Propane demand squeezing US ammonia truck supply
Ammonia distribution to US Midwest growers this fall faces mounting restrictions as heightened propane demand has strained logistics in the region.
Prolonged crop-drying propane demand has overlapped with seasonal home heating consumption, requiring more LPG tanker trucks and reducing the number of available drivers to transport ammonia.
Crop-drying typically starts in September and wraps up in November. But this year's delayed corn harvest has extended the drying period to overlap with the start of fall ammonia injections in isolated areas of the Corn Belt.
One distributor said a single truck can discharge nearly a dozen loads within a three-day period during a typical season, but the current pace is closer to one load every 72 hours. Waiting times have swelled to 10-12 hours to pick up cargo, furthering the delay to the retailer and farmer.
The bottleneck highlights a growing problem for the US trucking industry, which has faced growing shortages of drivers in recent years. The American Trucking Associations said the driver shortage reached 45,000 in 2015 and was anticipated to surpass 50,000 by the end of 2017. Industry forecasts last year estimated the driver deficit to hover around 50,000 by the end of this year.
Several states in key growing areas have issued exemptions to truckers shipping heating fuel, including propane, this month to enable drivers to meet heightened demand. Ammonia distributors recently said the squeeze on available trucks has not restricted shipments to farmers yet, but there is growing concern a logistical bottleneck will impact fall applications.
Restrained asset utilization could eventually diminish total ammonia consumption this fall, further compounding two lackluster consumption periods stretching back to fall 2018. Peak application demand in the Midwest is still weeks away as farmers complete the harvest, and ammonia distributors will likely face further competition to meet heating demand.
Spot ammonia terminal values in the Corn Belt have not reacted to the logistical constraint but could face downward pressure into the first quarter if inventories build because of delayed truck shipments during the fourth quarter. Terminal prices in the Corn Belt typically climb from the fourth quarter into the first quarter to meet post-harvest and pre-plant application demand.
By Connor Hyde
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EPS to register six ammonia-powered newbuilds with SRS
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London, 17 April (Argus) — Shipping firm Eastern Pacific Shipping (EPS) will register six dual-fuel ammonia powered vessels, due to be delivered from 2026, with the Singapore Registry of Ships (SRS). The commitment is part of an initial agreement with Singapore's Maritime and Port Authority (MPA), vessel classification organisation American Bureau of Shipping (ABS) and Lloyd's Register. EPS said the collaboration with the MPA will extend to supporting crew and seafarer training on the vessels powered by "zero and near-zero emission fuels", in addition to pilot trials of these fuels, and building on the capacity and infrastructure required for ammonia bunkering. Argus assessed the price of green ammonia dob east Asia on a very-low sulphur fuel oil energy density equivalent (VLSFOe) at $2,608.90/t in March, a premium of over $1,975.08/t against VLSFO dob Singapore. Grey ammonia in east Asia was assessed at an average of $829.52/t VLSFOe across March, a premium of $195.70/t to VLSFO dob Singapore. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore's MPA, IEA unite on maritime decarbonisation
Singapore's MPA, IEA unite on maritime decarbonisation
Singapore, 17 April (Argus) — The Maritime and Port Authority of Singapore (MPA) and the IEA have signed an initial deal to push the transition to zero and near zero emission fuels, while working on technology as well as digitalisation to meet the maritime decarbonisation agenda. The agreement, signed by MPA chief executive Teo Eng Dih and IEA executive director Faith Birol, was announced at the Singapore Maritime Week 2024 (SMW) this week. "Greater international collaboration in maritime and energy industries is critical for international shipping to meet international decarbonisation goals," Teo said. "Shipping is one of the hardest sectors to decarbonise and we need to spur development and deployment of new technologies to slow and then reverse the rise in its emissions," said IEA chief economist Tim Gould. "This will require strong collaboration at a national and international level." Training programmes will be built to support the adoption of new fuels. There will also be partnerships made towards fuel-related projects and initiatives such as the International Maritime Organisation-Singapore NextGen project. The IEA plans to open its first regional co-operation centre in Singapore, which will be its first regional office outside of its headquarters in Paris, France. By Mahua Chakravarty Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Gulf lowest-cost green ammonia in 2030: Report
US Gulf lowest-cost green ammonia in 2030: Report
New York, 16 April (Argus) — The US Gulf coast will likely be the lowest cost source of green ammonia to top global bunkering ports Singapore and Rotterdam by 2030, according to a study by independent non-profits Rocky Mountain Institute and the Global Maritime Forum. Green ammonia in Singapore is projected to be sourced from the US Gulf coast at $1,100/t, Chile at $1,850/t, Australia at $1,940/t, Namibia at $2,050/t and India at $2,090/t very low-sulphur fuel oil equivalent (VLSFOe) in 2030. Singapore is also projected to procure green methanol from the US Gulf coast at $1,330/t, China at $1,640/t, Australia at $2,610/t and Egypt at $2,810/t VLSFOe in 2030. The US Gulf coast would be cheaper for both Chinese bio-methanol and Egyptian or Australian e-methanol. But modeling suggests that competition could result in US methanol going to other ports, particularly in Europe, unless the Singaporean port ecosystem moves to proactively secure supply, says the study. In addition to space constraints imposed by its geography, Singapore has relatively poor wind and solar energy sources, which makes local production of green hydrogen-based-fuels expensive, says the study. Singapore locally produced green methanol and green ammonia are projected at $2,910/t and $2,800/t VLSFOe, respectively, in 2030, higher than imports, even when considering the extra transport costs. The study projects that fossil fuels would account for 47mn t VLSFOe, or 95pc of Singapore's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia (about 1.89mn t VLSFOe) and green methanol (3.30mn t VLSFOe). Rotterdam to pull from US Gulf Green ammonia in Rotterdam is projected to be sourced from the US Gulf coast at $1,080/t, locally produced at $2,120/t, sourced from Spain at $2,150/t and from Brazil at $2,310/t. Rotterdam is also projected to procure green methanol from China at $1,830/t, Denmark at $2,060/t, locally produce it at $2,180/t and from Finland at $2,190/t VLSFOe, among other countries, but not the US Gulf coast . The study projects that fossil fuels would account for 8.1mn t VLSFOe, or 95pc of Rotterdam's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia, at about 326,000t, and green methanol, at about 570,000t VLSFOe. Rotterdam has a good renewable energy potential, according to the study. But Rotterdam is also a significant industrial cluster and several of the industries in the port's hinterland are seeking to use hydrogen for decarbonisation. As such, the port is expected to import most of its green hydrogen-based fuel supply. Though US-produced green fuels are likely to be in high demand, Rotterdam can benefit from EU incentives for hydrogen imports, lower-emission fuel demand created by the EU emissions trading system and FuelEU Maritime. But the EU's draft Renewable Energy Directive could limit the potential for European ports like Rotterdam to import US green fuels. The draft requirements in the Directive disallow fuel from some projects that benefit from renewable electricity incentives, like the renewable energy production tax credit provided by the US's Inflation Reduction Act, after 2028. If these draft requirements are accepted in the final regulation, they could limit the window of opportunity for hydrogen imports from the US to Rotterdam to the period before 2028, says the study. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Romania's growing autogas market boosts 2023 imports
Romania's growing autogas market boosts 2023 imports
Demand for autogas is expected to continue rising in the country as it maintains a discount to competing motor fuels Moscow, 16 April (Argus) — Romania's autogas consumption increased last year as more drivers were attracted by its lower price compared with gasoline and diesel, helping to lift imports to the country by over a quarter on the year. Autogas sales in the country rose by 10,000-30,000t on the year to 270,000-300,000t as a result of its lower price against other motor fuels. "The ratio of autogas to gasoline prices fell below 50pc last year from 60-65pc owing to rising global gasoline and diesel prices," a Romanian trader says. Romanian autogas prices stood at 3.27-3.35 lei/litre (71-73¢/l) last week, while gasoline prices were Lei7.12-7.15/l ($1.50/l), putting the former at 47pc of the latter . This compares with autogas' cost of Lei3.91-3.98/l in April 2023, and gasoline at Lei6.63-6.69/l, with a ratio of 59-60pc. The country's autogas demand could have been even stronger last year had it not been for a fire at the Flagas refuelling station in Crevedia, near Bucharest, in August. Immediately after the accident, a special commission consisting of firefighters, police, an environmental body and tax authorities was formed to carry out inspections at the country's autogas stations, resulting in many being closed. "The commission would close a fuelling station for a slightest non-compliance, so some retail operators shut down their fuelling stations before it arrived," a market participant says. Romania has more than 1,000 autogas refuelling sites. But around 300 stations are reported to have closed since September 2023 following the incident. This resulted in sales dropping in September-December last year compared with the same period in 2022, according to local market participants. The growth in autogas sales over the whole of last year boosted Romania's LPG imports to around 353,000t compared with 278,000t in 2022, Vortexa data show. All of the country's LPG deliveries were to its sea ports of Midia, Mangalia and Galati, as rail shipments from Russia transiting Ukraine, which had been 2,000-3,000 t/month, halted after the war in Ukraine began in late February 2022. Imports were also supported by cuts to domestic output and an increase in overland exports. Exports rose by about 5,000–10,000t to 330,000–340,000t in 2023, according to market participants, with most of this supported by rising shipments to Ukraine, growing by 45,600t to 235,600t. Romania's LPG imports from Egypt doubled to 104,200t, Vortexa data show, with most of this supplied by trading firms Naftomar and Evicor. Arrivals from Turkey grew by 51,300t to 69,600t, mostly delivered by Turkish distributors Aygaz and Milangaz. More Kazakh LPG arrived from Georgia's Batumi port, rising by 14,800t to 27,600t, to partially offset the loss of supply from Russia's Taman terminal after exports halted in May 2023. LPG arrivals from Algeria and the US also increased last year (see table). Gassing up Romania's autogas demand should be on course to continue expanding this year, with autogas prices at around an 80¢/l discount to gasoline at the beginning of April. The government raised autogas excise duty again from 1 January, to around Lei874/t ($191/t). But it also increased the duty on gasoline to Lei2.02/l and on diesel to Lei1.85/l, and will do so again from 1 July to Lei2.38/l and Lei2.18/l, respectively, while the rate on autogas is expected to remain unchanged. Autogas sales in the country are expected to increase to 280,000-320,000t this year from 270,000-300,000t in 2023 because of lower excise tax on LPG compared with gasoline and diesel, according to traders. Exports should stabilise while domestic output will increase as technical issues at the Rompetrol refinery are resolved, they say. Seaborne LPG imports to Romania '000t 2023 ±% 2022 Egypt 104.2 99.5 Turkey 69.5 35.7 Russia/Kazakhstan 54.5 -163.0 Georgia 27.6 86.8 US 27.1 49.0 Algeria 26.9 50.2 Tunisia 12.0 11.1 Greece 6.3 -235.4 Croatia 5.7 -456.2 Italy 3.7 183.2 Netherlands 3.4 247.4 Libya 1.1 -283.3 Other 11.6 11.6 Total 353.5 30.8 — Vortexa Romania LPG demand by sector 2022 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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