Japan’s Astomos adds LPG-fuelled VLGC to fleet

Market: Freight, LPG
06/09/24

Japanese LPG importer Astomos Energy has commissioned a very large gas carrier (VLGC) with a dual-fuel LPG engine, adding to its existing fleet of 26.

Astomos on 4 September commissioned the 86,953m³ Liverty Pathfinder, which was built by shipbuilder Kawasaki Heavy Industries at its Sakaide shipyard in southwest Japan's Kagawa prefecture and is co-owned by shipping firm NYK. The VLGC is the fourth co-owned vessel with NYK, adding to Gas Capricorn in 2003, Gas Garnet and Gas Amethyst in 2024.

The VLGC can use LPG as a bunker fuel from a cargo tank. It is possible to reduce more than 95pc of sulphur oxide and more than 20pc of carbon dioxide emissions when the vessel uses LPG as a marine fuel compared with conventional fuel oil, Astomos said.

Japan currently imports 10mn t/yr of LPG to cover 12mn t/yr of domestic demand, according to the Japan LP Gas Association.

By Reina Maeda

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18/06/25

Israel-Iran conflict raises European middle distillates

London, 18 June (Argus) — The continuing and escalating conflict between Israel and Iran is rallying European jet fuel and diesel values, due to fears of supply tightness. The rise in middle distillate values has outstripped those in crude in the past week, suggesting European jet fuel and diesel markets are pricing in the risk of substantial supply constraint arising from Israeli-Iranian tensions. This has not happened yet, with the conflict in a sixth day. Front-month Ice gasoil futures — the underlying value in Argus' European jet fuel and diesel assessments — settled at $731/t on Tuesday, 17 June, up by $45.75/t on the day. This was the highest settlement since 20 February, and the largest daily increase since the start of the Russia-Ukraine war in 2022. Argus priced cif northwest European jet fuel and fob ARA diesel at $789.75/t and $744.50/t on Tuesday, the highest assessments since January. Refining margins for cif northwest European jet fuel and diesel to North Sea Dated crude were $5.17/bl and $4.07/bl higher on the week, at $22.46/bl and $22.45/bl respectively, at Tuesday's close. This is the widest jet fuel crack in a year and the widest diesel crack since February. Although supply has not yet been affected, freight sources told Argus they expect Additional War Risk Premiums (AWRPs) in the Mideast Gulf to rise sharply in the coming days, which could weigh heavily on arbitrage economics to Europe and dissuade shippers from sending product to the region. Loadings of 10ppm diesel and jet totaled 430,000 b/d and 460,000 b/d respectively from ports in the Mideast Gulf in May, according to Kpler, or 11pc and 28pc of global daily loadings. With much of this heading to European destinations, the prospect for disruption is clear. Prompt supply concerns are also reflected through the difference between front- and second-month Ice gasoil futures contracts. The backwardation structure steepened from $9.75/t on Monday to $15/t at Tuesday close. Backwardation between the second- and third-month contracts stretched to $10/t on Tuesday, the widest since February. This suggests concern that supply issues could persist for several months. Europe was already facing unworkable diesel arbitrages for cargoes loading from east of Suez ports for northwest European destinations. Seasonal European jet fuel demand usually relies on supply from the Middle East, the largest jet fuel exporting region to Europe. By Amaar Khan and George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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AWRP tanker insurance to jump in Mideast Gulf

18/06/25

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18/06/25

AWRP tanker insurance to jump in Mideast Gulf

London, 18 June (Argus) — Additional War Risk Premiums (AWRP) in the Mideast Gulf could be set to rise sharply in the coming days in the wake of the Iran-Israel conflict, potentially pushing up freight rates, sources indicated to Argus , as the number of underwriters willing to commit at current levels appears to be shrinking. Offers from underwriters in line with last-done levels are becoming increasingly scarce, sources told Argus , with a number of underwriters now offering at significantly higher premiums. The situation is extremely fluid and even the higher offer levels are expected to climb in the coming days, sources said. One source suggested that tomorrow would be a trigger point to revise AWRP rates upwards for all oil and gas cargoes seeking Mideast Gulf cover and the new level would require "a massive uplift". AWRP cover protects a vessel against any physical loss or damage incurred from war related activities such as missile, drone or mine attacks, as well as capture, seizure or detainment. Although vessels are still able to secure AWRP in line with the standard 0.125pc for the Mideast Gulf before the conflict, participants have indicated that some offers are now at or above 0.2-0.4pc of the insured value of the vessel — hull and machinery value. Offers vary widely depending on the specifics of the vessel or providing insurer but several sources have indicated that some offers are at least 50pc higher than early last week. One source stressed that protection and indemnity (P&I) clubs have not yet made a definitive statement on insurance but there is increased alertness. P&I clubs provide marine protection and indemnity insurance for about 90pc of the world's oceangoing tonnage and are key determiners of the overall policies around marine insurance. AWRP in the Black Sea for a Russian crude cargo on a Suezmax tanker peaked at 1.5pc of the insured value of the ship according to Argus assessments, (around $800,000) in 2022 and 2023 as a result of the Russia-Ukraine conflict. Argus estimated that the insured value of a very large crude carrier (VLCC) at around $90mn, and a 0.4pc AWRP would equate to around $360,000. A shipowner could receive up to 50pc of this back as part of a no claims bonus but it remains a substantial extra cost faced by crude exporters from the Mideast Gulf. The Mideast Gulf to Asia-Pacific VLCC rate already jumped to the equivalent of $2.14/bl for Murban crude ($16.35/t or WS70) on 17 June from $1.34/bl ($10.28/t or WS44) on 12 June before the first missile strike on Iran. VLCC tankers carrying crude from the Mideast Gulf is the single largest crude trade in the world and since the start of the current conflict between Israel and Iran the cost of freight has bounced almost to a 2025-high from close to a 2025-low. A higher AWRP would most likely be passed on to charterers, leading to further gains in the spot freight market. There is also the likelihood that some insurers could cease offering cover citing inherent risks. But, higher AWRPs are also an opportunity for insurers to generate higher revenues, albeit with significant risks. By John Ollett, George-Maher Bonnett, and Rithika Krishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Keyera acquiring Plains' Canada NGL assets for $3.75bn

17/06/25

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17/06/25

Keyera acquiring Plains' Canada NGL assets for $3.75bn

Houston, 17 June (Argus) — Midstream operator Keyera will acquire Plains All American's Canadian natural gas liquids (NGLs) business for C$5.15bn ($3.75bn). The transaction, which is expected to close by the first quarter of 2026, includes 193,000 b/d of fractionation capacity in western Canada, more than 1,500 miles of pipelines gathering 575,000 b/d of NGLs, 23mn bl in NGL storage capacity, and the 5.7 Bcf/d Empress straddle gas processing plant. The acquisition is expected to deliver C$100mn of annual synergies between the assets in the first year, according to Keyera. Plains said the divestiture will allow the US-based midstream operator to focus on its crude handling assets in both the US and Canada. Plains will keep nearly all of its NGL assets in the US. The acquisition of Plains' assets gives Keyera NGL fractionators and gas processing plants in Fort Saskatchewan, and at the Empress facility in western Canada as well as storage at Sarnia, Ontario. It also links Keyera's existing assets to takeaway agreements for LPG exports out of British Columbia. Keyera chief executive Dean Setoguchi said the acquisition "... brings key infrastructure under Canadian ownership, keeping value and decision-making closer to home." Plain's Canadian business is underpinned by fee-based contracts with an average remaining life of 10 years, Keyera said. Associated NGL production in Canada is expected to grow by 500,000 b/d by 2040, according to Keyera, as natural gas production in western Canada climbs by 6 Bcf/d during the same timeframe. By Amy Strahan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US ethane exports slump as China flows blocked

17/06/25

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17/06/25

US ethane exports slump as China flows blocked

The EIA has revised down its forecast for US ethane exports following the introduction of licensing requirements, writes Amy Strahan Houston, 17 June (Argus) — US exports of ethane fell to a nearly five-year low in early June following the US Department of Commerce's restrictions on shipments to China , but market participants expect the trade dispute to be short-lived. The department's Bureau of Industry and Security (BIS) sent a letter to midstream firm Enterprise Products in late May requiring it as the operator of the 240,000 b/d (5mn t/yr) Morgan's Point ethane terminal in Texas to obtain a licence for future shipments to China citing possible military uses for ethane and butane. The US' largest ethane exporter, Energy Transfer, which operates the 180,000 b/d Nederland ethane terminal, then received a similar notice on 3 June. Enterprise's request for emergency authorisation to ship three ethane cargoes totalling 2.2mn bl (177,000t) was subsequently denied, sending ethane prices at the Mont Belvieu hub in Texas to a six-month low of 19.25¢/USG ($142/t) on 5 June. Around 198,000 b/d of US ethane loaded during the week to 26 May, after Enterprise received its letter, down from 410,000 b/d a week earlier and 547,000 b/d in the same week of 2024, Kpler data show. They are forecast to stand at 218,000 b/d over the week to 9 June. Ethane prices at Mont Belvieu had recovered to levels seen before the trade restriction by 10 June, owing in part to seasonal gains in Gulf coast natural gas prices but also because market participants expect disruptions to cargo loadings to be temporary, with the US and China holding trade talks in London this month. Very large ethane carriers (VLEC) that deliver ethane to China were on standby by mid-June. The Pacific Ineos Grenadier , which loaded ethane from Morgan's Point while Enterprise appealed against the BIS measure, has been moored at the company's nearby Houston terminal since 9 June. Satellite's Seri Erlang remains offshore Energy Transfer's Nederland facility, while its STL Qianji ang , which loaded at Nederland in the first week of June, is now heading to India. Another Satellite vessel, STL Yangtze , discharged in India in early June, possibly owing to maintenance at Satellite's cracker in Lianyungang , China, and is now returning to Nederland, according to Kpler. "We are all hoping the policy will be reversed soon," one market participant says, while another adds that it is likely to be resolved in days and not weeks. Restricted view US government agency the EIA has nevertheless attempted to forecast the impact the restriction would have on US ethane exports, revising down its forecast by 51pc to 310,000 b/d (6.4mn t/yr) for 2026. US ethane export capacity is on track to grow to as much as 900,000 b/d by the end of next year following the opening of new projects, including Enterprise's new 360,000 b/d Neches River ethane and propane terminal near Beaumont, Texas, and expansions at Morgan's Point and Energy Transfer's Marcus Hook terminals. Chinese buyers of US ethane are also hopeful of a relatively swift resolution owing to the mercurial trade policy of the Donald Trump administration. If it is not forthcoming, they may look to switch feedslates to LPG and naphtha when possible in the shorter term, and those that have invested in new VLEC fleets could repurpose them to LPG or ethylene in the longer term. Neither would be an attractive proposition given the substantial levels of investment in new ethane-fed cracking and VLEC capacity, but would ensure that domestic downstream derivative plants are kept running. Chinese companies are unlikely to begin importing ethylene instead given the margins would still be uncompetitive compared with cracking alternative feedstocks. In any event, buyers "do not want to make a big decision they will regret", one market participant says. Mont Belvieu ethane price Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Q&A: Suburban's renewable quest continues

17/06/25

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17/06/25

Q&A: Suburban's renewable quest continues

London, 17 June (Argus) — US LPG distributor Suburban Propane was the first company to sell a propane-renewable DME (rDME) blend in California in 2022 . The company has also pioneered sales of biopropane in the US and has since expanded into renewable natural gas (RNG) — also called biomethane — and hydrogen. Argus spoke with Suburban's vice-president of renewable energy, Douglas Dagan, about the push into renewables and the challenges ahead: Could you provide an update on Suburban's renewable DME sales? We continue to have a strategic partnership with Oberon Fuels , which produces rDME in the US. We are the only commercial seller of a propane-rDME blend — right now we sell to all of our forklift truck and autogas customers from our Anaheim, California, location. The product is a true drop-in replacement that can be used in all propane applications. The blend ratio is currently small, but we are testing higher percentages to determine the maximum drop-in blend level. We received an exemption from the California Air Resources Board [CARB] to run a pilot testing higher blend levels in vehicles. What is the current blend ratio and what is the maximum you are looking at? Our commercial blend is 4pc rDME. This ensures no issues as a drop-in replacement. We want to get to a 10pc maximum, but we've done a lot of testing and are delivering at 4pc in the Anaheim market. We are confident there are no issues on the customer side when a 4pc blend is used in an engine. Now we're looking to assess higher blend percentages. Getting CARB pilot approval was the first step. Why has the maximum fallen from previous estimates of 20pc and then 12pc? RDME has a lot of potential, but it's more challenging than anticipated. We started testing before the World Liquid Gas Association [WLGA] did. The belief was you could blend up to 20pc and everything would work. It turns out it's more like 10pc — lower than hoped — which means environmental benefits don't scale as fast. You have to ensure no issues arise from the oxygen content in DME, such as seal degradation causing leaks. There must be a high degree of confidence. On the supply side, different blend ratios require dedicated tanks and infrastructure — you can't switch between 4pc and 20pc easily — so it's very costly to have more than one blend. What are the latest in terms of your renewable propane sales? We are rapidly scaling — we've sold over 1mn USG [1,900t] of renewable propane in California, where we primarily offer renewable propane. Several programmes support renewable propane, but California credits are the most lucrative. We will sell outside California and are exploring expansion. The biggest challenge is availability. Many producers don't yet see value in separating renewable propane from the stream — it's a by-product, from renewable diesel or sustainable aviation fuel (SAF) production. We're building relationships to say: we have demand, and we'll pay. We just need more of it. How does Donald Trump's presidency and the resulting pressures on the regulatory environment for the energy transition affect Suburban's renewable plans? I think the Trump administration is supportive of what we're doing. It has different priorities from the Biden administration, but we still see support at both state and federal levels for our traditional product. On the renewable side, we're developing drop-in renewable propane, as well as RNG and clean hydrogen. There's support for all three. A Trump priority is domestic industry, and our plans are heavily domestic. Every administration brings new challenges. Lack of certainty is the biggest — knowing future policies is hard. Luckily we have a traditional product and a renewable platform that have support from both parties and we think the outlook for the future is good regardless of which party is in control. Can you explain why the carbon intensity (CI) metric could be an important tool for policy makers? It's a critical metric, though a bit technical. Policy makers deal with many issues — energy is just one. But the more people understand CI, the better the decisions. The CI scale, developed by Argonne National Lab, is a full life-cycle emissions calculation, covering production and use. Electric vehicles [EVs] are often seen as cleanest, but not always. CI reveals this — the lower the better. For example, if the electricity grid is dirtier than gasoline, switching to EVs worsens emissions. In most US states, the grid is dirtier than traditional propane. Gasoline and diesel score about 100, traditional propane around 80, and renewable propane 20-40. Suburban is moving into hydrogen and RNG. Is this a diversification strategy or do they somehow complement the core LPG business? We have a large RNG facility in Arizona using dairy manure and co-feed from organic waste. We can produce 1,000–1,500mn Btu/d of RNG sent via pipeline to California for engine fuel. Its CI score is a little better than minus 350 — phenomenally clean. We're building a new facility in upstate New York, and upgrading one in Columbus, Ohio, that uses food and organic waste. We're also evaluating other RNG opportunities. But we're also growing our LPG business. RNG is a great product — and part of a strategic platform. Digesters make biogas, which becomes RNG. But raw biogas can also be used to make rDME and renewable propane. And RNG can make clean hydrogen — or rDME/renewable propane that can be transported and reformed into clean hydrogen on site. These are all interconnected. Will the company retain its core focus as a propane supplier? Yes. Propane is a unique energy source that will remain critical. Many customers are in areas where large-scale grid decarbonisation isn't feasible, so propane as distributed energy is vital. [And] more extreme weather events take down grids. Propane is resilient — useful for heating, cooking and generating electrons to power EVs where the grid can't meet demand. If emergency EVs run on electricity and the grid fails, you need another way to generate electrons. [So, propane has a lasting role.] Have Suburban's traditional propane sales been pressured by warmer winters? Winter 2024–25 was much colder than the record-warm winter a year earlier, which had lowered demand. This winter, heating demand climbed and sales increased. But our strategy doesn't rely on cold weather. We're growing non-weather-related demand via traditional and renewable platforms — especially for engines and back-up power. Our goal is to grow both platforms and deploy capital for the greatest returns. What are your hopes for the rest of this year for the renewables business? We plan to keep growing RNG production. Output is rising at our Stanfield [Arizona] facility and the other two mentioned. We're also exploring hydrogen opportunities and expect that segment to grow. For renewable propane and DME, we've seen tremendous recent growth — especially in renewable propane. We're pursuing more supply and new markets outside California. Reaching 1mn USG in sales was a big milestone — and we want to keep building on that this year. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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