risavika
** An estimate for 10 % LBG blend FOB Risavika
Risavika LNG index has increased to 104.8 EUR/MWh gaining 10 % week on week as Europe anticipates a cold start of December, higher withdrawals from the storage, while gas supply is tight. The day-ahead capacity auctions for Ukrainian pipelines and at Germany’s Mallnow compressor station will provide a strong signal on price development in December. Russian Gazprom has said it aims to keep refilling European storage sites until the end of December, however, it hasn’t used short-term auctions to ship more fuel. The market is likely to see day ahead prices volatility this month as the price will be defined by weather and short-term capacity bookings.
Benchmark oil prices dropped for the fifth consecutive week and were just above 71 USD/BBL mark as the market anticipates impact of new covid variant on oil demand recovery, while release of strategic reserves could have impact in the first quarter of 2021 oversupplying the market. Oil product prices were dropping following the benchmarks. Fuel oil 3.5 (FO 3.5) price was down 7.3 % to 386.53 USD/t, low sulphur oil (MFO 0.5) dropped 7 % to 504.33 USD/t and marine gasoil (MGO 0.1) lower by 7.6 % to 609.8 USD/t week on week.
|
Front Month Price index |
||||||
|
LNG Risavika* |
LBG blend Risavika** |
FO 3.5 FOB Rdam |
MFO 0.5 FOB Rdam |
MGO 0.1 FOB ARA |
ULSD FOB ARA |
Unit |
|
104.80 |
107.80 |
27.71 |
34.63 |
41.87 |
43.24 |
EUR/MWh |
|
1775.37 |
1826.20 |
386.53 |
504.33 |
609.80 |
603.08 |
USD/t |
LNG Risavika - LNG FOB Risavika
LBG Risavika 10 % - 10 % blend of Liquified Biogas
FO 3.5 FOB Rdam – European 3.5% Fuel Oil Barges FOB Rdam (Platts) Futures Quotes
MFO 0.5 FOB Rdam - European FOB Rdam Marine Fuel 0.5% Barges (Platts) Futures Quotes
MGO 0.1 FOB ARA - Gasoil 0.1% Barges FOB ARA (Platts) Futures Quotes
ULSD FOB ARA - European Diesel 10 ppm Barges FOB ARA (Platts) Futures Quotes
Source: CME Group, Gasum, Bloomberg, Argus Media
*An estimate for LNG FOB Risavika
** An estimate for 10 % LBG blend FOB Risavika
LNG helps to mitigate climate change by offering a cleaner alternative to conventional fuels used in maritime transport.
LBG is 100% renewable fuel that can reduce CO2 emissions over its life cycle by up to 85% compared to conventional fuel.
We offer ship to ship bunkering of LNG both at sea and in port. Our LNG bunker vessel Coralius serves frontrunners in the marine market.
Swedish passenger shipping company, Destination Gotland, has decided to increase its biogas fuel blend from one to ten percent in its gas-powered ships.
Samskip is a European multimodal transport company and short-sea operator. The company is increasingly refueling LNG on ships and cars. Biogas is a future area of interest.
ESL Shipping, the leading carrier of dry bulk cargo in the Baltic region, promotes sustainability through LNG powered vessels.
