High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
Royal Dutch Shell announced Monday it has agreed to charter a fleet of fourteen new LNG-powered crude oil and product tankers as part of its drive to decarbonize shipping.
Shell Tankers (Singapore) Private agreed to the long-term charter deal from Sinokor Petrochemical, which expects to take delivery of the newbuilds from Samsung Heavy Industries in 2021. The ships will consist of 10 LNG dual-fuel Aframax crude oil tankers.
Separately, Shell has agreed long-term charters for four new LNG dual-fuel oil products tankers from institutional investors advised by J.P. Morgan Asset Management, with delivery of the vessels expected from 2021.
“LNG is already a commercially competitive way to reduce emissions from ships, including those delivering oil to our customers,” Mark Quartermain, Shell’s Vice President for Crude Trading and Supply, said. “This is an important step in Shell’s wider drive to help decarbonise the shipping sector, both as a leading supplier and user of LNG.”
The deal comes as the International Maritime Organization has set a target of reducing total annual greenhouse gas emissions from shipping by at least 50% by 2050, compared to 2008 levels.
“LNG is a cleaner-burning and lower-carbon fuel, so ship owners are increasingly using it to help achieve their environmental ambitions in a cost-effective way,” said Grahaeme Henderson, Shell’s Vice President of Shipping and Maritime.
According to a “well-to-wake” emissions study by consultants Thinkstep, LNG has the potential to cut GHG emissions from ships by up to 21% compared to traditional marine fuels, Shell said in a statement. LNG also virtually eliminates sulphur and particulate emissions.
Shell says it plans to fuel the tankers at existing facilities in Singapore, Rotterdam and other bunkering ports under consideration.
In 2018, Shell International Trading and Shipping Company Limited chartered four LNG dual-fuel Aframax crude oil tankers on a long-term basis, several dual-fuel inland oil products barges in northwest Europe, and three LNG-powered offshore supply vessels supporting drilling operations in the US Gulf of Mexico.
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