INTERVIEW: Minerva aims global growth; sets decarbonization, digitalization goals

Singapore — Minerva Bunkering, one of the world's largest bunker fuel players and a wholly-owned subsidiary of commodities trader Mercuria, expects to expand its presence in Singapore and other geographies, while helping it's customers embrace the twin objectives of decarbonization and digitalization, company CEO Tyler Baron said.

"We have a healthy pipeline of business development activity in new markets, with live projects in the Far East, the Middle East and in the Americas," Baron told S&P Global Platts in an interview.

In Singapore, the world's largest bunkering port, Minerva has been operating since 2014, serving clients on a trading and ex-wharf basis. However, it was also awarded a bunker supplier license last year.

"We made certain projected volume commitments to the Maritime and Port Authority of Singapore as part of obtaining our license and we've well exceeded those commitments," Baron said, adding that he sees continued growth potential in the city-port.

Minerva Bunkering's barge fleet in Singapore has grown from two to five in less than one year, Baron said.

The company has also purchased a floating storage unit which will be arriving in the next couple of weeks to support its growth in Singapore going forward, Baron said.

In 2020, the Port of Singapore recorded bunker sales of 49.83 million mt, a 5% year-on-year growth.

"We were not surprised to see the strength of Singapore in 2020," Baron said, noting that its efficiency and transparency made it appealing to maritime players.

"We like Singapore because it is a fairly transparent market and [provides] a level playing field such that leveraging economies of scale effectively is key to competing and serving clients well," Baron added.

Fujairah operations

In 2020, Minerva restarted physical operations in Fujairah by utilizing the license formerly held by Aegean and becoming an active licensed bunker supplier at the port, where it currently operates two barges.

"We've been operating two barges in Fujairah, we're happy with how we've been rotating our assets but the market structure of Fujairah is such that we're not aiming to be the largest player," he said.

The Fujairah market remains largely fragmented with numerous local independent suppliers, many of whom don't hedge the flat price, Baron said.

"There can be large distortions between price and value in Fujairah with delivered pricing at times untethered to the cost of cargo and logistics," he said.

While Fujairah met Minerva's expectations for 2020, future growth will be aimed at customers "who are particularly focused on service quality," Baron said, adding that the company's Advanced Delivery Platform, or ADP, paved the way for a "truly differentiated service offering."

Digitalization initiatives

In March, Minerva began the commercial offering of its new ADP in Fujairah, Singapore and Amsterdam-Rotterdam-Antwerp.

"The ADP is a solution to some of the biggest challenges our customers have when it comes to maximizing the total cost efficiency of their bunkers spend," Baron said.

The ADP not only offers ship operators complete transparency over the quality and quantity of fuel they purchase but it also streamlines and digitizes the entire operation resulting in significant time savings during bunkering, Baron said.

"We believe 2-3 hours are saved on the average delivery time when using the platform," he said.

Bunker outlook, decarbonization goals

According to Baron, global bunker fuel volumes declined by close to 10% in 2020.

However, as COVID-19 restrictions ease worldwide and as the impact of record fiscal stimulus permeates through the global economy, bunker consumption will recover, he said.

"Whether we'll able to get back to the 2019 peak in 2021 remains to be seen but I think we'll recover a good deal of what we've lost in 2020," Baron said.

While the macro-recovery is supportive, the industry will face some long-term headwinds to volume growth due to a growth in fuel efficiency as the International Maritime Organization's decarbonization targets loom, he said.

As far as alternative fuels were concerned, Tyler said "we think in terms of phases."

While it's too early to pick a future fuel from among hydrogen, ammonia and methanol because there are many uncertainties related to both their unit economics and infrastructure requirements, "we like LNG as a technology that represents decarbonization progress during the current phase."

"Its economics work today, and it is increasingly available...So, we think there is a path for LNG for the foreseeable future."

Meanwhile, Minerva has also introduced a carbon offset offering to support the industry's decarbonization objectives.

"With each transaction, Minerva retires verified carbon offset certificates in an equal and offsetting amount to the emissions value of the bunker fuel as calculated per the International Maritime Organization's published emissions factors," it said in a statement March 11.

Minerva's offering is certified by international standard bodies including the ICAO's CORSIA, Verified Carbon Standard, REDD+, Gold Standard, and the American Carbon Registry, it added.