Monjasa to grow English Channel as bunker hub


Danish bunker fuel supplier and shipping firm Monjasa sees huge potential in the English Channel and wants to expand its services along the key waterway in what could act as a complementary bunkering hub to the dominant Amsterdam-Rotterdam-Antwerp region.

Monjasa recently moved the 3,800 dwt tanker, MT Fredericia, from Denmark’s Skaw to Portland Port on England’s south coast. It joins the 4,300 dwt MT Skaw Provider to service a terminal that Monjasa operates with Portland Bunkers UK.

“Exiting Skaw has meant we can add more flexibility and cover an extended geographic area across the English Channel to assist with supply operations there,” Mikkel Kannegaard, managing director Europe for Monjasa, told S&P Global Platts in an interview June 10.

“We plan to use Portland as a base to expand our services in the English Channel further across France for example. We see a lot of potential in the channel activity,” Kannegaard said. Monjasa and Portland Bunkers UK established their base at Portland Port in 2015 and have steadily built their presence in the region. The port has deep, sheltered waters and is ideally located for bunkering operations, being midway along the Channel.

Kannegaard explained that Portland’s potential is anchored around it as a bunkering port only. “There’s minimum waiting time and no draft restrictions compared to ARA where there’s lots more traffic. That’s part of the reason why it makes sense for customers to bunker there,” he said.

By focusing on bunker calls only, Portland can offer a complementary alternative to its giant European neighbor and is not seen as a direct competitor. “As a direct price comparison Portland will always be more expensive than the Amsterdam-Rotterdam-Antwerp hub,” the newly appointed head of European operations said. “I think dollar per metric ton Portland is never likely to be there with Amsterdam-Rotterdam-Antwerp hub price levels, and there are other reasons why customers choose to bunker on the English Channel aside from costs.”

Market players see the increased offerings as boosting price competitiveness. The “English Channel used to be good margins for suppliers…Now there are [more suppliers] all trying to take a slice of the market share,” one bunker buyer said. “As an occasional buyer in the English channel I am looking forward to getting some sharp levels and some fierce competition for my tonnage.”
English Channel Limitations

The presence of bunker supply operations along the English Channel has received a mixed reception, with skeptics noting that higher prices could limit buying appetite, while supporters say its location is only complementary to the ARA hub.

In the past, prices were not competitive and access to barges was limited, a shipowner said.

“The English Channel may become more competitive and at times sell at lower premiums to ARA versus what it is now but these are not a like-for-like comparison. ARA is a hub so is hard to beat on the price but to bunker there you need to call a port for ops unless you head to Flushing and pay extra for layby to bunker. So the English channel might compete more with Flushing than ARA as a whole in my view,” said Anton Shamray, senior research analyst at bunker fuel trader Intergr8. Flushing is a smaller port in the Netherlands and is seen as more comparable to Portland as a bunkers only option.

In addition, stormy weather conditions could prove challenging. “Weather has always been an issue, winter time [is] a real drama,” a source said. Shamray was also downbeat over the weather along the English waterway.

Peter Sand, chief analyst at international shipping association BIMCO, meanwhile said it’s all about location, which is also why Singapore is the world largest bunkering hub. “China cannot compete with that for top spot, but surely they can lure substantial business away from Singapore, if the price is competitive,” Sand added. “That may also be the make or break for English Channel – is the price right? Do they need to set lower prices? Or will location be enough? Only time will tell, but in order to establish a presence in the first place, you may need to convince someone to try this new bunkering site, rather than going to the usual place, by offering lower prices,” he said.

Monjasa’s other operations in the English Channel include at Tongue Anchorage off England’s east coast and at sites in France.
Source: Platts



Leave A Reply

Your email address will not be published. Required fields are marked *