INTERVIEW: Hafnia and Cargill to Set Up One of World's Largest Bunker Firms

Cargill's Olivier Josse and Hafnia's Peter Grünwaldt will be co-CEOs of the new enterprise. Image Credit: Hafnia / Cargill

Commodities firm Cargill and tanker company Hafnia are setting up a marine fuel procurement joint venture expected to be among the world's largest bunker firms.

The new company, Seascale Energy, will be a combination of Cargill's bunker unit Pure Marine Fuels and Hafnia's Bunker Alliance, the new firm's managers said in an interview with Ship & Bunker.

The new company will be jointly owned by Cargill and Hafnia, with more than 25 team members from the two firms operating from Singapore, Geneva, Copenhagen and Houston.

Cargill's Olivier Josse and Hafnia's Peter Grünwaldt will be co-CEOs of the new enterprise, which is set to start operations in the second quarter of 2025, subject to regulatory approval.

The joint venture is expected to have bunker volumes of about 7.5 million mt/year, of which around half will come from Cargill and Hafnia's own needs, the co-CEOs said.

For comparison, TFG Marine saw bunker volumes of about 10.6 million mt in 2023, while Monjasa had 6.5 million mt and Integr8 6.3 million mt, according to Ship & Bunker's Top Ten Bunker Companies for 2024 report.

"The expected bunker volume of 7.5 million metric tons includes both the bunker needs of Cargill and Hafnia fleets as well as third-party sales," they said.

"This is the first set-up of this kind at this size.

"Approximately 50% of this volume will come from Cargill and Hafnia, providing a strong anchor to our third-party vessel services, which ensures the commitment of our services in the future."

Reducing Bunker Bills

One of the main aims of the new company will be to achieve for its customers lower bunker prices than they would otherwise be able to secure.

"The potential savings depend on the customer's profile," the co-CEOs said.

"For existing customers already benefiting from competitive, all-in procurement, we believe Seascale Energy can deliver additional savings on their bunker costs.

"For new customers, the impact could be even more significant, depending on their current bunker procurement setup.

"A customer with an annual bunker requirement of 100,000 metric tons could achieve significant savings - in some cases several million USD - that have a real impact on the bottom line.

"Additionally, there are factors such as timing and port arbitrage that can further enhance savings. Beyond cost reductions, there are also benefits related to reduced counterparty risk, compliance with sanctions, and other operational efficiencies."

A saving of $2-3 million on annual bunker consumption of 100,000 mt would amount to $20-30/mt in average bunker cost savings.

FuelEU Opportunities

There may also be the possibility of setting up a pooling service run by Seascale for the purposes of FuelEU Maritime compliance.

The FuelEU Maritime regulation came into effect at the start of this year, mandating steadily tougher carbon intensity reduction requirements on voyages involving EU ports.

Shipowners have the option of pooling their vessels with those from other companies for the purposes of the regulation, meaning overcompliance by one vessel can be averaged across the whole pool.

"Pooling of Cargill and Hafnia vessels for FuelEU Maritime compliance is certainly a possibility, but it was not the primary reason for creating Seascale Energy," the co-CEOs said.

"More broadly, we can facilitate connections and collaboration among Seascale Energy customers who are interested in pooling aspects for FuelEU compliance."