Fuel barge movement from north to south US picks up
Rare barge gasoline shipments have increased from New York Harbor to southeastern ports this week after regional supplies tightened following the Colonial pipeline outage.
At least three barges carrying CBOB have been booked from New York Harbor to the Carolinas and Georgia this week, according to traders. This is in addition to at least one barge booked for Baltimore, Maryland, over the weekend. Transit time on these routes is typically three to four days.
North-south barge movements are uncommon, as the Colonial pipeline typically provided more than enough supplies to southeastern states — so much that the pipeline's gasoline segment ending in Greensboro, North Carolina, has been operating under capacity since September 2020. But the Colonial pipeline outage has caused a shortage of fuel across the east coast as well as available barges.
The barge trades done this week were priced at least as high as 4.5¢/USG above the Nymex RBOB contract on a delivered basis. The cost for barging from New York Harbor to these southern destinations was estimated at as high as 7.5¢/USG, or the equivalent of 3¢/USG under the Nymex contract on an FOB basis in New York Harbor. In comparison, prompt Buckeye CBOB traded at 5¢/USG to 6.5¢/USG under the Nymex contract yesterday.
The US government issued a single waiver to the Jones Act to an individual company yesterday, which allows foreign-flagged vessels to transport fuels between US ports. All available Jones Act-compliant vessels had been booked up earlier this week. More waivers are likely on the way.
Colonial began a phased restart of the pipeline yesterday afternoon after stopping operations on its 5,500-mile pipeline network on 7 May following a ransomware attack. Shipments of existing inventory restarted on 10 May under manual control on Line 4, running from Greensboro, North Carolina, to Woodbine, Maryland, but existing gasoline stocks were thin.
Prior to the pipeline outage, New York Harbor gasoline inventories fell to a six-week low at 35.4mn bl in the first week of May following a decline in imports and were well below last year's level of 38.7mn bl, according to data from the Energy Information Administration.
Lower Atlantic coast gasoline stocks rose slightly the first week of May to 24.6mn bl but were well below 2019 and 2020 levels.
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US readies sale of 1mn bl gasoline reserve
US readies sale of 1mn bl gasoline reserve
Washington, 21 May (Argus) — President Joe Biden's administration is requesting bids for a congressionally mandated sale of a 1mn bl gasoline reserve that it says has been "strategically timed" to bring down prices during the peak of the summer driving season. The US Department of Energy (DOE) said the pending sale of the Northeast Gasoline Supply Reserve will release gasoline blendstocks into the commercial market by no later than 30 June. The sale will consist of 900,000 bl of gasoline in Port Reading, New Jersey, and nearly 99,000 bl of gasoline in South Portland, Maine. Bids for the competitive solicitation will be due no later than noon ET on 28 May. The administration was required to sell off the gasoline reserve, which was created in 2014 in the wake of Superstorm Sandy, by no later than 30 September under a bipartisan spending deal signed into law earlier this year. US energy secretary Jennifer Granholm said the administration organized the sale with a goal to bring down prices at the pump. "By strategically releasing this reserve in between Memorial Day and July 4, we are ensuring sufficient supply flows to the tri-state and northeast at a time hardworking Americans need it the most," Granholm said. US regular grade gasoline cost an average of $3.58/USG in the week ending on 20 May, down from a recent weekly high of $3.67/USG reached nearly a month earlier, according to US Energy Information Administration data. Biden administration officials have been paying close attention to fuel prices, which typically carry outsize weight in public perceptions about inflation. The Northeast Gasoline Supply Reserve consists of gasoline held in leased commercial storage tanks that is commingled with commercial supplies. Congressional appropriators came to see the reserve as a waste of resources that should be liquidated. The US was spending about $13/bl annually to maintain the reserve even though it was not likely to be effective during an emergency, the US Government Accountability Office said in a 2022 report. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
ScanOcean to supply MGO-HVO blend in Sweden
ScanOcean to supply MGO-HVO blend in Sweden
London, 21 May (Argus) — Swedish bunker firm ScanOcean will supply a B30 marine biodiesel blend made of marine gasoil (MGO) and hydrotreated vegetable oil (HVO) by truck at all Swedish ports. The B30 blend will comprise 70pc MGO and 30pc HVO and meet ISO 8217:2017 MGO specifications, according to ScanOcean. The biofuel component will not contain any fatty acid methyl ester (Fame) and the blend will reportedly be accompanied by ISCC-EU certification and a proof of sustainability (PoS) document. ScanOcean added that they will supply the physical blend but that the HVO component will be sourced from the EU. The B30 blend will achieve a 25pc reduction of CO2 emissions on a well-to-wake basis when compared with conventional MGO, according to the Swedish supplier. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Iraq’s Somo issues first gasoil export tender
Iraq’s Somo issues first gasoil export tender
Dubai, 21 May (Argus) — Iraq's state-owned Somo issued its first gasoil export tender, likely because additional volumes are coming from its new 140,000 b/d Karbala refinery. Somo is offering 82,000t (612,000 bl) of 500ppm sulphur gasoil over a three-month period from the date of signing the deal, with an option to extend the agreement upon Somo's approval. Somo indicates gasoil is to load from North Company refineries. The bids are to be submitted by 26 May. This is the very first gasoil export tender issued by Somo as historically Iraq has been heavily dependent on gasoil imports to satisfy its domestic demand. Market participants suggest Iraq can now afford to export gasoil because it has ramped up its new 140,000 b/d Karbala refinery south of Baghdad. Karbala refinery began commercial operations in April last year and primarily supplies oil products to domestic market, but in doing so it creates gasoil surplus in the northern part of the country. Iraq has also recently reopened its 150,000 b/d North refinery — part of Iraq's largest downstream facility the 290,000 b/d Baiji complex. The refinery was running at around 70,000 b/d in March, according to market sources. Additional production potentially caused Iraq to stop importing gasoil this year. Iraq's gasoil imports dropped to zero in February and March, show the latest data from Joint Organisations Data Initiative (Jodi). This is compared with around 24,500 b/d gasoil imports in 2023. By Ieva Paldaviciute Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Q&A: Marine CO2 goals need culture shift: TotalEnergies
Q&A: Marine CO2 goals need culture shift: TotalEnergies
Amsterdam, 20 May (Argus) — A cultural change in buying behaviour and supply patterns is necessary for the shipping sector to meet its decarbonisation targets and may be the biggest hurdle to overcome, strategy and projects director for TotalEnergies' marine fuels division Frederic Meyer told Argus. Edited highlights follow: What is the biggest challenge standing in the way of the maritime industry in meeting decarbonisation targets and the fuel transition ? A cultural change is required — for decades the maritime sector has relied on by-products with high energy density from the crude refining process such as fuel oil. The industry will now have to pivot its attention towards fuels developed for the purpose of consumption within the maritime industry. This will also require time as the sector looks to level up, and it remains to be seen whether there will be enough time to meet the International Maritime Organisation (IMO)'s net-zero by or around 2050 targets. But we have seen some good progress from cargo owners who are seeking scope 3 emissions related documents. How does TotalEnergies see marine biodiesel demand moving in the short term? In the short term, there is little incentive for the majority of buyers in the market. This is due to a lack of any regulatory mandates, as well as limited impact from existing regulations such as the IMO's carbon intensity indicator (CII) and the EU's Emissions Trading System (ETS). Despite providing a zero emission factor incentive for biofuels meeting the sustainability criteria under the EU's Renewable Energy Directive (RED), EU ETS is still on a staggered implementation basis beginning with only 40pc this year, rising to 70pc next year and 100pc in 2026. Further, EU ETS prices have been quite low, which also weighed on financial incentives for marine biodiesel. Therefore, many buyers are currently waiting for further incentives and signals from the regulators before purchasing marine biodiesel blends. Another point impacting demand is the current edition of ISO 8217, which does not provide much flexibility when it comes to marine biodiesel blend percentages and specifications. The new 2024 edition will likely provide greater flexibility for blending percentages, as well as a provision for biodiesel that does not meet EN14214 specifications. This will provide greater flexibility from a supply point of view. However, there remains stable demand from buyers who can pass on the extra costs to their customers. And how do you see this demand fluctuating in the medium to long term? If the other alternative marine fuels, such as ammonia and methanol, that are currently being discussed do not develop at the speed necessary to meet the decarbonisation targets, then marine biodiesel demand will likely be firm. Many in the market have voiced concerns regarding biofuel feedstock competition between marine and aviation, ahead of the implementation of sustainable aviation fuel (SAF) mandates in Europe starting next year. With Argus assessments for SAF at much higher levels than marine biodiesel blends, do you think common feedstocks such as used cooking oil (UCO) will get pulled away from maritime and into aviation? With regards to competition among different industries for the same biofuel feedstock, suppliers may channel their feedstock towards aviation fuels due to the higher non-compliance penalties associated with SAF regulations as opposed to those in marine, which would incentivise greater demand for SAF. An area that can be explored for marine is the by-product when producing SAF, which can amount to up to 30pc of the fuel output. This could potentially feed into a marine biodiesel supply pool. So it's not necessarily the case that the two sectors will battle over the same feedstock if process synergies can be found. Regarding fuel specifications, market participants have told Argus that the lack of a marine-specific fuel standard for alternatives such as marine biodiesel is feeding into uncertainty for buyers who may not be as familiar with biofuels. What impact could this have on demand for marine biodiesel blends from your point of view? Currently, mainstream biodiesel specifications in marine biodiesel blends are derived from other markets such as the EN14214 specification from road diesel engines. But given the large flexibility of a marine engine, there is room to test and try different things. For "unconventional" biofuels that do not meet those road specifications, there needs to be a testing process accompanied by proof of results that showcase its safety for combustion within a marine engine. Some companies may not have the means or capacity to test their biodiesel before taking it into the market. But TotalEnergies always ensures that there are no engine-related issues from fuel combustion. Suppliers need to enact the necessary testing and take on the burden, as cutting out this process may create a negative perception for the product more generally. Traders should also take on some of the burden and test their fuels to ensure they are fully compatible with the engine. With many regulations being discussed, how do you see the risk of regulatory clashes impacting the industry? The simple solution would be an electronic register to trace the chain of custody. In the French markets, often times the proof of sustainability (PoS) papers are stored onto an electronic database once they are retired to the relevant authority. This database is then accessible and viewable by the buyer, and the supplier could also further deliver a "sustainability information letter" which mirrors the details found in the PoS. It is important for the maritime sector to adopt an electronically traceable system. What role could other types of fuels such as pyrolysis oil potentially play in the maritime sector's decarbonisation targets? We have teams in research and development at TotalEnergies which are studying the potential use of other molecules, including but not limited to pyrolysis oil, for usage in the maritime sector. It may become an alternative option to avoid industry clashes, as pyrolysis oil would not be an attractive option to the aviation sector. We are currently exploring tyre-based pyrolysis oil, but have only started doing so recently so it remains an untapped resource. We need to figure out the correct purification and distillation process to ensure compatibility with marine engines. For the time being we are specifically looking at tyre-based pyrolysis oil and not plastic-based, but we may look at the latter in a later stage. The fuel would also have to meet the RED criteria of a 65-70pc greenhouse gas (GHG) reduction compared with conventional fossil fuels, so we are still exploring whether this can be achieved. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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