In his interview with IAA PortNews, Yury Gilts, General Director of Volga Shipping Company JSC (Volga-Flot JSC), tells about bunker fuel prices, new types of bunker fuel, chemical cargo carriers and retrofitting of tankers.
- Mr. Gilts, what is your opinion about the today’s bunker market?
- This year has seen a considerable increase of bunker prices in the maritime market. As compared with the previous year, bunker prices have risen by 40% on the average. Actually, dry cargo freight rates are also record high this year, they have been rising from May.
The situation is different in the market of inland water transport. It is more stable.
I think the price of bunker fuel in seaports has reached its limit. Most probably they will remain flat or show a slight decrease. We already see that the prices have stabilized from the end of October 2021.
The freight market's future dynamics is not obvious but the rates are currently much affected by pos-Covid implications as well as the energy crisis and the growth of coal demand in the global market. All those factors entailed the increase of freight rates. I do not know how long the situation is going to last. Basing on general forecasts, it will potentially last till the end of the next year.
- Do you consider using alternative types of fuel?
- First of all, liquefied natural gas (LNG) which is currently referred to as the prime alternative, is very expensive.
We were looking into using it on ships of Volga Shipping Company but it proved to be unreasonable for ships of low tonnage. That is the second aspect: the fleet of our shipping company has ships of limited dimensions while LNG propulsion system requires additional premises and volumes thus affecting cargo capacity of a ship. The third aspect is endurance, which is crucial for us. In this respect, LNG-powered ships of dimensions we have face certain limiting factors. Therefore, availability of LNG refueling infrastructure is a key condition while it is not sufficient so far.
So, we continue our operations with the conventional propulsion – running on heavy or light fuel oil and on low-sulphur fuel as well. New ships we lay down will have Tier 3 compliant engines which are environmentally clean ones.
One more alternative fuel under discussion is methanol. We are not looking at it as a fuel but we will consider it as cargo since it seems to show high prospects for the market growth.
Methanol cargo can be carried in standard chemical tankers with a special coating. One of Volga Shipping Company’s tankers is currently undergoing a conversion to become an appropriate chemical tanker. In particular, that ship will have a coating needed to carry methanol. That will be our pilot ship in the new segment focused on methanol transportation.
- You have recently announced the conversion of three tankers into dry cargo carriers. Are you going to continue this work?
- Three tankers underwent conversion in 2019 and three have been converted this year. Yes, we are going to continue implementing such projects later, starting from 2023.
The reasons behind it are quite viable: liquid bulk cargo base is decreasing in the river segment.
As of today, we operate 30 river-sea-going tankers and one river-going oil / deck cargo tanker of Project RSD54.