London: A new consultancy, 20|20 Marine Energy, was launched last month to help companies create and implement strategies for purchasing and selling marine energy, as well as supporting the development of bunkering infrastructure. In a changing market of increasing risk and complexity, 20|20 works with shipowners, operators and financial institutions on the buy-side, fuel suppliers and traders on the sell-side, as well as ports, and local and national governments on developing infrastructure projects. The company also provides research and insight services.
20|20 has been established by Adrian Tolson, a well known marine energy experts. With 30 years of experience he has a detailed knowledge and insight on the supply and demand side of fuel purchasing, as well as bunkering infrastructure development. His experience spans leadership roles with some of the industry’s largest marine fuel suppliers, including Chemoil Energy and OW Bunker.
Speaking to Maritime CEO on bunkering trends to note in the coming year, Tolson starts with his assessment of oil prices in 2016.
“The market has fully acknowledged that OPEC is no longer providing a market floor and it is unlikely to change course soon,” he says, adding: “The continued high production levels of global producers as they seek market share have significantly exceeded the growth in oil consumption, and OPEC’s refusal to cut production combined with Iran’s impending re-emergence from sanctions will provide more supply for a market already in surplus.”
With the continued low fuel prices, in the short-term, distillates will be the most viable alternative within Emission Control Area zones, Tolson reckons. In the medium to longer term LNG has real potential, he thinks. However, there are a number of significant obstacles for LNG to grow. First, he notes, both infrastructure and bunkering regulations for LNG need to continue to develop at a significant rate. And secondly, LNG pricing needs to be at a significant discount to distillates.
“If oil, and in particular distillate, prices rise as we near 2020, in line with the potential implementation of the global 0.5% sulphur limit, then HFO scrubbers also come into play,” Tolson says, explaining that HFO is ultimately a by-product that can only realistically be used for marine transportation, which means that refiners must find a very competitive price point.