World Bunkering Autumn Issue 2018 by Constructive Media

Autumn 2018

CONTAMINATED FUELS HUNT IS ON TO IDENTIFY HARMFUL CHEMICAL COMPOUNDS

INSIDE THIS ISSUE: 2020 PROGRESS AT IMO SCRUBBERS: ORDERS SURGE EUROPE AND CHINA ACT ON EMISSIONS

THE ONLY OFFICIAL MAGAZINE OF

Editor’s letter IMO

A time for talking The northern summer is a time when few meetings of official bodies or industry gatherings take place. But the remainder of the year will be very different

erhaps, as an industry, we could be accused of talking too much. In most months the calendar seems to be full with IMO meetings as well as conferences, forums, networking events etc. In truth though we are facing huge changes and challenges, and they do need discussing. In this issue our deputy editor and IBIA’s representative at the IMO Unni Einemo outlines the important work being done ahead of the introduction of the global 0.50% sulphur cap in January 2020. That issue will again come up at the Marine Environment Protection Committee (MEPC) October. The impending lower sulphur cap is the industry’s immediate focus but MEPC will also spend a lot of time talking about the much bigger long term issue of moving to zero carbon. To some extent, the two issues overlap as can be seen in the report on our LNG pages. An environmental campaign group has dismissed switching to LNG as a “distraction”. Not surprisingly SEA\LNG is not impressed and argues the public health case of going for gas. Such issues are bound to be prominent at two major bunker industry gatherings, SIBCON and our own IBIA Convention. As noted in our IBIA Asia report, IBIA is closely involved in this 20th SIBCON and will have a table in the exhibition hall where members can come and meet the team. Meanwhile, and predictably, the focus within the conference hall will be “How you can prepare for 2020 and beyond”. World Bunkering AUTUMN 2018

2020 also is also a top theme for IBIA’s Annual Convention in November, but there’s a twist; ‘Hygge’ gets equal prominence in publicity for the event. The Danish word, apparently, means “creating a warm atmosphere and enjoying the good things in life with good people”. So, a chance to talk about serious issues, but still have fun. Also featuring in this issue’s Diary and the IBIA Events page, taking place in London soon after SIBCON, an IBIA Seminar will look at the challenges facing owners when the 0.50% cap comes into effect. It will include a presentation on new fuels that are emerging to comply with the impending cap.

It is also tough if, as an owner, you take on fuel that causes serious operational issues and you don’t know what caused it. In our Fuel Quality feature, Unni reports on an apparent epidemic of contaminated fuels, starting in the US Gulf, and explains how difficult it is to get a proper handle on the situation. So, there is a lot to read in this issue and a lot to talk about at the upcoming industry events. The IBIA team will be there and happy to discuss all these issues.

These new fuels will not, however, be of great interest to owners who will have fitted scrubbers by 2020. As reported in our regular look at abatement technology, sales of scrubbers are starting to pick up. But we are still only looking at orders amounting to less than a thousand ships being retrofitted with this equipment. Our report on the independents reflects a very tough market for all players. And, as noted in our Legal page, it appears physical suppliers who bunkered ships on the instructions of failed huge independent OW Bunker will never be paid for the fuel they supplied. That really is tough.

David Hughes Editor 3

content

28-29

Chairman’s Letter

46-47

China Changes afoot on the Chinese fuel scene

LNG Debate over LNG hots up

30-31

Industry News Slow speed engines “have lower claims”

Legal Lost in the middle

9 Chief Executive’s Report

10-11 IBIA Events Thinking about education and events? Thinking about 2020? Think IBIA!

15 Asia Report Asia branch expands training reach

17-19 Africa Event Report Taking africa towards 2020

22-23 Interview Getting on board with bunkers

24-26 Environment Countdown to 2020 – IMO gets down to business

32-33

49-50

Innovation ISO asked to develop methanol specification

Scrubbers More owners opt for scrubbers

34-35 Independents Headwinds still strong

36-39 Russia Bunkering News Russian bunker industry forum

40-43 Fuel Quality Barking up the wrong tree?

44-45 Lubricants Focus on lubes

52-55 Northern Europe Europe: cleaner and leaner

56-58 Equipment & Services Getting the speed right

59-63 Company News

64 Diary

66 Next Issue New IBIA Members

Singapore Singapore gets ready

Publisher & Designer: Constructive Media ibia@constructivemedia.co.uk Editor: David Hughes anderimar.news@googlemail.com Deputy Editor: Unni Einemo unni@ibia.net Project Manager: Alex Corboude alex@worldbunkering.net

On behalf of: IBIA Ltd 4th Floor 50 Liverpool Street London EC2M 7PR, UK Tel: +44 (0) 20 3397 3850 Fax: +44 (0) 20 3397 3865 Email: ibia@ibia.net Website: www.ibia.net

The views expressed in World Bunkering are not necessarily those of IBIA, or the publishers unless expressly stated to be such. IBIA disclaims any responsibility for advertisements contained in this magazine and has no legal responsibility to deal with them. The responsibility for advertisements rests solely with the publisher. World Bunkering is published by Constructive Media on behalf of IBIA and is supplied to members as part of their annual membership package.

Constructive Media 50 George Street, Pontypool NP4 4PR Tel: 01495 740050 Email: ibia@constructivemedia.co.uk www.worldbunkering.net

CHAIRMAN’S LETTER

QUALITY IN A CHANGING ENVIRONMENT Change is afoot in the industry and in IBIA

nless you’ve been taking an extended break from bunkering it can’t have escaped your attention that the industry has recently experienced the biggest single quality issue that we’ve seen for quite some time. The ripple effect caused by the cases seen around the US Gulf coast in April and May of this year has impacted numerous ship owners, operators and managers. It had a detrimental effect on the running of over a 100 vessels and has extended its reach across the world. Fuel quality problems are by no means a new phenomenon but we do find ourselves in a situation where an incident of this nature re-establishes a degree of industry focus on the need for the continued supply of good quality product and how 2020 will affect the nature of fuels to be supplied. For the fuel purchasers out there the continued supply of good quality compliant product has always been of key significance however, in recent years, it’s fair to suggest that a degree of complacency has become apparent given that the industry has not seen a major quality scare for a very long time. Fuel quality over the last few years has been consistently high and whilst we have seen sporadic cases of poor quality fuel it has been restricted to small localised areas and usually dealt with quickly and without too much disruption – this being the case it is no wonder then, that the sudden shuddering halt of this positive trend has come as a huge shock to the industry

World Bunkering AUTUMN 2018

An incident of this nature, at this particular time, comes as something of a wake-up call. Whilst it would be unwise to link the problems experienced to the drive for compliance it does remind us that the whole bunkering industry is looking at a significant degree of uncertainty in the not too distant future and advance preparation is key if we are to avoid any nasty surprises. Whilst a degree of familiarity will remain, new and different compliance options will offer challenges which are beyond current considerations - change is most certainly afoot. Talking about change, I must address a very different topic directly related to IBIA. As you have no doubt seen, Justin Murphy is set to leave his role as CEO for a new challenge in Abu Dhabi. It is no exaggeration to say that IBIA has flourished under his guidance and I’m sure I speak for all when I offer thanks for his support and hard work during the last 18 months. It is with great sadness that that we must bid farewell to Justin but as one door closes another opens and in looking to find a replacement for Justin we have been forced to think about the direction IBIA should take in an ever changing environment. In looking at the current IBIA structure and appreciating where we are currently and what we want to do, we have come to the conclusion that we need to move with the times and the idea of a like for like replacement may not be the most logical step forward. It is with this thought in mind that we have undertaken a degree of restructuring to provide a greater degree of diversity of expertise within the secretariat to match our changing ambitions and goals.

This being the case I am delighted to advise that Unni Einemo will take on the newly created role of the Director of IBIA. She will be ably supported in this role by Sofia Konstantopoulou who takes on the role of Global Head, Marketing and Events. In looking to add another level of diversity and support I am happy to welcome to the IBIA family Laura Robinson, who will join the team in the new role of General Manager, Membership and Administration in October. On a personal level I am extremely excited by these changes as I am very much of the opinion that this will allow IBIA to expand its capabilities and offer a much greater degree of flexibility in looking to support member’s needs.

Michael Green Chairman

I IA

INTERNATIONAL BUNKER INDUSTRY ASSOCIATION

2018 - 2019 IBIA EVENTS PROGRAMME

SEPTEMBER 5-6th 19-20th OCTOBER 2-5th 2-3rd 10-11th 24-25th 24-25th 24th NOVEMBER 6-8th 14-15th 28-29th 29th FEBRUARY 25th 25th

2 Days Basic Bunkering Course including SS600:2014 and TR48:2015 (MFM) 2 Days Enhanced Bunkering Course including SS600:2014 and TR48:2015 (MFM)

Singapore, Asia Singapore, Asia

SIBCON African Ports Evolution 2 Days Basic Bunkering Course including SS600:2014 and TR48:2015 (MFM) 2 Days Enhanced Bunkering Course including SS600:2014 and TR48:2015 (MFM) IBIA Africa AGM and Bunker Training Course Mass Flow Meters Seminar: New Rules-New Fuels-Digital Solutions

Singapore, Asia Durban, South Africa Singapore, Asia Singapore, Asia Cape Town, South Africa London, UK

November IBIA Annual Convention 2018 2 Days Basic Bunkering Course including SS600:2014 and TR48:2015 (MFM) 2 Days Enhanced Bunkering Course including SS600:2014 and TR48:2015 (MFM) IBIA Africa End of Year Networking Event

Copenhagen, Denmark Singapore, Asia Singapore, Asia Cape Town, South Africa

IBIA Board metting and AGM IBIA Gala Dinner 2019

London, UK London, UK

*note please view the IBIA website (www.ibia.net) for updates on training and events

Copenhagen

Athens

Singapore

Cape Town

chief executive’s report

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DISCONTINUOUS CHANGE

It’s said that the happiest people in life are those that combine a sense of purpose with a wide network of friends and whose focus is on helping others. In this respect, IBIA is a happy place to work and knowing that by the time this magazine reaches you I will no longer be working at IBIA makes me a little sad.

owever, when I reflect on the past 18 months it is also with a great deal of pride. There has never been a time when the bunker industry was more in need of support and leadership from its industry association and it’s also true that IBIA has never been in better shape to provide that support and leadership. And, for IBIA members, the level of support and service that you receive will continue to improve under Unni Einemo’s leadership.

IBIA is a not for profit organisation but the reality is that cash is central to our existence as it provides the fuel that we need to propel us on our journey. Our improved financial situation has enabled us to invest in the awardwinning membership software that we’ll be implementing later this year and to update our corporate website. These improvements will directly benefit both our members and the secretariat.

In summary, our network and influence is expanding. IBIA has held more events in a greater range of places around the world, participated in more industry groups and provided industry training courses in more countries than ever before; IBIA has also published more insight and guidance for our members and communicated to them through a wider range of media channels than ever before. What is also evident (via literally thousands of monthly likes, views, shares, comments, new followers, clickthroughs, re-posts, emails, phone calls and face to face feedback) is that members are more engaged with us than ever before.

A great deal has changed in the 25 years since IBIA began and we’re proud of our history. We’re also confident and excited about our future. Our new logo, featured so prominently throughout this magazine, is bright and dynamic it’s a vibrant manifestation of the confidence that we share with our members about the future. Our Industry is Fuelling Global Trade and we’re working together for a cleaner world!

We’ve overcome the significant economic challenges that we faced in 2017. We’ve achieved this through the support of a growing membership, a committed Board, our regional Excos and the hard work and dedication of our wonderful employees, the secretariat. World Bunkering AUTUMN 2018

From what our members tell us the industry’s key focus today is spread across three general areas, namely: preparing for the IMO 2020 Global Sulphur Cap; managing the risks associated with 2018’s US Gulf fuel oil contamination episode; and tackling and improving Ethical standards. From time to time, each of these issues has been the subject of sensationalist headlines or provocative speeches which has contributed,

in varying degrees, to a sense of anxiety or frustration among bunker industry professionals. IBIA has addressed each of these issues in a pragmatic, professional and meaningful way (rather than performing for the crowd) and our website contains a significant amount of advice, guidance and updates. We are very grateful for the key contributions and guidance provided by our global membership. Wherever you are, and whatever aspect of bunkering you are involved in, we are here to support you.

Justin Murphy Email: justin.murphy@ibia.net Tel +44 20 3397 3850 9

ibia events

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THINKING ABOUT EDUCATION AND EVENTS? THINKING ABOUT 2020? THINK IBIA! If you want to learn about the IMO’s upcoming 0.50% sulphur limit, IBIA can help. This subject is high on the agenda at all our events, and by coming along, in particular to the IBIA Annual Convention, you also have the opportunity to inform IBIA’s input at the IMO, where we play an active role

ince the summer issue of World Bunkering, IBIA has co-hosted a successful one-day conference in partnership with BMS United in Athens, Greece, offering “A Glance into the Future of Shipping”. Set in the Benaki Museum of Greek Culture in Athens on 30 May, the conference covered a broad spectrum of issues, with a specific emphasis on the IMO’s 2020 sulphur limit, digitalisation, risk management, shipping economics and ethics. Speakers included IMO’s Edmund Hughes. The conference was preceded by IBIA’s educational training course led by industry veteran Nigel Draffin, founding IBIA member and renowned author of several books on bunkering. Both the Conference and the training course were filled to capacity. We’re anticipating a healthy attendance at our training course at the IBIA Annual Convention in Copenhagen, Denmark, on Tuesday 6 November. The course covers a full range of relevant industry topics including procedures, regulations, contractual relationships, claims,

operational issues, 2020 regulations, and a session on fraud and ethics. It really is a must for those who want to operate in the bunker industry or learn about it. Before the IBIA Annual Convention, however, we are organising two IBIA events. On 5 September, we have an IBIA seminar – sponsored by Intertek – taking place at SMM 2018 Hamburg, the huge bi-annual international maritime trade fair, where we will examine the readiness of the industry for the IMO 2020 global sulphur cap. We will be looking at what IMO is doing regarding the regulatory framework and compliance, how to manage new fuels coming into the market and whether this huge change means “chaos or opportunity” for the industry. The IMO 2020 regulation will also feature strongly on the agenda at our event in London on October 24 called “New Rules – New Fuels – Digital Solutions”.

We will also examine how the transformative power that Mass Flow Meter solutions have had in Singapore, the world’s largest bunkering market, can benefit other markets. This IBIA seminar, sponsored by Endress + Hauser Ltd and supported by Bunker One, will take place in the offices of the UK Chamber of Shipping. Explore “Hygge”, 2020 and much more at the IBIA Annual Convention Everybody is talking about “Hygge” and 2020. Join us in Copenhagen, the wonderful capital of Denmark, and learn about both first hand! We would like to welcome you to the IBIA Annual Convention 2018, taking place on 6 to 8 November, 2019 at the Scandic Kødbyen hotel in Copenhagen’s trendy and creative Vesterbro area. Denmark is home to several bunkering and shipping companies, including some of the industry’s biggest players.

World Bunkering AUTUMN 2018

oreover, the industry and authorities here have many years of experience with low sulphur limits, and the bunker industry in Denmark has come under intense scrutiny in recent years following the OW Bunker debacle. We think this makes Copenhagen an ideal place for IBIA’s members to convene to talk about industry issues which have global relevance now and into the future. IBIA has arranged a dynamic series of sessions around diverse topics, which will cover a broad spectrum of issues, with a specific emphasis on the future challenges facing the bunker and shipping Industry. At various times during the Convention there will be simultaneous sessions, offering delegates more variety and the opportunity to customise their Convention experience by choosing the topics of most interest to them. Topping the agenda is an update on IMO 2020 regulations, including compliance and enforcement, featuring Danish ministry and maritime authority officials. We then move on to sessions covering fuel quality, how the Blockchain concept can be applied in the bunker industry to reduce fuel contamination and credit risk, various digital tools, scrubbers, alternative fuels for the future, bunker and freight market updates, the latest BIMCO Bunker Terms & Conditions, and the thread that should be running through all these other elements; ethics. So what about “Hygge?” There will be plenty! Hygge is a concept relating to a convivial atmosphere and we are certain that it will prevail during the multiple opportunities to socialise and network with your industry peers, customers and to make valuable new connections. The Convention venue itself is an ideal location for the welcome reception and multiple refreshment breaks, and we are looking forward to the gala dinner in Tivoli Gardens, Copenhagen’s iconic theme park right in the heart of the city. We are very proud to have Bunker One as the Gold Sponsor for the IBIA Annual Convention, Stena Oil as Supporter Sponsor, and VPS and Dan Bunkering acting as individual sponsors. Without their immense support we would not be able to include so much “hygge” for delegates to enjoy!

World Bunkering AUTUMN 2018

ibia events

We would also like to thank our Media Partners Ship & Bunker and All About Shipping and our Media Sponsors Efoplistes News and Manifold Times. If you want your company to take advantage of the benefits that the IBIA Annual Convention 2018 offers, including a livestream platform which will create even greater capacity and awareness of the Convention around the world, contact us for more information about the remaining sponsorship opportunities contact Sofia Konstantopoulou on this address: sofia.konstantopoulou@ibia.net Check out the IBIA Annual Convention website for full details and updates on speakers and the agenda: https://www.ibiaconvention.com/ More to look forward to IBIA’s regional branches are also involved in events and training; you can read more about that in the IBIA Asia and IBIA Africa Regional Manager reports in the magazine. IBIA is also frequently invited to participate as a partner, and take part as speakers and/or moderators at events organised by others,

Nigel Draffin, Lars H. Nielsen, Sofia Konstantopoulou, Justin Murphy

which enables us to offer discounted rates to IBIA members. We have started taking bookings for our prestigious annual dinner, the only way to kick off IP week in style. We have once again secured the fabulous ballroom at the swanky Grosvenor House Hotel in Mayfair for the 2019 IBIA Annual Dinner, which will take place on Monday February 25. We look forward to raising a glass with you there, if not before.

Conference panellists at the Benaki Museum

Nigel Draffin teaching at IBIA’s educational training course in Piraeus

Office Address 83, boulevard Berthier 75 017 PARIS - France Paris office: +33 (0)1 42 56 13 77 Bunker office: +33 (0)4 69 96 06 96 Emails: bunkers@oil-atlantic.energy

Join US Membership Benefits By joining IBIA you will become part of a global network of bunker industry experts who collectively form the world’s leading authority on bunkers. Not only will you have access to a wealth of information and insight (we publish newsletters and industry updates on current issues) which offer pragmatic advice for managing the industry’s challenges; members also have the potential to shape and influence both international and local legislation. This happens through IBIA’s Working Groups which are responsible for developing industry guidance, participation in IMO correspondence groups, solving long-term industry issues, and addressing both commercial and technical issues.

Corporate • Register up to three offices in the same country • Free attendance or discounts on IBIA training courses/ conferences/seminars/events • Discounts on other industry events • IBIA Board member eligibility • IBIA Working Group eligibility • Multi-subscription to World Bunkering magazine • Eligible to book tables at the prestigious IBIA Annual Dinner • Representation at IMO (International Maritime Organisation) • Use of IBIA logo on your website and stationery • Access to online membership directory • IBIA mediation and dispute resolution • IBIA membership certificate

Individual • IBIA board member eligibility • IBIA Working Group eligibility • Free or discounted IBIA training courses/conferences/ seminars/events • Individual discounts on other industry events • Subscription to World Bunkering magazine • Representation at IMO (International Maritime Organisation) • Use of IBIA logo on your website and stationery • Access to online membership directory • Eligible to book up to 4 tickets at the prestigious IBIA Annual Dinner • IBIA mediation and dispute resolution • IBIA membership certificate

New Member Benefits Multiple year discounts 15% discount for 3 years membership, (Paid in one instalment) – Guarantee no membership increases for the next 3 years.

The new website is designed so members can easily access and change their own information.

IBIA Members fees Individual membership: £250 Corporate membership: £1,250

Please note that all of the above publications can also be downloaded by members by visiting www. ibia.net and logging into your account. Please then go to the download section of the website.

This directory is only available to IBIA members.

IBIA World Bunkering Magazine – free copies for Members of IBIA Please note non-members are requested to subscribe to the magazine at a cost of Pounds Sterling £45, £60 or £80 depending on location.

IBIA Logo Both Corporate and Individual members will have the right to use IBIA’s logo on their website and stationery.

Up to 20 additional free copies of the magazine are offered to buyer members of IBIA for forwarding to their vessels.

If you are interested in learning how you can become involved then please get in touch.

IBIA Members On-line Directory If your details are not correct, please log on to our new website and update them on your members page.

Asia Report Bunker Operations & Safety Training in Klang 14 & 15 May 2018 ©IBIA Asia

ASIA BRANCH EXPANDS TRAINING REACH IBIA Asia has expanded its training activities beyond Singapore in recent months, and remains active in Singapore with an event co-organised with Argus Media, involvement with SIBCON, and several technical committees dealing with industry standards

raining remains one of the main activities at the IBIA Asia office. We conduct twice-monthly specialised training for the bunker sector with courses certified by the Maritime and Port Authority of Singapore (MPA). We run both a Basic Bunkering Course and an Enhanced Bunkering Course covering the Singapore Standard, SS600 and the Mass Flow Meter technical standard, TR48.

Details of our regular courses are available at www.ibia.net/training or you may contact Nadiah at +65 6472 0916 or nadiah@ibia.net. While we have our own training facilities in Singapore, we also offer training beyond Singapore to help improve the skills and knowledge of people involved in the sector. IBIA Asia conducted Bunker Operation & Safety Training in Klang, Malaysia on 14 to 15 May. The training was based on the ISO 13739 standard, which specifies procedures and requirements for the transfer of bunkers to vessels involving bunker tankers, road tankers and shore pipelines. A total of 21 surveyors and Port Authority personnel were trained and certified. Our next training outside Singapore will be a Bunker Training Course for surveyors in Dubai on 4 to 5 September. We remain dedicated to providing training to raise professionalism for the benefit of our industry. World Bunkering AUTUMN 2018

Events Every other year is SIBCON year, which is always a busy time for us. IBIA Asia is actively involved in the 2018 SIBCON Steering Committee, and is a supporting organisation for SIBCON meaning we can offer a promotional package for IBIA members. We will have an IBIA table in the SIBCON Exhibition Hall where member can come and meet the team. This year’s SIBCON, the 20th, will be held on 2 - 5 October, Resorts World Sentosa, Singapore.

IBIA Asia is also currently working closely with Enterprise Singapore (Ex Spring Singapore) on the review of the TR 48 Mass Flow Meter Bunker Standards. In addition, we are also participating in the following Technical Committees and Working Groups: TC Bunkers, TC LNG Bunkering, WG MFM and WG for TR 56 LNG Bunkering.

Before then, just after this issue goes to press, we are arranging a joint half-day forum with Argus Media in Singapore on 31 August. Speakers are Alan Bannister of Argus Media, Dennis Chan of Singapore Chamber of Maritime Arbitration, Capt Rahul Choudhuri of VPS and Jens Maul Jorgensen of Oldendroff Carries. Topics include bunker price assessments, arbitration, fuel quality and IMO 2020 compliant fuel implications.

Simon Neo Regional Manager Asia T: (65) 6472 0916 Email: regionalmanagerasia@ibia.net

Other activities IBIA Asia’s Executive Committee had a meeting with MPA on 7 August to officially introduce Timothy Cosulich as the new Chairman. Moreover, it was an opportunity to discuss the current bunker market, keeping up the good relationship and understanding that IBIA has with Singapore’s bunker industry regulator.

In short, IBIA Asia continues to work hard to educate, inform, and consult with regulatory and standardisation bodies for the benefit of our industry.

Bunker Operations & Safety Training in Klang 14&15 May 2018 ©IBIA Asia

AFRICA Report

Taking Africa towards 2020

IBIA Africa hosts a successful 2020 seminar in Cape Town and engages the industry in facing the new reality, Regional Manager Tahra Sergeant reports

BIA Africa hosted our CEO, Justin Murphy on a whirlwind visit to South Africa in August. The purpose of the visit was to engage both members and non-members within the bunkering industry and bring to life the reality of the IMO’s 2020 global sulphur cap. IBIA Africa has a long-standing relationship with Lawhill Maritime Centre. Both Justin Murphy and I spent the morning with the Grade 12 students in an interactive class covering the shipping industry and career planning. The class interacted in such an inspiring manner, one can only be positive for the future of maritime with these motivated youngsters entering into it. By providing students with an industryfocused education in their last three years of secondary schooling (Grade 10 to 12), the Lawhill Maritime Centre at Simon’s Town School has, for the past 23 years, made it possible for hundreds of young South Africans to embark on successful careers in the maritime and other industries. While most of the students begin the Maritime Studies course knowing very little, if anything, about the maritime industry, after three years they emerge from the programme with a broad understanding and knowledge of the industry which greatly increases their prospects for post-school employment and/or admission to maritim e-related courses at tertiary institutions. See www.lawhill.org for more. World Bunkering AUTUMN 2018

IBIA Africa’s seminar, “New Rules, New Fuels, New Era” was hosted by the law firm Webber Wentzel and attended by 85 delegates. The seminar covered the impact of the IMO’s upcoming global sulphur cap and addressed many of the questions raised by industry. Our speakers, Justin Murphy (IBIA CEO) and Neville Joseph (Regional Operations Manager, Intertek) took the attendees through the three aspects of what this legislation means: new rules - looking at how the sulphur limit will be enforced, and whether there is any leeway; new fuels - looking at what the options are for compliance, with more choices than ever before for ship operators to consider; and finally the new era looking at the future of shipping and bunker industries as emission regulations become ever tighter.

With this in mind, IBIA Africa and our CEO spent the next day in a closed workshop working with members to further unpack and understand the scope of new fuels, requirements and enforcements.

The notion that still exists among some in the industry that the 0.50% global sulphur limit will be deferred was firmly rejected by Murphy. Industry will need to have strategies and plans in place to accommodate this change in time.

Tahra Sergeant, IBIA Regional Manager, Africa Tel: +27 79 990 7544 Email: tahra.sergeant@ibia.net

Off the back of our CEO’s successful visit, IBIA Africa offers its members support and guidance through this process and will dispel the myths and fears on what the future holds and support our members with facts. Coming up: We will be confirming the date for the IBIA Africa AGM in October 2018, as well as a one day Bunker Course to be run at the same time. Please visit the IBIA website for updates or contact the Regional Manager directly.

AFRICA Report

IBIA Seminar delegates, venue Webber Wentzel ©Liesl Vente

IBIA team, Tahra Sergeant, Regional Manager, Justin Murphy, CEO, Patrick Holloway, IBIA Board Member ©Maritime Review Africa

IBIA Seminar delegates, venue Webber Wentzel ©Maritime Review Africa

World Bunkering AUTUMN 2018

INTERVIEW

GETTING ON BOARD WITH BUNKERS Eugenia Benavides is one of the few women in the bunker business to have served as an IBIA board member. She speaks to Unni Einemo about her industry experiences and thoughts on what the future holds

orn and raised in Barranquilla, Colombia, Eugenia Benavides has built her career close to home, having advanced through the ranks of the Colombian oil company Organization Terpel after joining as an intern in 1984. Since 2004, when Terpel del Norte merged with Organizacion Terpel and reorganised, Eugenia has been working solely in the marine business and she is currently the Sales Director of Marine Fuels for Colombia. In 2011, she was elected to serve as an IBIA board member and was re-elected to serve an additional three year period in 2014. UE: You have been working in the bunker industry for over a decade now. What are the best/worst things about it? EB: The best thing about the bunker industry is that it is a dynamic market. Every day is completely different from the day before. Each day has new a new challenge. Working in the bunker market you meet people from different cultures and from all parts of the world. Conventions, forums, summits and events worldwide, have been very enriching. I have experienced different cultures and built relationships. As a result I have great friends in every continent. This makes business dealings easier; when you meet the people you deal with and you share experiences with them. Maybe the worst thing is that because we serve ships, which do not stop and work 24/7, 365 days a year, we operate in a market with unpredictable conditions, and you have to be constantly connected. Keep in mind that we all live in different time zones, so for us many orders are generated 8 or 13 hours ahead of our office hours. So when you wake up in this part of the world your mail box is already full with lots of e-mails before you get to the office.

UE: Has it changed much during your time? EB: Yes â&#x20AC;Śit has changed a lot. Many companies have closed and some have failed. Many colleagues had changed positions within the industry. So maybe one year they are in one company and the next you will find them at other company. Still, I think the bunker business is a small club. Once a member, always a member. We see today there are a lot of platforms for the industry. We also have many new communication tools available; both have helped a lot to develop new business opportunities. Regulations to reduce sulphur oxide emissions introduced limits for sulphur content of the fuels used by ships since MARPOL Annex VI entered into force in 2005. Under the new global cap, starting January 2020, ships will have to use fuels with a sulphur content of no more than 0.50% against the current 3.50% limit that has been in effect since 2012. This means that everyone has to be prepared for the new regulation and the specifications of the products available to meet demand has been changing. Now we can find LNG and cold ironing in some ports while many years ago this was a just a dream. UE: Why did you stand for election to become an IBIA board member the first time, and what made you stand for reelection after your initial 3-year tenure? EB: I stood for election for the first time at the request of my friend Alejandro Risler (from Risler Argentina), who was with IBIA since the start, I met him in 1993, at the first IBIA event in Orlando, Florida (USA). Once his term was up, he had to step down. However, Alejandro wanted to have someone from Latin America replacing him at the board and representing the Latin American bunker business. So he called me to stand for board election. The first time I stood for election was in 2010 and I was not recommended by the BDC, but I stood again in 2011, when I was recommended and elected.

I stood for re-election as I had a great experience during my first period as an IBIA Board Member. I think there are a lot of things to be achieved in my part of the world. I think participating in events worldwide and sharing experiences with my board mates from different sectors and cultures has helped me understand the industry better. I feel more passionate about my job. I think there still are a lot of things to be done and the Association has to increase its membership by establishing branches in areas that are not yet covered by the Association; such as the Americas. I enjoyed working all those years in an association that works with all players in the industry. We attempted to bring in best practices for the businesses, a code of ethics, organised worldwide events, and presented at conferences in every continent. Also being a board member opens doors everywhere and allows you to have updated and fresh information of what is going on IMO. You also get a feel for what the maritime world tendencies are. Being on the board for me also has been an education. I feel that I earned a masterâ&#x20AC;&#x2122;s degree in bunkers. I have learned a lot from my board-mates, from the surveyors, suppliers, traders, ship-owners, consultants, brokers and port operatorâ&#x20AC;&#x2DC;s point of view. UE: As an active member of IBIA, what are the key benefits you see from being part of the Association? EB: The benefits I perceive as a member of this worldwide Association, is that IBIA is the voice of the industry representing all the global players. It is an association that tries to have presence in every continent and in every sector that has to deal with the maritime business. The IBIA Annual dinner during IP week every February in London, is a must if you are a member of the bunker market. The Association has a monthly newsletter and you are updated on every theme in the business.

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It continues to organize events in different parts of the world and/or countries, capturing issues relevant to the players of that area and updating everyone on the movements of the industry. Being a member of the Association allows you to get discounts on event rates that the Association is cosponsoring or associated with. I believe in action and IBIA is that. UE: The bunker and shipping industries are male-dominated, and there have not been many women on the IBIA board. How do you think we can encourage more women to get involved? EB: When I first attended a bunker industry event in 1993 at the Orlando Walt Disney Dolphin resort (when IBIA was established), I was shocked as we were not so many women participating. Today, more women executives are involved in the business as well as many young people and millennials are entering the business. I think today women are getting ahead in many sectors that were once male dominated. I invite all of my female friends to participate, and stand for the next board elections coming up in October. I am sincere when I tell you that being a board member has been one of the best professional experiences of my life. UE: We are on the cusp of a major shift in the bunker market due to the 0.50% sulphur limit taking effect in 2020. This raises many questions. First of all, how is your company preparing? What type of fuels will you be offering to ships and will you be able to replace your current HSFO supply volumes with low sulphur fuels? EB: Regarding this sulphur limit we are dealing with refineries to see what products we are going to have to offer.

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INTERVIEW

t also sends you a welcome package regarding glossary terms, memberâ&#x20AC;&#x2122;s directory and a guide for best practices in the business.

So far compliant low sulphur marine diesel sulphur is available, but the raw materials to produce compliant IFOs are not. So they are working to see what kind of products they will be able to offer. The state oil local refinery will update the market on the action plans regarding this at the end of the third trimester of this year. UE: How do think the new low-sulphur era will impact on the bunker industry in Latin America in general, and in Colombia in particular? Will there be sufficient availability? EB: These are the themes we are working on with the state oil refinery in Colombia. Regarding Panama, all bunker fuels are imported so they will have availability of the products. It is clear that we need to get compliant products otherwise the bunker demand will shrink and our ports will not be able to keep up the current bunker supply volumes. UE: Ship operatorsâ&#x20AC;&#x2122; greatest concerns about 2020 is not just the availability and price of compliant fuels, but also the safety of compliant fuels with regards to quality and compatibility between fuels bought from different ports and suppliers. What can the supply side do to reassure those who buy and consume bunkers about fuel quality? EB: Suppliers should always test the final blend and ensure that the product is within all the required specifications. They should adopt the IBIA Guidance On Best Practice For Fuel Oi Oil Suppliers, published at the beginning of this year in particular chapter 4.2 on quality control during the production and supply of bunkers. UE: How do you think the world will cope with the 0.50% sulphur limit in 2020? EB: That is a very difficult question. Looking toward 2020 has too many limitations and it makes it hard to make predictions of the availabilities of fuels and its price. For sure everyone is working on this aspect. At every event/ conference this is the main theme of discussion. Shipowners have to decide if they will invest in scrubbers,

switch to distillates or compliant low sulphur fuel oil blends, or use LNG. Physical suppliers will have to work on having products to offer to satisfy the market needs. UE: What are your main concerns about the 2020 sulphur limit? EB: I think the changes will result in a cost increase for ship owners as they change from high sulphur heavy fuels to more expensive lower sulphur alternatives fuels, LNG or scrubbing systems. Because of fuel costs, the maritime freights will increase and that will make goods more expensive. On the other side ship-owners will need more cash flow to pay for low-sulphur products and suppliers will need to adjust their credit lines as this will mean more money will be involved in each transaction. UE: After dealing with sulphur emissions, the pressure is growing to reduce GHG from shipping. What can the industry do to make it happen, and how do you think it will impact the bunker supply business? EB: The greenhouse gas emissions can be reduced if the shipping companies reduce their fuel consumption, for example by operating at slow speed and optimising their routes. The use of renewable energy such as wind power for propulsion and cold ironing can also help as well as the use of lower carbon fuels for propulsion. Shipping companies will have to choose which way or product they will use and the suppliers will have to offer what the demand will ask for, as long it complies will all the regulations. So the market will keep moving.

Eugenia Benavides

ENVIRONMENT

COUNTDOWN TO 2020 – IMO GETS DOWN TO BUSINESS

The International Maritime Organization has acknowledged that the regulatory change coming into force in 2020 won’t be a walk in the park. Unni Einemo reports on work underway to support consistent implementation of the 0.50% sulphur limit

ew will have missed the news that the IMO has approved in principle amendments to MARPOL Annex VI to prohibit the carriage of bunkers above 0.50% sulphur on ships unless they have approved abatement technology. The amendments, expected to enter into force in March 2020, won’t change the fact that ships without scrubber will not be allowed to use fuels exceeding 0.50% sulphur from the start of 2020, down from 3.50% today. But it will make it easier to enforce the new limit, as it means port State control (PSC) authorities can take action against ships even if the ship didn’t use non-compliant fuel within their jurisdiction; they only need to check what the ship has in its fuel tanks. It is hoped this will is make it harder for ships to avoid abiding by the reduced sulphur limit, which will inevitably be a temptation as the cost of compliance soars. Ensuring effective enforcement is not, however, the only concern, and with much to do and little time left, IMO scheduled an extra meeting in July. IBIA played an active role at the intersessional working group (ISWG) meeting of the Sub-Committee on Pollution Prevention and Response (PPR), which took place at IMO’s London HQ from 9 to 13 July 2018.

Ship Implementation Plan The first order of business was to develop a ship implementation plan (SIP) to provide guidance on preparatory and transitional issues leading up the 1 January 2020 implementation date. These aspects needed to fast-tracked so they can be approved by the IMO’s Marine Environment Protection Committee (MEPC) in October this year and issued as IMO circulars. The SIP, which is not mandatory, can be filled in by ship owners/ operators to help them plan and demonstrate the steps taken by ships to prepare for compliance with the 0.50% sulphur limit. This includes aspects such as modifications to fuel oil systems and tank cleaning if needed, fuel oil capacity and segregation capability, and bunkering plans in the lead-up to the compliance date. In addition to the SIP itself, there is an appendix addressing the impact on machinery systems, containing advice on how to prepare for use of distillates, fuel oil blends, or both, as the compliance option for the 0.50% sulphur limit.

The document focuses on any adjustments and changes that may be required or advisable on the ship ahead of the implementation date, rather than subsequent operational aspects, which are expected to be detailed in guidance documents that are still under development. A second appendix to the SIP relates to tank cleaning. It is based on a document submitted by IBIA to the ISWG describing options available for cleaning fuel oil tanks and systems. IBIA’s paper explains potential operational risks, and the risk of noncompliance with the 0.50% sulphur limit if they choose to simply load compliant fuels into tanks that have held high viscosity high sulphur fuel oil (HSFO). Compliant fuels could act as solvents causing HSFO sediments and asphaltenic sludge to rapidly dissolve, a risk ship owners need to be aware of so they can make the right decisions for their ship. Some shipping organisations at the meeting were concerned, however, that the document could create an expectation that tank cleaning is a pre-requisite, and wanted to make it clear that flushing through the fuel system with compliant fuels until it is sufficiently clean to be compliant is also an acceptable option. They proposed a shortened version of IBIA’s tank cleaning guidance document. World Bunkering AUTUMN 2018

he appendix to the SIP set for approval at MEPC 73 highlights that options for preparing HSFO tanks for compliance include flushing through fuel systems (i.e. not cleaning tanks first), manual cleaning of tanks during dry docking, manual cleaning during service, and cleaning tanks in service with specialised additives. Safety of new low sulphur fuel blends Concerns about the safety of fuel blends complying with the upcoming 0.50% sulphur limit were on the agenda. Some documents submitted to the meeting stated that these fuel blends would not meet ISO 8217 specifications, and cited safety concerns including stability, compatibility, cold flow properties, acid number, flash point, ignition quality and cat fines. IBIA has already gone on record to explain that the current SOLAS flashpoint limit and existing ISO 8217 parameters will still apply to fuel blends produced to meet the 0.50% sulphur limit, or they will be ‘off-spec’ and hence not commercially viable. IBIA was encouraged to hear several delegations at the ISWG also highlighting that ISO 8217 already addresses most of the safety concerns raised. In particular, a statement made by ISO, represented at the meeting by the Chair of the technical committee in charge of the ISO 8217 marine fuel standard, said the 0.50% fuel oils “will be fully capable of being categorised within the existing ISO 8217 standard.” Moreover, ISO explained that the Publicly Available Specification (PAS) which the ISO 8217 committee expects to develop prior to 2020 will provide guidance as to the application of the existing ISO 8217 standard to 0.50% sulphur fuels. One of the key concerns expressed in the market is the stability of fuel blends, as it has been pointed out that some blend components – especially if mixing aromatic and paraffinic refinery streams - would increase the risk of the final blend being unstable. ISO pointed out to the meeting that fuel oil blenders and suppliers should take careful note of these consequences ensuring this fuel characteristic is not overlooked. World Bunkering AUTUMN 2018

That is in line with IBIA’s “Best practice guidance for suppliers for assuring the quality of bunkers delivered to ships” published earlier this year, in particular under Chapter 4.2 - Quality control during production of bunkers. One element that ISO 8217 cannot address, however, is compatibility between different blends ordered by ships. Compatibility between pure distillate fuels is not an issue as they do not contain asphaltenes, however for blends containing residual fuel oils, ship operators need to be fully aware of the potential for different batches of fuel being incompatible. Even today, suppliers do not guarantee compatibility with other fuels. Come 2020, it is expected that blend formulations will vary widely, hence ships will have to consider the risk of incompatibility more carefully. The ISO representative told the meeting: “Recognising that some degree of mixing of different fuel oils onboard the ship cannot be avoided, many ships today have already procedures in place to minimise commingling of fuel oils with bunker segregation being always the first option. We would therefore encourage ship operators to evaluate further their segregation policy.” Some of the safety considerations surrounding fuel management under the 0.50% sulphur limit have been addressed in guidelines developed for the planning and preparatory stage as part of the SIP, but a more comprehensive document containing guidelines of a more operational nature to help operators manage both distillate fuels and fuel oil blends containing residual fuel will be developed at PPR in February next year for approval by MEPC 74 in May, 2019. Several elements of such guidelines were described in documents submitted to the July meeting, however, it was agreed to take up an initiative by OCIMF and IPIECA to establish industry guidance that addresses the impact on fuel and machinery systems resulting from new fuel blends or fuel types with guidance on the handling, storage and use of such fuels.

They have engaged with organisations including CIMAC, the Energy Institute and ISO to develop such guidance and have invited other interested parties to join. IBIA has taken up the invitation. Sulphur testing and verification issues There appears to be significant support among IMO member States to ensure consistency in fuel oil testing and verification procedures for the verification of compliance with MARPOL Annex VI sulphur limits through regulatory amendments. The ISWG meeting considered proposals to include a definition of “sulphur content” in Regulation 2 of MARPOL Annex VI, originally proposed by IBIA at PPR 5 in February 2018 to add a definition based on the ISO 8754 test method. This would help achieve uniformity in testing of bunkers for compliance checks globally. China followed up with a similar proposal at MEPC 72, and the ISWG agreed to go forward with a regulatory amendment. But while the proposals were to include the ISO test method in the regulatory text itself, the draft developed by the meeting placed it in a footnote due to unresolved questions about how ISO standards can be incorporated in IMO regulations. The decision regarding the draft amendment lies with MEPC and it is expected that such a regulatory change, if approved, would take effect in mid2021. IBIA has therefore proposed that the anticipated amendment needs to be covered in IMO guidelines to be approved by MEPC prior to 2020 to ensure that the testing and reporting protocol as per ISO 8754 is applied as soon as possible. Also up for discussion was regulatory changes regarding sulphur verification for samples taken from ships’ fuel systems, known as in-use samples. At present, these are not covered by appendix VI to MARPOL Annex VI which deals with the sulphur verification procedure for the sample provided to the ship at the time of delivery, known as the MARPOL sample.

ENVIRONMENT

here was majority support for dealing with this aspect by amending appendix VI on the sulphur verification method so that it can be applied to both MARPOL and in-use samples, and to simplify appendix VI so that verification of compliance can be achieved by testing at just one laboratory. The current method in appendix VI could require further testing by a second laboratory. The amendments to appendix VI were not fully agreed at the meeting and will be further discussed at PPR 6 in February next year. However, two main options were emerging as the possible way ahead. One of these is to treat all samples (in-use and MARPOL) in exactly the same way, meaning a sulphur test result from one laboratory should be considered as meeting the regulatory limit as long as the test result does not exceed the limit and the 95% confidence limit as per the statistically proven precision of the test method. The other option would allow the 95% confidence limit to be applied to the in-use sample, but not to the MARPOL sample. This would align the MARPOL sample verification with how ISO 4259 treats the supplierâ&#x20AC;&#x2122;s retained sample in the event of a dispute.

Much work remains Many issues that still need to be addressed remain unresolved following the July meeting. One of these was the question of the exact nature of guidance to be provided to port State control (PSC) in enforcing MARPOL Annex VI sulphur limits. While some want to emphasise the need for PSC to be pragmatic and understanding of the problems faced by ships in meeting the 0.50% sulphur limit, especially during the first few months of 2020, others are concerned that such guidance could send the wrong signal. Discussions on exactly what should be in a standard reporting format for fuel oil non-availability to be developed by IMO, generally referred to as a FONAR (fuel oil non-availability report) were inconclusive and more work will be required by PPR to finalise it. Even more difficult was the discussion on how PSC should deal with reports of fuel-oil non-availability. For example, what happens to any remaining non-compliant fuel left onboard after a ship, having provided a FONAR, arrives at a port where compliant fuel is available?

While many believe they should be required to debunker, the point was raised that not all ports will provide discharge facilities for debunkered fuel. And if the ships has non-compliant fuel onboard, but the port it arrives at does not allow it to debunker, what happens to the ship if this is after the carriage ban on noncompliant fuel enters into force? IBIA also suggested to the meeting that the situation where a ship discovers through fuel testing, after leaving port, that the fuel it has lifted fails to meet the limit as stated on the bunker delivery note, might be an issue to cover in a FONAR as well because the ship has, unexpectedly, and despite its best efforts found itself short of compliant fuel to complete its voyage. These issues will be further discussed at PPR 6 in February 2019, where they need to be finalised before being sent to MEPC 74 in May 2019 for approval. MEPC 74 will be the last chance to approve IMO guidelines for consistent implementation of the 0.50% sulphur limit before it enters into force on 1 January, 2020.

Regardless of which of the above options go forward, if they do, IBIA reminded the ISWG that a regulatory amendment wonâ&#x20AC;&#x2122;t take effect until mid-2021 and hence asked that IMO guidelines are issued prior to 2020 to ask relevant authorities to take the 95% confidence principle into account when interpreting test results for in-use samples. If we fail to do this, we risk that port state control officers will apply appendix VI as it stands now for interpretation of test results for in-use samples, IBIA told the meeting. The current verification procedure in appendix VI does not fully recognise the limitations of the test method with regards to 95% confidence limit and as such we risk ships being penalised for a test result indicating marginal exceedance of the sulphur limit that could, if the test had been done on the same sample in a different laboratory, have returned a compliant test result.

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SINGAPORE

Singapore gets ready Volumes may not be surging any longer but the global bunker hub continues to prepare for a strong future

n 2017 Singapore saw its bunkering volumes increase yet again, to 50.6 million tonnes, up from 46.8 million the year before. This is the scenario we have all become very accustomed to, impressive year-on-year increases. This year looks like being a bit different. After a strong January and February the numbers have tended to be down a bit. There is still good bit of this year to go, of course, but perhaps this will turn out to have been a slightly quieter year than the recent record-breaking ones. Whether or not total volumes in Singapore, and worldwide for that matter, continue to grow what is clear is that there will much more diversity in the marine fuel market. That trend is apparent in the port’s figures which show sales of 180 cSt fuel starting to increase, from none at all in the first half of last year. Exactly what will happen when the 0.50% sulphur cap comes into force in 2020 is really anyone’s guess but the widely held assumption is that much more distillates will be sold. That being the case it is not surprising that Maritime and Port Authority of Singapore (MPA) is extending the mandatory use of mass flow metering (MFM) to all bunker tankers delivering distillates from 1 July next year. The move follows “the successful completion of test-bedding the system for delivery of distillates” according to MPA’s Assistant Chief Executive (Operations) M Segar when he announced the move at the IBIA Asia Gala Dinner in April. The MPA says that the use of the MFM system will enhance transparency in the bunkering process, improve operational efficiency and increase the productivity of the bunkering industry.

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Similar to the use of MFM for marine fuel oil (MFO) delivery, the use of MFM for distillates will, it argues, provide better assurance to both the bunker buyers and suppliers on the quantity of bunkers delivered, and safeguard Singapore’s reputation as the world’s top bunkering port. The Singapore Shipping Association and IBIA support this initiative. Capt Segar said: “The industry has given positive feedback on the mandatory use of MFM for MFO. As the world’s top bunkering port, it is important that we continue to set the highest bunkering standards to ensure fuel quality and reliability and this can be achieved through the use of MFM. This will also prepare the industry for an expected increase in delivery of distillates with the introduction of a 0.5% global sulphur cap from 1 January 2020 by the International Maritime Organization. We will continue to work closely with all our stakeholders to prepare the bunkering industry for the future.” Since 2014, MPA has invested almost S$17 million to help the industry adopt the use of the MFM system. Now, to defray part of the cost in installing the MFM system, companies may apply for co-funding of up to S$60,000 from MPA for each existing bunker tanker delivering distillates in the Port of Singapore. MPA has set aside S$9 million to co-fund this initiative. As well preparing for increased distillates sales in the short term, MPA is also getting ready for a shift to LNG bunkers. Late last year, MPA injected a further S$12 million to boost Liquefied Natural Gas (LNG) bunkering in the Port of Singapore. This followed initiatives announced in 2016 that included committing up to approximately S$2 million to co-fund the development of an interim truck loading facility for LNG bunkering. Of the S$12 million then allocated for a co-funding programme for LNGfuelled vessels, a total of S$8 million was awarded to Harley Marine Asia,

Keppel Smit Towage and Maju Maritime. Half of this latest S$12 million has been set aside to co-fund the building of new LNG bunker vessels. The remaining half will be used to top up MPA’s existing co-funding programme to support the building of LNG-fuelled vessels. MPA Chief Executive Andrew Tan said: “With the implementation of the IMO’s 0.5% global sulphur cap on 1 January 2020, LNG is a viable and tested solution for shipowners. As the world’s largest bunkering hub, MPA will support future demand by promoting the development of ship-to-ship LNG bunkering in the Port of Singapore. This will provide the industry greater confidence in the availability of LNG supply across key shipping routes.” Meanwhile MPA is continuing to crack down on suppliers who breach its regulations. It has revoked the bunker craft operator licence of Pegasus Maritime (S) Pte Ltd. Pegasus will no longer be allowed to operate as a bunker craft operator in the Port of Singapore. An MPA statement said: “As part of MPA’s ongoing efforts to ensure the integrity of bunkering in Singapore, checks were conducted on Pegasus earlier this year. MPA’s investigations revealed that Pegasus had allowed an unlicensed craft operator to use its bunker craft to make bunker deliveries. Given the severity of the breaches, MPA has revoked Pegasus’ bunker craft operator licence.”

china

Hainan is primarily a tourist destination, but could be home to the country’s next free trade zone ©Shi-Chi Chiang

Changes afoot on the Chinese fuel scene

China’s moves to improve air quality and lower emissions across all sectors are starting to see major developments in shipping and ports

he Chinese government instituted a blanket 0.5% sulphur cap on marine fuels across the Yangtze River delta last September, matching rules already in place across some ports. This was followed by a ban on domestic sales of diesel with sulphur content higher than 10ppm in November, with Chinese refineries reportedly increasing their imports of low sulphur crude to match. These reduced sulphur limits and a government push to clean up Chinese air has seen a run of interest in alternative fuels and their supporting infrastructure from Chinese operators. This spring, Cosco, US-based IGP Methanol and Jinguotou (Dalian) Development Co signed an MOU to build up to two methanol plants in the US to supply Jinguotou’s methanol-to-olefins plant in Jin Zhou. While Cosco aren’t involved in the plant construction, the shipping giant is eyeing the possibility of building and operating methanol-powered tankers to link the two. “It is a key step for Cosco to move toward new clean transportation fuels, promoting the transformation and upgrading of traditional businesses for Cosco Energy Transportation,

while providing strong support for IGP Methanol and JGT methanol distribution,” the company said. Other Chinese ship operators working on the country’s inland waterway network have been exploring all-electric propulsion. In December last year, Huangzhou Modern Ship Design & Research Co launched what it claims to be the world’s first all-electric cargo vessel. The ship’s 2,400 kWh lithium battery pack allows it to carry 2,000 tonnes of cargo just 80 km at around 7 kts on a full charge, with a charging time of two hours at either end. HMSDR chairman Huang Jialin said: “As the ship is fully electric powered, it poses no threats to the environment. The technology will soon be likely … used in passenger or engineering ships.” “The cost of electric power is less than traditional fuel. The main cost of the new energy cargo ship depends on how much lithium battery it is equipped with,” Guangzho Shipyard general manager Chen Ji said. “Theoretically, the fully electricpowered ship could have more capacity in cargo loading.

If it is equipped with larger energy batteries, it will carry goods of more than 2,000 tonnes.” While the provision of sufficient battery storage remains an obvious chokepoint for the technology, heavily restricting range and speed, the launch is still a step forward. Ironically, the ship is to be used to ferry coal for power generation to plants along the Pearl River. This summer, the Yangtze joined the all-electric club with its first batterydriven passenger vessel and accompanying charging infrastructure. China Shipbuilding Industry Corporation built the 1,000 gt, 300-passenger cruise tour ship, which has a better range at 120 km at the cost of a 6-hour charge time, as well as building charging facilities along the river. According to CISC’s Zhou Linghui, the ship carries 25 tonnes of lithium batteries. It will operate on the Wuhan section of the river, in the province of Hubei. While all-electric vessel deployment seems likely to be restricted to shortrange, inland and niche situations for the time being, most industry analysts expect China to become one of the biggest, if not the biggest, individual markets for LNG and LNG bunkering in the near future. World Bunkering AUTUMN 2018

china

his spring, Ji Yongbo, a researcher at the China Waterborne Transport Institute was quoted by news agency Interfax as saying at a Nanjing conference that the Chinese LNG-fueled merchant fleet numbered 275 vessels, 160 of them newbuilds and 115 retrofits. More importantly, Ji also said the country now had 19 LNG bunkering facilities, albeit only three of them fully operational. Infrastructural support across most of China’s major ports is likely to be in place before long. Again, inland usage on the country’s vast waterway network is helping drive interest. At the turn of the year, Shanghai SMI Environmental Industry Co launched the first of a series of 36 LNG-powered waste container ships. The vessel is deployed on the Huangpu River. Demand for LNG for both industrial and domestic use in China is expected to soar in coming years as the manufacturing and power sectors come to comply with emissions controls. Along with this increased and more widespread interest in gas will inevitably come the type of storage, transfer and delivery infrastructure that bunkering requires with a consequently reduced investment overhead for the maritime sector. Last year the country became the world’s second largest importer of LNG, primarily as a result of winter heating demand, and with several producers actively looking to expand supply coverage across the Asia Pacific region, a boosted gas supply chain should see Chinese investment in gas continue through the foreseeable future. China National Offshore Oil Corporation put the overwinter demand in context at the start of the year: “From 9 December 2017 to 8 January 2018, CNOOC delivered 5,226 tons of LNG from Dapeng LNG, Yuedong LNG and Zhuhai LNG to North China. On 4 December 2017, the daily gas supply of Tianjin LNG exceeded 20 million [cubic metres] for the first time. By March 2018, it is expected to unload 21 cargos from LNG tankers.”

World Bunkering AUTUMN 2018

“In November 2017, Fujian LNG unloaded a record high 350,000 tons of LNG and delivered 27.4 million cubic meters of gas to Jiangxi, Hunan through LNG trucks. As of 25 November 2017, Zhejiang LNG supplied 3 million tons of volume, increasing by over 80% compared to the same period last year. The facilities achieved the design capacity for the first time.” CNOOC is not the only national Chinese gas supplier, of course, and this year saw Sinopec open a new US$2bn LNG terminal in Tianjin capable of handling 3m tonnes per annum. Not to be outdone, according to a report in the Xinhua Daily this summer, CNOOC itself is planning a US$2.17bn LNG terminal in Yancheng capable of handling 100,000 gt vessels, with associated storage and transfer infrastructure. The terminal is planned to come online in 2020. All this comes against a backdrop of the ongoing trade war between the Trump administration and China. While LNG has not yet been included in tariff measures, China has already taken markedly fewer LNG imports from the US, switching instead to Russian and Australian supplies. Across the two years prior to this spring, China took around a seventh of all US gas exports, and while some of the decline seen so far in 2018 is likely to be due to seasonal variations, Chinese imports were up 57% on a tonnage-per-mile basis last year and uncertainty over the future shape of trading relations between the two superpowers has many industry watchers expecting to see greater cargo swaps and traffic shifts. Infrastructure and material investments in LNG bunkering - which naturally tends to follow supply availability - may yet see knock-on uncertainty. Such political concerns haven’t yet affected efforts to expand and consolidate developments in the China (Zhejiang) Pilot Free Trade Zone in Zhoushan, one of several ventures aimed at smoothing international trade. Several Singaporebased bunker suppliers have been lined up to offer bunkering services in the new port, with Consort Bunkers joining Brightoil Petroleum in the sector in recent months, alongside Glencore Singapore which has launched a joint oil trading venture in the FTZ with Zhejiang Petroleum.

President Xi Jinping, who has described the Zhoushan FTZ as a project of national strategic significance, has also announced plans to develop a similar free trade port in Hainan over the course of the next 20 years. Hainan is principally a tourist destination and there are doubts about its current port capacity, but foreign bunker suppliers have already voiced tentative interest in the potential for the project. According to Xinhua, an initial free trade zone could be established by 2020, the initial stages of a full free trade port by 2025, with “mature” free port operations by 2035. As the prospective free trade port plans were being developed, Hainan’s Maritime Safety Authority launched a year-long bunker inspection campaign across the island province, including the ports of Basuo, Haikou, Sanya and Yangpu as well as the Qiongzhou strait. Huatai Insurance, describing the campaign, said: “The inspection on fuel oil quality of calling ships will be reinforced, with focus on inspecting whether the oil record book is recorded normatively, whether the fuel oil supply record and fuel oil sample is kept integrally and whether the index on the fuel oil supply record meets the relevant requirement.” As well as checking fuel regulations are being met, the MSA is reported to be cracking down on MARPOL Annex VI and BWM Convention compliance on ships in the monitoring area.

A clean air drive has seen a sulphur ECA imposed across the Yangtze delta

industry news

The Costa Fortuna, owned by carnival subsidiary Costa Crociere. Carnival and the Bellona Foundation have agreed to work together on environmental issues

Slow speed engines “have lower claims” The Swedish Club says that its latest statistics show that vessels propelled by medium/high speed engines have a claims frequency 2.5 times higher than slow speed engines, with an average claims cost of close to US$650,000

ain Engine Damage, the latest loss prevention report from The Swedish Club, includes loss prevention advice from the major engine manufacturers, MAN Engines and Wärtsilä. Swedish Club’s Senior Technical Advisor Peter Stålberg explains: “Our investigation shows that bulkers and tankers are the best performers for claims cost in comparison with Club entry. Most of these vessels have slow speed engines. Conversely passenger vessels/ferries have the highest frequency of main engine claims – 0.066 claims per vessel and year. Often these vessels have multiple medium speed engine installations. The same is also true for ro-ro vessels. He says: “When there is a choice to be made between a slow speed engine and a medium/high speed engine, the Club’s experience demonstrates that the slow speed engine is the safer option, when you balance the space saving advantages of the medium/high speed engine against the increased costs of running the vessel in its lifetime. In addition, not only is the claims frequency of medium/high speed engines higher, but they also have a disproportionate claims cost (43%) in relation to insured vessels (28%).” The marine mutual insurer says that lubrication failure is still the most expensive and frequent cause of damage, followed by incorrect maintenance and/or repairs.

Gothenburg to keep LNG discount at 20% in 2019 Sweden’s Port of Gothenburg says it will keep its discount on port tariffs at 20% for LNG-fuelled vessels in 2019 before starting to phase them out in 2020 with a reduction to 10%. However during the phase-out period the Port Authority will focus on developing its regular indexed environmental discount, which takes greater account of the vessels’ overall environmental impact rather than the technology or the fuel used to run the vessel. In 2015, the Port of Gothenburg introduced an environmental discount on the port tariff in an effort to increase the number of calls by ships running on liquefied natural gas (LNG). Several major LNG investments have been made since then, including initiatives by a number of Swedish shipping companies. This has had a positive impact on the environment, including reduced emissions of sulphur dioxide, particles and nitrogen oxides into the air in western Sweden. The Gothenburg Port Authority is now set to extend the discount period and is already outlining a renewed environmental discount. As part of the Gothenburg Port Authority environmental discount scheme, vessels that report good environmental performance receive a 10% discount on the port tariff,

assuming they achieve a certain level according to the globally recognised environmental indexes ESI and CSI. Vessels that run on LNG receive an extra discount of 20% each time they call. The LNG discount is subject to a time limit and was due to run to the end of 2018. The port authority says that use of LNG began to gather momentum at Gothenburg in the second half of 2016. “Prior to that,” it says, “shipping companies were sceptical about investing as there was no means of bunkering LNG at the port. At the same time, the bunkering companies were unwilling to supply LNG without a customer base”. Edvard Molitor, Environmental Manager says: “A catalyst was necessary to break the deadlock, and the energy discount has been a strong contributing factor behind many players choosing to follow the LNG route.. It took time before it really took off, but today these players are at the LNG forefront at the Port of Gothenburg. Now that the discount period is drawing to a close, we can see that the upward trend is continuing at the port with a growing number of LNG calls. We aim to maintain our support for this development, and we are therefore planning to extend the four-year discount period by a further two years.” World Bunkering AUTUMN 2018

Bellona Foundation and Carnival Corporation in sustainable cruise tourism pact The Bellona Foundation and cruise ship giant Carnival Corporation, with nine global cruise line brands, have agreed to work together to continue improving environmental and sustainability impact. A statement says: “The newly formed cooperation is based on the two parties’ shared vision of an even more sustainable cruise industry in a future zero emission society.” The two parties say that the recently adopted IMO strategy for reducing greenhouse gas emissions by 2050, together with an increasing focus on continuing to improve the cruise industry’s environmental impact in local communities and destinations, will provide an important framework for joint cooperation. Setting an aspirational goal of zero emissions in port and during operations in pristine areas will help to force breakthrough approaches in technology and operations to reach that goal. “Sustainable operations is a top priority for our business, and as the world’s largest cruise company, our global cruise line brands have taken and continue to take a leadership role for sustainable tourism,” says Michael Thamm, Group CEO, Costa Group & Carnival Asia for Carnival Corporation. “We are deeply committed to protecting the environment, and that includes the oceans and seas in which our vessels sail and the communities in which we operate. Working together with leading environmental NGOs such as The Bellona Foundation will help us to achieve our vision to provide our guests with extraordinary vacation experiences while meeting and often exceeding our environmental commitments.” World Bunkering AUTUMN 2018

LR launches MRV compliance program Lloyd’s Register (LR) has launched an online verification service, CO2 Verifier, that it says “provides a simple solution to comply with both the EU monitoring, reporting and verification (MRV) regulation and the IMO Data Collection System (DCS)”. CO2 Verifier is a secure cloud-based application designed by LR’s technical staff and co-created with ship managers that provides one place for LR’s clients to manage their fleet compliance and submit data to the EU and IMO. Nick Brown, LR Marine & Offshore Director, said: “Implementation of these regulations presents a significant compliance challenge for shipowners and operators – LR’s CO2 Verifier offers one simple way to comply with them both. It will save our clients time and effort, enabling them to focus on their day-to-day business.” LR is an accredited third-party verifier for EU MRV and a Recognised Organisation (RO) for IMO DCS. When data is submitted to LR, it carries out the necessary checks and verification procedures and issues the respective certificates to keep onboard for port State control inspections. Wärtsilä company in LNG-fuelled bulker project Wärtsilä subsidiary Eniram has signed a memorandum of understanding with Athens-based Arista Shipping to participate in its Project Forward to develop a dry bulk carrier that features “an unprecedented high level of energy efficiency”. The bulker will be LNG fuelled. Eniram’s contribution will be to assist in the development of monitoring and optimisation tools.

The vessel design will enable compliance with all applicable and anticipated IMO regulations, including the Energy Efficiency Design Index 2025, SOx post 2020, and NOx Tier III without any after treatment. “We are delighted to be a part of this exciting project, which will create a vessel with the levels of performance and sustainability needed as the marine industry enters a new era. Our input will help ensure that operational visibility will be maximised, and that the new ships can operate at optimal efficiency,” said Giannis Moraitakis, E&A Business & Sales Development Manager, Wärtsilä Marine Solutions. “Project Forward represents a milestone for the shipping industry, since it brings a substantial discontinuity to traditional ship design and performance. The project establishes LNG as a global marine fuel, and we welcome Eniram’s involvement. They have proven expertise in energy management technology, and this know-how will be of great importance. The aim of the project is to arrive at a fully elaborated decision support tool, which will be extremely valuable in enabling us to predict, monitor, optimise, and also demonstrate the actual performance of the vessels,” said Antonis Trakakis, Technical Manager, Arista Shipping. Arista Shipping has signed a letter of intent with Yangzijiang Shipbuilding to build a series of up to 20 bulk carriers to the new design.

A ship to ship bunkering of LNG in the port of Gothenburg. ©Gothenburg Port Authority

industry news

He added: “We will of course continue to support vessels that offer a good environmental profile, but we won’t make any distinction in the discount between vessels that produce the same environmental outcomes. As the environmental effects of LNG operation continue to be good, these will also be incorporated into our future environmental control system.”

INNOVATION

Eco Marine Power has carried out a five year study of the potential use of solar power by ships

ISO asked to develop Methanol specification IMO request to international standards body reflects growing interest in methanol as a marine fuel

MO has asked the International Organization for Standardization (ISO) to develop a standard for methyl/ethyl alcohol as a marine fuel and a standard for methyl/ethyl alcohol fuel couplings. ISO will work to develop the standards and provide them as soon as possible, the first time it has considered these fuel types. The Methanol Institute (MI), which promotes the use of methanol as a fuel says that the decision, taken at the 99th session of the IMO’s Maritime Safety Committee (MSC 99) is a significant step forward in the recognition of Methanol as a marine fuel that already meets IMO’s 2020 regulations and provides a pathway for very low carbon fuels in future. “The global chemicals industry currently relies on the IMPCA specification for producers and consumers but a dedicated ISO standard will help shipowners understand the fuel in a marine fuel context,” said MI Chief Operating Officer Chris Chatterton. “We are seeing increasing interest around Methanol as a liquid fuel that is safe to handle easy to ship and store and is more widely available than other low sulphur alternatives.”

There are currently eight ships trading internationally operating on Methanol as fuel – the ropax Stena Germanica and seven tankers operated by Waterfront Shipping with at least four more expected to enter into service in 2019. MI notes that several recent research projects have independently confirmed methanol’s suitability as a suitable replacement for conventional marine fuels in coastal, inland and shortsea sectors. IBIA’s IMO Representative Unni Einemo said: “A comment was made during MSC 99 that fuel standards should be developed before ships begin using such low-flashpoint fuels so that safety concerns are adequately addressed before, not after, larger numbers of ships start using them. However, ISO has traditionally developed fuel standards only after user experience to be able to assess which parameters need to be specified, and also what relevant limits should be.” The decision to invite ISO to develop standards for methyl/ethyl alcohol fuel for ships was taken when MSC 99 discussed the report from the fourth session of the Sub-Committee on Carriage of Cargoes and Containers (CCC).

CCC has been tasked with drafting technical provisions for using methyl/ethyl alcohol as a ship fuel under an ongoing item on its agenda regarding amendments to the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (IGF Code). In May MI welcomed the findings of the Sustainable Marine Methanol (SUMMETH) project, which concluded that there are no obstacles to the efficient use of methanol in a converted diesel engine and that smaller vessel conversion projects are feasible and cost-effective, with levels of safety that easily meet existing requirements. The study found that switching to methanol would offer immediate environmental benefits, including close to zero SOx and particulate matter emissions and significantly lower NOx emissions compared to conventional marine fuels or biodiesel. Joanne Ellis, Project Manager for SSPA which led the research says the partners sought to build on the work already done in earlier research projects that resulted in the Stena Lines and Waterfront Shipping methanol dual-fuel vessels, using a vessel type that could use methanol in a converted single-fuel engine. World Bunkering AUTUMN 2018

Dr Ellis adds that as biomethanol increasingly becomes available, vessel operators will have the opportunity to blend in this zerocarbon fuel and progressively meet emission reduction targets set by the IMO. She said: “The Swedish government has recently asked the country’s Transport Administration to investigate making all of its ferries, pilot boats, icebreakers and workboats fossil-free by either 2030 or 2045, something that could make biomethanol increasingly attractive. Sweden has the potential to satisfy required demand for the biomethanol, which can be produced from renewable feedstock such as pulp mill waste, and there are several initiatives underway investigating the production of sustainable methanol.” Ship solar power study After an extensive study project, Eco Marine Power (EMP) has released some of the key findings related to the use of solar power on ships and the selection and installation of related equipment. This study was carried out over a five-year period and included installation of a trial system on the high speed ro-ro ferry Blue Star Delos, several ship surveys, computer-aided analysis, plus evaluation of various equipment in a test lab and also at an outdoor evaluation area. The overall system design used as a basis for the study was EMP’s Aquarius Marine Solar Power. This system incorporates class-approved hardware and is able to provide a stable and reliable source of emissions-free power on-board ships or it could be used as an emergency back-up power system. The study covered a range of topics including system design, system performance, installation methods, hardware selection and a review of marinegrade photovoltaic (PV) technologies. Some key findings resulting from the study included: • The type of PV module best suited for a ship-based project may vary depending on a number of factors including the location where the modules will be installed. World Bunkering AUTUMN 2018

•

In some cases PV modules of differing types and/or technologies may be required in different locations. Careful attention needs to be focused on the way the PV modules are installed and mounted. For best results specially designed marine-grade frames suitable for use on ships should be used. High quality valve regulated lead acid (VRLA) battery technologies are suitable for ship-based solar projects. These batteries are cost effective and require very little ongoing maintenance. The installation methods suggested by the PV module manufactures may not be suitable for ships, and customization of the PV module may be required in certain cases. A class approved monitoring system should be included with any ship-based solar power system. A solar power system on a ship combined with DC loads such as lighting can be an effective way to reduce system cost, lower power losses & simplify the overall system design.

Based on these and other findings resulting from the study, EMP says it has made a number of improvements to its products. Greg Atkinson, Chief Technology Officer at Eco Marine Power said, “We have gained many valuable insights into the design, installation and use of solar power on ships during the last 5 years. These insights have been used to refine our system design and product offerings and we are now in the process of deploying commercial systems.” Working towards more efficient hulls Marine coatings manufacturer PPG and classification society DNV GL have signed a collaboration agreement focused on operational data analysis using DNV GL’s next-generation hull analysis methodologies.

The ISO 19030 standard, released in 2017, defines a set of performance indicators for hull and propeller maintenance, repair and retrofit activities to improve operational performance. “DNV GL and PPG have identified a market demand for methodologies that go beyond ISO 19030 and share a common vision to develop future requirements and solutions that enable optimum vessel performance,” says Tom Molenda, PPG’s Global Marine Director. Our goal is to enhance hull efficiency for multiple operational profiles and optimize vessel performance.” DNV GL Senior Research Engineer Jason Stefanatos explains that as more owners invest in more sophisticated sensors, tools and systems to collect operational data, performance can be measured more precisely over time. “By applying DNV GL’s expertise in hull degradation and operational data analysis tools, PPG will be better able to transparently demonstrate the impact of their coating solutions” Stefanatos says, noting that the methodologies and data analytics tools are also available on DNV GL’s Fleet Performance Management Platform ECO Insight. “The ECO Insight platform provides information on the performance of voyage, vessel, hull, engine, fuel, weather, cargoes, among other variables,” he explains. “And because we have access to real-time vessel performance data from more than 1,900 vessels, we are confident that our collaboration with PPG can be used by owners and operators to optimize hull performance.”

To tackle the challenge of poor hull and propeller performance, PPG and DNV GL will work together to collect data and apply DNV GL’s methodologies to contribute to PPG’s further development of innovative coating solutions. According to data presented to the IMO by the Clean Shipping Coalition in 2011, about one tenth of the world fleet’s fuel consumption can be attributed to poor hull and propeller performance. This was said to cost owners an estimated US$30 billion in additional fuel costs per year and account for a 0.3% increase in man-made carbon emissions.

DNV GL’s George Dimopoulos, Head of R&D and advisory Greece and PPG’s Tom Molenda, Global Director Marine Coatings sign the collaboration agreement

INNOVATION

“The work on Stena Germanica and the Waterfront Shipping vessels proved the dual fuel concept in larger vessels; we wanted to understand whether conversion of a smaller engine was feasible. We looked at a road ferry with an engine capacity of about 350 kW which makes short trips between the mainland and the island of Ljusterö in the Stockholm archipelago, carrying people as well as cars, where there was a real desire to improve the emissions profile.”

INDEPENDENTS

Headwinds still strong

The ghost of OW Bunker still haunts the sector as another major company hits choppy seas

he collapse of OW Bunker may now be four years astern but when, in early June, the big New York-listed independent Aegean Marine Petroleum (AMP) made the shock announcement that it was taking a US$200m hit over questionable transactions the prospect of a similar disaster seemed all too real. With many physical suppliers badly hit by the OW Bunker failure the collapse of another big independent was the last thing the bunker industry needed. However in AMP’s case a lifeline has been thrown though the company is not out of the legal woods yet. AMP’s shares dived nearly 75% when it told the US Department of Justice and Securities and the Exchange Commission that it had written off US$200m on transactions that may have been “without economic substance”. The company, founded by Greek tycoon Dimitris Melissanidis had appointed three US activist hedge fund managers, owning about 15% of AMP, to its board after they agreed to drop shareholder lawsuits against the company. The Financial Times reported that AMP’s audit committee had discovered about US$200m in questionable transactions related to four counterparties, dating back to at least 2015. AMP’s market capitalisation fell immediately to less than US$30m from US$115m before the announcement.

A statement said: “Based on the preliminary findings of the review, the Audit Committee believes that approximately $200 million of accounts receivable owed to the Company at December 31, 2017 will need to be written off.” It added: “The transactions that gave rise to the accounts receivable may have been, in full or in part, without economic substance and improperly accounted for in contravention of the company’s normal policies and procedures.” AMP said that a “number of individuals” it believed to have been involved in the questionable transactions had been “terminated or placed on administrative leave pending the outcome of the investigation”. While the spectre of another hugely damaging collapse hung over the sector moves were ongoing to save the company. In early July AMP announced that it had entered into an MOU with one of the world’s largest independent commodities and energy players, Mercuria Energy Group, to support AMP’s US and global revolving credit facilities and “to explore a global strategic partnership”. “We look forward to further developing our relationship with Aegean and providing the flexibility to execute a strategy that enhances the Company’s operations and positions the Company for long-term success,” AMP Chairman and independent director of the Board, Donald Moore, said,

“As part of the announced strategic review, the new leadership at Aegean has, in short order, brought forward an opportunity to completely redefine and optimise the Company’s capital structure, enhance near term liquidity and position the Company for a dynamic partnership with one of the world’s largest privately held integrated energy and commodity groups. We are extremely pleased to enter into this Agreement with Mercuria and look forward to working with them on a broader relationship, for the benefit of our respective stakeholders.” He added: “Importantly, the Agreement provides for immediate credit support from Mercuria for the benefit of Aegean’s banks, customers, suppliers, and logistics providers, putting the strength of one of the world’s largest independent energy and commodity companies behind Aegean. We look forward to further developing our relationship with Aegean and providing the flexibility to execute a strategy that enhances the Company’s operations and positions the Company for long-term success,” said Magid Shenouda, Mercuria’s Global Head of Trading. Mercuria committed to provide a US$1 billion trade finance facility also provide increased liquidity to Aegean of not less than US$30m, adding flexibility to Aegean’s operations. World Bunkering AUTUMN 2018

The deal also envisages a potential broader strategic partnership between the AMP and Mercuria, including operational services, trading and hedging arrangements, and other support provided by Mercuria to Aegean. While the Mercuria deal appears to have been the necessary lifeline for Aegean, it is facing legal action brought by several parties. Specialist US action and shareholders’ rights law firm WeissLaw is one of the legal firms involved. It announced that “a class action lawsuit has been filed on behalf of all persons or entities who purchased shares of Aegean Marine Petroleum Networks securities between April 28, 2016 and June 4, 2018, both dates inclusive”. The complaint alleges that ANW failed to maintain effective internal controls over the Company’s operations and financial reporting, resulting in the issuance of materially false and misleading financial statements.

Michael Kasbar, chairman and chief executive officer of World Fuel Services Corporation, commented: “Our focus on operating efficiencies, portfolio refinement and organic growth initiatives should position the company for improved operating performance in 2018 and 2019.” Meanwhile, in what it describes as a “bid to meet customer needs beyond 2020”, WFS has upgraded its facilities at Falmouth, UK, and introduced a new supply vessel. WFS currently stores and supplies marine diesel and fuel oil from the Falmouth terminal, which forms the deepest harbour in Western Europe and provides an advantageous position at the start of the European ECA zone, offering ECA-compliant fuel.

The investment includes an upgrade of the terminal facilities and an extension of existing bunkering options with the introduction of the 2008-built, 1,942 dwt bunker tanker Lizrix, which provides the ability of segregating up to five grades and has a pumping rate of 3-400 cbm/hr. WFS may be looking ahead but many in the bunker sector and wider shipping industry still have to deal with continued fall-out from OW Bunker’s collapse. In May this year a Danish District Court sentenced the former CEO of OW Bunker’s Singapore subsidiary, Lars Møller, to18 months in prison for his role in the bunker company’s collapse. There was bad news too for physical suppliers who had hoped to claim against the ships they supplied on OW Bunker’s instructions. A series of appeals in US courts have gone against them, as you can see from our Legal section on 48.

Prior to the June statement AMP had been expanding and started physical supply operations on the Germany’s Kiel Canal in January. The operation, at the Baltic Sea entrance to the canal, is managed by Aegean’s German subsidiary, OBAST Bunkering & Trading (Rostock) in partnership with local tank farm operator Unabhängige Tanklogistik. Meanwhile times have been happier for the giant World Fuel Services Corporation (WFS) which produced healthy overall second quarter results, with adjusted EBITDA of $84.2 million, up 8% yearon-year. While its aviation fuel business was doing particularly well, however, its very large global marine network faced headwinds. The company’s marine segment, which supplies about 31 million tonnes of marine fuel a year, generated a gross profit of US$30.2 million, a decrease of 8% year-on-year, primarily due, WFS said, to “exiting low return activities”.

World Bunkering AUTUMN 2018

Falmouth, one of World Fuel Services’ physical supply locations

INDEPENDENTS

s part of the deal Mercuria acquired new shares that made it a 30% shareholder, with a representative of Mercuria to join the Company’s Board of Directors.

RUSSIA BUNKERING NEWS

Odin – new bunker barge in St-Petersburg port

Russian bunker industry forum

Marine fuel professionals gathered in St. Petersburg to assess the state of the country’s bunker industry and discuss key issues, as Olga Bogacheva reports

elatively speaking there was good news for delegates a XI Russian Forum on the Current State and Prospects for Development of the Russian Bunker Services Market. In 2017 the Russian total bunker market grew 8%, or about 250,000 tonnes. This was a promising development because 2016 was marked by a dramatic decline of 25%.

About 4.6 million tonnes of fuel, about 27% of the national total, were sold in Far Eastern ports in 2017. The biggest surprise of last year was that due to natural disasters and related disruption of the railway caused recurring shortages, fuel in Far East Russian ports sometimes cost more than in Singapore.

The main trend in recent years, which mirrors the situation in the whole Russian economy, is a steady increase in the share of enterprises with state participation. There are four such companies in the bunker market who, in 2016, together accounted for 36.4% of Russia’s marine fuel sales. In 2017 their share edged up slightly to 47.4%.

Prospects for development of the Far East look bright. The published Russian sea port infrastructure plan to 2030 shows a number of major projects, including the construction of terminals in small ports including Nikolayevskon-Amur, Sakhalin, Plastunand Olga. These projects are scheduled to be implemented between 2020 and 2023. However the ports of the Far East and Primorye are somewhat disappointed at a lack of movement on free port status which would help see them through the current difficult market conditions. This is despite an excellent public relations campaign.

Hence, 150 or so private sector companies account for just over half of the market, 52.6% last year. Bear in mind though that the private sector includes two major players, LUKOIL and Transbunker, who have about 15% and 6% respectively. This means that other independent entrepreneurs supply only about 30% of marine fuel and their niche is gradually getting smaller. Rosneft-Bunker was the most successful of these other private sector companies in 2017, increasing its share from 12.6 to 21.6% and apart from LUKOIL it remains the undisputed market leader.

The most active participants in the marine bunker market in the Far East are: Rosneft-Bunker LLC, NNKBunker LLC, Dilmas LLC, Nayada LLC, Niko Group and Transbunker Group. However Nakhodka-Portbunker, a large independent company, ceased operations and started bankruptcy proceedings in 2017.

A declining trend continued in the North-West basin in 2017 with the total amount of fuel delivered falling 100,000 tonnes compared to 2016, to 3.8 million tonnes. The five market leaders in the region are Gazpromneft Marine Bunker, LUKOIL Bunker, Baltic Fuel Company, Rosneft Bunker and Nevsky Mazut. Since 2015 the implementation of the Baltic ECA has dramatically changed the make-up of marine fuel sales in the North West. While prior to 2015 high sulphur heavy fuel oil made up 90% of sales, last year it only accounted for 57% while diesel fuel sales reached 24.2% and ultra-low sulphur content blended fuel accounted for 18.2%. In terms of port use in the Arctic and North West there are eight areas of development which will significantly increase traffic soon. These are Bronka, Primorsk, Ust-Luga, Pionersky, Sabetta, Lavna, Chaika and Tanalau ports in the near future. Bronka’s multi-role marine transshipment complex is the only deep-water terminal in St. Petersburg. By 2020 Bronka is expected to increase annual capacity to 1.9 million TEU and 260,000 ro-ro units. By 2021 a new Baltic terminal for fertilisers, with an annual capacity of 5 million tonnes, should be operational at Ust-Luga.

World Bunkering AUTUMN 2018

here are no doubts over the future of the Arctic projects at Sabetta and at Lavna near Murmansk. The former will see throughput of about 60 million tonnes, including 30 million tonnes of LNG, a year, and the latter is expected to handle 28 million tonnes a year. Construction of the multi-role transshipment complex, which will handle up to 100 million tonnes of bulk cargo, has started at Primorsk. It is hoped that it will be given free port status. As this proposal was discussed at the highest level by Prime Minister Dmitry Medvedev and the Governor of the region Alexander Drozdenko and then widely and favourably covered in the media, it would appear highly likely that this could happen quickly. Sales of marine fuel in the Southern Basin, that is in the Black Sea and Sea of Azov, amounted to 2.4 million tonnes in 2017. That was a decline of 17% from the previous year. Market leaders in the region are LUKOIL Bunker at 20%, Gazpromneft Marine Bunker at 19,7%, Rosneft Bunker at 12.5% and Transbunker-Novo at 12%. In recent years, the sales of fuel at inland waterways has hovered at around 600,000 tonnes, a very modest amount given the size of the country. Since 2016, the government has taken a number of measures aimed at stimulating the development of river navigation. However these have yet to arrest a shift of river freight to road and rail. Now in 2018 a sharp increase in prices has become an unexpected and extremely acute problem for water transport. The St. Petersburg forum heard experts describe the situation as critical. The only hope, as usual, is that the government will support the industry. However no specific measures have yet been announced. The St. Petersburg Exchange held its first bunkers auction in June when 1,000 tonnes of ULSFO was sold ex-tank in St. Petersburg. World Bunkering AUTUMN 2018

In the future, traders expect a range of fuels to be sold this way and at locations including Kaliningrad, Murmansk, Arkhangelsk and southern ports. According to PortNews the price of ULSFO in June 2018 in St. Petersburg ranged between US$580 and $620 per tonne. LNG bunkering in Russia is gradually becoming a reality. The Forum in St. Petersburg was attended by about a dozen specialists engaged in the smaller scale production of LNG and who are seriously interested in its distribution as a marine fuel. The first company with practical experience was Gazprom Bank subsidiary Kriogaz which produces LNG at its plant in Pskov and supplies it by trucks to its partner, the Estonian operator Eesti Gaas. The LNG is used by the Megastar ferry shuttling between Tallinn and Helsinki. Some 18,500 tonnes of LNG had been delivered to Megastar since February 2017. Eesti Gaas says it intends to diversify sources of supply, referring to potential agreements with the companies from Poland and Finland. However, Russian LNG has a distinct price advantage as gas is not subjected to export duty on truck and tanker shipments. Also Pskov plant is located reasonably close to Tallinn, about 350 km away. The logistics of using other LNG suppliers are more complicated and therefore more expensive. A Kriogaz representative told Forum participants about the company’s expansion plans. These include a second production line at Pskov that will increase annual capacity up to 200,000 tonnes and also another liquefaction plant at Kaliningrad, with an annual capacity of 150,000 tonnes will be commissioned.

According to Kriogaz the production of both of these plants will be in demand as a marine fuel, particularly for the Tallink ferry operator. While the future of a government scheme to build three LNG-powered train ferries on the Baltiysk to Ust-Luga route in 2020 is in some doubt, it is clear that LNG bunkering will develop. The main problem now is not technical complexity but a lack of relevant legislation. Kriogaz, in cooperation with the Russian Association of Bunker Suppliers, plans to invest in developing relevant regulations. However regulation regarding the wider bunker industry is one of its main problems. Delegates listened intently to a presentation by Vladimir Sergeev, the Chairman of the Board of the Russian Association of Bunker Suppliers. He talked about the Association’s interaction with the authorities and its efforts to facilitate the business environment. He described a situation where there were a huge number of regulations covering all aspects of bunkering services. He said that very many of them were “not only controversial but unprecedentedly ill-designed.” He said these regulations included new laws, amendments to existing regulations in the Customs Union, changes to existing regulations, the draft regulations of the RF Government, orders of ministries and other rules. He said that these all tended to have hundreds of pages of incomprehensible text, not aimed directly at the regulation of the bunker industry. They required systematic interpretation. One example was the Federal Law on Sea Ports and Shelf Zone.

Dmitry Postnov, CMT-Shipping, general manager

RUSSIA BUNKERING NEWS

e said: “Often there are provisions which, if entered into force, could greatly hamper or even make impossible running any bunkering business. Not always it is someone’s evil intent, although this also happens. Technical mistakes happen, sometimes the drafters do not consider circumstances important for the sector, or simply they do not have the necessary qualifications. For example, new Technical regulations of the Customs Union actually prohibit the sales of high-sulphur marine fuel (including heavy grade based on fuel oil) on the territory of the Russian Federation, while the global shipping industry uses such fuel and will use it in the future. We are talking about millions of tons of resource that the market demands and can’t substitute in any way. At the same time any trans-location of these products in Russia is illegal. It is still unclear how to resolve this problem.” For more than two years any bunker industry meeting has not been complete without discussing the ongoing confrontation between the bunker operators and the Federal Sea Rescue Service (FSRS).

This government agency unilaterally increased the prices of its services for oil spill preparedness. In many ports FSRS has a monopoly, effectively excluding any private rescue companies whose prices are significantly lower. The Federal Antimonopoly Service supports the Association and has consistently won all court cases on this issue. However, the FAS rulings are not enforced. In May an administrative fine was imposed on the head of the FSRS. A second penalty must be followed by disqualification and it gives hope that the legitimate claims of the Association will eventually be met.

The key event of second day of the Forum was a seminar entitled Construction and repair of bunkering tankers: state subsidies, leasing, other financial instruments. An unusual format was selected for this discussion to stimulate an optimistic mood among the participants.

In the programme it was billed as a “Business Breakfast”. In reality, the meals, combined with presentations and discussion lasted for several hours and ended with the flow of champagne. Dmitry Postnov, CEO CMS-Shipping, presented an excellent overview of the state of the bunkering fleet. The total number of tankers in operation is about 220, with a total deadweight of about 630,000 tonnes. The average age of these vessels is 32 years. In recent years civilian shipbuilding has increased in Russia. According to the new reports, 40% of investments were made by private companies. This is the result of state subsidies on loans and leasing payments as well as issuance of ship utilization grants. Nevertheless, economic reality forces bunkering companies, including the largest and most cash rich, to buy their vessels on the secondhand market.

World Bunkering AUTUMN 2018

Rosneft subsidiary RN-Bunker sold 555,600 tonnes of marine fuel in the first quarter of this year, up by 10.5% on the same period in 2017, the company has reported. This brought its share of the Russian bunker market to 23%

press release claims that its greatest success has been achieved in the Far East. It says that 395,000 tonnes of marine fuel were sold in the ports of Primorsky Kray, almost 40% more than in the first quarter of 2017.

Primorsk commercial sea port, the largest Russian oil port on the Baltic Sea with an annual throughput of 60 million tonnes, is located in the Gulf of Finland. It can take tankers of up to 150,000 dwt.

Last year was an extremely successful one for RN-Bunker. Total sales grew by 47% to 2.8 million tonnes, which made the company the undisputed market leader. Its Omsomolsk refinery and Angarsk petrochemical plant started producing products using cracking. The company said this was major factor behind its expanded sales and allowed it to enter into long-term contracts with the largest container lines in the Far East.

Large cruise ships call in Far East The efforts of Primorsky Kray authorities to attract cruise ships appear to have paid off. Following improvements to customs, border and visa control facilities as well as a targeted marketing programme Costa Cruises’ Costa Serena, the largest cruise ship to call in Primorsky Kray waters, arrived in Vladivostok in the middle of May. This was the first of 25 such calls planned for this year’s season.

The deployment of the company’s bunker barges in the North Western basin, in the ports of St. Petersburg, Ust-Luga and Kaliningrad, were also reorganised. The RN Magellan, an ice class bunker tanker, was transferred to NorthWest to expand the geographical scope of its business by providing bunkering services to transit ships in Kaliningrad. RN-Bunker has offices in key regions of the country: Moscow, Nakhodka, Vladivostok, Yuzhno-Sakhalinsk, Arkhangelsk, Murmansk, St. Petersburg, Novorossiysk, Tuapse and Samara. The first Baltic free port “to be in the Leningrad region” Dmitry Medvedev, Russian Prime Minister, and Alexander Drozdenko, the Governor of Leningrad region, have discussed the establishment of a free port in Primorsk, Leningrad region, the Governor’s press office has said. The construction of a large terminal at Primorsk is now underway. It will be able to handle up to 100 million tonnes of cargo a year. The Prime Minister has ordered the construction of new port facilities with rail and road connections. Creating the first free port in the Baltic Sea will need special customs, tax, investment and related regulations.

World Bunkering AUTUMN 2018

The city authorities emphasise that the development of port infrastructure, including dredging works at the port continues. Next year Vladivostok expects to welcome larger passenger vessels with a capacity up to five thousand people. Royal Caribbean Cruises is understood to be considering the development of its global business in Primorye. The company intends to launch a new cruise line which will make Vladivostok one of its regular ports of call. It is planned that the first visit of a large cruise ship to the region will take place in September 2019.

Meanwhile Petropavlovsk-Kamchatsky port accepted Norwegian Jewel, which cruises from Japan to Alaska, for the first time. New large bunker tanker at St. Petersburg Baltic Fuel Company subsidiary Kontur has bought an 8,500 dwt ice class 3 tanker. She is the biggest bunker vessel flying the Russian flag in the Baltic Sea. The tanker was named Odin in honour of the Supreme God in Nordic mythology. The vessel was built in China in 1998. PortNews Agency quoted Stanislav Korneev, Director General of Baltic Fuel Company as saying: “The new vessel will allow the company to strengthen its position in the region and in the port of St. Petersburg, where our holding is the third with bunker sales more than 240,000 tonnes. Totally we sold about 400,000 tonnes of bunker fuel in the North-West in 2017. Odin will be involved in the bunkering operations and in export shipments. We plan to increase sales, including through the development of our own terminal Turukhtannye Ostrova in the port of Saint-Petersburg”. The company’s operates 34 ships, comprising the largest bunkering fleet in the North-West. The company is among three market leaders providing bunkering services in the ports of St. Petersburg and Leningrad region, and transportation of oil products by motor transport in the North West of Russia.

Mikhail Panchenko, Bunker Trader, KPI Bridge Oil, Singapore Pte Ltd

RUSSIA BUNKERING NEWS

Rosneft boosts marine fuel sales

FUEL QUALITY

iStock

BARKING UP THE WRONG TREE?

An epidemic of ships experiencing fuel-related problems with seemingly on-spec fuels this year, starting in the US Gulf, has led to feverish speculation about the root causes with many predicting that this is a precursor for worse to come in 2020. Something is afoot, but facts are hard to pin down and we must be careful about jumping to conclusions, says IBIA’s Unni Einemo

ave you ever observed dogs chasing squirrels? In the excitement, as squirrels flee to safety up a tree, but then proceed to jump to another tree, dogs can get confused. There are squirrels around, but sometimes you see dogs barking up a tree that has no squirrels in it. They are, literally, barking up the wrong tree. In the frantic chase for culprits when bunker fuels are found to cause operational problems on ships – despite having met ISO 8217 specifications during routine testing against the standard – there is a risk that something similar could happen. It has happened before, which we’ll get to later.

For the most part, fuel testing agencies have indicated that the fuels met ISO 8217 specifications during routine testing against the standard. It was only when vessels began encountering problems that they commenced forensic-level investigative fuel analysis. Reports from testing agencies have identified certain commonalities between these fuels indicating they contain chemical contaminants from non-petroleum sources. The most commonly reported findings include phenols, fatty acids, and markers typically associated with Tall Oil. These have been found in variable concentrations; sometimes only at trace levels.

What do we know? While we do not have exact numbers, anecdotally it would appear that more than 100 vessels have experienced broadly similar operational problems which have been attributed to bunker fuels. The first reports of severe operational problems came after ships started to use fuels lifted in the US Gulf area, chiefly Houston, mainly lifted during March, April and May this year. Later, in June and July, similar issues were reported by ships lifting bunkers in Panama and Singapore and possibly other locations. The issues associated with problem fuels have manifested in the form of sticking of fuel injection systems components (mainly pumps), excessive sludge formation, or both. In some cases these issues have been so severe as to cause a loss of main engine power.

That’s all we actually know. As to whether the fuels causing problems are all showing the same chemical contaminants or are likely to have originated from the same source, there are some people who think they do, others are not so sure. So we cannot say for certain if we are dealing with one original problem source that has since been exported to other locations, or if these types of problems have sprung up in parallel from different sources. It is remarkable, however, how long the supply of these problem fuels has lasted, which has caused those on the receiving end much frustration. This in turn has created demands for answers and firm action, but while it is easy to get upset and make demands, there are no easy answers.

Multiple theories We cannot say with certainty whether all of the reported cases share the same root cause(s). Reports from testing agencies are not conclusive as to what is in the fuels and what caused the problems, and their investigations are continuing. A common view is that the fuels causing sticking of fuel pumps contain adhesive chemical compounds and that these may have been introduced into the supply chain via inappropriate cutter stocks used in the production of bunkers at one or more refineries and/or terminals. However, this is speculation and we may never know exactly. In similar cases in the past, the source of the contaminant has generally never been adequately identified, but the root cause was by and large a lack of control of the quality of cutter stock used in the marine pool. There is also the possibility that the problems stem from cross-contamination due to a new product cargo being loaded into multi-purpose storage tanks that were not sufficiently emptied and cleared. Another view is that the cases are not all related and that where only sludge formation has been reported, it could have been caused by incompatibility between a new product and existing residues remaining in tanks. World Bunkering AUTUMN 2018

Proving that there is something in the fuel that contravenes Clause 5 is not straightforward and requires non-standard, forensic levels of testing, typically using Gas Chromatography/Mass Spectrometry (GCMS) and/or Fourier Transform Infrared Spectroscopy (FTIR), which is time-consuming and processing the results can take weeks, especially when there is a spike in demand for such testing. It is likely that some questions may be raised about previous bunker fuels carried on vessels and the on-board fuel management procedures, hence ship owners would be well advised to carefully document procedures and retain all relevant fuel samples. However, when testing agencies have identified unusual chemical components and say that these are not naturally present in bunker fuels, the question quickly becomes: who is to blame for these contaminants being in the fuel? Where certainty is lacking this affects liability; this is why the alleged fuel contamination cases are such a controversial topic, especially regarding which parties should be held accountable. Presently, there is no consensus and many stakeholders are reluctant to share their findings – especially as compensation claims that can run into millions of dollars begin finding their way into courts. We may never get a definitive answer as the legal implications are immense. Speculation is nevertheless rife and includes suggestions ranging from the deliberate introduction of contaminants into the supply chain, to negligence around quality control, bad luck and poor procedures. IBIA recognises that generalisations may not apply in all cases and that speculating as to the root cause(s) may result in suggestions that fault lies with parties who are later proven to have acted fully in accordance with best industry practice. Generally perceived wisdom can occasionally prove to be unfounded. There may be some chatter in the market, but IBIA has not directly been presented with any evidence of malpractice or negligence by specific companies. It is unlikely that we will, given the substantial legal and financial risks of releasing details to third parties. World Bunkering AUTUMN 2018

Some have called for IBIA to bring allegations to the attention of authorities. It is important to understand that to do that, allegations must be corroborated by solid evidence. Anybody that has evidence should contact the relevant authorities directly, though we suspect most who do will be keeping their powder dry until they can present evidence to help them with commercial settlements through insurers and/or courts. What we can say is this: All suppliers selling product to meet ISO 8217 have a duty to test those cargoes in advance. Once again we call on the industry to observe the advisory in IBIA’s “Best practice guidance for suppliers for assuring the quality of bunkers delivered to ships”, in particular the sections dealing with quality control in the production of bunkers and the subsequent supply chain. Chasing squirrels Testing against ISO 8217 did not flag up the off-spec fuels reported in the US Gulf, Panama and Singapore, so what can the market do to protect itself? The trouble is that while the relationship between the parameters for which there are defined limits in ISO 8217 and operational issues is well understood, when it comes to un-specified contaminants – of which there can literally be thousands – this relationship is not well understood. If it was, a limit and recognised test methods would be specified in ISO 8217. Cases have occurred in the past when seemingly on-spec fuels caused problems and the cause was subsequently deemed to be chemical contaminants. Sometimes the troublesome contaminant has been successfully identified, on other occasions it was not. Moreover, the concentration at which the contaminant can be deemed to be harmful is a question that has clearly not been answered to everybody’s satisfaction, or it could be quantified and added to the standard. To go back to our original metaphor: dogs chasing squirrels often identify that there are squirrels up a tree and mark it accordingly. But are these squirrels causing any harm? This is a very pertinent question as often, fuels with certain chemical compounds appear to cause problems for some ships, but not for others. The same issue has been heard regarding fuels provided in the US Gulf; with some saying that there were times when several ships have been provided with fuel from the same batch, but only some encountered operational issues.

While those that did have problems went on to have the fuels tested for contaminants not specified in ISO 8217, those that didn’t may not have seen any reason to do so. What’s missing is a reference database because today, “no one knows which components are commonly found in harmless fuels nor at which concentration,” says a White Paper written by Bureau Vertias’ fuel testing arm VeriFuel in 2017. The same paper cites an interesting example. “Styrene was, for a while, identified by some fuel testing companies as an unusual and potentially harmful component in bunkers. It has the ability to polymerise and form polystyrene, and polystyrene has been known to cause filter blocking,” the VeriFuel paper noted. However, studies later showed that styrene in marine fuels does not polymerise, and what’s more, an investigation of vessels that, unknowingly, had bunkered fuels containing styrene, revealed that none experienced any issues consuming the fuel. Only on the rare occasions that polystyrene (not styrene) was present in the fuels, filters were blocking. Yet, some fuel testing agencies have reported styrenes as “unusual and potentially harmful” components when, perhaps, this may have been a case of barking up the wrong tree. There have been cases in the past where specific contaminants have been identified as the culprit but until the industry can agree at what concentration they pose an unacceptable risk and the appropriate test methods to identify them, setting standards remains as elusive. Just like squirrels elude the dogs that chase them. At present, empirical evidence from US Gulf cases seems to suggest a link between the operational issues on ships and certain phenolic compounds. But does this mean all phenols are harmful? And do we know at which concentration they cause problems? We don’t. Shale oil, for example, contains phenols and according to ISO 8217 hydrocarbons from shale are among the sources from which fuels can be derived. If shale oil was inherently problematic as a source of bunkers, would we not have seen more widespread and frequent operational issues? Or is this something that needs to be carefully investigated as fuels derived from shale oils become more common?

FUEL QUALITY

Blame game & quality control It seems very likely that the problem fuels contravene Clause 5 in ISO 8217 and Regulation 18.3 of MARPOL Annex VI which broadly state that fuels shall not contain any material in a concentration that adversely affects the performance of machinery – in other words, it contains harmful contaminants.

While IBIA does not underestimate the challenges that will face the market when suppliers need to find new blend recipes to produce fuels to comply with the 0.50% sulphur limit, we would like to emphasise that the contamination cases that have rocked the market this year are completely unrelated to low sulphur fuel oil blending. Moreover, it is important to understand that todayâ&#x20AC;&#x2122;s bunker fuels; both HSFOs and distillates, are also by and large blends. Blending has been going on for decades to ensure bunkers meet the relevant ISO 8217 specifications. Traditionally, the blend target would be to bring viscosity, density and metals within the relevant specifications. In recent years, due to environmental regulations, sulphur has also become a blend target.

In some cases, it was too late and the damage was done while in others it was possible to find operational remedies to at least get the ship safely to the next port. For ships that have lifted bunkers in areas during the time when contaminated fuels were known to be supplied, it is strongly recommended to get a solid overview of the quality of the fuel prior to using it by allowing time for tests going beyond routine ISO 8217 quality tests. Ship operators that decide to use fuels from the affected areas without this precaution should pay close attention to fuel oil system components, in particular fuel pumps and filters to act quickly if there are signs of problems. They should further consult technical managers/chief engineers within their own company and/or from other technical service providers, including bunker suppliers. An issue that has been highlighted is that the methodology for the application of non-standard, forensic levels of testing varies from one laboratory to the next which means that the results cannot always be compared and there may be questions around the reliability of the results.

The closest we are to a standard method is ASTM D7845 -17, which has been developed to quantify chemical species at low levels in marine fuel oils and cutter stocks by multidimensional GCMS, but it has limitations.Indeed, using the ASTM D7845 -17 is not sufficient to identify all the chemical species that may cause operational issues and hence give more full protection against breaches of Clause 5 of ISO 8217 and Regulation 18.3 of MARPOL Annex VI IBIA has many corporate and individual members employed in the laboratory testing industry, and we have called on them to participate in a Working Group to address the current issue and the potential solutions. We have had a good response to this and while IBIA fully recognises and respects the work done by ISO, ASTM and CIMAC in identifying appropriate test methods, we hope to assist in the development of globally consistent methods and protocol which, along with our Best Practice guidance for bunker suppliers regarding supply chain control, can bring better understanding of what happened this year and how to prevent it from happening again.

In this regard, nothing is changing in 2020; low sulphur fuels will still be blends and the blend components need to be permissible under the scope of the ISO 8217 standard. According to ISO 8217:2017, fuels can be hydrocarbons from petroleum crude oil, oil sands and shale; hydrocarbons from synthetic or renewable sources, similar in composition to petroleum distillate fuels, and blends of the above with a fatty acid methyl ester(s) (FAME) component where permitted. The blend composition will change, as refinery residual that make up the biggest share of bunkers today are typically too high in sulphur. This may cause some teething problems before bunker fuel producers have identified the â&#x20AC;&#x153;recipesâ&#x20AC;? that work best, but it should not open the door to including cutter stocks with contaminants. What can be done? Owners that have been unfortunate enough to bunker these problem fuels have been getting help and advice from fuel testing agencies in managing the situation. World Bunkering AUTUMN 2018

FUEL QUALITY

Fears about 2020 fuel blends With the market already fearful about the quality of fuel bends provided to meet the new 0.50% sulphur limit in 2020, many have predicted that contamination cases like the one seen in the US Gulf and beyond during the spring and summer of 2018, are going to get much more frequent due to blending to ensure sulphur limit compliance. Some have even suggested that the US Gulf cases were linked to experimental blending of low-sulphur fuels. This has not, however, been supported by the testing agencies we have heard from, who have said the products identified as causing problems were high sulphur fuel oil (HSFO) sold as an RMG380 grade under ISO 8217 specifications (typically either the 2005, 2010 or 2012 edition of the standard).

Lubricants

It’s getting more diifcult to choose the right lube

Focus on lubes Choosing the right lubricant has become more complex in this age of slow steaming and fuel switching

ubrication failure is still the most expensive and frequent cause of damage, according to The Swedish Club in a new report Main Engine Damage (see News page 28) .The marine insurer says that lubrication problems cause more damage than poor maintenance and repair work. Shell Marine makes the point that, with less than 18 months before IMO restrictions on sulphur content come into force in 2020, ship owners must decide which types of marine fuel will best serve their future needs. Doing so demands an additional decision on the cylinder oils suited to maintaining engines in optimum condition. Certainly the lubricant manufacturers have been busy preparing the complex demands that now face ship operators. For example both Chevron Marine Lubricants and Total Lubmarine have each been issued with two NOLs (No Objection Letters) by engine manufacturer MAN Energy Solutions,. In Chevron’s case is for the use of three of its Taro® cylinder oils with their cylinder oil mixing system, MAN’s Automated Cylinder Oil Mixing (ACOM) system. “Receiving the NOLS from MAN Energy Solutions (formerly MAN Diesel & Turbo), demonstrates the impressive performance of our products in the field.

The Taro range of cylinder lubricants provides solutions for the varied range of engines, different fuels and the increasingly complex operating requirements that we are faced with. It also highlights our continued strong working relationship with this leading OEM.” said Ian Thurloway, Chevron Marine Lubricants Brand & Marketing Manager. Both sets of field tests were carried out on a 6S90ME-C8 MAN B&W two-stroke engine. The first NOL relates to Taro Special HT Ultra, a 140BN product that Chevron says has achieved impressive results helping combat cold corrosion in slow speed vessels burning high sulphur fuel and which Chevron Marine Lubricants was first to market with in 2017, blended with Taro Special HT LF, a 25BN lubricant ideal for low sulphur, distillate and alternative fuel types. The second NOL allows for blending Taro Special HT 100 (100 BN) and Taro Special HT LF. The company says: “These successful tests prove that the Taro range of cylinder lubricants can provide maximum flexibility for operators, as well as reliable service for vessels.” Meanwhile Total Lubmarine says that it has received two NOLs from MAN for two of its lubricants.

The first NOL approves Talusia HR 140 cylinder oil for use in MAN engines. Total Lubmarine says this product has a higher base number (BN) than most of its market counterparts. It is designed for slow speed engines running on HSFO and has high acid neutralisation capacity for cylinder protection. Total Lubmarine says that Talusia HR 140 was created to maintain cylinder protection over long periods of high sulphur residual fuel usage, preventing corrosion resulting from sulphuric acid formation. This prevents cylinder wear and scuffing, and can extend the length of time between engine overhauls. The second NOL allows for the combined use of Total Lubmarine’s Talusia HR 140 and Talusia LS 25 lubricants in MAN’s Automated Cylinder Oil Mixing (ACOM) system. The MAN ACOM system is an onboard cylinder oil-blending unit designed to simplify the lubrication aspect of fuel switching – allowing vessels to use scrubbers or MAN GI or LGI type engines using LNG or fuel mixtures. Meanwhile Shell Marine has launched Shell Marine 40, an engine oil for use in high-speed diesel engines in the fishing and tug boat segments. It has been formulated to react to the combustion processes that take place in high-speed engines and is designed to give added protection and extended machinery life.

World Bunkering AUTUMN 2018

Lubricants

lobal maritime operator Van Oord has signed a five-year partnership agreement with Shell Marine covering the lubrication needs for its entire fleet of vessels. “We are involved in dredging, oil & gas infrastructure and offshore wind projects around the world,” said Jaap de Jong, Staff Director Ship Management Department at Van Oord. Van Oord will use Shell Marine’s LubeMonitor 4T programme to minimize lubrication feed rates and oil consumption. Shell Marine’s global team of field-based engineers will also be deployed to support the Van Oord vessels, as required. The team assists in lubrication surveys, vessel assessments and in-depth technical and application support, whilst focusing on value creation for its customers, such as optimising energy efficiency and upholding the sustainable supply chain.

World Bunkering AUTUMN 2018

lng

Debate over LNG hots up

Proponents of LNG as a marine fuel respond to claims that natural gas is a “$22bn distraction for EU shipping that won’t decarbonise the sector“

he industry body stressed: “Today, LNG is the only scalable and economic alternative fuel available for the vast majority of deep sea ocean shipping. Alternative fuels such as hydrogen and ammonia are not economic, not available at scale, and unproven for shipping operations. They are called future fuels for a reason! Electrification, batteries and hybrid solutions on the other hand may be viable for certain specific short sea, harbour or ferry type operations but this represents an almost infinitesimal portion of the world’s vessel fuel consumption. These future fuels will require huge investments by industry and governments over decades to realise their potential. SEA\LNG encourages and supports industry and government initiatives which would assist with the development of future technologies.” SEA\LNG also takes issue with argument that LNG is not a ‘bridge fuel’. It says: “LNG offers a commercially viable long-term bridging solution to a zero-emissions shipping industry. BioLNG (from biogas sources such as landfills and waste generators which is renewable and CO2 neutral) can and is already being used as a ‘drop-in’ fuel, significantly reducing GHG emissions. While longer-term, ‘power-to-gas’ is a key technology with the potential to produce large volumes of renewable LNG.

LNG-fuelled vessels and bunkering infrastructure can easily blend in bioLNG or zero- emission fuels. Today’s investments will not become stranded and offer further potential to progress towards a zero- emission solution for shipping.” The statement adds: “It should also be noted that the infrastructure for LNG supply is already there; the focus is on investments in the ‘last mile’ – getting the LNG from the bulk LNG terminals to the ship.” It says that SEA\LNG, in conjunction with SGMF, is continuing to develop studies and tools for the industry to better understand the true benefits of LNG from both an air quality and GHG mitigation perspective. The coalition continues to encourage meaningful debate using current and academically supported data and analysis. Hammering home the point SEA\LNG emphasises: “LNG is the only credible alternative to meet national and international regulatory targets. It solves the sulphur and particulate matter emissions issues and dramatically reduces nitrous oxides. LNG also enables the shipping industry to take a major step forward to reduce GHG emissions. It is readily available at scale now and offers a proven, affordable, and competitive solution for the maritime sector while retaining tremendous flexibility for the future.”

The International Chamber of Shipping’s view was set out recently by its deputy secretary general Simon Bennett who said: “To be clear, zero CO2 fuels mean radical and as yet unproven technologies such as hydrogen fuel cells using ammonia or methanol, or batteries powered using renewable energy. While LNG or biofuels will play an important part in the transition we only really see these as interim solutions that won’t deliver the ambitious targets which IMO has now set for 2050.” New developments Meanwhile there has been a steady stream of new projects and developments in recent months pushing ahead with LNG as a marine fuel. Shanghai Waigaoqiao Shipbuilding Co (SWS) and Lloyd’s Register (LR) have agreed to jointly develop an LNG dual-fuelled Newcastlemax 210,000 dwt bulk carrier design. SWS produced the design and updated it to incorporate LNG propulsion, based on their existing conventional 210,000 dwt bulk carrier. LR provided assistance and support, in terms of the LNG fuel system application and verifying the design against the IGF code (regulation for ships using low-flashpoint fuels), LR’s Gas Fuelled Rules as well as other relevant applicable standards.

World Bunkering AUTUMN 2018

lng

WS’s commercial director Chen Gang, commented: “SWS has an extensive reference list for designing and building large Capesize bulk carriers. The experience and know-how that has been built to-date has been utilised to develop this latest world class design – LNGpowered Newcastlemax bulk carrier. This design enables the lowest possible fuel consumption and allows owners to select a design that will meet the future SOx emission challenge.” In another development classification society ClassNK granted an Approval in Principle (AIP) based on its Rule Part GF which adopts the IGF Code to NYK Line and Japan Marine United (JMU) for their joint project on the concept design of an LNG-fuelled 200,000 dwt bulk carrier. NYK says that the design is based on a 200K dwt bulk carrier developed by JMU. It notes that, despite added weight due to the increased amount of equipment such as its LNG fuel tank and LNG fuel supply system, the design provides more cargo hold capacity. By running on LNG, in addition to reducing NOx, SOx, and PM emissions, this vessel is expected to satisfy Phase 3 (30% less than Phase 0) of IMO’s Energy Efficiency Design Index (EEDI). Much of the focus is on new designs and new vessels that can use LNG but Canada’s BC Ferries has converted the ABS-classed Spirit of British Columbia, the first of two of the company’s ferries that will use LNG. “The conversion of these vessels to operate on LNG is an important milestone for BC Ferries and the region, supporting more efficient and environmentally-friendly transportation,” said ABS Vice President for Global Gas Solutions, Patrick Janssens. “With the increased pressure for environmental compliance, LNG as fuel is a practical option for many marine owners and operators.” In another move ABS has signed a Joint Development Programme (JDP) with Greek-based probunkers to provide technical support as they embark on designing a fleet of specialist LNG bunker vessels for key ports around the world.

World Bunkering AUTUMN 2018

“With its low sulphur emissions, LNG is an attractive proposition for shipowners and operators responding to the 2020 Sulphur Cap. However, lack of bunkering infrastructure has been one of the key constraints on its adoption. ABS is proud to play a part in addressing that issue with probunkers,” said ABS Vice President for Global Business Development, Peter Fitzpatrick. Based in Athens, probunkers aims to design, build, own and operate a fleet of LNG supply vessels in seven ports initially: Houston; Rotterdam (or, alternatively, Antwerp); Gibraltar; Singapore; Hong Kong; Busan and Fujairah. Alexander Prokopakis, probunkers Chief Executive, said: “Our vision is to become the premier global bunker supplier of LNG. Our collaboration with ABS will play a key role in realizing our ambition to build a reliable global-scale bunkering network that will support the future of Sustainable Shipping and Green Energy.” In another LNG bunkering project, Central LNG Shipping Japan Corporation (CLS), a joint venture established by Kawasaki Kisen Kaisha., Chubu Electric Power Co, Toyota Tsusho Corporation, and Nippon Yusen Kabushiki Kaisha, has ordered an LNG bunkering vessel from Kawasaki Heavy Industries.

She is due to be delivered between September and December 2020 and is expected to become the first LNG bunker tanker to be operated in Japan. Meanwhile a new venture, Probunkers, is working on an ambitious project to design, build and operate a fleet of modern LNG bunker tankers, The company says: “This innovative, multimillion US dollar global-scale bunkering project involves planning, financing, implementation, operations and sales. The Probunkers project will contribute to the development of LNG marine infrastructure by providing premier and reliable LNG bunkering services that will support the future of Sustainable Shipping and Green Energy. Probunker’s CEO, Alexander Prokopakis, told World Bunkering: “I am very pleased to report that we are progressing with our business plan and there is vast interest about our company and project. It is a common belief that there is a need for a Global Independent LNG Bunker Supplier like probunkers. Over the next few months we will be working closely with ABS on the technical aspects of our vessels and we are running the selection process for our business and financial advisor for our upcoming roadshow.”

LNG bunker tanker ©Kawasaki

legal

iStock

Lost in the middle Three US court judgments go against physical suppliers left unpaid by the OW Bunker collapse

ver the past several months physical suppliers have lost appeals against rejection of claims against vessels supplied with fuel on the instructions of OW Bunker. The most recent was Valero Marketing v MV Almi Sun, http://www.ca5.uscourts.gov/ opinions/pub/16/16-30194-CV0.pdf, , heard by the US Court of Appeals for the Fifth Circuit in June. The court ruled that a bunker supplier who was contracted by OW Bunker and not directly with the vessel or its did not have a maritime lien against the vessel. The judgment noted: :The record shows that Verna, through its agent Almi Tankers, contacted OW Malta because it was a “reputable bunker trader[]”;that during negotiations, Almi Tankers asked who would be the bunker fuel supplier, and it did not object to Valero’s selection; that the sales order confirmation listed Valero as the supplier; that Valero provided the entire bunkering service that Almi Tankers contracted for, with no assistance from OW or its affiliates; that the Vessel’s agents monitored and tested Valero’s performance; and that Almi Tankers expressed concern about OW’s ability to pay Valero. These facts do not demonstrate that Valero provided the bunkers to the Vessel “on the order of the owner or a person authorized by the owner.” It concluded that Valero provided the bunkers at OW ‘s request, and OW is not a “person presumed to have authority to procure necessaries.

These facts are “more akin to those in which general contractors have been engaged to supply a service and have called upon other firms to assist them in meeting their contractual obligations.”19 Thus, Valero must show that an entity authorized to bind the ship “controlled [its] selection . . . and/or its performance.”20 The record, however, proves no more than the Vessel’s awareness of Valero, not that the Vessel “controlled” the selection or performance of Valero. The court found that “mere awareness does not constitute authorisation” under the US Commercial Instruments and Maritime Liens Act. In another OW Bunker-related case in June the US Court of Appeals for the Second Circuit held that that a maritime lien for a bunker supply belongs to the bunker trader, not the physical supplier of the bunkers. The assignee of a maritime fuel contract supplier, ING, and the physical supplier Cepsa made competing maritime lien claims arising from the delivery of fuel to a vessel. To effect actual delivery of the fuel, the contract supplier, OW Bunker, subcontracted with an intermediary, an OW Bunker group company, which resubcontracted with the physical supplier.

After delivery of the fuel but before any party received payment, the contract supplier and the intermediary declared bankruptcy. The appeal court affirmed ruling of the lower court that the physical supplier did not have the lien, essentially because the physical supplier did not deal with the charterer who ordered the bunkers. These two case followed one in November last year. The US Court of Appeals for the Eleventh Circuit confirmed the denial of a maritime lien in an in rem action brought by bunker provider, Barliiff, against the vessel to which the bunkers had been delivered. The vessel owner had contracted with OW UK to purchase bunkers for the vessel to be delivered in the Port of Mobile. OW UK purchased the fuel from an affiliate, which in turn subcontracted with Barliff to actually supply the several hundred tonnes of fuel on the credit of OW UK. After the fuel was provided but before any money changed hands, O.W. UK went bankrupt. As with the Cepsa case a bank intervened. The court held that the maritime lien for the bunkers had arisen in favour of OW UK and had been assigned to the bank.

iStock

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SCRUBBERS Grimaldi Group has signed an agreement for PureSOx connectivity services on five vessels operated ©Atlantic Container Line (ACL)

More owners opt for scrubbers Orders build up as 2020 sulphur limit approaches

recently completed survey of Exhaust Gas Cleaning Systems Association (EGCSA) members reports a rapidly accelerating uptake of marine scrubbers with 71 scrubbers ordered in May 2018. According to EGCSA the number of ships with exhaust gas cleaning systems installed or on order stood at 983 at the end of May 2018. This follows a slew of recent scrubber orders by major ship operators, including Spliethoff, Frontline, DHT and Star Bulk, who have opted for exhaust gas cleaning systems. The survey shows that 63% of the ships have either been or will be retrofitted with scrubbers, while 37% are new build installations. EGCSA says that, with uptake of scrubbers across the global shipping fleet on the rise, shipowners are expected to spend more than US$20 billion over the next five years on exhaust gas cleaning systems. It notes that, back in 2015, in readiness for the switch to 0.10% sulphur fuel, a number of ro-ro and ferry operators led the way and opted for scrubbers as a means of compliance. The cruise industry came next and now, with 2020 looming, bulk carriers have taken over as the leading shipping sector to adopt exhaust gas cleaning, with container ships and tankers following. In each of these sectors retrofit open loop installations predominate. World Bunkering AUTUMN 2018

Nearly 60% of all retrofits and new building installation works take place in Asian yards, which carry out nearly 85% for new build installations. EGCSA director Don Gregory believes that, “although there has been a surge in demand, yard capacity is not an issue going forward. However other constraints such as the availability of laser scanning specialists and experienced installation teams mean that it may not be possible to pick and choose an installation slot nor coincide a scrubber installation with an already scheduled drydock in the near future.” For this reason, he explains, several scrubber manufacturers are now taking options through to 2023 to enable ship-owners to secure a position on the installation timetable. Until relatively recently, the largest installed exhaust handling capacity was for engine powers in the region of 25 to 30MW. However, EGCSA comments that the latest data shows that this has been “well and truly exceeded by a retrofitted hybrid system for a 72MW container ship engine”. Large capacity scrubbers are not confined to retrofits as the maximum size new building installation is a hybrid system for a 65MW engine.

Of the 983 vessels with scrubbers installed or on order, 63% have opted for open loop scrubbers; confirming it as the most popular exhaust gas cleaning system. “It is the simplest scrubbing system and favoured by ship crews,” EGCSA’s Don Gregory explains. Although many early adopters in the North Sea and Baltic fitted hybrid systems, they are operated in open loop the majority of the time. Open loop scrubbing has also been used for years by coastal power stations and by oil tanker inert gas (IG) systems when in port without environmental issues. While closed loop and hybrid systems are available for enclosed bodies of water with little water exchange or where discharges are restricted by local regulation, ECGSA suggests open loop operators switch to low sulphur fuel for port stays where open loop operation is not possible. It advises: “The cost impact is likely to be limited as over 90% of fuel consumption is during full away at sea, which is where the financial benefits of scrubber-related fuel savings really accrue.” Meanwhile US-based classification society ABS has updated the ABS Advisory on Exhaust Gas Scrubber Systems (Scrubber Advisory) providing deeper insights into installation and operational considerations for existing vessels.

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“M

any in the industry are still evaluating their 2020 Global Sulphur Cap compliance options, trying to determine their most cost-effective and operationally suitable solution,” said ABS Senior Vice President Technology and Engineering, Derek Novak. “As the 2020 compliance deadline nears, we are seeing an uptick in new orders for scrubbers for both new construction and existing vessels.” The updated Advisory provides background on the different types of available scrubber technologies along with the associated installation and operational challenges during new construction and retrofitting of existing vessels. ABS says that it introduced the world’s first scrubber-ready notation, providing guidance for owners who are planning to retrofit their vessel with a SOx scrubber at a future date. It adds that, by looking ahead during the design phase and accounting for possible future retrofits, owners are better prepared to costeffectively manage future regulatory requirements. ABS also published the ABS Guide for Exhaust Emission Abatement which applies to vessels fitted with an exhaust emission abatement system, including SOx scrubbers, selective catalytic reduction (SCR) and exhaust gas recirculation (EGR) systems for nitrogen oxide (NOx) emission control. Scrubber manufacturer Wärtsilä says that a “major European container shipping company“ has ordered hybrid exhaust gas cleaning equipment and retrofit services to its container vessels, worth EUR170 million. Wärtsilä Services will deliver 50 MW, 60 MW and 70 MW Wärtsilä hybrid scrubber systems which will be retrofitted to its container vessels. It says that these are solutions which have the flexibility to operate in both open and closed loop. When operating in open loop mode, it uses seawater and in closed loop mode seawater with an additional reagent to remove SOx from the exhaust, helping to reduce emissions in coastal and sea areas. Wärtsilä will also provide engineering and site advisory services for the vessels.

Wärtsilä says that using new scrubber unit design, water cleaning system mode, and the engineering and advisory services will allow more operational efficiency and compliance with the new IMO MARPOL regulation’s emission level. While Wärtsilä’s customer has not been named, the Grimaldi Group, a longtime Alfa Laval PureSOx customer, has signed an agreement for PureSOx connectivity services on five vessels operated by Atlantic Container Line (ACL). The services will provide not only compliance monitoring, but also use the data to optimise PureSOx operation. The Grimaldi Group has been using PureSOx for exhaust gas cleaning aboard its vessels since 2014. ACL, a Grimaldi Group company specialized in transatlantic cargo shipping, has hybrid PureSOx scrubber systems installed on all five of its Generation 4 (G4) vessels: Atlantic Sail, Atlantic Sea, Atlantic Sky, Atlantic Star and Atlantic Sun. The PureSOx systems on these vessels will now be retrofitted with the Alfa Laval Remote Emission Monitor (ALREM), a data reporting and storage device that forms the basis for the growing PureSOx connectivity programme.

The need to prepare for the new emissions cap is coinciding with another IMO requirement, according to Gibraltarbased Gibdock. With owners required to respond to new rules on invasive species and emissions, the Western Med’s gateway repair facility is nonetheless seeing a stronger than expected surge in interest in ballast water management system and exhaust gas scrubber work. Richard Beards, Managing Director, Gibdock, attributes the upturn in inquiries to the yard’s enduring advantages of location, quality of work and onschedule redelivery. “We have undertaken significant ballast water work over the last 18 months and in the first half of 2018 we have had more enquiries than ever before,” says Mr Beards. “At present, it’s fair to say that there are more conversations around ballast water retrofit installations than scrubber retrofits, but both are fast becoming areas of focus for customers. Some of the discussions relate to turn-key projects, but others are more about preparations onboard before installation.”

A scrubber installation ©Wartsila

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Northern Europe

EUROPE: CLEANER AND LEANER

European authorities have spent much of 2018 evaluating the performance of the current Baltic/North Sea ECA and are looking at potential ECA expansions. Meanwhile, ports are busy future-proofing their marine fuel options

pring saw the European Commission (EC) produce a report looking at sulphur limit compliance within the shipping industry, as well as effects on air quality after an earlier report had already concluded that there was no significant loss of shipping cargo to road transport and no major issues with low-sulphur fuel availability. The good news is that compliance has been good, overall; despite a vastly increased number of inspections for fuel standard or abatement usage, only 2.3% of vessels in the Baltic ECA failed checks. The number is much higher for the North Sea at 7.7%, and a cynic might speculate that some operators were more inclined to try to cheat the limit closer to the ECA boundary, but regardless, compliance has been encouraging. But the EC isn’t entirely satisfied. “Union air quality standards continue to be exceeded in many coastal cities and regions around the EU calling for action and measures that reduce emissions of atmospheric pollutants from all different contributing sources, including shipping,” the Commission said in its report. “While as of 2020 all European citizens will benefit from a reduction of SOx emissions from shipping following the taking effect of the 0.50% sulphur standard,

no immediate reduction of NOx emissions from shipping is foreseen outside the Baltic Sea and North Sea NOx-ECAs even though exceedances of EU air quality standards for NO2 frequently occur also in coastal regions in Southern Europe.” In short, the EC is now taking a serious look at expanding ECA restrictions across Northern Europe as well as into the Mediterranean, on which a conference is due to take place in Marseille as World Bunkering goes to press. “The Commission launched in 2017 a study to identify the health benefits and associated costs of designating additional Emission Control Areas (both for SOx and NOx emissions) in European seas other than the Baltic and North Seas,” the EC said. “The study will also assess the benefits of lowering the sulphur content of marine fuels from 0.50% to 0.10% in European seas outside the SOx-ECAs as of 2020. The Commission also tasked EMSA to develop inventories of total ship emissions (SOx, NOx and PM) in all European waters based on ship activity data.”

“Work on both tasks should be finalized in 2018. It will allow the Commission and Member States to better assess the impact of ship emissions on air quality in coastal regions in support of defining appropriate policies and measures that could further reduce the contribution from shipping to air pollution in the Union. It may also inform the discussions, under the ‘Barcelona Convention’ to which the Union is a contracting party, on the feasibility of a future designation of the Mediterranean Sea, or parts thereof, as a SOx-ECA.” While the possibility of extending ECA restrictions to the rest of Europe is hardly a new one - it’s been mooted one way or another for years, and this is obviously the direction the world is heading - this is the clearest indication yet that European authorities are considering taking actual action. They’re not the only ones; in May this year reports emerged suggesting that the UK was considering extending the 0.10% ECA sulphur limit to all its waters, not just the North Sea. Whether the UK’s ongoing political quagmire makes this a realistic possibility in the medium term very much remains to be seen.

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Port of Rotterdam pursues projects One organisation that’s kept a weather eye on the future in this respect for years is, of course, the Port of Rotterdam. “The Port Authority wants to develop the port into the foremost location where the energy transition can take shape. To realise this ambition, it is following an ‘and-and’ strategy: it not only facilitates existing, fossil-based industrial parties in the reduction of their CO2 footprint; it is also investing heavily in the development of sustainable, circular and bio-based industries and renewable energy,” Port of Rotterdam CEO Allard Castelein said, presenting the port’s annual report. ”We do this by initiating concrete new activities in close collaboration with the private sector and government agencies. Our programmes focus on a range of areas, including carbon capture and storage, the conversion of waste into ‘green’ methanol, the use of residual heat rather than natural gas as a heating source for homes, greenhouses and businesses, and the facilitation of offshore wind.” Rotterdam has been pushing LNG bunkering over the course of the past year and quantities are certainly rising, with some 1,500 tonnes supplied in 2017 and Q1 volumes (the most recent available at time of writing) already at 729 tonnes. While this is small potatoes compared to the 2.1m cubic meters of HFO sold in the port during Q1, alongside 380,659 cbm of distillates, or the 9.7m cbm of fuel delivered in 2017, it’s a clear sign that the infrastructure and industry interest in the technology is slowly bearing fruit, and it’s a sign of how much the port wants to be at the leading edge. Its LNG offerings are continuing to improve, too. June saw the introduction of ship-to-ship LNG bunker transfers in the port. According to reports in Reuters, STS bunkering will extend from smaller short-sea shipping to cruise vessels in November and to oceangoing ships by the end of the year. Existing LNG supplies have been made by truck. World Bunkering AUTUMN 2018

“We expect that by 2020, LNG bunkering will be a routine operation in the port of Rotterdam,” said national harbour master René de Vries. In support of the port’s overall emissions reduction aims, this year has seen it introduce active funding support for bunker savings and emissions reduction for inland shippers via the Dutch Inland Shipping Expertise and Innovation Centre (EICB). Companies or public bodies are free to submit their projects to the EICB through to February next year, at which point an independent “innovation council” will assess each proposal based on its environmental returns - fuel savings, GHG and emissions reduction - in the Rotterdam area per euro invested through to 2025 and then allot funding accordingly. 25% of the available funding is to be given to research projects, with the bulk going to those offering concrete, tangible benefits. The port has also launched, alongside VT Group, Unibarge and Titan LNG, a trial project aimed at taking bunkering announcements online rather than over VHF. “The project is the first step towards completely paperless bunkering where the Port Authority is committed to making bunkering more efficient,” the port said. “Parties refuelling in the port of Rotterdam are required to notify the port authority of this operation prior to bunkering. These announcements are currently made via VHF. There are some 20,000 bunkering operations in Rotterdam every year – equivalent to 20,000 VHF notifications. The details for each of these operations are entered in the various systems by hand.” “The online submission of notifications largely automates these processes, resulting in greater efficiency and less room for human error. In addition, the app features a link to the Customs Administration’s Maritime Single Window – meaning that bunkering parties are only required to submit one bunkering announcement, rather than two. This also works a lot more effectively than the existing procedure.”

The level of traffic in Rotterdam - blamed in many quarters for the slow downward trend in the port’s bunker sales over the past few years - has given the other ARA ports, and those further afield, an opportunity to pick up the pieces. Rotterdam rivals The French port of Le Havre is in the process of securing funding for a major port upgrade, and Denmark’s Monjasa group expanding its physical supply operations into northern France. Northern Germany is to get its first LNG bunkering terminal at Brunsbuettel as with many similar developments, focusing first on inland and shuttle shipping - which is aiming for a 2022 launch of operations. Stena Oil is to build what it calls “the largest of its kind” low-sulphur-only bunker terminal in the Danish port of Frederikshavn. But it’s nearby Amsterdam which is perhaps the clearest rival for Rotterdam’s newer, and greener, market niches. The port is now home to Titan LNG’s FlexFueler001 LNG bunkering pontoon, which is targeted primarily at inland vessel traffic but can also supply deep-sea ships at berth. Niels den Nijs, CEO of Titan LNG, said at the time: “We are very pleased with the support of Port of Amsterdam. Their trust has enabled us to realise a long-term supply solution for vessels that run on LNG.” The port is also putting in place shoreside power supplied by local waste and organic material incineration, and has introduced a harbour dues discount for zero-emission inland vessels (electric or fuel cell powered) effective from the start of this year, both as part of a bid to reduce port-wide air emissions under its “Clean Shipping” policy. Vessels qualifying for the dues discount - which are likely to be a small niche initially but liable to increase in significance over the coming years - will receive the Green Award ‘platinum’ certification. Marleen van de Kerkhof, harbour master, said: “I hope that other ports will soon join us in supporting this important initiative.

Northern Europe

Regardless, owners operating in Northern Europe clearly need to build a certain amount of future-proofing into their emissions mitigation strategies and investments.

Northern Europe

We are all striving for cleaner and more sophisticated vessels. This includes Smart Shipping. Our joint efforts will result in the achievement of future-proof shipping.” Amsterdam is also home to a project on which construction began this May aimed at converting non-recyclable plastics into bunker fuel. Dutch company Bin2Barrel is pumping €28m into the plant, aiming to produce 30m litres of fuel from 35,000 tonnes of plastic per year. It claims that compared to traditional waste management options, the process will save 57,000 tonnes of CO2 annually. The company eventually aims to have four plants operating in Amsterdam before expanding further across Northern Europe. The Port of Amsterdam’s Head of Circular & Renewable Industry Roon van Maanen said: “By creating a new product from an otherwise problematic waste product, Bin2Barrel fits perfectly within the mission of Port of Amsterdam to facilitate energy transition as well as transition to a circular economy.” Also in position to take advantage of bunker traffic moving out of Rotterdam’s busy harbour, particularly in the southern North Sea, is the UK. However, in terms of facilities and newer and alternative fuels, the country has lagged a little behind the competition. UK behind on ship emissions measures This spring, France-based industrial giant Schneider Electric - which has sold atberth power installations at various ports around the world - took the unusual step of calling, seemingly apropos of nothing, for the UK to embrace shore-side power and criticising it for largely ignoring shipping emissions to concentrate on road transport instead.

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“The UK is one of the last global regions to introduce shore connections at its ports and it will take industry collaboration and innovation to bring forward the introduction of portside electricity in a quick and sustainable manner,“ said Peter Selway, Schneider Electric’s marine segment marketing manager. ”There is now a global standard for shore connections and it is up to our ports now to catch up with the global norm and demonstrate that we truly believe in a cleaner, healthier future.”

“The sooner we understand the air quality implications, particularly in port cities, of domestic shipping, the sooner costeffective and sustainable strategies to address the coupled GHG and air quality issues can be developed.”

Natural desire to sell berth power connections aside, he has a point. In December 2017, University Maritime Advisory Services (UMAS) and Ricardo Energy & Environment published a report for the Department for Business, Energy and Industrial Strategy that showed, thanks to much-improved modelling and inclusion of many more ship types, that the UK’s maritime fuel consumption was 250% higher than previously estimated. The updated UMAS figures - which feed into the UK’s National Atmospheric Emissions Inventory, the measure by which the country’s performance under international emissions quotas is recorded mean that while shipping is still a relatively small part of the emissions pie, it’s no longer one as easy to ignore. Since December, though, that’s largely what the UK government has done; when a £260m local air quality improvements package was launched in March, it targeted road and industrial pollution and largely ignored ports.

Grain LNG has inked a partnership deal with Skangas to provide LNG bunkering as well as small-cargo gas break-bulk capability at its LNG terminal in the Thames estuary. The companies aim for bunkering to be operational by 2019. The terminal is used primarily for large-scale gas imports, and the company is extending its berthing space to accommodate Skangas vessels in the process of adding bunkering capacity. “We believe the best way to encourage growth in the market is to offer competitive alternatives which ensure security of supply for small scale market participants,” said Grain LNG’s Nicola Duffin. “Grain LNG is excited to be at the forefront of developing this market in partnership with progressive companies such as Skangas.”

UMAS director Dr Tristan Smith said: “This work shows that the UK’s efforts to decarbonise and improve air quality must include domestic shipping. Not only does this study show that we formerly underestimated the significance of domestic shipping, but reinforces the concern that without action this sector will become an increasing share of UK’s GHGs.”

In fairness, the Port of London Authority did introduce a draft air quality strategy for the Thames Estuary, but still the bulk of improvements in the field will come from the private sector. Here, the picture is a little rosier.

The spring has also seen ferry operator Red Funnel trialling a variety of biodiesel-MGO mixes on its services to the Isle of Wight. The biodiesel, a mix of waste and residual plant oils with a cerium oxide additive, is provided by Green Biofuels. The results of the trial have not been revealed at the time of going to press. If commercial interest in alternative and cleaner fuels takes off in the UK, that would certainly be an improvement. Central incentives would make this more likely, of course, but perhaps that won’t happen until the present mess over Brexit is resolved one way or another.

EQUIPMENT & SERVICES

Enginei fuel management screen

Getting the speed right Management system upgraded to work out best speed

iesel power specialist Royston has developed a special ecospeed analysis capability as part of its enginei electronic fuel management system (EFMS) to enable ship operators to identify and maintain optimum vessel speeds for efficient fuel usage. Devised with marine engineering specialists from Newcastle University, Royston has developed a new ecospeed algorithm based on speed modelling and an analysis of vessel operating data, correlating and synchronising information from different sensors installed on the vessel. Ecospeed calculates a unique optimum performance profile for individual vessels by taking into account a range of shipping data including fuel use, speed and distance, as well as sea state, wind speed and current. This information is gathered during a dedicated sea trial or from a vessel’s existing enginei system installation and is used to identify optimum vessel speeds in different conditions to ensure that maximum fuel efficiencies are maintained. As well as fuel consumption, the ecospeed module also provides details of carbon emissions and voyage duration to help crews to make informed decisions on vessel speed and environmental performance for all journeys.

Royston asserts that common shipping practice for economic operation is to run vessels based on a crew’s experience but, it says, the results can vary widely and in terms of fuel economy for a specific voyage this may not necessarily result in the use of the most fuel efficient speed for the vessel. It says that ecospeed is compatible with all types of vessel, enabling potential fuel use and emission reductions.

Then a 400 MWh fully automated factory and a new marine system testing and development facility will be built in the Bergen area of Norway to fulfil strong growth in the Norwegian market resulting from new ferry tenders and high demand for hybrid energy systems in the offshore and shipping sectors. The new factory, test and development facilities are expected to be completed by the summer of 2019.

Gearing up for increasing battery demand Canadian-Norwegian energy storage solutions provider Corvus Energy says it is expanding its battery production facilities in Vancouver, Canada and intends to build a factory in Bergen, Norway in response to high demand for energy storage. It says its new battery factories will be more modern and more automated than other similar factories, resulting in eight times the production capacity compared to today.

The market for maritime batteries has seen strong growth in recent years, and Corvus Energy is a major supplier in the market.

Initially the Corvus Energy factory in the Vancouver, Canada region will be expanded and upgraded to house a 200 MWh semi-automated battery production facility. A new product R&D, design and engineering facility will also be developed. The expansion is expected to be completed by the beginning of 2019.

“There is an electric revolution going on in the maritime sector, and we want to deliver the best solutions in the industry. These strategic locations of our R&D and production facilities will enable us to quickly test and develop new systems that can meet the future needs of the industry. Further, by switching from manual processing to automated production, we will increase production capacity and remain price-competitive,” says Geir Bjørkeli, CEO of Corvus Energy. Corvus Energy is a partner in the NCE Maritime CleanTech industry cluster, which is assisting with consultancy and project development in the planning phase of the Norwegian factory.

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e have a strong maritime cluster in Western Norway, and the Corvus facility will strengthen our position as a global hub within maritime environmental technology. With a battery factory in the Bergen area, the industry will have close access to core products that are vital to ensuring that shipping is more environmentally friendly and more profitable for the ship owners,” says Hege Økland, CEO of NCE Maritime CleanTech. “It will be natural for us to link our R&D activities with other relevant R&D institutions. In this way we can strengthen the cooperation between industry players and research institutions, which will be beneficial to all parties,” says Corvus Energy’s Bjørkeli. Oil record books go electronic The Red Ensign Group (REG) is to carry out a trial of electronic oil record books across its 13 British shipping registries. This was agreed by the REG’s Technical Forum, with the Isle of Man Ship Registry taking the first steps and providing industry guidance for the rest of the group. Oil record books are used to record all oil or sludge transfers both internally and externally to and from the vessel. One of its main functions is to ensure that the Port State and Flag State authorities can monitor and verify that all oil and sludge transfers are carried out in accordance with the MARPOL requirements. Until recently these books have always been a paper publication completed b y the engineers onboard the ship. The advantage of an electronic Oil Record Book (eORB) is the calculations are carried out by the software, which will reduce mistakes and simplify the onboard process. Cameron Mitchell, deputy director of the Isle of Man Ship Registry said: “So much of our life is lived online – from shopping to paying taxes – it makes sense where we can move over to this kind of technology.

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We worked with industry on this which included a very useful presentation from Prevention at Sea on the use of eORBs. This helped to clarify and explain how the software works and how it complies with the MARPOL requirements.” He added: ”There are some caveats to this trial – for example, the software must be approved by one of our recognised organisations to make sure it complies with the appropriate regulations and requirements. We’ve issued a Technical Advisory Notice setting out the criteria for the acceptance of electronic oil record books.” Richard Pellew, who chairs the Technical Forum on behalf of the Maritime & Coastguard Agency, said: “There are practical challenges of regulation which can draw on the expertise from across the REG. The REG Technical Forum agreed all REG members would allow trials and the Isle of Man were the first to get this under way. They’ve provided their industry guidance for the reference of the other members.’” Meanwhile IMO has approved the use of Prevention at Sea’s Oil Record Book software, called the ε-ORB, on all Liberian registered vessels as an alternative to the traditional hard copy oil record books under MARPOL Annex 1, regulations 17 (Part I) and 36 (Part II). An IMO circular has gone to parties of the MARPOL convention and member states of the organization for their appropriate action, if any, with the aim to inform Governments worldwide and Port State Control MOUs on the use of ε-ΟRB on board ships. The Liberian Government’s letter goes on to state that the electronic ORB can be used onboard after the vessel receives a ‘Declaration of MARPOL Electronic Record Book’ issued by the registry. Currently, Prevention at Sea encourages clients to place a copy of the said IMO Circular on board fleet ready for demonstration with the aim to act as evidence in case clarification is required by Port State Control Authorities and Safety Agencies.

Those vessels using the ε-ORB will have to print from the software the traditional ORB hard copy until amendments to MARPOL Annex I on the use of electronic record books enters into force. This should not be too onerous for seafarers as the ε-ORB software was designed with the aim to help minimise errors and mistakes due to human element as well as assure best ORB recording practices. “I am delighted that the IMO has released the subject Circular to all parties as this vindicates our determination to develop this software with the aim to minimize errors and mistakes in oil record book entries,” said Petros Achtypis, CEO of Prevention at Sea. “With the aim to support our clients with strong evidence, I am happy to deliver today the subject circular which proves that our software is recognized worldwide and ensures that ships will not face complications at any port.”

Small dredger meets IMO Tier 3 Specialist Netherlands-based firm Dutch Dredging (Baggerbedrijf de Boer) says its new 22.4-metre-long bed leveller, the Peter, complies not only with the strict IMO Tier 3 standard for the emission of harmful substances in shipping but also with the Euro Stage 5 standard for emissions in inland shipping. John Nieuwenhuijse, the manager of New Building at Baggerbedrijf de Boer – Dutch Dredging, says that there was a lot of fiddling and fitting but, in the end, the two 550 hp Scania main engines were fitted out with aftertreatment systems to clean exhaust gases. ‘We installed a selective catalytic reduction system (SCR) in the exhaust that converts nitrogen oxides (NOx) into water vapour and nitrogen. We also have diesel particulate filters (DPF) to reduce soot emissions. So we can now cater to the increasing demand from clients for low-emission vessels.’

EQUIPMENT & SERVICES

“W

EQUIPMENT & SERVICES

ith the installation of these systems, the dredging company is taking pre-emptive steps to comply with requirements that IMO Tier 3 and Euro Stage 5 will make compulsory in 2019 and 2020 respectively. The Peter also has an IMO ‘Green Passport’. LR launches MRV verification service Lloyd’s Register (LR) has launched CO2 Verifier, an online verification service that provides a simple solution to comply with both the EU monitoring, reporting and verification (MRV) regulation and the IMO Data Collection System (DCS).

To save users time, the application features streamlined data submission with quick multiple uploads and a fast turnaround time following the submission of information. It also has the ability to integrate with ship managers’ existing reporting system and enables users to contact an LR technical expert directly, in addition to online user support. LR is an accredited third-party verifier for EU MRV and a Recognised Organisation (RO) for IMO DCS.

When data is submitted to LR, they carry out the necessary checks and verification procedures and issue the respective certificates to keep onboard for Port State Control inspections. Nick Brown, LR Marine & Offshore Director, said: “Implementation of these regulations presents a significant compliance challenge for shipowners and operators – LR’s CO2 Verifier offers one simple way to comply with them both. It will save our clients time and effort, enabling them to focus on their day-to-day business.”

CO2 Verifier is a secure cloud-based application designed by LR’s technical experts, and co-created with ship managers, which provides one place for LR’s clients to manage their fleet compliance and submit data to the EU and IMO. The small dredger Peter meets IMO Tier 3

World Bunkering AUTUMN 2018

Eurocheck Marine B.V.

BETTER SAFE THAN SORRY

For over 20 years, Eurocheck Marine B.V., a Dutch based inspection company serving clients in the ARA (AmsterdamRotterdam-Antwerp) area, has grown to become one of the best performing companies in Bunker Quantity Surveys.

ith a track record of more than 2500 Bunker Quantity Surveys annually, Eurocheck Marine are considered one of the leading survey companies in the ARA . A large number of shipping companies, charterers, traders and brokers acknowledge Eurocheck Marine’s knowledge, flexibility and professionalism within the sector. Eurocheck Marine B.V utilize a team of in-house inspectors, who work 24/7 to maintain the highest level of accuracy and safeguard the clients from unwanted quantity disputes. Vessel crews are also assisted so all (local) relevant documents and checklists will be filled in properly and signed before a delivery starts. The founder of Eurocheck Marine B.V.(Ron van den Berg) started his career in 1983 in the local oil shipping industry, he started as sailor, moving up to captain then worked for almost a decade as barge master. Eventually he started the company in 1998.

The Bright and Clear strategy is also fully visible in pricing, only lumpsum fees will be charged. Clients are fully aware of all costs before the inspection starts, so no extra “surprises” afterwards. The main services of Eurocheck Marine B.V. are: • Bunker Quantity Surveys, • Bunker On/Off Hire , • Detective/ROB Surveys, • Condition Surveys • STS inspections As extension of the ARA area, Eurocheck Marine B.V. now covers surveys in all ports from Le Havre up to Hamburg.

Contact Details: EUROCHECK MARINE B.V. Tel: +31 180 465 395 (24 hrs) Email : office@eurocheckmarine.com Website: www. eurocheckmarine.com

Ron van den Berg, owner of Eurocheck Marine

The strategy of Eurocheck Marine B.V.is Bright and Clear, do in what you are best. This means, performing inspection services at the highest level. Analysis conform ISO 8217- rev 2012 can be carried out by Eurocheck Marine B.V. due to the cooperation with one of the biggest world leading laboratories in Marine Oil testing. This combination ensures a profitable advantage for all clients. World Bunkering AUTUMN 2018

company NEWS

We are Bunker One

Earlier this year Bunker Holding Group launched a new physical brand named Bunker One. The aim was having all the group’s physical supply operations operating under a unified brand. And Bunker One has been a success.

ou might know us already? We are a global physical supply network, offering seamless and streamlined bunkering. With more than 80 bunkering experts spread all over the world in 13 offices, we are ready to help your business succeed and keep your vessels moving. Even though the Bunker One brand is quite new, we have been in the business for more than four decades - and we are now one of the world’s leading independent bunker suppliers. So why just one brand? For several good reasons. Moving towards 2020 it is time to do things differently. When you have operations all over the world, there is a need for alignment and definition of targets to ride in the same direction. As an example, we needed to be better aligned externally on the services and products we were offering to our clients. Also, we have some very skilled people with local expertise in our operations and wanted to utilise this world-wide. Peter Zachariassen, Global Director of the new physical brand, Bunker One, explains: “It is first of all about our clients and their needs. We need to be one step ahead and be ready to support their future strategies towards new trading routes and new bunkering ports – and of course advise and help them prepare for the impeding 0.5% limit on marine fuel in 2020.

So besides making sure that it’s easy and safe for ships to refuel, it’s important to us that we can serve our clients from the right ports around the world with the right product compositions. To support this, we are always on the lookout for new opportunities to further build our physical presence worldwide.”

Q3/Q4 2019 and Q1/Q2 2020 we will see many different directions. So, it’s all about being prepared.” In Bunker One we are getting ready for 2020 – of course starting with our own operations. We are already signing contracts beyond 2020 to ensure the supply of compliant products.

Another major benefit we have seen, is a significant Bunker One brand value. We are now profiting from our good reputation around the world on a broader scale as well as performing very well in our operations with a high customer satisfaction. This gives us a head start when establishing new operations. 2020 will be a challenge and an opportunity The introduction of the 0.5% Sulphur global cap in 2020 is in many ways going to be a challenge for everyone in the shipping industry. But with challenges come opportunities. Peter Zachariassen elaborates: “Where many ship owners and operators are still to set their preferred 2020 compliance options, our preparations have been going on for a long time now. We have a wealth of experience from the introduction of previous Sulphur caps, like the 0.1% Sulphur fuels in emission control areas (ECA) in 2015. I do firmly believe that the fuel buying patterns will alter significantly in the run up to 2020 and beyond, especially in

“As we are moving towards 2020, we see an obvious focus on the VLFSO products being introduced to the market. As a physical supplier, it is important for us to play an active role in different forums to voice and share knowledge about our technical and operational expertise.” Get in touch If you still don’t know who we are and how we can support your business moving forward, we would really like to meet and tell you more.

Please contact Peter Zachariassen, Global Director at Bunker One at +45 88 38 21 01

World Bunkering AUTUMN 2018

company NEWS

Fuel 0.5%Sulphur? Definitely! Galp is well on the way to developing a proprietary 0.50% sulphur fuel, to meet the 2020 challenge. The company also commits to maintain production of HSFO to supply scrubber-equipped vessels, responding to clients’ needs.

onsidering that the LNG infrastructures will not be available in most ports immediately in 2020 and the insufficient desulphurization capacity to take HSFO to VLSFO, the only alternative to enable refiners to supply the global VLSFO market will be through blending sweet residue with other low sulfur components. Here at Galp, we have been testing close to 100 different VLSFO formulations since the beginning of 2016, to understand which are the most competitive and stable blends. This work involved several lab analysis, including p-value determinations, SARA analysis, compatibility testing and Total sediment Potential/Total sediment Accelerated determinations. Besides analyzing pure blends, we ran several cross-compatibility tests. This work will continue until 2019 but right now, Galp is 100% confident that it can produce a completely stable VLSFO if certain “blending rules” are taken into consideration. We are continuing to work in our formulations and keep on testing new alternatives with the goal of assuring a stable, compatible and competitively priced 0.5%S residual bunker fuel that can be bunkered into ships from 1 January 2020 in all Portuguese ports.

World Bunkering AUTUMN 2018

HSFO Galp is planning to continue the HSFO production and will have all the required facilities and logistics in place to provide their clients who already equipped their ships with scrubbers. Responding to our clients’ needs and to the wider world’s concerns to preserve the Planet for the coming generations is our own corporate responsibility and the two most basic requirements for any company willing to stay in business in the 21st Century. Galp continues to grow it’s bunkers business dedicating special attention to bunkers-only calls in the Port of Lisbon. Working closely together with the port administrations to reduce calling costs, offering competitive prices and making Lisbon a port not just for cargo operations or bunker lifting, but also a port where ships can be provided with all kind of extra services.

It is present in 100 countries, ensuring that each member company follows the exact same strict technical, performance and safety procedures. Lubmarine provides the shipping industry with the best marine lubricants and greases, associated with first-class service. Galp produces the right lubricant to your ship and supplies at the right port. If you require bunkers in Portugal or Spain then just contact us at Galp. We look forward to receiving your call! +351 217 240 654/952 +351 210 039 032 bunkers@galp.com galp.com

Galp remains ahead of the market priding itself in supplying fuels that already meet the latest ISO edition, i.e. ISO 8217: 2017. It is also a co-founder and member of Lubmarine – a worldwide organization specialized and dedicated to marine lubricants fully integrated from product development, supply chain, marketing and sales.

COMPANY NEWS

FUELVISION BY lOGIC VISION FuelVision is the no.1 ERP software solution for bunker companies

bout: Logic Vision is the ERP software provider that supports business processes for companies in the Oil & Gas, Maritime and Manufacturing sectors. Founded in 1992, Logic Vision has supplied and implemented business software integrated with Microsoft Dynamics NAV. More than 2,500 satisfied users work with our software and services daily. Microsoft Dynamics NAV has been the go-to flexible ERP solution for companies for 30 years. More than 160,000 different organizations in over 195 countries work with this powerful software solution. Bunker industry, dynamism at its best. Variable prices, fluctuating stocks, and increased pressure on the margins mean that a clear overview of business processes is a must.

That saves time. Absolutely perfect for companies in the bunker industry. FuelVision consist of: • Contract management • Purchasing & Sales • Price management • Inventory management • Excise management • Digital files • Reports • Financials The future: The future is now and it is challenging. Is it a threat or an opportunity? Business software is evolving at a rapid pace. The integration between FuelVision and other Microsoft business applications such as Office365, PowerBI and Azure intensifies every update.

Did you know that there are many add-ons available that support your daily business processes? We believe that the future offers many opportunities. Our is goal is to be the one stop shop for business software in the sectors we serve. FuelVision is a choice for the future! More information:

www.logicvision.nl Hakgriend 18B, 3371 KA Hardinxveld-Giessendam The Netherlands +31 (0)184-677588 info@logicvision.nl

FuelVision: FuelVision, insightful, easy to use and has several adaptable features. You can simply build a complex pricing structure. FuelVision meets the strict legal and tax regulations. Excise registration is transparent, easy to understand and to report. With nomination functionality, commission registration, credit checks and digital files, you can switch between different menus with ease while registering everything in an easy-to-use software solution.

World Bunkering AUTUMN 2018

Bunkering by truck or by barge in all French ports

reated in 1999, ATLANTIC ENERGY is a French company specialized in bunkering operations and negoce fuels. We are able to deliver our products in all the French ports and to supply all vessels with Marine Gasoil or Fishing Gasoil (max Sulphur 0,10 %) by truck in France.

ATLANTIC ENERGY have created a bunkering opportunity by barge at ROUEN and LE HAVRE port area to supply Marine gasoil 24 hours a day, 365 days a year, via dedicated barge service. Our barge can deliver all required fuel volumes, starting from 10 M3 up to 500 M3.

Email: bunkers@oil-atlantic.energy

We are also able to meet your marine fuel oil requirement on RMG380 HS (max Sulphur 3,5%) and RMG380 LS (max Sulphur 1,5 %) by truck in South port. In order to ensure compliance with the ISO-8217, all products delivered by ATLANTIC ENERGY are regularly analyzed. We deliver all the products in respect of Marpol regulation.

Bunker office: +33 (0)4 69 96 06 96

All the ports in Channel, from Dunkerque to Brest by truck and at Le Havre, Rouen by truck and by barge. All the ports in Atlantic coast, from Brest to Bayonne by truck. All the ports in Mediterranean coast, from Monaco to Port Vendres by truck. ATLANTIC ENERGY can offer to owners, to charterers,to operators and to traders inner French ports.

World Bunkering AUTUMN 2018

company NEWS

atlantic energy

diary

5 SEPTEMBER 2018

5 – 6 NOVEMBER 2018

The IMO 2020 Global Sulphur Cap; is Shipping ready for this once in a generation change? A chance to hear IBIA’s experts shed light on the main issues. Unni Einemo, IBIA’s IMO Representative talks on IMO 2020 Regulations – what is being done regarding compliance and enforcement: Michael Green, Intertek ShipCare’s Global Technical Manager, tackles the topic how will we manage new fuels, while IBIA CEO Justin Murphy ask whether to expect chaos or opportunity. Come and hear what is really going on.

As West African ports and rail authorities collaborate to dramatically expand facilities and improve hinterland connections, the potential of the region’s economy grows exponentially. West African Ports and Rail Evolution is designed for ports and rail authorities, terminal operators, shipping lines, bulk exporters, investors and governments looking to forge new frontiers for the economy through ports and rail connectivity, optimisation and new business opportunities.

SMM HAMBURG – IBIA SEMINAR SPONSORED BY INTERTEK

http://ibia.net/

WEST AFRICAN PORTS AND RAIL EVOLUTION, LAGOS

https://www.transportevolutionwest.com/

6 – 8 NOVEMBER 2018

2 – 5 october 2018

IBIA ANNUAL CONVENTION, Copenhagen

With over 1600 attendees expected at SIBCON 2018, key decision makers from the shipping and marine fuels community are expected to converge in Singapore to outline market potential, growth segments, and strategies to operate in the current environment.

IBIA’s Annual Convention, being held at the Scandic Kodbyen hotel in Copenhagen. is one of the most anticipated Bunker/ Shipping events in the industry, held annually in different countries around the world, with highly acclaimed speakers, sponsors and delegates. IBIA aspires to be the voice of the global bunker industry and represents every aspect of the industry value chain from suppliers to buyers, traders, brokers, port authorities, regulators, surveyors, ship owners, barge operators, testing companies and a host of other service providers.

SIBCON - SINGAPORE

http://www.sibconsingapore.com/

2 – 3 october 2018

AFRICAN PORTS EVOLUTION AFRICAN RAIL EVOLUTION, DURBAN Africa’s premier transport event with participation from over 20 African port and rail authorities, this is, Africa’s largest transport event welcoming dozens of African ports and rail authorities and thousands of qualified maritime, transport and logistics professionals. African ports and rail evolution unites buyers and sellers from across the value chain to provide comprehensive access to planned blue economy development and expansion projects across the African continent.

Nearly 200 attendees, including Ship Owners, Bunker Suppliers, Traders, Port Authorities, Regulators, NGOs, Brokers, Lawyers, Surveyors and Academics, are expected to attend the Convention, while a livestream platform will take place during the Convention to create even greater capacity and awareness around the world. IBIA has arranged a dynamic series of discussions around diverse topics, which will cover a broader spectrum of points at issue, but with a specific emphasis on future challenges for the Shipping Industry. The conference will offer delegates a unique opportunity to participate in a lively debate, whereas the programme will run in a paralleled mode, so the delegates can attend the sessions of their choice. http://ibia.net/

https://www.transportevolution.com/

29 – 30 NOVEMBER 2018 24 OCTOBER 2018

NEW RULES – NEW FUELS DIGITAL SOLUTIONS, LONDON The countdown for the IMO 2020 Global Sulphur Cap has begun – it’s the most significant change in the industry in 50 years. Is shipping ready? What will the new fuels look like? Mass Flow Meter solutions have transformed Singapore, the world’s largest bunkering market – how can the market benefit from this technology? An IBIA seminar sponsored by Endress + Hauser Ltd and supported by Bunker One http://ibia.net/

25 – 26 OCTOBER 2018

PLATTS MEDITERRANENAN BUNKER FUELS CONFERENCE, ATHENS https://www.platts.com.es/events/emea/ mediterranean-bunker-fuel/index

25 FEBRUARY 2019

IBIA ANNUAL DINNER, LONDON The IBIA Annual Dinner is a well-established fixture in the bunker industry’s calendar. Please join us and more than a thousand colleagues, peers and customers at the luxurious Grosvenor House in Park Lane, London on Monday 25 February 2019. http://ibia.net/

ARACON, ROTTERDAM

ARACON is the longest-running and biggest bunkering conference in the Amsterdam-Rotterdam-Antwerp region. Its no-nonsense conference programmes attracts all the main bunker suppliers and barging companies in the ARA and Northwest Europe as well as shipowners and managers from throughout the region. ARACON now takes place every autumn in Rotterdam, the biggest port and by far the biggest bunkering centre in Europe. https://www.bunkerevents.com/events/aracon-2018

25 – 27 March 2019 FUJCON, FUJAIRAH

The Fujairah Bunkering & Fuel Oil Forum 2019, or FUJCON, returns for its 11th edition. This prestigious bunker forum for the Middle East bunker markets as grown to enjoy international recognition and attendance from over 50 countries, covering the full supply chain of the bunkering industry. It is the anchor event held during the Fujairah Bunkering Week. www.fujcon.com/

World Bunkering AUTUMN 2018

Next ISSUE

winter 2018 - Special Features: IBIA Convention Our round-up of what was said and who was there.

SIBCON We report on this major gathering of the global bunker industry in Singapore.

Blending Blending is seen as one of the ways to achieve compliance with the impending 0.50% sulphur cap. We look at the latest developments.

Fuel Additives Additives have been available for many years but will their use become normal practice?

Barge Design Bunker suppliers are facing increasing challenges, including the need to supply more grades and types of fuel. Is the need for product segregation to avoid cross contamination being reflected in current bunker tanker design?

Geographical Focus: Middle East The region remains politically unstable and we look at the effects of renewed US sanctions on Iran on the countryâ&#x20AC;&#x2122;s bunkering sector. We also take a look around the regionâ&#x20AC;&#x2122;s main bunkering ports.

Africa Our annual survey of bunkering around the coasts of this massive and diverse continent.

NEW IBIA MEMBERS

Regular Features Russian Update, News, Views, Analysis, Interview, Industry News, Environment, Testing, LNG, Lubricants, Innovation, Legal News, Equipment and Services, Diary, Event Previews & Reviews

Individual

Corporate Broker Mohammed Madani Mohammed Bin Haider Aljarash Comm Brkr L.L.C Middle East vmakki28@gmail.com Supplier Basem Nassar Uno Honduras SA de CV America basem.nassar@uno-terra.com Supplier, Trader Joseph Addo-yobo Petra Energy Ltd Africa joseph.addo-yobo@petraghana.com

Ship Owner James Pippard Heidmar Europe james.pippard@heidmar.com Service Ioannis Polychronopoulos Environmental Protection Engineering SA Europe epe@epe.gr

Surveyor Sizwe Nkukwana South African Maritime Safety Authority (SAMSA) Africa snkukwana@samsa.org.za Ship Owner James Belviso Norwegian Cruise Line America jbelviso@nclcorp.com Legal Aaron Greenbaum Salvador Pusateri America aaron.greenbaum@pjgglaw.com

World Bunkering AUTUMN 2018