World Bunkering Winter Issue 2019 by Constructive Media

Spring 2019 Winter 2019/20

THE OFFICIAL MAGAZINE OF IBIA

ARE WE READY?

GETTING OUR DUCKS IN A ROW FOR IMO 2020

INSIDE THIS ISSUE: NEW FUELS FOR 2020 AND BEYOND INTERVIEW: STAR BULKâ&#x20AC;&#x2122;S STRATEGY RUSSIA WOBBLES ON 0.50% COMPLIANCE

Dear Reader

I am sure you will not be surprised to find within this Winter 2019 issue a huge number of references to the impending 0.50% sulphur in fuel limit. World Bunkering has, I believe, provided comprehensive, in-depth coverage of what this means to the shipping industries from the time of the IMO decision. To find out exactly where we are now and, if you are a supplier or a ship operator where you ought to be, turn to our Environment pages. You will find that IBIA director Unni Einemo has set out the out latest situation with great clarity. In addition, our New Fuels pages explore in depth the implications of switching to VLSFO.

And, incredibly, a decision will only be made at the END OF DECEMBER! The one mitigating factor is that little can move on most Russian waterways until the ice melts. So perhaps there is a bit more time to consider carefully the implications of flouting an IMO regulation. Now let’s turn to an intellectual debate that is underway. Does is it take any energy to produce residual fuel? That is possibly a question you haven’t asked yourself, but how your answer has significant implications. One answer is: “No it doesn’t. The energy is all used to produce distillates. That is the only reason why the refineries do what they do, manufacture products. Residual is just what is left over from that process.”

On the everything covered front, I have heard in the last few days that one particularly large global vessel operator has been so concerned by the prospect of taking on incompatible fuels that it has arranged for exclusive storage capacity for VLSFO at locations worldwide and will, in effect, turn itself into its own bunker supplier.

That answer does not go down at all well with the LNG lobby because it could imply that HSFO, a residual fuel, has a lower carbon footprint than LNG. This debate feeds into an issue that is actually much more important than implementing the 0.50% limit. The real question facing shipping is how to achieve zero carbon emissions within this century. Given current political pressure it is safe to assume that the IMO’s current stated ambition of halving the carbon footprint from international shipping by 2050 will, if anything, be seen as too weak. Come 2023, when the IMO’s initial GHG strategy is due to be revised, that ambition may be deemed to be too little, too late.

At the other end of the scale are both Indonesia and Russia. Our feature on Indonesia highlights the issues with the country’s massive domestic fleet. While the government has reversed its decision not to implement the limit, the signs are that it would take a confirmed optimist to predict a complete switch-over on 1 January.

Proponents of LNG and scrubbers both believe their approach is the best way to bridge the transition to a carbon free future. This issue has pages dedicated to each of these points of view. And our Environmental News pages have more on the way towards a carbon free future. They also report on the dark horse in the bridging race, methanol.

Perhaps more worrying is the breaking news (too late for the country report but in our main News section) that the Russian government is considering delaying implementation of the regulation for its inland waterways fleet until 2024.

While it is difficult to get away entirely from the 2020 elephant in the room, our pages, as ever, cover a wide range of other topics. We feature reports on Northern Europe, Africa, Australia and Indonesia. The latter has long been the sleeping giant of the bunkering world.

I would like to think that few ship operators will still be wondering what is the best way to prepare their vessels for compliant fuel. Unfortunately, my feeling is that the level of preparedness ranges all the way from ‘everything covered’ to ‘not thought about it yet’.

World Bunkering WINTER 2019/20

Now there are signs that it is starting to stir. So, we are nearly there. The next few weeks will seem to pass very quickly, partly due to the near two-week shut-down in many parts of the world over Christmas and the New Year. As an ex-seafarer I just hope that the new year won’t bring reports of ships suffering engine breakdowns due to sludge forming in their fuel systems. If that happens in stormy weather off lee shores then we could be in very sombre mood by the time of our Spring issue is due. It is the responsibility of the shipping and bunkering industries to get this right. On a more cheerful note, that first World Bunkering of 2020 will be out just in time for the IBIA dinner. See you there!

David Hughes Editor 3

EDITOR’S LETTER

ALMOST THERE!

Chairmanâ&#x20AC;&#x2122;s Letter

Directorâ&#x20AC;&#x2122;s Report

IBIA Events

IBIA Events Come along as IBIA heads into 2020

IBIA Asia A new chapter

IBIA Africa Reflecting on 2019

IBIA Annual Convention Turkish delights

Interview Star bulk on strategy

CONTENT

Environment The long road to IMO 2020

Australia Confounding the critics

Africa Ready for 2020

Mauritius Political uncertainty but commercial opportunity

Scrubbers Malaysian set-back

Innovation Using waste methane as fuel

Northern Europe Northern Europe aims beyond IMO 2020

Russia Gazpromneft launches ULSFO lubricant, increases sales

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 Office 239 New Broad Street House 35 New Broad Street London, EC2M 1NH, UK Tel: +44 (0) 20 7417 1803 Fax: +44 (0) 20 3397 3865 Email: ibia@ibia.net Website: www.ibia.net

LNG Stacking up the studies

Lubricants Lubricating 2020

Fuel Additives Adding to 2020

Legal Bunkering and US sanctions on Iran

Company News

New Members

Industry News Russia could delay 0.50% rule

New Fuels The big switch

Equipment & Services Blockchain meets DNA

Diary

Next Issue

Indonesia Great potential

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

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World Bunkering WINTER 2019/20

CHAIRMAN’S LETTER

THE NEW WORLD OF BUNKERING

As I write my final Chairman’s letter of 2019 it is somewhat strange to think that we are now within touching distance of the much anticipated 0.50% m/m global sulphur cap

find it quite difficult to believe that we are about to experience the much talked about 2020 milestone and that the long mooted legislative change, that has caused so much speculation and discussion, is about to be realised. The sense of anticipation around the industry as we go through the final weeks of the year is palpable and the importance of the time in which we find ourselves in was not lost on any of the attending delegates at the recent IBIA Annual Convention. Whilst the annual convention is the flagship event of the IBIA year, the 2019 convention proved to be an extra special affair being hosted in the magnificent and historic city of Istanbul. Special thanks must go the Turkish Chamber of Shipping for acting as our hosts and I must also offer thanks to all of the sponsors who contributed to make the event possible. I cannot possibly think about mentioning the convention without offering my most sincere thanks and congratulations to the IBIA secretariat who, as always, worked tirelessly to ensure that this event was able to build on the successes of previous events and showcase IBIA as a truly global association that represents all aspects of the bunkering industry. It was also wholly fitting that the final IBIA convention prior to the implementation of the 0.50% m/m global sulphur cap be held in Istanbul given symbolic references between the two - Istanbul as the transcontinental crossing point between Europe and Asia, and the 1st January 2020 being the crossing point from the ’Old’ bunkering world to the ‘New’. Given the success of last year’s annual convention in Copenhagen it was hugely satisfying to see that we managed to build on that success and deliver IBIA’s biggest ever convention to date.

World Bunkering WINTER 2019/20

In excess of 260 attendees joined the convention specifically to gain the most up to date and definitive information, not just in relation to 2020, but also regarding the expectations for a post 2020 bunkering industry. Attending delegates were able to listen to presentations from key industry figures as well as actively participating in discussion sessions that combined to create a program that showcased over 40 front line industry professionals. At this very moment the bunkering industry finds itself standing on the cusp of the most substantial bridging point it has seen for decades, something which has become more apparent as we move towards the final weeks of 2019. It is clear that, we as an industry, are approaching a key transitional period, something IBIA has gone to great lengths to highlight, particularly in relation to the output to the membership as well as all of the time and effort being made in contributing to the discussions within IMO. The representation that IBIA has at the IMO is something that you have no doubt heard me mention on a number of other occasions but this is because I feel it is of vital importance not simply to IBIA, but to the bunkering industry as a whole. I am extremely proud to say that the contributions IBIA makes to the discussions at IMO, through its Director and IMO Representative, Unni Einemo, takes into account the real-world experiences of our members to ensure that a reasoned approach is taken to address the practical considerations of the changes being made. Whilst many people may wonder what the industry will discuss once the 2020 hurdle has been traversed, it is wholly apparent that this is not the end, it merely represents the beginning of another series of era defining changes and topics of conversation will not be in short supply.

The completion of this section of the MARPOL Annex VI timeline is simply laying the foundations which allow us to continue to build a greener industry for the future. The expectations that have been laid before us by the IMO regarding the reduction of Green House Gases is something that will offer even greater challenges to all corners of the industry, but it is certainly not beyond our means and will ensure that we, as an industry, still strive to improve. A great deal of work still needs to be done in looking to dispel public perceptions that the shipping and bunkering sector is still an industry that is “polluting”, “dirty” and “uncaring”. However, the steps we’ve seen since 2005 and the ones we expect to take in the coming years surely demonstrate our commitment to improving the world we live in now and for future generations. In an attempt to promote the message of change and to offer a greater degree of interaction with members and other industry bodies IBIA has increased its presence over the last year by organising and being involved with a greater number of industry events. This increased interaction is set to continue through 2020 as we see more challenges unfurl as a result of the direction the industry takes after we step over the threshold into the ‘New World of Bunkering’.

Michael Green Chairman

ANNUAL 2020 DINNER 24 FEBRUARY Grosvenor House Hotel, Mayfair, London ibia@ibia.net

As 2019 draws to a close, I hope we are all as ready for IMO 2020 as we can be

his issue of World Bunkering is the final one of 2019, and as we go to press the big topic of the year, widely referred to as simply ‘IMO 2020’, is just weeks away. For me, 2019 has been all about helping the industry prepare for the 0.50% sulphur limit that enters into force on 1 January, 2020. So, are we ready? This question has been asked repeatedly over the past three years. There has been, and still are, many doom-mongers. Uncertainty has prevailed about availability, fuel quality and safety issues arising from incompatible fuels, and the extent to which there will be effective enforcement. Some of this uncertainty remains, but there are positive signals indicating that the industry has, for the most part, been getting its ducks in a row. When the IMO made the decision, in October 2016, that the 0.50% sulphur limit would take effect in 2020, it was based on a study saying there would be sufficient global refining capacity to meet demand. But the IMO’s mandate is to regulate international shipping; the refinery industry was under no legal obligation to provide the necessary volumes of low sulphur fuels to the marine sector. We were told that there was not sufficient time left for the major refinery upgrades needed to ensure sufficient supply of low sulphur fuels. But refiners around the world realised that the global market for high sulphur fuel oil would approximately halve in 2020 and have been remarkably pro-active in finding ways to tweak production to avoid being stranded with HSFO that will be worth even less than before. The supply industry has really stepped up to the plate and made huge efforts to make compliant fuels available during the final quarter of 2019, whether that means very low sulphur fuel oil (VLSFO) or marine distillates. Regular readers of this magazine will know that IBIA has been helping the industry prepare for IMO 2020 in multiple ways. This includes our input at the International Maritime Organization, where IBIA has consultative status. IBIA has contributed to the development of the IMO’s comprehensive framework, World Bunkering WINTER 2019/20

including regulatory changes and guidelines, to assist industry and authorities in ensuring effective implementation of the 0.50% sulphur limit. I have included an overview of these IMO guidelines in my IMO 2020 feature in this issue. IBIA also took part in the development a comprehensive Joint Industry Guidance on the supply and use of 0.50%-sulphur marine fuel to provide stakeholders with factual, practical advice to safely manage all aspects of marine fuels meeting the 0.50% sulphur limit. We have also shared with our members a CIMAC guide on bunker fuel stability and compatibility. So, the tools are there for both suppliers and ship operators to manage the new VLSFO blends, as well as distillates. IBIA has also been helping to educate industry stakeholders through our own events, partnership events and participation in others. As you can see in our Events report, IBIA worked with partners to have conferences in Jamaica in September, in Panama in November, and in between we were in Istanbul for our Annual Convention. In addition to IBIA events, I participated as a speaker and/or panellist at multiple conferences during the past four months of 2019. In September I took part in the 9th Biennial Bunkering in Asia conference and a CSA 2020 forum in Singapore, and an Innospec conference in Scotland. In October I was in Geneva addressing charterers and traders invited by Gard and I was a presenter and panellist at a Symposium on IMO 2020 and Alternative Fuel held at IMO’s London HQ. In November I spoke at the 8th Annual Mediterranean Bunker Fuel Conference organised by S&P Global Platts in Athens, Greece and also spoke to a group of Greek shipowners invited by Prime’s Bunkersplus. In December, my only conference commitment was as a panellist at the S&P Global Platts Essential commodity Exchange in London. The latter is evidence of just how important IMO 2020 is for the commodities market.

This intense conference activity means my carbon footprint has been much worse than usual in 2019, but it was important to help explain what needs to happen to get IMO 2020 straight, as well as listen to how the industry has been preparing for it. Considering how many pessimistic predictions we have heard along the way, in particular ongoing concerns about potential fuel technical and financial difficulties hitting the industry in 2020, I am impressed by the positivity and ‘can do’ attitude displayed by so many of IBIA’s members. The bunker and shipping industries are resilient, and I was pleased that a roundtable industry meeting hosted by IMO at its London HQ in November, in contrast to a previous meeting in June, saw increasing confidence that significant efforts by all stakeholders means there was now general readiness to meet the 2020 sulphur requirement. It is a hope of mine and many of our members that by moving up the value chain instead of dealing mainly with the ‘bottom of the barrel’, the shift from HSFO to higher value products will also be a catalyst for positive change within the industry. I would like to thank all my colleagues in the IBIA Secretariat and our Board members for their support in 2019. I would also like to thank you – our members – for your support, and I truly hope IBIA has helped you get ready for the anticipated challenges. IMO 2020, here we come! I wish you a successful year ahead.

Unni Einemo Director International Bunker Industry Association unni@ibia.net 9

DIRECTOR’S REPORT

WHAT A YEAR!

Vacancy Notice Bunker Trader The Company West Indies Petroleum was incorporated in 2012 and commenced operations in 2013 as a special purpose vehicle to enter the ship bunkering business in the Caribbean and Latin American region. It was founded out of the need to meet the ever-growing demand of the region’s marine. Whilst our main business is bunkering, we pride ourselves as a fuel company with activities spanning the full range of products and services. Most importantly we strive to offer better service, better quality; accurately safely and efficiently.

Main Duties and Responsibilities:

The Perfect Candidate

• Produces profitable trading results meeting or exceeding the annual goal for the team. • Develops and maintains a solid and stable portfolio of customers and suppliers • Develops trading strategies, initiates and manages physical and financial positions for profit, focuses on supply portfolio, manages price exposure for system and trading positions and proposes relevant risk management and hedging strategies • Executing trades with preapprovals and price approvals • Determines market sentiment via research, valuation and data analysis • Analyzes, tabulates, and reports principal risks, market risks, inventory exposure, the economics of trades, and overall P&L of positions • Collaborates with commercial operations to manage physical inventories consistent with supply requirements and financial market structure • Represents the company externally • Seeks and forecasts market intelligence for trading opportunities. Embeds optionality to reduce exposure in trading positions • Resolves client issues upon getting information from the sales team • Negotiates contracts both short and long-term. Builds relationships, manages third parties and internal relationships • Participates in setting annual strategic plan for supply & trading team

We are constantly expanding and is always looking for new talents and now we are in search of an experienced Bunker Trader to add to our team. As a Bunker Trader/ Broker in our trading team, you will play a pivotal role in driving West Indies Petroleum’s business forward. You will be responsible for your own personal budget and for building and maintaining your personal customer portfolio, which includes forecasting and pipeline management. The perfect candidate is:

We can offer: • A job with a high level of freedom and responsibility • Competitive compensation and benefit package matching your performance and skills • An exciting and challenging work environment • Great possibilities for developing and perfecting yourself within trading • An experienced and motivated team of colleagues

• in possession of minimum 3-5 years of documented experience as a Bunker Trader or a related job in the shipping industry • confident, driven with high level of energy and a positive attitude • a great salesperson with strong business acumen and numerical skills • independent as well as a team player • flexible and has a strong and winning personality • proactive and creative • hungry for success, entrepreneurial, performance oriented and self-motivated • social and finds it easy to contact new people • excellent at communication, negotiation and social skills

Qualification: • MBA in Finance or other related discipline from a recognized tertiary institution.

We thank all candidates for expressing an interest. Regrettably, only those who are shortlisted will be contacted. Deadline for submission is on or before December 27, 2019. Please submit applications to hr@westindiespetroleum.com

2020 IBIA EVENTS PROGRAMME JANUARY 8-9 22 - 23 FEBRUARY 24 24 5-6 19 - 20 MARCH 10 - 12 11 & 12 25 & 26 APRIL 23

IBIA Basic Bunkering Course (SS600 : 2014 & TR48:2015) IBIA Enhanced Bunkering Course (SS600 : 2014 & TR48:2015)

Singapore, Asia Singapore, Asia

IBIA AGM IBIA Annual Dinner 2020 IBIA Basic Bunkering Course (SS600 : 2014 & TR48:2015) IBIA Enhanced Bunkering Course (SS600 : 2014 & TR48:2015)

London, UK London, UK Singapore, Asia Singapore, Asia

IIBIA & S&P Global Platts Middle East Bunker Fuel Conference IBIA Basic Bunkering Course (SS600 : 2014 & TR48:2015) IBIA Enhanced Bunkering Course (SS600 : 2014 & TR48:2015)

Dubai, Middle East Singapore Singapore, Asia

IBIA Asia Annual Dinner 2020

Singapore, Asia

2020 EVENTS IBIA SUPPORTS & WILL PARTICIPATE IN JANUARY 22 - 23 30 FEBRUARY 3-6 MARCH 17 - 20 17 23 - 27 18 - 20 APRIL 22 - 24 18 - 24

Dubai

13th Annual European Oil Storage Conference (S&P Global Platts) Middle Distillates conference, 10th Annual (S&P Global Platts)

Amsterdam, Netherlands Antwerp, Belgium

Middle East Bunkering Convention (Petrospot)

Dubai, Middle East

European Shipping Week MARINE ENERGY TRANSITION FORUM 2020 Maritime Week Africa (Petrospot) Asia Pacific Maritime 2020

Brussels Antwerp Cairo, Egypt Singapore, Asia

International Bunker Conference Singapore Maritime Week

Oslo, Norway Singapore, Asia

London

Singapore

*For more information about the training courses and events, please visit IBIAâ&#x20AC;&#x2122;s website www.ibia.net

Oslo

IBIA EVENTS

Gold Sponsor - Bunker One

COME ALONG AS IBIA HEADS INTO 2020 We have been leading the way in providing industry insights in the build-up to the IMO 2020 changes, says Sofia Konstantopoulou, IBIA’s Global head of Marketing & Events

BIA’s impact and events agenda has developed significantly in the past year. During 2019 we organised nine events including conferences, forums and webinars in seven different countries, we have supported more than 20 industry conferences, and we spoke at more than 20 seminars and conferences, reaching around 2,000 people across the world. Senior executives gather at IBIA’s events to learn from industry experts and network with their peers, such as at the IBIA Caribbean Bunker Conference (ICBC) in September in Montego Bay, Jamaica, hosted by the Maritime Authority of Jamaica and presented in partnership with Ship & Bunker. With over 150 attendees, it was a highly successful regional event that lived up to the expectations of being one of industry’s landmark conferences of 2019.

Minister of Transport, Jamaica, opened the conference, where delegates heard about Jamaica’s ongoing drive to establish itself as the bunkering hub for the Caribbean region. Bunkering could bring over $3 billion in income, and 900 jobs to the country, delegates were told. The minister discussed various steps the country was taking to achieve its ambitions, including plans to implement a bunkering framework with legislation that will provide for the licensing of bunkering operators and their vessels. The conference covered a range of topics, most of them linked to the changes happening because of IMO 2020, while also looking ahead to the Impact of IMO’s emerging greenhouse gas regulations. The conference closed with a tour of the New Fortress Energy LNG facility.

The conference featured the IBIA Bunker Training Course taught by industry veteran and IBIA board member Nigel Draffin, and the IBIA Ethics Workshop, which was moderated by J Steve Simms, Principal, Simms Showers LLP and Robert E O’Connor, Managing Partner, Montgomery McCracken.

We would like to thank all the speakers and sponsors who supported ICBC: West Indies Petroleum, Bunker One, New Fortress Energy, Petrojam, Cryogenics Industries, Inc., Caribbean Maritime University, RYCO-JA Ltd., Habonim USA, Jampro, JSEZA, The Port Authority of Jamaica, The Viswa Group and media sponsors.

Rear Admiral (Ret’d) Peter Brady, Director General of the Maritime Authority of Jamaica and Hon. Robert Montague,

Shortly after Jamaica, we run our inaugural joint live webinar with our strategic partner S&P Global Platts,

where we heard about how Platts is adapting to IMO 2020, and about the impact the changes could have on a range of product prices. Leading editors from S&P Global Platts bunker fuel team joined Unni Einemo, Director of IBIA, to discuss the impact of the 0.50% sulphur limit on fuel oil and middle distillate markets, while Unni explained how ISO specifications continue to apply. In case you haven’t taken part in such a webinar before, this is a great way to stay up to date with the key issues without having to leave your desk. We will keep you posted about our next webinar which will take place in February, during IP week. With the global 0.50% sulphur cap just weeks away, the IBIA Annual Convention 2019 took place at the historical Çırağan Palace Kempinski in Istanbul from 22-24 October. We gathered in this unique and historically significant city that straddles two continents across an important waterway at a time when our industry is undergoing significant historical changes for the benefit of human health and the environment. The transition to the global low-sulphur regime is underway and we gathered to examine how to bridge the gap to IMO 2020.

World Bunkering WINTER 2019/20

The IBIA Annual Convention 2019 was the most successful IBIA Convention yet with record attendance and a high calibre of speakers. Apart from knowledge and networking opportunities, the IBIA Annual Convention offered its 260+ delegates the unique opportunity to explore Istanbul with a private boat trip on the Bosphorus and a private guided tour of the iconic Hagia Sophia. Our sincere thanks go to everyone who contributed to making this IBIA Annual Convention a success, in particular our host the Turkish Chamber of Shipping, our sponsors: ISTANBULBUNKER2020, Peninsula, BMS United, Asmira, Terpel, Med Petroleum, Cockett Group, Zeos Shipping, Argus and Turkuaz, our media partners: World Bunkering, Ship & Bunker and our Media sponsors: Allaboutshipping, Argus, Petrospot, Manifold Times, Deniz Ticareti and Virahaber.

For the closure of this report we are pleased to announce that S&P Global Platts and IBIA will organise their inaugural Middle East Bunker Fuel Summit 2020. The conference builds upon the success of our combined bunker event portfolio throughout world and will be looking to cement its place as the must attend event in the region. This special event will bring together regional bunker suppliers, refiners, ship operators, bunker traders, leading analysts, solution providers and local infrastructure players for two days of unrivalled insights and networking. One of our aims is to bring various stakeholders together to learn from each other and increase mutual understanding and cooperation. IBIA is a member driven organisation and our mission is to ensure that it brings value to its members.

We would like to take this opportunity to thank our dedicated community for their continued support and we look forward to the next exciting phase of the organisationâ&#x20AC;&#x2122;s growth. See you all soon. If you want to become a speaker, sponsor or find out more about our events, you can contact:

Sofia Konstantopoulou at sofia.konstantopoulou@ibia.net. Follow our social media: internationalBunker IndustryAssociation/ ibiabunkers https://linkedin.com/ company/ibia.net @IntBunkIndAssoc Website: Ibia.net

As I write this report, IBIA is about to go to Panama for an exciting one-day seminar on 20 November, acting as the official partner of the 2nd Americas Gas & Power Summit. Delegates will hear from IBIAâ&#x20AC;&#x2122;s IMO representative and Director, Unni Einemo, who will present updates on the legislation and guidelines from the IMO and explain what is required from stakeholders as we move towards a cleaner and even more environmentally friendly industry. She will be joined by a range of industry specialists. Wherever you live or work, we would like to refresh our contact with you on 24 February at the IBIA Annual Dinner 2020. With over 1,000 industry stakeholders gathered in the same room, it is guaranteed to be the must attend event of the calendar. We hope to see you all again.

World Bunkering WINTER 2019/20

Sofia Konstantopoulou

IBIA EVENTS

The IBIA Annual Convention 2019 brought together over 260 stakeholders from across the world. Delegates from 25 countries, including bunker buyers/ consumers, bunker providers (oil majors, independent suppliers, traders), regulators, various service providers and consultants came to forge connections, exchange views, educate and prepare for the changes ahead.

IBIA EVENTS

IBIA CARIBBEAN BUNKER CONFERENCE 2019

Carls Von Lindeman,Charles Chambers,Debnil Chowdhury,Yamil Lasten, Martyn Lasek

Charles Chambers , CEO, Platinum Sponsor - West Indies Petroleum

Unni Einemo, Capt. Sukhjit Singh, Kevin Frantz, Danar RoyalLasten

ICBC Conference

Rear Admiral (Retâ&#x20AC;&#x2122;d) Peter Brady, Unni Einemo, Hon. Robert Montagne

World Bunkering WINTER 2019/20

Sofia Konstantopoulou (IBIA), Peter Zachariassen, Georgia Kounalakis (Bunker One)

Georgia Kounalakis, Robert E. Oâ&#x20AC;&#x2122;Connor, Sami Sarosh, Eric Deans, Steve Simms

New Fortress Energy LNG Terminal Tour

Sofia Konstantopoulou with Silver Sponsor - Petrojam

IBIA Bunker Training Course

Unni Einemo, Eric Evans, Adrian Tolson,Mel Larson

Unni Einemo, Director IBIA

World Bunkering WINTER 2019/20

Maritime Authority of Jamaica

Official Dinner sponsored by West Indies Petroleum

Nigel Draffin, Jack Grogan,Emmanuel Gallegos,Martyn Lasek

IBIA EVENTS

IBIA CARIBBEAN BUNKER CONFERENCE 2019

IBIA ASIA

A NEW CHAPTER New IBIA Asia Regional Manager Alex Tang reports on his first 100 days

am embarking on a new journey, having joined IBIA Asia starting from August 2019, with excitement and drive to take on the challenging role of managing the internal and external demands of the organisation. This has included getting on with the day to day operation of biweekly bunkering courses, meeting with the Maritime and Port Authority of Singapore (MPA), IBIA Asia Directors, Asia ExCo members, IBIA members and potential new members to expand IBIA’s membership in Asia. Thanks for all the support, help and encouragement and well-wishes received so far over the last three months. As I am writing this report, the IBIA Asia team just got back to the Singapore office from a successful IBIA Annual Convention in Turkey, Istanbul which had over 250 global participants.

Training & new Singapore Standard for MFM The IBIA Asia office offers specialised training for the bunker sector in Singapore with MPA approved and certified courses. This includes Basic Bunkering and Enhanced Bunkering Courses covering the Singapore Standard SS600 and the Mass Flow Meter Technical Reference TR48. In August, September and October 2019, we attracted 49 trainees to attend the courses, which is comparable to the beginning of the year,

This exciting, beautiful city where the Asian and European continents are linked is the exact feeling of what I am doing now to bridge my past technical, leadership and business skills towards my current role. I am confident in building bridges for our members, from all bunker industry stakeholders, towards all challenges ahead. Conferences and Seminars IBIA Asia attended one conference and one seminar during the last three months. Firstly, IBIA’s Director, Unni Einemo, spoke at the 9th Biennial Bunkering Asia Conference which took place in Singapore on 2-3 September 2019. It was organised by IBC Asia with 240 attendees registered. The topic presented by Unni of IBIA was on “IMO Framework for Consistent Implementation of the 0.5% Sulphur Limit”.

when we had 47 trainees over the course of February, March and April. On 7 November 2019, we saw the official launch of a new Singapore Standard, SS 648 - Code of Practice for Bunkering Mass Flow Metering (MFM), which expands on the 2015 Technical Reference TR 48 for MFM to cover both marine fuel oil and distillates. SS648 will replace TR 48 from May 2020. To reflect the changes, a new syllabus for training is currently under development and gaining MPA approval,

Alex Tang

It was well received by the regional delegates regarding the IMO’s work, and we also had opportunity to exchange views with a broad section of industry stakeholders on the current situation, preparations and level of readiness for 2020. During the same week, we were also at the Clean Shipping Alliance 2020 (CSA 2020) Technical Seminar which was held on 5 September in Singapore, with some 40 attendees. Unni spoke at this event too and her presentation was called “Foundations for life in 2020 and beyond”.

which means local trainees will be entitled to grants from the MPA’s Maritime Cluster Fund to attend the course. We plan to roll out this new course in January 2020 and will update you in the next report on the progress of the syllabus and course structure.

Alex Tang, CMarSci MIMarEST Regional Manager, IBIA Asia Mobile: +65 88766491 Email: regionalmanagerasia@ibia.net

IBIA Director Unni Einemo presenting at the 9th Biennial Bunkering Asia Conference

World Bunkering WINTER 2019/20

IBIA AFRICA

REFLECTING ON 2019 Regional Manager Tahra Sergeant takes a look back at IBIA Africa’s activities in 2019

BIA Africa can reflect on a successful and engaging 2019. We successfully hosted IBIA’s Intermediate Bunker training and a 2-day information-packed conference at our 4th IBIA Africa Conference, attended monthly meetings of the Port Liaison Forum, had bi-monthly engagement with the South African Maritime Safety Authority (SAMSA) at their Bunker Stakeholder meeting, active involvement with the South African branch of the Women’s International Shipping & Trading Association (WISTA) as well as quarterly online engagement with our members in East and West Africa. Held in Cape Town, South Africa, the 4th IBIA Africa Conference brought together the African and international bunker industry to create a platform for engagement with industry and government, shared learning and networking. With 99 delegates and speakers from 15 different countries, the programme supported by our 24 speakers was robust and covered a large spectrum of the bunkering industry, focusing largely on the latest updates on the legislation and guidelines from the IMO, the requirements of industry, Africa’s readiness for the 0.50% sulphur limit taking effect in 2020, and what the future will hold as we move towards a cleaner and even more environmentally friendly industry.

IBIA Africa actively participates in the Port Liaison Forum, which is a Cape Chamber of Commerce initiative to bring all stakeholders and port users together on a monthly basis to discuss any issues directly with the Port Authority and work together to find solutions.

IBIA Africa also attends the Bunker Stakeholder meeting hosted in Nqqura by SAMSA. These meetings are held every second month and are attended by the South African bunker industry and supporting industries. It is SAMSA’s objective to promote South Africa’s maritime industry, with a goal of making South Africa a world maritime centre by 2020.

Tahra Sergeant, IBIA; Chrystel Bassett-Simmonds (SAMF, Lavin Energy and IBIA Africa Exco); Siya Maya (SAMF)

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PAGEAFRICA TITLE IBIA Engen End of Year Lunch 2019

I am an active member of WISTA in South Africa, which in January saw 35 women from across the maritime and trading sectors gathering in Cape Town to consider strategies to support a more diverse, inclusive and strong maritime industry. WISTA was subsequently officially registered in South Africa in May 2019, and has since held bi-monthly meetings in Cape Town. IBIA Africa would like to recognise that Ms. Nomatemba Tambo, High Commissioner of South Africa has been appointed President for the IMOâ&#x20AC;&#x2122;s Assembly, a feather in the cap for the South African maritime Industry. We congratulate her on this honourable position. I would also like to thank the Regional Exco for their continued support and promotion of IBIA within the African Bunkering Industry. The IBIA Africa Exco team are:

Chrystel Bassett-Simmonds, Chairperson and co- founder SAMF and Managing Director Lavin Energy Ltd. Patrick Holloway, Partner, Webber Wentzel Paul Maclons, Managing Director, African Marine Solutions (AMSOL) Grant Bairstow, Head Marine and Aviation, Vivo Energy Professor Trevor Jones, Kwazulu Natal University Niall Kramer, Executive Director, South African Oil and Gas Alliance (SAOGA).

Engen recently hosted their traditional end of year luncheon, bringing together a large portion of the IBIA South Africa Members. Thank you to Engen for a great afternoon. Last but not least, IBIA Africa would like to thank all our members for their continued support during 2019, and we look forward to an engaging 2020.

Tahra Sergeant Regional Manager: Africa Mobile: +27 (0)79 990 7544 E-mail: tahra.sergeant@ibia.net

Jon Hughes (SABT) Tahra Sergeant (IBIA) Chrystel BassettSimmonds (SAMF, Lavine Energy and IBIA Africa Exco)

4th IBIA Africa Conference Session: Unni Einemo, Director and IMO Representative, IBIA; Sharon Rassie, Marine Manager, FFS Refiners; David Sineke, ENGEN Enterprise Risk Manager (speaking in personal capacity); Kevin Baart, Head: Projects, SAPIA; Jean-Baptiste Texte, Fuel Oil Trader, Addax Energy SA; Chrystel Bassett-Simmonds, Chairperson and co- founder SAMF, Managing Director Lavin Energy Ltd.; Guido Cardullo, Global Head Business Development, Fratelli Cosulich

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IBIA ANNUAL CONVENTION

Welcome Reception sponsored by the Turkish Chamber of Shipping

TURKISH DELIGHTS

Over 260 delegates gathered in Istanbul for the IBIA Annual Convention 2019 and were treated to a high calibre of speakers and networking with a wow-factor

ith the transition to a hugely significant and impactful regulatory change underway, Istanbul was an apt location for the IBIA Annual Convention 2019 to examine how to bridge the gap to the global lowsulphur regime. The historically significant city of Istanbul straddles two continents across an important waterway, and the theme for our Convention this year was “Connecting East & West to Get 2020 Straight”.

We opened the conference itself with welcome notes from IBIA Director Unni Einemo and the IBIA Chairman Michael Green, from Mustafa Muhtaroğlu, Reserve Board Member and Bunker Committee Chairman of Turkish Chamber of Shipping and Deniz Eraydın, Chairman, Turkish Bunker Association.

Following that we heard keynote speeches from Sadan Kaptanoglu, BIMCO President, from Tamer Kiran, Chairman of the Board of Directors, Turkish Chamber of Shipping and finally, with a translator, from Selim Dursun, Vice Minister, Republic of Turkey Ministry of Transport and Infrastructure. They all recognised the significance of the sulphur regulation from the International Maritime Organization.

Just under a year earlier, IBIA’s Annual Convention in Copenhagen heard reassuring messages from the supply side that the necessary products will be made available when the time is right. In Istanbul, it was time to take stock to assess whether we are in fact ready for the entry into force of the 0.50% sulphur limit. We were honoured to be hosted by the Turkish Chamber of Shipping, which was also the host for the welcome reception held on the evening of 22 October in the splendid Çırağan Palace Kempinski. This historical palace was also the venue for our Convention, making use of one of its huge ballrooms which could comfortably accommodate our 260-plus participants.

IBIA Chairman- Michael Green, Turkish Chamber of Shipping Chairman -Tamer Kiran

Unni Einemo, IBIA Director

Tamer Kıran, Turkish Chamber of Shipping, Chairman

Selim Dursun - Vice Minister, Republic of Turkey Ministry of Transport and Infrastructure

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IBIA ANNUAL CONVENTION

he IMO has put in place a truly comprehensive set of 2020-related guidelines for all stakeholders, helping ships to prepare and ensuring that control mechanisms are in place to deter non-compliance. Industry has also been working hard to provide guidance on the practical aspects of dealing with new fuel blends. This was covered during the first session of our Convention, which heard from Edmund Hughes, Head, Air Pollution and Energy Efficiency at the IMO’s Marine Environment Division and from IBIA Board Member Patrick Holloway, a partner in the law firm Webber Wentzel. IBIA Director Unni Einemo was also speaking in this session where she stressed that while enforcement is up to the MARPOL Annex VI signatory states, compliance is up to the industry. Even if enforcement may be weak in some parts of the world, industry must not be discouraged from complying, she said. She also stressed the need for stakeholders to support each other in seeking compliance through communication, a pragmatic approach and a cooperative spirit. Calls for cooperation was a recurring theme throughout the Convention. In session two, “2020 Fuel Challenges – Are we Ready?” we heard from Tracy Wardell of Intertek ShipCare about the anticipated quality of fuels complying with the 0.50% sulphur limit, based both on past experience with low sulphur fuel oil blends and testing of products that meet the 0.50% sulphur limit received by the company so far. There will be a wide variety of fuels entering the market, which means a degree of caution is essential along with gaining knowledge of fuel quality prior to use. Although the 0,50% sulphur fuels tested so far appear to be of good quality, the on-board handling of the fuel is critical, she said, pointing to support and guidance available in the Joint Industry Guidance document which IBIA has been involved in producing, and the Publicly Available Specification from the ISO. Erdem Coker of Istanbul-based supplier Unerco also spoke about how the very low sulphur fuel oil (VLSFO) products are expected to present more challenges with compatibility. World Bunkering WINTER 2019/20

Edmund Hughes from the IMO’s Marine Environment Division

Patrick Holloway, Partner, Webber Wentzel delivering the IBIA Bunker Training Course

While predictive models suggest 75% of VLSFOs will be compatible with each other, the 25% that are not represents a much higher risk of incompatibility than is the case for the HSFOs that have been commonly used until now. We heard about the difficulty in deciphering the initial price signals for VLSFO from Matt Wright of Argus Consulting, who also shared insights on how refineries are dealing with the sudden sharp drop in demand for HSFO and how VLSO blend stocks vary between regions. This is one of the key reasons why the nature of VLSFO blends will also vary. Wright also spoke about the uptake of scrubbers which he said has slowed down but would likely pick up again if differentials between HSFO and compliant fuels are high going forward into 2020. Ian Adams of the Clean Shipping Alliance 2020 put forward the case for scrubbers,

pointing to advantages in terms of not just sulphur oxide reductions, but also achieving better results than burning low sulphur distillate fuels with regards to emissions of particulate matter. As for the controversy surrounding open loop scrubbers, he pointed to several independent studies showing that scrubber washwater does not pose any threat to the marine environment either in the short- or long-term.

Unni Einemo, Ian Adams, Erdem Coker, Tracy Wardell, Matt Wright

IBIA ANNUAL CONVENTION

MO 2020 is just the beginning of fundamental changes to the bunker market: we need to decarbonise shipping and we need it to happen fast. Session three explored some of the options available to put shipping on the course toward zero emissions. A presentation by Tomas Aminoff of Elomatic was a tour de force demonstrating the challenges ahead as shipping searches for future-proof options. He predicted a big role for natural gas and electrification, but cautioned that availability of green primary energy will be a limiting factor for years to come. Many of the alternative fuels have shortcomings due to taking more space on the ship, and hence future vessels need to be extremely efficient, he noted. Alexander Prokopakis of Probunkers is a believer in LNG as part of the solution to reduce GHG emissions from shipping, with the only disadvantages being the cost of building LNG-ready ships and supply infrastructure. Probunker’s ambition is to ensure supply infrastructure is enhanced, aiming to establish an LNG global supply company with its own LNG bunkering vessels and physical LNG bunker supply in seven key ports. Chris Chatterton of the Methanol Institute, meanwhile, spoke about the potential for methanol as a marine fuel as it is not just clean-burning but also widely available, and ships can be adapted to use it at a relatively low cost. Although it is currently produced mainly from natural gas, it is an energy carrier that can be sustainably produced in large quantities either as bio-methanol or from combining carbon capture with renewable electricity in the future, he said.

We live in an age where technology is developing rapidly. Stuart Hall and Marc Johnson of BunkerTrace showed us how synthetic DNA ‘tag and flag’ markers can be applied to bunker fuel at multiple locations, enabling the verification of product origin. Used in combination with blockchain technology, they believe it is possible to enhance marine fuel traceability and provide a clear chain of custody for quality assurance. Their solution includes a portable test kit that can quickly identify whether the tag and flag DNA markers are correct and present. It has already been trialled and is gaining interest from some bunker suppliers. Session four was a leadership panel with a stellar line-up representing a cross-section of the supply side: Alex Jamet of Peninsula Petroleum, Lars H. Nielsen of BMS United, Cem Saral of Cockett, Mikhail Shapiro of Glencore and Luca Volta of Exxon Mobil.

We had Charis Plakatonakis of Star Bulk from the shipping side and Robin Meech of Marine and Energy Consulting. They shared their views on the overall IMO 2020 readiness in the shipping and bunkering markets, what are the opportunities and challenges, and how do they see the future beyond 2020. While they had some concerns, overall this ‘magnificent seven’ shared IBIA’s hope that IMO 2020 will be a catalyst for raising standards in the global bunker industry, and to a some degree help us prepare the right mindset for the even bigger challenge coming our way as the IMO steps up the drive to reduce GHG emissions from international shipping. Wednesday ended with the Convention gala dinner which saw the conference venue ballroom transformed into a stunning dinner venue with delicious food and live music from the talented Turkish band Dolapdere Big Gang, chosen by the sponsor for the dinner, the so-called ‘Istanbul 2020’ group of local companies.

Unni Einemo, Alex Jamet, Lars H. Nielsen, Cem Saral, Luca Volta, Charis Plakantonakis, Robin Meech, Mikhail Shapiro

Tomas Aminoff, Chris Chatterton, Alexander Prokopakis, Stuart Hall, Nigel Draffin

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Eleni Pittalis from S&P Global Platts spoke about the changing pricing structure for distillates and fuel oil leading up to 2020. Her most surprising message was that there was no evidence of anybody building up a repository of distillates in preparation for 2020. This is puzzling given that there is an expectation for distillate demand to go up sharply, either for use as fuel or as a blend component to make VLSFO. Meanwhile, stockpiling of VLSFO has been evident in bunkering hubs. The distillate market may be in for a rude awakening when the dual pressures of IMO 2020 and the northern hemisphere heating oil season both kick in at the same time. Session 5 ended with a double act from OceanConnect. Can Ertem spoke about the challenges in managing counterparty risk in 2020, which comes after period of weak earnings in shipping sectors since 2008. Bunker prices will rise significantly in 2020, which will hit already severely weakened shipping company cash flows, unless freight earnings rise sufficiently to cover the extra cost. It will be a challenge for bunker providers, both suppliers and traders, to maintain sufficient liquidity to maintain the same volumes of fuel as prices go up, especially if end buyers are slow to pay, or even worse, can’t pay.

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IBIA ANNUAL CONVENTION

On Thursday morning, session five heard a strong line-up of speakers address the repercussions of IMO 2020 on the legal and commercial landscape in the bunkering industry. Danny Chua of Singapore law firm Joseph Tan Jude Benny Llp spoke about what vessels calling at the port of Singapore can expect with regards to enforcement, and about legal issues arising in charter parties. Grant Hunter of BIMCO elaborated further on the range of contractual issues arising during the transition period to the 0.50% sulphur limit. BIMCO has worked hard to create a suite of clauses which fit into existing time charter party schemes that will address the issues by allocating risk and responsibility in a fair and proportionate way. Hunter recommended to Incorporate the BIMCO 2020 Clauses and also to review existing bunker clauses in time charters to ensure they are fit for purpose.

Danny Chua, Grant Hunter, Eleni Pitalis, Kumar Balian, Can Ertem, Steve Simms

The risk of defaults and bankruptcy cases means banks have less appetite to provide funding for bunker companies, Ertem noted. Kumar Balian focused on the legal implications, in particular how it is mostly the ship that needs to ensure compliance. He also spoke about an increased risk and exposure for insurers due to things that could go wrong, such as potential for engine damage caused by fuel problems, or covering fines for accidental non-compliance. Session six was a panel of shipowners composed of several Turkish company representatives: Aydin Aydin of GedenLine,

Cihan Eegenç of ER Denizcilik AS who is also Vice president of the Turkish Ship Owner Association, and Capt. Ulunay Terzi of COFCO International Freight. We also had Peter Martin Grünwaldt of leading tanker firm Hafnia, and a duo from Stena Bulk of Sweden; Lars Malmbratt and Vishnu Prakash. The first half of this session was dedicated to IMO 2020. With few exceptions, the panellists demonstrated a good level of preparedness, having for the most part accepted that the transition to the 0.50% sulphur limit actually needs to happen prior to 1 January 2020 and not during 2020. Compliance is expected from the start of the year, not sometime later.

Aydin Aydin, Cihan Ergenc, Peter Martin Grunwaldt, Capt. Ulunay Terzi, Lars Malmbratt, Vishnu Prakash, Unni Einemo

IBIA ANNUAL CONVENTION

he second half of this session focused on the future GHG challenge, something Stena Bulk has given a lot of thought to. Malmbratt gave a presentation on opportunities and challenges for decarbonisation in shipping. There are many challenges, such as questions of how GHG reductions will be regulated and the high cost of every carbon-reduction alternative beyond those simply targeting better energy efficiency. “Uncertainty, highcosts for early adopters, and slow growth in demand for clean shipping create both challenges and opportunities,” Malmbratt said. Stena Bulk, for its part, is actively seeking collaboration with industry stakeholders to move in the right direction, and called for the bunker industry to get involved and engage in the 2050 transition in order to have input regarding how to stay on the trajectory towards lower CO2 emissions. That way, Stena Bulk hopes the options for how to reduce CO2 will be identified and kept to a minimum to help streamline the process and avoid stranded investments in suboptimal solutions. The final session of the Convention was all about Turkey as an example of 2020 readiness in a panel debate moderated by Mustafa Muhtaroğlu of local bunker supplier Energy Petrol. He had also selected all the panellists: Ufuk Erinc of Unerco, Celal Ersan of POAS/Vitol, Taha Karakan of BMS United Bunkers, Zeki Tarakci of Socar Energy and Mustafa Aslan of Asmira Bunker. Although he was not participating in the panel, the discussion broadly reflected points made about Istanbul by Erdem Coker of Unerco during his presentation the day before. He said Istanbul is a safe and economically advantageous place to buy bunkers because it is known for having no quantity issues, quality is controlled by customs, the market is governed by strong rules and code of conduct and is served by strong suppliers with about 60 bunker barges operating in Istanbul, of which 20 came into the market as recently as between 2010 and 2017. Moreover, bunkers delivered in Istanbul are delivered to ISO 8217:2017 standards, he said.

Bronze Sponsorship Award Recognition to BMS United - Antonis Xiros, Group Director, by Sofia Konstantopoulou, IBIA Global Head, Marketing & Events

Mustafa Aslan - CEO, Asmira Petrol

Another interesting snippet that came up during the Istanbul panel was that some of the local bunker suppliers have agreed to use the latest bunkering terms and conditions from BIMCO, the so-called BIMCO Bunker Terms 2018. In conclusion, Istanbul is well prepared for 2020 with supplies of both distillates and VLSFO complying with the 0.50% sulphur limit as well as plans to continue to offer HSFO to ships equipped with scrubbers.

As the conference programme drew to a close, delegates stepped out of the Çırağan Palace into the warm afternoon sun, and onto a large leisure craft. We were treated to drinks and nibbles while sailing along the scenic Bosphorus, sponsored by Asmira Bunker, a company with supply operations along Turkey’s Aegean Sea coast. As the sun was setting over the Bosphorus, we stepped ashore for a very special evening sponsored by Peninsula Petroleum, starting with a private guided tour of the iconic Hagia Sophia followed by a late evening dinner at the Park Fora restaurant.

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Our sincere thanks go to everyone who contributed to making this IBIA Annual Convention a success, in particular our host the Turkish Chamber of Shipping and all the support provided by its Bunker Committee Chairman; Mustafa MuhtaroÄ&#x;lu. We all benefited from the generosity of our sponsors that enabled us to produce a Convention with such a lavish setting and hospitality: ISTANBULBUNKER2020, Peninsula Petroleum, BMS United, Asmira, Terpel, Med Petroleum, Cockett Group, Zeos Shipping, Argus and Turkuaz. We are also grateful to our media partners World Bunkering and Ship & Bunker as well as our Media sponsors Allaboutshipping, Argus, Petrospot, Manifold Times, Deniz Ticareti and Virahaber. Is the industry ready for 2020? Judging from the messages coming from most industry stakeholders at the IBIA Annual Convention 2019, preparations have been made and many were just waiting for the final push during November and December. It increased our confidence that industry will face up to the challenge and bridge the gap to IMO 2020.

Hagia Sophia Private Tour Sponsored by Peninsula

ISTANBUL BUNKER 2020 and Turkish Chamber of Shipping

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IBIA ANNUAL CONVENTION

Eugenia Benavides, Tahra Sergeant, Unni Einemo, Sadan Kaptanoglu, Irene Notias, Sofia Konstantopoulou

IBIA ANNUAL CONVENTION 2019

Conference Room at the Ciragan Palace Kempinski

IBIA Bunker Training students with Nigel Draffin

ETHICS Workshop by Steve Simms, Prinicipal, Simms Showers LLP and Irene Notias,Managing Director, Primeâ&#x20AC;&#x2122;s BunkersPlus Services

IBIA Secretariat

Closing Dinner sponsored by Peninsula

Exhibition Opportunities

Gold Sponsorship Award Recognition to ISTANBULBUNKER2020 by Sofia Konstantopoulou, IBIA Global Head, Marketing & Events

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Official Gala Dinner sponsored by ISTANBUL BUNKER 2020

Networking Opportunities at the Çırağan Palace Kempinski

Official Gala Dinner sponsored by ISTANBUL BUNKER 2020

Private Boat Trip in Bosphorus sponsored by Asmira Petrol

Private Boat Trip sponsored by Asmira Petrol

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Silver Sponsorship Award Recognition to Peninsula - Can Besev, Global Business Origination Manager, by Tahra Sergeant, IBIA Africa Regional Manager

IBIA ANNUAL CONVENTION 2019

Mustafa Muhtaroglu, Sadan Kaptanoglu, Ahmet Secuk Sert, Tamer Kiran, Ismet Salihoglu, Selim Dursun, Durmus Unuvar, Salih Zeki Cakir

JOIN US Membership Benefits Join IBIA to become part of a global network of bunker industry experts who collectively form one of the world’s leading authority on bunkers. 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 through participation in IBIA’s Working Groups that help to develop industry guidance, formulate IBIA’s input to the IMO, and work on solving industry issues, addressing both commercial and technical aspects. Individual - £250

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ALL THE BENEFITS OF INDIVIDUAL+ • Register up to two offices anywhere in the world • The right to vote for Board Member Elections (2 votes) • 5 user registrations on the IBIA portal • 2 subscriptions per office to World Bunkering magazine, sent to all registered offices • Eligible to book up to 4 tables at the prestigious IBIA Annual Dinner • Eligible to add further offices for a reduced fee of £500* per office

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* The £1250 corporate membership is for the first two offices only. Corporate additional is £500 per office.

Corporate additional members get all the benefits of the Corporate membership with the exception of the right to vote for Board Member elections. You can add as many additional offices as you pay for. Affiliation with the primary Corporate member must be authorised. £500 per additional office. Special cases can be negotiated individually with the IBIA membership management team.

Multiple year discounts • 15% discount for 3 years membership, (Paid in one instalment) – Guarantee no membership price increases for the next 3 years. • IBIA Members On-line Directory • The IBIA directory is only available to IBIA members. • If you are interested in learning how you can become more actively involved and become a member email tara.morjaria@ibia.net or visit ibia.net. • Unregistered offices will not get IBIA benefits

IBIA CODE OF ETHICS IBIA is appealing to all of its members to join this important initiative by showing support for our Code of Ethics. It’s an aspirational statement and an important step towards our aim of promoting the adoption of a common set of ethical values across the industry. We believe that when the entire industry acts with the highest ethical standards that this will be to the benefit of us all.

FAIR BUSINESS • We conduct our business in a fair and transparent manner • We will always act in the best interest of each business partner and are honest with the stakeholders involved in our business • We only engage in business using compliant products, and deliver the quality and quantity agreed with our business partners • We always act in good faith

BEST PRACTICE • • • • •

We always act in accordance with applicable legislation, including sanctions We always meet contractual obligations in a timely manner We always do our best to avoid disputes and seek resolution promptly if disputes occur We comply with all applicable competition and anti-corruption laws We respect confidential information and do not unlawfully use any intellectual property

SOCIAL RESPONSIBILITY • • • •

We seek to minimise our environmental impact and the risk of environmental damage We will always ensure employees’ health, safety and security We offer equal opportunities, prohibit unlawful discrimination and respect human rights We offer the same opportunities for professional development to all our employees

TRANSPARENCY • • • •

Our accounts and records are kept accurately and reflect the true state of the company and its operations During audits or investigations, we fully cooperate with the authorities We will not receive or give any gift or entertainment of disproportionate value We are fully committed to preventing both money laundering and terrorist financing

You can sign up to our Code of Ethics online: https://codeofethics.ibia.net/ World Bunkering WINTER 2019/20

INTERVIEW

STAR BULK ON STRATEGY Star Bulk is a major global shipping company. The company’s Chief Strategy Officer, Charis Plakantonaki, shares her thoughts on industry issues with IBIA’s Unni Einemo

tar Bulk Carriers Corp. is the largest US listed dry bulk shipping company with a fleet of more than 110 modern vessels with a combined capacity of more than 13 million dwt. Charis Plakantonaki joined the Athensbased company in 2015 where she is responsible for strategic planning, corporate communication, human resources and information technology. UE: We are just weeks away from 1 January 2020 and Star Bulk has chosen exhaust gas cleaning systems (EGCS), or scrubbers, as its main IMO 2020 compliance strategy. How much of your fleet is not yet ready to use scrubbers, and will the entire fleet eventually have them? CP: Our strategy is to install EGCS on more than 95% of our existing fleet. As of 1 January 2020 we expect to have at least 70% of our vessels with operable and fully certified EGCS while the certification of the systems on the remaining vessels is expected to be gradually completed by early March 2020. UE: For those ships that are not scrubber-ready, will you be using MGO or very low sulphur (VLSFO) fuel oil blends? Do you have concerns about VLSFO? CP: For the few of our vessels which will not be equipped with an EGCS by 1 January 2020 we will be prepared to use both MGO and VLSFO. Regarding very low sulphur fuel oil, either blends or direct refinery products, and given that they are new products for the marine industry, we are following the relevant IMO and industry guidance and also taking all necessary action such as tank cleaning and crew training on fuel storage and handling. For the initial roll out phase of the regulation it is our intention to use LSMGO as a tested fuel solution, something though that may change later into 2020.

UE: What other preparations has Star Bulk made for the transition to the 0.50% sulphur limit in anticipation of potential problems? Have you, for example, entered into contracts for supply of high sulphur fuel oil (HSFO)? Are you concerned about HSFO availability? CP: HSFO availability and pricing is definitely a consideration for us as the majority of our fleet is expected to continue burning HSFO as of 1 January 2020 and we are constantly in discussions with our bunker suppliers and oil majors to identify potential supply disruption issues. So far we have not entered into physical contracts but we may decide to do so in the future should we see a need for it. Overall, we expect that HSFO will be available in major ports although during the first months we may experience volatility in pricing until supply and demand eventually balances out. UE: IMO has finalised a comprehensive set of guidelines for consistent implementation of the 0.50% sulphur limit. Have you found them useful? Are you, for example, making use of the IMO’s voluntary Ship Implementation Plan for your vessels? Is there anything else that should have been covered? CP: We have seen the IMO develop detailed Guidelines on various fronts related to 2020 and this has been critical in order to prepare the industry for timely and effective compliance. Despite the non-mandatory nature of the Ship Implementation Plan (SIP), Star Bulk has developed vessel-specific SIPs for all its vessels including the ones fitted with ECGS. We have also carried out specialized workshops with major classification societies, main engine makers and laboratories to identify risks related to the new fuels such as storage and handling. UE: Companies that have chosen scrubbers as a compliance solution with MARPOL Annex VI sulphur limits would in large part base the decision on economics,

in particular the price differential between HSFO and compliant fuels, and possibly gaining preferential rates when chartering out vessels. Have the economics changed much since the company decided to go down this route and would you make the same decision today? CP: One of our major considerations when we made the decision to comply with IMO 2020 back in 2016 through installing EGCS on our vessels, was risk management. If the market fundamentals do not play out in ship-owners’ favour as of January 2020 onwards and we are faced with a market downturn, we will still be able to continue burning HSFO which is expected to be more economical than 0.5% fuel, therefore we see scrubbers as a financial and operational hedge safeguarding our company’s viability. We would still make the same decision today even if the differential price reduces because our main goal is not outsized profits but making sure the company survives operating in a challenging market environment. UE: The use of open-loop scrubbers has come under fire from several quarters, including other Greek shipping companies, who claim it isn’t an environmentally sound solution because it simply moves pollution from the air to the sea. What do you think of the on-going debate around this issue and where do you see it going? CP: The IMO has in place Guidelines for EGCS which include among others criteria for the discharge water from open-loop scrubbers, stipulating strict limits on the washwater parameters so as to prevent pollutants from entering the sea. To ensure a uniform and consistent implementation of IMO 2020, it is important that we place trust in the decisions of the global regulator which is the IMO and which comprises of members states at the end of the day. At the same time,

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UE: Star Bulk is obviously a major bunker fuel buyer so I’d like to ask you about the company’s experiences in this area. Were any of your ships affected by operational problems stemming from HSFO supplied in Houston, Panama or Singapore during the first half of 2018? If yes, how was this resolved, or are there still unresolved issues? CP: We did not experience any contamination issues from our suppliers, however, these incidents highlight the importance of applying additional risk mitigation measures. When necessary, specialised fuel lab analysis is carried out to identify contaminants in the bunker stems that are not part of ISO 8217 latest edition. UE: What do you want from bunker suppliers? What works, and what needs to improve? CP: Quality of fuel is our top priority. Also, service reliability: we need to be certain that our selected fuel supply counterparties honour their obligations, deliver exactly what was ordered, at the date agreed, without quantity issues. Finally, more transparency of the bunker supply chain for more efficient pricing is needed and there are various initiatives across the industry towards this direction. Improvements should be seen on all fronts, although it is positive to see that bunker suppliers are already adapting to more stringent requirements. UE: Do you see a need for more regulations on the bunker supply side? If so, what do you think needs to be regulated? CP: We would urge administrations to carry out ad-hoc tests on fuel prior to delivery to ships so as to prevent delivery of fuels that do not comply with MARPOL regulations – both regarding sulphur and fuel quality.

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This matter has been discussed within the IMO as well and we would welcome such spot checks whenever there is cause for concern. UE: The 2020 sulphur regulation is clearly a challenge for the shipping industry. Do you see opportunities as well? CP: During 2020 vessel supply is expected to be impacted because some vessels will be out of the market fitting scrubbers, others could be cleaning tanks or slowing down to make up for increased bunker costs. We may also see accelerated scrapping and changes in trade patterns particularly so in the product tanker trades. All this should be good for the market overall and help freight rates improve. UE: Shipping companies have been pursuing energy efficiency since 2008 to reduce bunker consumption. What’s Star Bulk strategy in this area? What’s your fleet’s current bunker consumption, and have you set any carbon reduction targets? If so, how are you achieving them? CP: Our newly-built vessels of the recent years have been designed on the concept of optimising energy consumption. We have installed high efficiency electronically controlled engines with improved fuel oil consumption, high efficiency propellers, and have worked closely with shipbuilders in optimising hull form lines of the vessels to reduce further the underwater part resistance during sailing. In addition, we select carefully the antifouling paints in order to maintain hull resistance at the lowest practicable level. Regarding our bunker consumption, we are closely monitoring our vessels’ performance through onboard telemetry and sensors and have a dedicated team to optimise sea passage routing and therefore fuel oil consumptions. Star Bulk published this year its first Annual Sustainability Report where we report our fuel consumption, our GHG emissions, and our performance targets in terms of energy efficiency and emissions reduction. UE: The IMO is discussing how to put in place regulations to support its policy ambitions to reduce carbon intensity and overall emissions.

Do you have any thoughts on how Star Bulk can best adapt to these longer-term needs? CP: Having solidified our IMO 2020 strategy, decarbonization is now the major topic on our strategic agenda. We are committed to contributing to the industry’s efforts to develop commercially viable solutions to gradually phase out GHG emission from shipping. In this respect, Star Bulk recently joined the Getting to Zero Coalition: we believe that it is only through partnerships and collective action among all stakeholders, including governments, that we can achieve this major change in the industry. UE: IBIA welcomes all bunker industry stakeholders to the Association and I am very happy that Star Bulk has joined as a member. Do you have any advice for IBIA’s strategy going forward? CP: I believe IBIA is contributing greatly to the shipping industry by engaging all stakeholders and by voicing everyone’s ideas and concerns. This is the main reason we have joined, because we believe that you impartially represent all parties and not only bunker suppliers. Our advice would be to continue working towards driving the bunker industry to become even more transparent, qualitydriven and environmentally conscious.

Charis Plakantonaki

INTERVIEW

the most recent and comprehensive studies on this matter, such as the study of the Japanese government, the study of CE Delft which is a Dutch research organization and others, conclude that EGCS do not negatively affect the marine environment.

INDUSTRY NEWS

RUSSIA COULD DELAY 0.50% RULE The Russian government is considering exempting the country’s domestic fleet from the 2020 sulphur in fuel regulation for up to four years

layers in the Russian domestic shipping markets are hoping for a delay in the implementation of the 0.50% sulphur limit have been encouraged by official statements. It appears senior policymakers are considering allowing the use of high sulphur fuel oil (HSFO) until 2024. The heads of the Ministry of Transport and the Ministry of Energy of the Russian Federation have both announced that a decision will be taken at the end of this year, just before the global regulation is due to come into force. It now appears possible that, based on an initiative by the Deputy Prime Ministers of the Russian Federation, that the Council of the Eurasian Economic Commission could soon prolong the sales of fuel with a sulphur content of more than 0.5% on the territory of the Eurasian Economic Union until 2024. While the IMO regulation is concerned with the carriage and use of fuel, the discussion in Russia is being framed in terms of what fuel is going to be sold to ships on the inland waterways or even what will be available more generally. The inland waterways shipping companies have put considerable pressure on the government. They argue that the inland fleet is fleet is unprepared for the change and,

more importantly, there would be an “inevitable” increase in operating costs. According to Yuri Tsvetkov, the Deputy Minister of transport, if the decision to delay is not taken there would be an increase marine fuel prices of between 20 and 30%. “It is illogical to impose heavier requirements (than the requirements of MARPOL) and deliberately make matters worse for our river fleet,” Tsvetkov was quoted as saying. That appears to imply that he believes that the IMO regulation does not apply to internal waters. IMO guidance on this issue is: “The sulphur oxides regulation (MARPOL Annex VI, regulation 14) applies to all ships, whether they are on international voyages, between two or more countries; or domestic voyages, solely within the waters of a party to the MARPOL Annex.” Russia is a party to MARPOL Annex VI. The possible delay would not, however, extend to ships on international voyages.

Industry sources say there should be adequate availability of compliant fuel in all Russian ports. The Russian Association of Sea and River Bunkers has appealed to various authorities to ensure the production, transportation and sale of higher-sulphur fuel after January 1, 2020 for ships equipped with scrubbers. (For more Russian news, see page 66. KPI Bridge Oil sells more 2020 compliant fuels than HSFO in November KPI Bridge Oil says that the group’s sales of 2020 compliant fuels exceeded that of high sulphur fuel oils for the first time in November. The company’s CEO, Søren Høll, said: “We started fixing 0.5% sulphur contracts in flow ports at the beginning of Q2 and, as expected, the demand from business partners looking to secure availability of 2020 compliant fuels has steadily increased since.

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World Bunkering WINTER 2019/20

Founded in 2016, ReSeaWorld is an Italian Company specialising in Marine Bunkering

he company is located in Italy, in the heart of the Mediterranean Sea, a strategic position for major shipping routes connecting Europe, Africa and the Middle East. On a daily base, the company works predominantly in the Mediterranean Sea and expanding the presence in Asia and Africa. The ending year allows ReSeaWorld to consolidate its presence in the bunker industry and allows increasing the portfolio network becoming an international company. History ReSeaWorld, founded after years of performing in the Shipping industry, born from ancestral Shipping Owner family inheriting the passion for the Sea.

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Thanks to the knowledge and the experience matured from the team during the precedent experience as Managing Director and Head of Bunker Supply, of a Shipping company, ReSeaWorld understands and achieves the clientâ&#x20AC;&#x2122;s needs and requirements Present As of today, ReSeaWorld, thanks to the market knowledge and the network build in over thirty years in the Shipping industry, works as Oil trader and broker providing to the clients worldwide services. We want to highlight our ability to support the foreign traders that work vessels in Italian ports. We have excellent relationships with all physical supply and all traders, we are also very informed of the Italian laws and of the difficult procedures and directives to be respected here in Italy.

ReSeaWorld, base its mission on providing high-quality services, following step by step the whole vessels bunkering process carefully, from the quotation, through the negotiation until the supply. The strong experience of the senior management team, the motivation and the determination of the young team, together, give ReSeaWorld the perfect balance in order to satisfy all customers needs.

Alberta Della Gatta, Valeria Sessa, Luciana Della Gatta

COMPANY NEWS - RESEAWORLD

PASSION TO PERFORM

INDUSTRY NEWS

n this final stage of the switch to 2020 compliant fuels we’re experiencing significant price and availability fluctuations in most ports around the world as the market adjusts. We have previously talked about an anticipated price differential of 3040% between compliant and non-compliant fuels, depending on region and local availability and this upward drive on prices seems to be materialising.” He added: “We are consequently also still expecting to see a shortage of available credit in the market moving into 2020. Like most of the leading players in the bunker industry, KPI Bridge Oil has been preparing for the expected market changes for a long time. We secured access to a new large revolving credit facility and undertook a comprehensive internal review of our business model to prepare our systems, operations and team members for the 2020 regulations. According to Høll there was likely to be frequent and significant price swings depending on location and availability until the market settled at a new equilibrium and the supply side had fully completed the transition. Futures contract for VLSFO Freight Investor Services brokered the first futures trade on the SGX Platts Marine Fuel 0.5% FOB Singapore Index in November. The trade was for March 2020 at $503 per tonne. “The volatility and price risks for shipping companies as we approach the start of the IMO2020 regulations are putting intense pressure on the margins that shipowners will earn next year,” said FIS Founder John Banaskiewicz. “On a Brazil-China voyage at a freight rate of $21.90/tonne, the 0.5% fuel component represents 56% of the freight rate, an incredible $6.60/tonne premium compared with using 3.5% fuel. On the Aus-China route at $9.80/freight rate, 2020 compliant fuel would be 43% of the freight rate, a $2.70/tonne premium over 3.5% Sulphur fuel.” He added that the fuel oil paper market, used for hedging bunker fuel exposure, is very liquid but shipowners are still a small part of the liquidity and can often get overlooked because of their trade size requirements.

Proman Stena Bulk has orderd two IMOIIMeMAX methanol-ready 49,900 DWT tankers from Guangzhou Shipyard International

Proman Stena Bulk orders 2 two methanol fuel-ready tankers Proman Stena Bulk has ordered two IMOIIMeMAX methanol-ready 49,900 DWT tankers from China’s Guangzhou Shipyard International (GSI), with the first vessel due for delivery at the beginning of 2022. The company says that, following extensive development and towing tank tests by GSI and Stena Bulk for their 2015 – 2018 series, the IMOIIMeMAX line of vessels are amongst the most energy efficient mid-range tankers in existence. Both vessels will be fitted with dualfuel engines that will normally run on methanol, which “is rapidly emerging as one of the most viable, low emission and cost-effective marine fuel alternatives,” Proman Stena Bulk says. “Available at over 100 ports around the world and boasting significant CAPEX cost and safety advantages to comparable alternatives such as LNG,” the company argues, “methanol offers a clear pathway towards meeting the International Maritime Organization’s (IMO) commitment to cut carbon emissions from the shipping sector by 40% from 2008 levels by 2030, and overall greenhouse gas emissions by 50% by 2050. Compared with regular marine fuel, methanol offers a more than 95% reduction in sulphur oxide (SOx) and particulate matter, and a 60% reduction in nitrogen oxides (NOx).” David Cassidy, Chief Executive of Proman, said: “Methanol is a readily available liquid fuel that meets the strictest emissions criteria, and it has huge global potential as a proven substitute for conventional bunker fuels, as well as more widely for power generation and as a high-octane addition to the gasoline fuel pool.”

Bunker suppliers lose out as shipping company goes bust Bunker suppliers are thought to be owed a significant part of the US$23.5 million debts incurred by now bankrupt Danish company TS Chartering and are unlikely to be able to recover any of the sums owed. TS Chartering’s five-ship fleet has been returned to their owner following the company’s bankruptcy in October. It has been reported that the administrator has only been able to discover the equivalent of US$1,150 in the company’s bank account. The company was set up in 2012 but is reported to have made a loss every year. Another supplier starts VLSFO deliveries at Fujairah Physical supplier GP Global’s 6,000 dwt barge GPB1 carried out its first supply of very low sulphur fuel oil complying with the 0.50% limit at Fujairah in September. In addition to Fujairah, the barge will also serve other UAE ports. Anil Keswani, Head of Bunkering, East of Suez at GP Global Group said: “We are thankful to the authorities of the Port of Fujairah and our partners for their continued trust in us, which has enabled us to undertake the first bunkering of LSFO, just in time as the IMO 2020 takes effect next year. We are committed to supporting our partners and clients in meeting specifications, which will contribute a long way to securing a cleaner marine environment.” GPB1 can supply a range residual and distillate marine fuels, including LSMGO, VLSFO, 180 cSt and 380 cSt. The company has three more barges at Fujairah. The largest, GBP2, will be used exclusively for VLSFO.

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NEW FUELS

THE BIG SWITCH As the 2020 deadline approaches it appears clear that many ships will switch to VLSFO rather than MGO

hile at one time it was thought that distillate fuel would take over from residual when the 0.50% sulphur in fuel limit came into force, the economic reality facing ship operators as the deadline approach is that they may to turn to the cheaper alternative of using the many different very low sulphur fuel oil (VLSFO) blended products that have been developed since IMO took its decision to move to a 0.50% sulphur in fuel limit. A major global trader and physical supplier seems to have seen this coming. It said that “years of preparation for the upcoming IMO 2020 regulations was condensed into Monjasa’s first ship-to-ship supply of the new bunker fuel with a maximum 0.50% sulphur content.” The stem took place in early September and comprised both VLSFO and MGO <0.10% sulphur, the latter allowing the vessel to trade within the North European ECA. In October Monjasa noted that shipowners, operators and charterers around the world were “carefully preparing marine fuel supplies ahead of the IMO 2020 low-sulphur transition effective by 1 January 2020”. The company added that it would be supplying compliant VLSFO “broadly across our supply areas by Q4 2019”. The company appeared confident, saying: “Through our close relationships with oil majors and subcontractors, we have confirmed availability of adequate volumes of compliant fuel to satisfy our customers’ demand.” Nevertheless, Monjasa acknowledged the complexities. It said: “Enabling a successful transition for the industry demands increased on-board operational expertise and detailed product knowledge. Both on the supplying and the receiving vessel. Introducing VLSFO will result in a wider range of fuel formulations across the industry. Commingling blended products has always posed some uncertainty and will continue to do so after the introduction of VLSFO.” World Bunkering WINTER 2019/20

It added: “By sourcing marine fuel from the oil majors and applying our detailed knowledge of supply areas and fuel specifications, brings us comfort in enabling a successful transition.” Certainly, the majors are gearing up to supply VLSFO. China’s Sinopec Corp has announced plans to build 100 barges over the next three years specifically to deliver VLSFO. Reuters reported: “In what would be one of the top Asian refiner’s biggest shipping investments, Sinopec hopes the fleet would serve its stated ambition to become a top regional supplier of very low sulphur fuel oil (VLSFO). “To match Sinopec’s goal of supplying 10 million tonnes of IMO compliant fuel next year and 15 million tonnes in 2023, it (Sinopec) must have a fleet of its own,” a senior Sinopec executive based in eastern Chinese port Zhoushan was quoted as saying. Spanish oil company Cepsa says it is producing a VLSFO that complies with the general requirements of Clause 5 of ISO 8217: 2017 with the characteristics and limits of an RMG 380 but with a maximum sulphur content of 0.5%. The company says that, before its launch, the fuel was subjected to various trials, among others, stability tests after 60 days, “with excellent results”. Cepsa added: “In particular, several samples were tested in February, and in May the first supply tests were carried out on nine vessels in the Port of Algeciras, Spain.

The results, which surpassed laboratory tests, guarantee the safety and operational efficiency of the ship’s engines.” However, there is some doubt as to whether there will be sufficient VLSFO available. “Some refiners have already started producing 0.5% sulphur fuels from early this year but most of them producing this have managed to do so without making a lot of changes in the way they operate,” Sri Paravaikkarasu, director for Asia oil at Facts Global Energy, told the Inaugural Bunker Fuel & Ballast Water Compliance Conference 2019, organised by Conference Connection in November in Singapore. She was quoted by Hellenic Shipping News as saying that some countries including Indonesia, Malaysia “and even Thailand” process a lot of low sulphur crude. So, she explained, “it is relatively easy for these refiners to segregate the residual streams because the VLSFO premiums are very attractive currently, close to $200/ tonne, over HSFO.” Paravaikkarasu observed that not many refiners had invested in residual desulphurisation capacity in this region as well as overseas. She estimated that current VLSFO production could only meet about 20% of total bunker fuel demand in 2020. Unless Paravaikkarasu is way out in her assessment the new blended 0.50% compliant fuels will be available come January, but not in the quantities required to meet expected demand.

From 1 January different fuels will be coming up from the barge

NEW FUELS

CIMAC has issued guidance on using VLSFO

STABILITY AND COMPATIBILITY GUIDANCE Newly published advice will help ship operators and marine engineers cope when receiving VLSFO from different sources

il majors have been rushing to put 0.50% sulphur fuels onto the market and compliant bunkers are likely to be available, at a price, at bunkering hubs around the globe. However, there will not be one single type of VLSFO. There will be many different blends with widely varying characteristics and ships’ engineers may be faced with stability and compatibility issues. IBIA has helped to circulate the newly published CIMAC Guideline: Marine fuel handling in connection to stability and compatibility. It has been developed and approved by the members of the Fuels’ working group of CIMAC (International Council of Combustion Engines). The guidance aims to provide a practical and working understanding of stability and compatibility of marine fuel oils. Fuels which are unstable or incompatible when mixed are both associated with sludge formation caused by precipitated asphaltenes. This CIMAC guide explains how these two specific fuel properties may be best managed in the supply chain and on-board ships to mitigate associated risk. It compliments and expands on the information given in ISO/PAS 23263:2019 Considerations for fuel suppliers and users regarding marine fuel quality in view of the implementation of maximum 0.50% Sulphur in 2020.

IBIA believes the guide, along with the Joint Industry Guidance on the supply and use of 0.50% – sulphur marine fuel published in September, provides stakeholders across the marine fuels and shipping industries, from fuel blenders and suppliers to end users, with great tools to manage IMO 2020. The guide notes that, essentially, all existing marine fuels, distillates and residuals, are to some degree mixtures or blends of a range of hydrocarbon fractions both in terms of the base hydrocarbon products from which they have been produced and from subsequent blending, to meet certain specification requirements. Already a factor of existing fuels, marine fuel stability is addressed in ISO 8217:2017 by test method ISO 10307-2.

Traditionally, CIMAC explains, for residual fuels blending was principally in terms of viscosity control but then, with the greater availability of high-density refinery products, density also became a blending factor. The increasing restrictions on marine fuel sulphur content, defined by MARPOL Annex VI Regulation 14.1.3, have changed the primary blend target from viscosity and density to sulphur. Whereas viscosity and/or density are at a relatively consistent level within the same fuel grades in the pre-2020 fuels, the implications of this is that blending of marine fuels post 2020 is expected to result in a wide variability of fuel formulations and characteristics alike. Despite this variability in characteristics against a single ordering specification, CIMAC still recommends all marine fuels be purchased under ISO 8217:2017 in its entirety.

AIDA Cruises is developing new technoogfy to power its newbuildings including the AIDAcosmo due in 2021

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However, it is the responsibility of the engineers on board to apply best practice fuel management to mitigate the risk of mixing incompatible fuels; this is best achieved through defining a ship specific storage segregation strategy and where this cannot be avoided by applying a concise commingling plan. Various methods are available for determining the compatible nature of a specific fuel with other fuels.

Really new fuels Right now the term ‘new fuels’ brings to mind the various blends that are being produced to meet regulatory sulphur limits. But in fact these are fossil fuels and the future must lie elsewhere if shipping’s carbon footprint is to be reduced drastically Carnival Corp subsidiary AIDA Cruises claims that, in two years’ time, it will be the world’s first cruise company to test the use of fuel cells on a large passenger ship, the AIDAnova, as part of the Pa-X-ell2 research project. In addition to AIDA Cruises, Meyer Werft shipyard, Freudenberg Sealing Technologies and other partners are involved in the joint project funded by the German Federal Ministry of Transport and Digital Infrastructure. The objective is to find practical solutions for climate-neutral propulsion across all shipping sectors. The Pa-X-ell2 project specifically aims to develop a decentralized energy network and a hybrid energy system with a new generation of fuel cells for use in oceangoing passenger vessels. “With the first-time use of fuel cells on board an oceangoing cruise ship, we will reach a further important milestone on our journey to emission-neutral cruising, and will show further concrete solutions for achieving our climate targets,” says AIDA President Felix Eichhorn. Fuel cells enable power supply on board with even lower emissions than is currently possible with LNG. In addition they are quiet and cause little vibration, obvious advantages for cruise ships.

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The guide provides an overview of the commonly accepted and available test methods applicable to fuel stability. In addition, the methods that can be used to evaluate compatibility between fuels, either by direct testing and/or through forward prediction is covered. CIMAC highlights several existing test methods to evaluate fuel stability in this paper but their applicability and accuracy vary. Not all have been standardised and some neither have sufficient scientific recognition nor industry experience to apply for marine fuel oils, at present.

The fuel cells run on hydrogen obtained from methanol, which also has the potential to be produced from renewable energies in future. They are made by Freudenberg Sealing Technologies and are designed to have a far longer useful life than, for example, cells intended for use in cars. The manufacturer’s first trials ashore have shown that a lifetime of over 35,000 operating hours can be achieved. In 2018 AIDA Cruises commissioned the AIDAnova, the world’s first entirely LNG fuelled cruise ship. Two further LNG-powered AIDA cruise ships, built by the Meyer Werft shipyards in Rostock and Papenburg, will be put into service by 2023. AIDA Cruises is also exploring other ways of using innovative technologies to ‘go green’. In 2020 the world’s biggest battery storage system on a passenger ship to date, with total output of 10-megawatt hours, is due to start operating aboard AIDAperla. The company is also looking at the possibility of CO2-free extraction of liquefied gas from renewable sources. By the end of 2020, at least 12 of AIDA’s 14 ships will be able to use shore power wherever it is available. Since 2017 the AIDAsol has been using the shore power plant in Hamburg-Altona for its regular operations. Battery fire and gas explosion on ferry Recent developments in lithium battery technology have meant that battery propulsion is already a viable option for some coastal vessels and battery-powered ships are starting to operate around the world, including on Norway’s coastal routes.

Only one method (ASTM D4740) is available as a useful onboard screening tool for compatibility between two fuels of which one must be of a residual (RM) nature. Even then, CIMAC cautions, this method can give a higher rating number when waxier fuels are involved potentially resulting in a false negative result. So fuels that are actually compatible may be deemed less compatible or incompatible by the method. Unfortunately for engineers needing a quick check of the fuel they are taking on, the most effective way to determine a fuel’s stability or compatibility between two or more fuels, is using test methods that can only be applied in a controlled laboratory setting.

However, an incident in October on a ferry that had been retrofitted with battery propulsion has been widely seen as highlighting potential issues with lithium batteries and, particularly ‘thermal runaway’. On the evening of Thursday 10 October, there was a small fire in the battery room on board the passenger ferry Ytterøyningen. The crew fought and extinguished the fire and the ferry reached port under her own power. Passengers and crew were evacuated on land when she arrived. However, the next morning, there was an explosion below deck, in or adjacent to the battery room.

Following the incident, the Norwegian Maritime Authority (NMA) has issued a warning, recommending that all shipowners with vessels that have battery installations, carry out a new risk assessment of the dangers related to possible accumulations of explosive gases in the battery systems. The NMA stressed that actual cause of the fires and explosion and the exact sequence of events were yet to be established. NMA made no mention of thermal runaway although it is seen within the sector as a potential problem. The battery supplier Corvus Energy warned that vessels must not operate without communication between the energy management system (EMS) and the battery packs, as this may result in a breach in the transfer of important system data to the EMS/bridge.

NEW FUELS

In addition, the fuels shall be sulphur compliant in accordance to statutory requirements. It is the responsibility of the supplier to ensure that the fuel as delivered is stable.

ENVIRONMENT

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THE LONG ROAD TO IMO 2020 IBIA’s Director Unni Einemo takes stock of preparations and readiness for the most significant regulatory change for the bunker industry to date

hen the International Maritime Organization made the decision, in October 2016, that the global 0.50% sulphur cap would take effect from the start of 2020, it triggered a period of intense speculation and uncertainty about how it would affect the world as we know it, and how affected industries would cope with the reduction from the 3.50% global sulphur limit for marine fuels. It also triggered a flurry of planning and activity at the IMO and in the industry – in particular for refiners, bunker suppliers and shipping - to prepare for the new low sulphur regime. As 2019 draws to a close, I am reminded of some very wise words from one of the shipping companies that spoke at the IBIA Annual Convention in Copenhagen in November 2018. He said the 0.50% sulphur limit is not a 2020 problem, it is a 2019 problem. Inspired by this attitude, I came up with a mantra in mid-November 2018 that has been frequently repeated since, both by IBIA and others, namely the three Ps for IMO 2020: Plan, Prepare, Practise. These three Ps were applicable both to shipping and to the supply side: planning for how to achieve compliance and source the right products; preparing ships and supply infrastructure for the shift from high sulphur fuel oil (HSFO) to products complying with the 0.50% sulphur limit;

and practice to gain experience with very low sulphur fuel oil (VLSFO), as producing compliant fuels would inevitably mean new blend recipes. Increasing clarity At the time of writing, with just a few weeks to go before 2020 is upon us, some uncertainties remain but we actually know a lot, and signals have been getting clearer week by week. Sure, many things may not go to plan as we enter the new low-sulphur era, but help is at hand. IBIA has contributed actively to provide clarity and help, in particular in two areas: the IMO’s regulatory framework, and working with an industry project to produce guidance on the safe supply and use of fuels meeting the 0.50% sulphur limit. So what do we know? First of all, we know that the regulation will not be delayed. That signal has been coming through strong and clear from the IMO, despite concerns raised at the IMO by Member States and industry organisations about availability and safety implications caused by the drastic reduction in the allowable sulphur content in marine fuels from 3.50% to 0.50%.

We know what needs to happen in the supply chain from refineries through to the actual bunker delivery to ship in order to be ready for the 2020 sulphur limit. We know that refiners and suppliers have planned accordingly and by mid-November were busy implementing the final steps or had already done so. Products meeting the 0.50% sulphur limit have been made, tested and trialled by ships and it seems the experience has been positive. We should add that everyone involved in the initial trials – from producing the fuel and all the way through to use on ships - have taken good care to ensure they prepared and handled these fuels properly. This is what we need from all participants going forward. We know ships need to have cleaned their tanks prior to 2020, otherwise they risk contaminating compliant fuels because of built-up residues of HSFO dissolving and pushing the sulphur content above the limit. Ships that are planning to do the tank cleaning by simply flushing through their fuel system should also be aware of the safety risk if the tanks have not been cleaned for a long time, as this could cause significant volumes of built-up residues to be dislodged and cause large amounts of semi-solid sludge.

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IMO’s 2020 tool-kit The IMO has been working solidly since the decision was made go for 2020 to produce guidance documents to remove uncertainties and ensure consistent implementation of the 0.50% sulphur limit, providing answers to the “what ifs”. IBIA contributed significantly to the process. The first concrete outcome from the IMO was the adoption of the so-called carriage ban to facilitate enforcement, meaning ships without scrubbers will not be allowed to have HSFO in their fuel tanks. Although the carriage ban doesn’t take effect until 1 March 2020, that does not mean ships can continue to use HSFO until then. The 0.50% limit will apply to any fuel used from 1 January, 2020. The later entry into force of the carriage ban only gives ships a little longer clear out any HSFO remaining onboard. From a practical and legal standpoint, it is better for ships to have cleared all HSFO by the end of 2019 seeing as they cannot legally use it, but naturally the temptation is to continue using cheaper HSFO for as long as possible.

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In the autumn of 2018, the 73rd meeting of the IMO’s Marine Environment Protection Committee (MEPC 73) approved the Ship Implementation Plan (SIP), a non-mandatory form to help ships plan and demonstrate steps taken to become compliant. It also had an appendix on “impact on machinery systems” – preparatory elements to help ships plan for operating with a variety of fuels types with different handling characteristics (distillates and/or fuel oil blends), which IBIA contributed to, and an appendix on tank cleaning options including ‘flush through’ with compliant fuel; manual tank cleaning in dry dock/in operation or the use of additives. This was broadly based on a paper submitted to the IMO by IBIA. When IBIA presented the tank cleaning document to the IMO, the option of using additives was regarded with some scepticism, however, from feedback I have heard during the second half of 2019 it seems additives has been one of the most popular options for tank cleaning. The fact that it could be implemented without any interruption to operations and no need for manual labour has clearly made it attractive and cost effective. By this stage, I hope the preparatory elements of the SIP have been completed, but the SIP itself will nevertheless by a good way for ships to document their respective 2020 compliance plans to relevant authorities, such as port State control (PSC) officers. In May 2019, MEPC 74 concluded a raft of 2020-related guidance documents to assist industry and Administrations to effectively and uniformly implement the 0.50% sulphur limit. The guidance documents deal with non-availability situations, including a standardised fuel oil non availability report (FONAR),

they provide instructions to port state control authorities on inspections to verify compliance and information sharing, they provide practical advice to ships on potential fuel safety issues, and encourage Member States to be more proactive in their oversight over suppliers operating under their jurisdiction. Confusion continues to surround the use of FONARs, so let’s be clear: a FONAR is not an exemption; it is a mechanism for the ship to self-report non-compliance due to non-availability. PSC is expected to take a FONAR into account as a mitigating circumstance and may refrain from penalising the ship. A ship is required to provide detailed documentation to prove it could not obtain fuel oil meeting the MARPOL Annex VI sulphur limits despite best efforts. If a ship makes insufficiently supported and/or repeated claims of non-availability, the ship can be subjected to more extensive inspections or examinations. Basically, it may raise suspicion that the ship is abusing the FONAR system, which will not be tolerated. MEPC 74 also approved amendments to MARPOL Annex VI relating to verification of fuel sulphur content when checking for compliance, which now applies to three types of samples; MARPOL delivered samples (the sample taken at the time of delivery to show what the ship received), in-use samples (taken from as near the engine inlet as possible to show what it is actually using) and onboard samples (taken from a fuel tank to show what is being carried for use). This was covered in detail in the Autumn 2019 issue of World Bunkering.

ENVIRONMENT

e have a pretty good idea now of how much HSFO will be needed by ships with scrubbers globally as we enter 2020. For a while, take-up of the exhaust gas cleaning technology was slow and it looked like it would not be more than 5% of global demand, but installations have picked up and several analysts now peg the demand for HSFO from ships with scrubbers closer to 10%, or even 15%, of global bunker demand in 2020. Suppliers in many parts of the world have indicated that they will continue to sell HSFO and it isn’t only in the biggest port hubs like Singapore and Rotterdam. Even so, clear communication between suppliers and ship operators who have scrubbers installed remains crucial to get the supply and demand balance right. HSFO has to be stored in different shore and barge cargo tanks from 0.50% sulphur fuels. Suppliers will not want to store and supply HSFO unless the turnover justifies this segregated supply infrastructure.

ENVIRONMENT

Living with uncertainty So, do we have perfect clarity now? No, we don’t, but do we ever have perfect clarity about the future? Uncertainty is not new and most of the things we speculate about regarding IMO 2020 are things that we can never really know about the future anyway. Bunker fuel prices, demand, availability and quality have always been subject to fluctuations and variability. Likewise, the extent of compliance with sulphur limits and how they will be enforced around the world have mostly been guesswork until after they are in place, as we have already seen in those parts of the world that have implemented emission control areas (ECAs) with lower sulphur limits. The IMO’s framework is very detailed, but it isn’t up to the IMO to enforce the regulation, that’s up to individual countries. Undoubtedly, there will be variations in how diligently they do enforce it. For some, limited resources to perform detailed inspections will be an issue. But ships trade globally, so even if it may be tempting for some operators to save money by not complying, awareness about the 0.50% sulphur limit is high and several countries are ready to clamp down on any deliberate attempts at non-compliance. Quality concerns Concerns remain about the quality of compliant fuel oil blends as blend recipes, and hence other fuel characteristics, will change. Fuels are likely to have more variable viscosity than the HSFOs used today, and while stability should be tested during production, there are concerns that not all blenders will take proper care, and that new fuel blends may potentially deteriorate more rapidly during onboard storage and handling.

so mixing MGO with MGO will not cause any issues with compatibility. Mixing MGO with a residual fuel, however, can result in an unstable blend. MGO also has variable cold flow properties which those who operate in cold areas need to be aware of. All of this is described in detail in the Joint Industry Guidance on the supply and use of 0.50%-sulphur marine fuel. In order to help address concerns about the quality of compliant fuels and associated safety risks, IBIA was took part in the Joint Industry Project (JIP), a collaboration involving industry experts from fuel testing agencies, the entire bunker supply chain, and end users which have produced a 60-page document: Joint Industry Guidance on the supply and use of 0.50%-sulphur marine fuel. It covers the responsibilities of bunker suppliers and users and it is packed with practical advice on dealing with the anticipated types of max 0.50% sulphur fuels coming into the market, including the dreaded issue of potential incompatibility between different fuels. The fuel supply and use issues covered by the JIP guidance document are not new, but the variability of fuels meeting the 0.50% limit is expected to be greater than it has been until now, which will make best practices and diligence more important. The document highlights ways to prevent and/or mitigate fuel problems, in particular the challenges around managing potential incompatibility between different batches of fuel. It was published in August and is available on IBIA’s website.

Unpredictable pricing MGO may be easier to handle than 0.50% sulphur fuel oil blends, but the supply industry has nevertheless chiefly prepared to provide VLSFO and expect most ships to be using that rather than MGO for compliance in 2020. The reason is simple: VLSFO will cost less than MGO. Just how much less is one of the questions everybody is asking and which nobody will really know until the market determines it. The price difference will vary depending on the cost of the blend stocks used, which will also vary, making prediction even harder. The question for operators will be what the predictability of MGO quality and handling characteristics is worth for them compared to buying various 0.50% sulphur fuel oil blends with all that entails with regards to more complex fuel management. Transitional pain The signals from suppliers throughout 2019 have pointed strongly toward intentions to make fuels complying with the 0.50% sulphur limit available from October onwards, as they believed that was when demand would really begin to pick up. But in October, as I was preparing to deliver a presentation at a Symposium on IMO 2020 at IMO’s headquarters on 17 October, IBIA members active in supply, trading and brokering services reported that actual VLSFO demand from bunker buyers had not been as high as anticipated by that stage. They had seen many enquiries about availability, but still very low volumes of actual VLSFO bunker stem fixtures. The supply side attributed this to ship operators who initially signalled that they wanted to start bunkering VLSFO from October were now postponing their purchases into November/December.

Those who are nervous about the quality of fuel oil blends, or uncomfortable about managing the fact that each new fuel oil bunkered may be incompatible with other fuels onboard, have the option to use only marine gasoil (MGO). Stability is a measure of the resistance of a residual fuel to break down and precipitate asphaltenic sludge. Incompatibility refers to comingling two fuels which then become an unstable mix. MGO is a pure distillate and pure distillate fuels do not contain asphaltenes,

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IMO 2020 GUIDELINES The following are some of the IMO guidelines issued to help industry and authorities with consistent implementation of the 0.50% sulphur limit under MARPOL Annex VI. • Ship Implementation Plan - MEPC.1/Circ.878 • 2019 Guidelines on consistent implementation of 0.50% sulphur limit under MARPOL Annex VI - MEPC.320(74) This is the most comprehensive set of guidelines and are aimed at assisting both industry and authorities. They include: - Definitions – descriptions of types of fuel oil for use by ships. - Impact on fuel and machinery systems – addressing specific concerns around the use of distillate fuels, distillate fuels with FAME, and residual fuel oil blends. It also describes key technical considerations for ship tank configurations and fuel systems, and a note on the use of the ISO 8217:2017 marine fuel specifications.

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Importing HSFO cargoes is not attractive when the price is expected to decline rapidly, and potentially end up much lower than the price paid at the point of purchase. Reduced HSFO supply capacity has come at a time when shipping still needs fuel, and during October, when the vast majority of bunker demand was still for HSFO, it caused a tightening of prompt supply of HSFO in some markets. There have been regional variations both for supply and demand during this transition period and it hasn’t always been well matched. Availability of both compliant fuels and HSFO could be unpredictable for a while during the transition to IMO 2020. Suppliers in major ports are expected to continue to offer HSFO for ships equipped with scrubbers, but leading up to the end of 2019 HSFO seemed to be disappearing from some ports, or there was limited supply.

- Verification issues and control mechanisms and actions – relating to what actions can be taken by MARPOL Annex VI signatory states to check ships and suppliers for compliance, enforcement actions, and sharing information. - Fuel oil non-availability – this part includes guidance on information sharing, consistent evidence and investigations of FONARs. IMO has also developed a standardised Fuel Oil Non-Availability Report (FONAR) set out in appendix 1 of Resolution MEPC.320(74) - Possible safety implications relating to fuel oils meeting the 0.50% sulphur limit – this section makes references the SIP which already has information on the subject and to general industry guidance. There is also a “Technical review of identified possible potential safety implications associated with the use of 2020 compliant fuels” set out in appendix 2. • 2019 Guidelines for Port State Control under the revised MARPOL Annex VI (amending 2009 version) - MEPC.321(74) This is aimed at PSC officers to enhance uniform enforcement. It helps understand what to expect during a PSC inspection.

Inevitably, the transition to the 0.50% sulphur limit will cause disruption and more volatility than usual for a while, and this will be confusing and painful for both suppliers and buyers of bunker fuel, the market will eventually adapt. It is quite remarkable how the global refining and supply industry has managed to gear up for this significant shift which, due to buyers wanting to continue to use HSFO for as long as possible to keep costs down, needs to happen during a very short timeframe. I remain optimistic that the guidance from the IMO and industry, combined with the high level of awareness in the industry and among PSC authorities, means we are well equipped to ensure IMO 2020 is successfully implemented, even if it may not be smooth sailing for all. Good planning, preparation and practice will see us through.

• Guidance for port State control on contingency measures for addressing non-compliant fuel oil - MEPC.1/Circ.881 Describes a hierarchy of ways to deal with any non-compliant fuel oil remaining on a ship in order to ensure the ship will become compliant as soon as possible. • MEPC circular on Early application of the approved amendments to the verification procedures for MARPOL Annex VI fuel oil samples - MEPC.1/Circ.882 Calls for member states to apply these amendments prior to entry into force, as these amendments will not enter into force until the second half of 2021. • MEPC circular on Guidance on indication of ongoing compliance in the case of the failure of a single monitoring instrument, and recommended actions to take if the EGCS fails to meet the provision of the Guidelines - MEPC.1/Circ.883

ENVIRONMENT

The “IMO 2020 effect” begun to cause market disruption as early as September and has become increasingly evident throughout October and November. The market disruption caused by the transition to IMO 2020 became evident as the supply side begun running down stocks of HSFO as they were preparing storage tanks for low sulphur fuels. Moreover, barges that have been carrying HSFO have been temporarily taken out of service to be readied for supply of VLSFO or MGO. At the same time, suppliers and traders have been reluctant to replenish HSFO stocks as they anticipate rapidly declining demand for it toward the end of 2019, a trend that has been exacerbated by price backwardation, meaning future prices have been lower than current prices.

ENVIRONMENT NEWS

Videotel is opening up its 2020 training package to the global fleet

BIG NAMES JOIN NEW CARBON-FREE PUSH Major players in the shipping industry support a global initiative to eliminate CHG emissions

eading companies within the maritime, energy, infrastructure and finance sectors have signed up to the Getting to Zero Coalition (GZC), a partnership between the Global Maritime Forum, the Friends of Ocean Action, and the World Economic Forum. The Coalition, which is supported by more than 70 public and private organisations, was launched before heads of state and government at the UN Climate Action Summit in New York in September. Its maritime members include Cargill, Lloyd’s Register (LR), Maersk, MISC, Shell, and Trafigura. The ambition of the Getting to Zero Coalition is closely aligned with IMO’s Initial GHG Strategy, which prescribes that international shipping must reduce its total annual greenhouse gas emissions by at least 50% from 2008 levels by 2050, whilst pursuing efforts towards phasing them out as soon as possible in this century. This will ultimately align greenhouse gas emissions from international shipping with the Paris Agreement. GZC says it is committed to “making this ambitious target a reality by getting commercially viable deep-sea zero emission vessels powered by zero emission energy resources into operation by 2030”.

LR’s CEO, Alastair Marsh, said: “The International Maritime Organization’s 2050 GHG ambitions require substantial and collaborative input from all maritime stakeholders and beyond. Getting to zero is about more than the delivery of zero-emissions vessels into the world fleet by 2030. As an industry we need to ensure that the infrastructure and supply chain is in place to support this change. Lloyd’s Register is proud to be part of the coalition to collaborate on opportunities and support the sector’s future achievements.”

said Raal Harris, Videotel’s Managing Director. “We have had tremendous support from within the industry in putting this video together and making it freely available seemed the right thing to do. Preparation is key to achieving 2020 compliance and we look at the key ways in which this can be achieved,” he continued.

LR also became an early signatory to the Sustainable Ocean Principles of the United Nations Global Compact, a framework for responsible business practices in the Ocean across sectors and geographies. The class society said that it “joins business leaders from around the world in setting clear and shared expectations industrywide for a healthy and productive ocean”.

Videotel also said it was working with industry partners on an e-learning course, primarily aimed at ships’ chief engineers that presents the key points of the MARPOL requirement, including implementation planning, fuel management and planning, procedures for establishing compatibility, fuel switching, and use of <0.50% sulphur fuel in boilers. It should be available by the end of the year.

Free training package on sulphur regulation Maritime training provider Videotel is offering free access to its new training package, The 2020 Sulphur Regulations – Achieving Compliance. “Making sure that the industry complies with the sulphur 2020 fuel cap is so important that we wanted to show our support for this industry by offering this advice for free,”

A special landing page has been created on the Videotel website for interested parties to access the video at www.videotel.com/sulphur2020

Norsepower in wind power tie-up with Wärtsilä Norsepower and technology group Wärtsilä have agreed a deal that will see Wärtsilä provide a global support service for the Finnish auxiliary wind propulsion systems manufacturer.

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Since the company’s launch in 2012, Norsepower’s Rotor Sails have been installed on board three vessels, with a fourth on order for delivery in 2020. The system, which can be installed on new vessels or retrofitted on existing ships without off-hire costs, is a modernised version of the Flettner rotor - a spinning cylinder that uses the Magnus effect to harness wind to propel a ship. The system is fully automated and senses whenever the wind is strong enough to deliver fuel savings, at which point the rotors start automatically. In September the company was boosted by a €8 million investment round lead by OGCI Climate Investments. The company said: “The investment enables Norsepower to scale up production at its manufacturing facilities as part of a next phase of commercialisation triggered by demand for its renewable wind energy propulsion systems. The increased take-up comes at a time when the international shipping industry looks to offset expensive fuel costs - that are likely to increase following the IMO’s 2020 global sulphur cap and prepare for IMO GHG emissions targets in 2030 and 2050.” Since its establishment, Norsepower has raised more than US$24 million of funding. In addition to OGCI Climate Investments, European venture capital funds and private investors, Norsepower has been funded by the European Commission and the Finnish Funding Agency for Technology and Innovation. Pratima Rangarajan, CEO of OGCI Climate Investments, said: “Improving energy efficiency is fundamental to reducing carbon emissions. Norsepower’s Rotor Sail technology is an innovative, impactful and immediately available solution that improves vessel efficiency, reducing fuel consumption. We look forward to working with Norsepower to deliver real impact to the shipping sector’s CO2 emissions.” World Bunkering WINTER 2019/20

Incheon goes for cold ironing Technology company ABB is to install South Korea’s first shore-to-ship power solution, after a pilot scheme for passenger ships to plug into the local grid received the go ahead from the Port of Incheon Authority. In addition to a new US$160 million ferry terminal opened in April 2019, Port of Incheon inaugurated South Korea’s largest cruise terminal in June this year. Given its metropolitan location and IPA’s ambitions to develop its Golden Harbor vision for Incheon as a new tourism hub for the Northeast Asia, environmental credentials rank highly in the port’s priorities. ABB’s contract includes the installation of an onshore power connection at the Incheon passenger terminal consisting of an enclosure featuring a 2000 kVA capacity Static Frequency Convertor with 50/60HZ output, a transformer, a Neutral Grounding Registor Unit and an outdoor enclosure. ABB’s shore-to-ship power technology has already been integrated by over 50 ports worldwide. In a separate development, the company will install its shore connection technology to enable three Corsica Linea ferries to cut emissions and noise pollution when berthed in the Port of Marseille, France. Teekay in quiet tanker project The Government of Canada says it will invest up to $30 million to support the development of the world’s first low-noise and low-emissions tanker, working towards an agreement in principle (AIP) with Vancouver-based Teekay Shipping (Canada) Ltd in a project aimed at protecting killer whales.

“This initiative is a unique opportunity to advance low noise technology in a deep sea commercial fleet. Protecting the iconic southern resident killer whale and biodiversity is a priority for our government. From designating new critical habitat to fisheries measures that help increase their prey, our government has taken action to recover this species.” Transport Canada said it was taking “an important step in supporting the development of a new vessel design to decrease underwater noise, which will help in the recovery of Canada’s endangered, iconic whale populations”. It added: “This world-leading lowemission and low-noise crude oil tanker will be equipped with the latest proven quiet technologies and powered by Canadian liquefied natural gas. To limit emissions and ensure the best outcome for marine life, the vessel will have specific design targets to reduce greenhouse gas emissions by 20% and reduce noise by up to 90%, compared to conventional tankers. A Transport Canada statement said that the AIP with Teekay will be consistent with the government’s promise to work with the shipping industry to develop and deploy the best available technologies and practices. Working together will support a safe, clean and efficient marine transportation system that improves marine safety and responsible shipping, and reduces emissions to improve air quality, while supporting economic growth. This reaffirms the Government’s commitment to building a Canada where protecting the environment and growing the economy go hand-in-hand.

The government’s Quiet Vessel Initiative aims to reduce underwater noise, protect the marine environment and foster the development of new technology, quiet vessel designs, and operational practices to reduce underwater noise. The country’s minister of transport Marc Garneau explained that the government took the protection of endangered marine species very seriously.

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ENVIRONMENT NEWS

Norsepower’s head of sales, Jukka Kuuskoski said, “Due to the rapid rise of demand for modern wind propulsion in shipping, Norsepower Rotor Sails are expected to be installed on multiple vessels in the near future.”

AUSTRALIA

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CONFOUNDING THE CRITICS John Rickards reports that, contrary to pessimistic predictions, Australia should be ready for 2020

his time a year ago, there were serious questions being asked about the availability of IMO 2020-compliant fuel in Australia. The market was too niche to be a priority for producers, the argument went, and so sufficient very low sulphur fuel oil (VLSFO) might not be on hand to cover the entirety of Australian demand come January. At the same time, the Australian Maritime Safety Authority revealed that it was looking at the possible environmental impact of openloop scrubber wash water following bans elsewhere, which could have further limited operator’s options. Now we’re a lot closer to the deadline, though, the picture has become somewhat rosier. AMSA’s evaluation of scrubber emissions seems to have produced no further action. In March, BP Marine announced that its IMO 2020-compliant VLSFO would be available at Fremantle, Gladstone and Brisbane and that the fuel had by that point already undergone sea trials with customers to establish its specifications and operating characteristics. Then in late October, Australia’s Viva Energy launched VLSFO produced at its Geelong refinery after customer trials. Thys Heyns, Geelong refinery’s general

manager said: “Viva Energy’s VLSFO is expected to be cheaper than diesel and MGO. Compared to high sulphur fuel oil, VLSFO is superior in terms of fuel economy, ignition characteristics, and of course, the environmental benefits it has through reduced emissions.” “Because we manufacture the fuel locally ourselves, we have full control over the process and can guarantee a high quality and consistent product. This means less risk and no surprises for our customers who use the fuel. It is compatible with most existing fuel systems on board, meaning ships can use the fuel without having to make significant upgrades.” TT-Line, operator of the Spirit of Tasmania ferries, trialled the fuel and is switching full-time. General manager of marine operations Captain Stuart Michael said: “Based on trial conditions, VLSFO has shown itself to be a suitable fuel for burning in the main engines and the auxiliary engines of Spirit of Tasmania vessels. The trial proved the fuel to be volatile and allowed the engines to reach maximum power output.

Operating pressures and temperatures were within acceptable limits and similar to those when operating on MGO or MFO380. Adverse wear to fuel injection equipment has not occurred under trial conditions. The MEs fuel oil circulation and filtration system was not compromised with the change to VLSFO. Trial conditions have recorded a minimum 3% saving in consumption overall compared to MFO380.” So far, so seemingly good, then. To be sure, though, World Bunkering spoke to Angela Gillham, the deputy CEO of Maritime Industry Australia. “I can tell you that there is an increasing level of comfort that there will be enough compliant fuel to meet marine demand in the major fuel supply ports in Australia,” she said. “The remaining areas of uncertainty, particularly for ships on the trades mentioned above, relate to the very practical issues around port state control treatment of vessels who, for one reason or another have non-compliant fuel on board. There are few if any opportunities to debunker and carriage of noncompliant fuel, in addition to its use, is prohibited from March 2020.”

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f course, the unknown cost of compliant fuel is also of concern, although I believe some suppliers are beginning to provide their clients with ballpark figures.” Enforcement of the ban and the regulatory underpinnings has been one of the other great areas of uncertainty in many markets,

so maybe it shouldn’t be surprising that the port state control side of compliance is less clear than the availability of suitable fuel in the first place. AMSA’s certainly taken a step to advance its physical detection of ships breaking sulphur limits even if debunkering might be an issue at Australian ports. In July,

along with Singapore’s MPA, AMSA took delivery of new handheld XRF sulfur content analysers from Hitachi High-Tech Analytical Science Corporation. HHTASC claims the units give results in under 60 seconds and automatically embed readings with GPS to show where the analysis is performed. The company claims the results are lab-standard.

Viva’s VLSFO was trialled earlier this year on the two Spirit of Tasmania ferries.

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COMPANY NEWS

PETROL OFISI Petrol Ofisi is to replenish Turkey’s first new generation marine fuel VLSF

n line with the International Maritime Organisation (IMO) 2020 process, marine fuel sulphur emissions cap for vessels will be reduced from 3.5% to 0.5% throughout the world. Having completed the preparations for this very important milestone in maritime history, Petrol Ofisi realised its first IMO 2020-compatible delivery in Istanbul with its marine fuel brand PO Marine. The replenishment took place offshore Kumkapi where “Demre-8” barge of Petrol Ofisi delivered 100 tons of new generation marine fuel VLSF on 4th of October 2019. Petrol Ofisi Marine Sales Manager Celal Ersan stated that with its experience and strength, Petrol Ofisi is the leader in marine fuels with PO Marine, like in all the other areas, and added: “We prepared for the IMO 2020 process meticulously and realised the first new generation marine fuel VLSF delivery in our country months before the start of this process. We not only delivered the first fuel in this process which is a milestone in maritime history, but also, we achieved another important success and introduced the Bunker Quality Quantity Security System which brings about a significant advantage for shipowners in this process.” Traditional leader of the Turkish fuel, mineral oil and chemicals market Petrol Ofisi pioneered this historic development as always and has completed all the necessary preparations months before. “We have completed the preparations months before”. Mr Celal Ersan said the following in his statement about Turkey’s first VLSF replenishment: “IMO 2020 criteria will certainly have a profound impact on world maritime industry. With our leadership mission, Petrol Ofisi is also leading in this regard and we have completed the necessary preparations meticulously months before the start of this process. We devised the Bunker Quality Quantity Security System so as to provide solutions to issues shipowners might experience in this challenging process.”

Petrol Ofisi to be the first in the Turkey. BQQSS – Bunker Quality Quantity Security System. Although world maritime industry agrees that the new regulation will provide significant benefits for environmental protection, there are concerns about significant losses in the transition process. With the launch of the IMO 2020, technical problems regarding the fuel and possible damage caused by fuels without established quality standards will constitute a major issue. We shall lead another first in this regard and provide independent surveyor services 100% in all our replenishment procedures. PO Marine, the marine sales brand of Petrol Ofisi, a Vitol Group Company, created a Quality Assurance System to adopt its clients to this change and protect them. We are proud to be the first and only bunker company in Turkey offering this system to its clients for free with a customer oriented approach. So what is the Bunker Quality Quantity Security System? In this new system, all PO Marine deliveries are carried out by independent and accredited surveyors 365 days a year, 24/7, for free of charge. So all PO Marine clients know how much and what quality fuel they purchase, guaranteed by an internationally accredited surveyors…

5. BDN issued by the surveyor is signed by the chief engineers and captains of the vessel and barge. 6. Collected samples are stored in accredited laboratories for 3 months. PO Marine has also created a technological infrastructure to ensure a better and faster service for clients. Below reports regarding deliveries are automatically sent to clients via e-mail a short while after the delivery. • Product Quality Report • Bunker Delivery Note • Survey Report (Bunker time log – Sounding report – Ullage report) • Delivery operation photos • Delivery sample photos • Invoice Ship owners preferring Petrol Ofisi shall know what product they purchase and will be able to verify that they receive the exact product fully, that the witness samples are collected by an accredited and independent surveyor according to world standards and that these witness samples are kept for 3 months in accredited laboratories. We are proud to be the only bunker company currently to provide this service to our customers 100% free of charge in Turkey.

How does the process work? 1. Initial measurements of both vessel and barge fuel tanks are taken, ensuring full product delivery. 2. After all safety measures are taken, delivery begins with the approval of the surveyor. 3. Samples are taken by surveyor with continuous dripping method, witnessed by the barge and vessel crew. 4. Details of the entire operation are recorded before, during and after the delivery.

Celal Ersan World Bunkering WINTER 2019/20

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AFRICA Monjasa seems fully ready for VLSFO supply in West Africa

READY FOR 2020? John Rickards takes a look at how prepared Africa is for the 0.50% sulphur limit and find most regions should be able to cope

hile there’s hardly anywhere in the world where questions don’t remain in one form or another regarding the availability, cost and specifications of IMO 2020 compliant fuels, ship operators plying the busiest African trades should be able to enter the new year with reasonable confidence. Monjasa, which continues to dominate the West African bunker market, laid out its own supply plans relatively early. In September the company completed its first ship-to-ship supply of very low sulphur fuel oil (VLSFO) complying with the 0.50% limit in Southampton, UK, giving the company valuable experience of the handling characteristics of the new fuel as well the work involved in cleaning and converting the supply tanker in question to IMO 2020. Monjasa Group COO Svend Stenberg Mølholt said: “Cleaning up our first tanker and supplying the new 0.5% product is a milestone for Monjasa. During this first supply, we learned more about the handling and specifications of VLSFO, to conclude that on-board operational expertise and detailed product knowledge is needed to enable a successful transition for the industry. We have been preparing thoroughly for this moment and we are ready to support this transition and keep global trade moving come 2020.” In West Africa, the company will make VLSFO available across the region from the Gulf of Guinea to Namibia via the 120,000 dwt Monjasa-operated SKS Darent, World Bunkering WINTER 2019/20

which serves as floating storage off Lome, Togo. Several of Monjasa’s 10 regionally deployed tankers are expected to supply low-sulphur products come 2020. The company has acquired five tankers totalling 37,500 dwt which it is deploying across its core West African, Middle East Gulf and Panama markets in time for 2020 and the fuel rule change, which it describes as “a critical point of time in bunkering and shipping” as everyone gears up for the new regime. “Last year, we increased our total supply volume by 17% to 4.1 million tonnes of marine fuel and we continue to see a growing demand for our services. This is also part of the reason we are now purchasing five quality tankers,” said Group CEO Anders Østergaard. “We are on the brink of bringing new lowsulphur fuel products to the market and the entire industry needs to adapt to a new multiple products demand. These five tankers can segregate between two and six different types of oil products onboard and this contributes to making them an attractive investment for us. Coupled with an average age of 10 years, the tankers are fully-furnished to handle the leap in quality required to perform bunker operations come 2020.” Four of the tankers had previously been on bareboat charter so they’re familiar tonnage for the company,

and brings their fleet to 20 of which 10 are fully owned. Monjasa hasn’t yet said which of the acquisitions will serve the African market and what the final makeup of their supply operation will look like going into 2020, but the company is certainly bullish about its chances in the new year. “The bunker industry will play a key role in enabling the near-future transition towards more environmentally friendly marine fuel products,” Monjasa said in a statement. “Both when it comes to the overall availability landscape of the new products and logistical flexibility to supply more bunker types. The demand is already building up and the first supplies are now taking place.” So far, so good, then, and it’s not just West Africa that has seen both market movement and a positive outlook coming into 2020. South Africa has struggled at times with high port dues and a comparatively closed market, but there have been reports in local press this year that the regulatory authorities have been considering issuing a third supply license for Algoa Bay/Port Elizabeth. The key port is currently served by two suppliers, both of whom have changed hands in recent months - Mercuria Energy Group buying out Aegean to form Minerva Bunkering and Oryx Energies taking over South African Marine Fuels (SAMF).

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AFRICA

However, a spill during bunker operations on the Liberia-flagged Chrysanthi S in July could yet dampen government interest in increasing the Algoa Bay bunker sector. The ship’s operator was fined R350,000 (US$23,296) and ordered to post R5 million in clean-up security as a result of the spill, the second in the bay since ship-to-ship bunkering was first permitted there in 2016. Algoa Bay is home to the largest remaining African penguin colony as well as a thriving tourist industry and local businesses and conservationist groups alike have called into question the safety of expanding bunkering off the port.

WB: How are you expecting the economics to play out in the South African market, given the disparity between likely VLSFO costs, regular HSFO and MGO? As a bunker supplier, are you expecting to see any changes in the market? SAMF: The new regulation implies lower sulphur so there will be an initial cost impact. We expect the market to find a balance in the price and to stabilize in the second half of 2020, but it will definitely have a cost impact for ship owners. The VLSFO is likely to increase together with marine gasoil, while HSFO will most probably decrease.

The South African government remains committed to pushing its overall ocean economy drive, and this October seemed to confirm that the national legislation bringing the IMO 2020 sulphur cap into law - in which the country had been lagging, much to the industry’s frustration - would be in place by the end of the year. On a visit to the port of Durban, transport minister Fikile Mbalula said, “[The legislation] will be in place. Before the end of the year we should be able to make those deadlines.”

WB: This year has also seen some local pressure from conservation groups following the Chrysanthi S spill in Algoa Bay. Is that likely to have any effect on the development of the South African bunker sector, or is it only a passing issue? SAMF: SAMF is highly committed to the safety of its operations and responsibility to people and the environment. As a responsible actor and operator in the Bay, SAMF conducts and participates in regular drills and exercises together with local and regional stakeholders to prepare for incidents of varying severity, including incidents such as this. We are confident that the measures in place will permit us to carry out safely our business and we hope that these measures will also contribute to developing the bunkering business in other locations thus opening new business and job opportunities in South Africa.

Hopefully the government can keep to that promise; as otherwise the country won’t be able to enforce the sulphur limit.. To get a clear idea of the situation on the ground as the IMO 2020 deadline approaches fast, World Bunkering spoke to South African Marine Fuels. WB: With IMO 2020 only weeks away, how ready is SAMF for the changes in demand that it’ll bring? SAMF: SAMF is closely working with suppliers, partners and cargo owners to be IMO 2020 compliant and have HSFO, VSLFO and DMA LS available. WB: How smoothly do you expect the transition to go in terms of meeting customer requirements? Have customers settled on an approach to their fuelling strategy? SAMF: We expect the transition to start smoothly in November and pick up at the end of the month of November for the vessels to be compliant from 1st Jan 2020.

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It all sounds pretty promising, then, for the South African supply sector. Local suppliers in some of the other major coastal states on the African coasts may have to wait and see what the effects of the 2020 changes are on their individual markets. Ghana’s Ministry of Transport reassured the country’s maritime and fuel sectors late this summer that the country would have its own adoption of the IMO 2020 regulations in place by the end of the year, while at the same time promising to maintain the country’s competitiveness against price shifts. The view was backed up by both the Ghana Maritime Authority and Ghana Shippers’ Authority, promising that compliance and enforcement would be in place in the course of a string of sensitisation meetings with industry stakeholders. However, at the same time, the chairman of the Greater Accra Shippers’ Committee warned that price rises might cause local economic effects due to extra import expenses, and according to local press member shippers have also expressed worries that fuel price increases might see lines bypass Ghana altogether due to bunkering costs. If so, they’re not alone. Similar fears have been expressed by other shippers. Despite the amount of crude produced in the region, in West Africa in particular, mostly low sulphur crude for which demand might well increase,

The South African government has promised to have its IMO 2020 legislation in place by the end of the year ©Flowcomm

AFRICA a good deal of the continent’s bunker fuel is imported from refineries in Europe and the Mediterranean. The extra expense of importing, fears whether founded or not over consistent quality and specs, and the relatively low level of local refining capacity at present certainly adds a degree of sensitivity to market conditions that will only play out for definite once VLSFO production and distribution is underway in the new year. However, there are numerous refinery expansions planned or underway along the West African coast which should be ideally placed to produce low sulphur fuels in the next five years or so, and this, coupled with ongoing investments in port infrastructure, should hopefully make any post–2020 nerves short-lived. Looking further ahead, more and more gas projects are coming closer to fruition, with Mozambique in particular seeing a string of movement on this score of late. Everyone accepts that gas bunker demand is only going to increase, and early bunkering capacity has historically tracked regasification and power generation facility development. June saw the final investment decision in Mozambique’s first onshore LNG production project, allotted to a consortium led initially by US-based Anadarko Petroleum, and then, three months later or so, by oil giant Total, which bought out Anadarko’s stake in the project for US$3.9bn and is now in negotiations for the rest of the company’s African assets. The facility will initially produce 12.88 million tonnes per annum of LNG from Area 1 off the northern coast near Tanzania, buyers for much of which have already been arranged. The facility will see gas exports through a marine terminal shared with the second production field, due to be exploited by Italy’s ENI and ExxonMobil via an FLNG facility expected to be complete in 2022. The combined facilities of the Afungi LNG Park are expected to cost an eye-watering US$25–30bn and are expected to be in operation in 2023.

It’s a huge project all told, one of the biggest and most expensive of its kind in Africa to date. The government’s own estimates put its potential 25-year earnings at an equally eye-watering US$46bn, and while there are no firm plans yet for LNG bunkering from the export terminal it’s almost certainly a possibility in the future, in some form or another, given that the two tend to go hand in hand.

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Certainly having such a volume of gas produced locally can only make LNG bunker availability more likely from the mid–2020s onwards. At much the same time, Mitsui OSK Lines and Karadeniz Holding announced East Africa’s first “LNG-to-powership” project at the port of Nacala in norhtern Mozambique. In the KARMOL project, an FSRU will supply regasified LNG to a vessel generating 120MW for the Mozambique shoreside market. Currently, that vessel is burning HFO for power, but is due to switch once the FSRU is in place and ready. The project, MOL notes, “will create a stable and reliable supply of electricity for the people of Mozambique and, provide critical infrastructure for the use of LNG within Mozambican territory”. Onshore, the Mozambique government also approved a 30-year concession to build and run a 2GW gas plant at Beluluane including pipeline connection to the port of Matola. The power plant will be built over the next five years and will cost an estimated US$2.8bn. All told, the raft of new projects and massive investment in both production and infrastructure in Mozambique represent promising indications of growing gas usage and handling facilities. The notion of gas-powered vessels using the country as a refuelling point is hardly a pipe dream.

For all BUNKER & DEBUNKER enquiries contact us on: Tel: +27 21 300 3370 / +27 21 300 3381 Email: internationalbunkers@ffs.co.za Suite 203, 2nd Floor, 7 West Quay Road, V&A Waterfront, Cape Town, South Africa

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MAURITIUS iStock

POLITICAL UNCERTAINTY BUT COMMERCIAL OPPORTUNITY A major legal battle has implications for the bunker sector but, as John Rickards reports, plans to develop Mauritius as a cruise destination could be good news for bunker suppliers

he future of Mauritius’ maritime policies hangs in the balance, with the country going to the polls at the time of writing at the end of a contentious election campaign with economic and environmental policies as well as questions over government transparency front and centre. Opinion polls have been too close to call the result. Energy policy and contracting has formed quite a chunk of the wrangling over government direction, reinforced by the summer’s final ruling by the country’s Supreme Court on the Betamax products shipping case. The case related to the cancelling of a contract awarded by the State Trading Company (which handles all petroleum trade and licensing matters, including bunkering) to products carrier operator Betamax, part of the Bhunjun group, to import distillates from India. The contract was awarded under the auspices of one government in 2009. In 2014, a new government decided to terminate the contract on the basis that it was in violation of public procurement rules..

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At the time, the 15-year contract had drawn criticism for being allegedly overly-favourable to Betamax in its terms as the Bhunjun family were considered to be close to the prime minister who led the government in 2009. Betamax went to the Singapore International Arbitration Centre for breach of contract, and the STC were required to pay MUR4.7 billion (US$132 million) in compensation. The STC then went to Mauritius’ Supreme Court - contested by Betamax, who argued that this amounted to an appeal barred under arbitration rules - on the grounds that the arbitral award breached public policy. After long and careful consideration, this summer the Supreme Court of Mauritius ruled that the Betamax contract had breached procurement procedures and as such the STC and 2014 government had been within their rights to cancel it. Regardless of the legal ins and outs of the long-running case,

the court’s ruling - albeit in favour of the government - may represent a warning against the award of overfriendly contracts in the fuel sector in future. On the upside, the country’s links to other Indian Ocean littoral states and further afield - have strengthened in recent months, which should provide a considerable boost to Mauritius’ efforts to become a regional maritime hub. In July, the Mauritius Ports Authority inked an MOU with Abu Dhabi Ports to “explore areas of collaboration between the public and private sectors, as well as how to ensure the safety and security of passengers, crew members, vessels and port facilities”. The two will also work together to elevate Port Louis as a cruise destination, particularly for potential tourists from the Arabian Peninsula, as well as attracting more cruise lines to the region.

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PA chairman Ramalingum Maistry said: “Given the expertise of Abu Dhabi Ports in developing world class facilities and infrastructure we are confident that this agreement will fulfil our needs and allow us to raise awareness of Mauritius as the preferred maritime gateway for Africa.“ In October, the country became the first in Africa to sign a formal free trade agreement (FTA) with China. As well as enabling easier imports from China, the FTA is expected to significantly boost Mauritian sugar exports and revenue over the next eight years. In a statement, the government said: “The FTA will create new investment opportunities in Mauritius targeting the Chinese market. The FTA provides for the protection of investors and their investments against discriminatory and unfair treatment. Moreover, investors will be compensated if expropriation of their investments is inevitable. Mauritian authorities also expect to have more investment in the services sector from China in view of the predictability and legal security which the agreement will provide to investors.”

Port Louis could see more cruise calls as well as greater Asian trade

China has taken considerable pains in recent years to expand its economic influence across the Indian Ocean and given its interests in port services including bunkering in Sri Lanka, Pakistan and elsewhere, closer and easier investment links with Mauritius coupled with the potential for increased cargo and tourist vessel traffic can only offer further opportunities for the country’s fuel industry.

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SCRUBBERS

Dr Lindstad says using scrubbers means better air emissions quality and a greater positive effect on global emissions reduction

MALAYSIAN SET-BACK Proponents of the use of scrubbers express disappointment at latest ban on use of open loop systems while European ferry operator demonstrates they can reduce SOx emissions to half the ECA limit

lean Shipping Alliance 2020 (CSA), a group which promotes the use of exhaust gas cleaning systems (EGCS or ‘scrubbers’), says that it members are disappointed by Malaysia’s decision to prohibit the use of open-loop exhaust gas cleaning systems in its coastal waters. This follows an earlier, similar decision by Singapore.

He added: “We don’t know what’s behind this decision by the Malaysian Marine Department, but it was not likely [to have been] science-based, as there is no evidence that would clearly support it. There also were no collaborative discussions with their global shipping partners, many of whom are very experienced with these systems.”

Malaysia Shipping Notice (MSN 07/2019), published on 12 November, states that ships calling at Malaysian Ports are advised to change over to compliant fuel oil or change over to closed-loop mode scrubber operations before entering Malaysian waters and ports.

CSA pointed to evidence presented at a Technical Conference it held in Brussels, in November. Dr Elizabeth Lindstad, Chief Scientist, SINTEF Ocean, confirmed that the use of HFO+EGCS not only has a better air emissions quality than ships operating on compliant fuel, but also a greater positive effect on global emissions reduction, including greenhouse gases.

“We are disappointed in this announcement,” said CSA 2020 Chairman Capt Mike Kaczmarek. “The decision will impact not only our member shipping companies, but over 200 other international shipping companies that have announced their intent to install scrubbers as an accepted means of compliance under MARPOL Annex VI. We will of course comply with these national rules. However, we do not understand the reasoning or timing, with the global sulphur cap deadline just weeks away and with the IMO already embarked on a comprehensive evaluation of the environmental impact of exhaust gas cleaning systems in ports.

Ian Adams, Executive Director, CSA 2020, said: “There are multiple credible studies just released during the last year that confirm the quality of washwater from exhaust gas cleaning systems, and clearly demonstrate that they have negligible environmental impact on the ocean or port environments. What makes this announcement so surprising is that the scientific evidence is there, and it is clear that the positive net environmental benefit from ships operating open loop in Malaysian waters would play an important role in Malaysian maritime sustainability plans.”

Meanwhile, Danish ferry operator DFDS has completed ten years of successful scrubber operation onboard the 37,939gt roro Ficaria Seaways achieving more than 50,000 running hours since 2009. Ficaria Seaways, one of the first ro-ro vessels to be fitted with an Alfa Laval PureSOx system, operates on the Gothenburg – Immingham route inside the European sulphur emission control area (SECA) where a 0.10% sulphur limit applies. “The installation has prevented a substantial amount of sulphur emissions from entering the atmosphere,” said Poul Woodall, DFDS’s Director Environment and Sustainability. He reports that data from the high sulphur HFO-burning Ficaria Seaways indicates that during the ten-year period the equivalent of using fuel with just 0.05% sulphur had been emitted. “Had the vessel been trading on compliant fuel during these ten years, then SOx emissions would have been almost 60 times higher,” he said. During the period, Ficaria Seaways emitted 150 tonnes less SOx than if it had been operating on compliant 0.10% marine gasoil. The Danish Environmental Protection Agency also reported particulate matter (PM) reductions were in the 31-53% range while mass was reduced by up to 55%.

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DFDS now has scrubbers on 28 of its vessels with 10 more scrubberoperating ships on order. Nevertheless, Woodall acknowledged that scrubber technology may ultimately give way to other technologies, noting: “To meet IMO’s ambitious target of 50% reduced greenhouse gas emissions by 2050 (compared to the base year of 2008) the industry must find an alternative to fossil fuel.

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dams said: “As one of the first commercial operators of marine scrubber systems, DFDS has shown that the technology is without doubt the safest, most effective way of reducing SOx emissions.”

However, until such alternatives are identified and developed for practical use, the current exhaust gas cleaning systems have proven themselves to be reliable,

effective means of dramatically improving air emissions without impacting the marine environment, and will continue to exceed the international air quality requirements in thousands of ships worldwide.”

DFDS ro-ro ferry Ficaria Seaways has used a scrubber system successfully for 10 years

INNOVATION

LR approves innovative ethane transportation solution from Babcock LGE. ©LR

USING WASTE METHANE AS FUEL New technology will use methane boil-off to partly fuel ethane carriers and reduce methane slip into the atmosphere

loyd’s Register (LR) has awarded Babcock LGE Approval in Principle (AIP) for its ecoETHN system which is designed to maximise the economic transportation of ethane in very large ethane carriers (VLECs), by combining the reliquefaction and ethane fuel supply systems. LR says that this is the first time such an application has been developed by the maritime industry. Babcock’s system separates excess methane from within the cargo boiloff gas (BOG) and feeds this into an ethane-fuelled VLEC engine, reusing the incondensable methane gas as fuel. LR says: “With no venting to the atmosphere, the industry-first design also minimises greenhouse gas emissions and as a result, the reliquefaction plant can optimise the operation whereby the system only condenses ethane boil-off gas.” LR says it carried out the appraisal of the system ensuring compliance with LR Rules and the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code) , assessing the technical feasibility of the combined solution for the use of an enriched-methane ethane fuel supply system and maintaining cargo tank temperature/pressure control intended for the new generation of innovative VLECs.

The system is intended to help owners and operators reduce power consumption within the reliquefaction plant by using excess methane as fuel. It is also expected to make processes at ethane liquefaction terminals more efficient as it allows a higher content of methane in the ethane cargo and therefore can reduce liquefaction costs. In addition, the reception terminals will receive cargoes with a lower methane content, enabling them to produce a higher quality ethane for suppliers. Neale Campbell, Babcock’s Managing Director, commented: “We are delighted that the most recent addition to the Babcock LGE innovative technology portfolio has attracted so much positive attention from ethane producers and shippers in support of the industry-wide approach to reducing emissions and improving whole ship efficiency and effectiveness.” LR’s Commercial Director, Marine & Offshore, Andrew McKeran, said: “ecoETHN® offers clear benefits to a variety of stakeholders, from power saving within the reliquefaction plant for owners, liquefaction terminals reducing costs by producing a higher content of methane in ethane, to terminals which can produce a high-quality ethane for their suppliers.

ecoETHN® also offers a greener alternative by preventing venting occurring into the atmosphere, reinforcing LR’s commitment to shipping’s transition to decarbonisation. We see this a great step in ethane’s journey as a marine fuel.” Air lubrication deal Technology group Wärtsilä and air lubrication solution provider Silverstream Technologies have a agreed a deal which will see Wärtsilä offering the Silverstream System as an integral part of Wärtsilä’s propulsion solution for newbuild vessels. The two companies say that the deal is expected to realise syngreeergies in capital and operational savings across the propulsion chain by increasing fuel efficiency, and optimising engine loading. They say the system has been proven to reduce fuel burn and associated emissions by 5 to 10%, depending on vessel type. The Silverstream System creates a carpet of microbubbles that coat the entire flat bottom of the vessel. This carpet reduces frictional resistance between the hull and the water, dramatically reducing fuel consumption and related emissions. The technology is said to work in all sea conditions, not to be weather dependent, and not to constrain or negatively impact the normal operational profile of the vessel.

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Self-fuelling waste disposal Technology group Wärtsilä is to supply and install an auto gasification for Carnival Corporation subsidiary Princess Cruises’ 142,714 GT cruise ship Regal Princess, with delivery in January 2020. This the system is intended to enable the safe disposal of waste from the ship through a self-fuelling thermal decomposition unit. Wärtsilä says the system will significantly reduce greenhouse gas emissions. It will also lessen the requirement for the 3,560 passenger-capacity ship to offload waste at shore facilities.

The Wärtsilä supplied gasification unit will replace one of the vessel’s onboard incinerators, and will safely dispose of hazardous, contaminated, and dry burnable waste in an environmentally sustainable way. The emissions quality from this system exceed the standards of land based thermal destruction, and treating waste onboard the vessel rather than offloading in port therefore significantly reduces the environmental impact. Furthermore, since the system recovers energy from the waste heat being produced by the thermal destruction process, additional energy and emission savings will be gained. The auto gasification process will reduce the ship’s waste to less than 5% of the original volume, and will produce Bio Char, a sterilised inert material, and synthesis gas, which is recycled within the unit as fuel.

Harnessing the wind Major Japanese shipping company Mitsui OSK Lines (MOL) and Oshima Shipbuilding Co. have jointly obtained approval in principle (AIP) from ClassNK for the design for a hard sail system. The system converts wind energy to propulsive force using a telescopic hard sail. The technology is a fundamental element of the Wind Challenger Project that is being spearheaded by the two companies. MOL and Oshima Shipbuilding say they will continue to move toward a detailed design and implementation for the Wind Challenger Project, with the aim of launching a newbuilding vessel equipped with a hard sail. That would reduce the vessel’s GHG emissions by about 5% on a Japan-Australia voyage, and about 8% on Japan-North America West Coast voyage. The long-term goal is to develop a widely accepted solution to achieve the IMO target in combination with other measures to reduce GHGs by equipping vessels with multiple sails.

A self-fuelling waste disposal system is being installed on Princess Cruises’ Regal Princess

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INNOVATION

Noah Silberschmidt, CEO, Silverstream Technologies, said: “With the global sulphur cap almost upon us and decarbonisation targets on the horizon, the commercial case for proven clean technology has never been stronger. Now is the time for ship owners to take action to reduce their operational costs and their impact on the environment, and today’s agreement will help unlock the power of air lubrication technology for more vessels across our sector.”

NORTHERN EUROPE

The AIDAnova will become the first cruise ship to use fuel cells in service

NORTHERN EUROPE AIMS BEYOND IMO 2020 While 2020 will no doubt be felt in the Northern European market, the fact that most of the region is within ECAs and hence has been living with low-sulphur emission regulations for over a decade has to some extent freed European interests to look further into the future, as John Rickards reports

aersk has moved to ensure a good chunk of its overall very low sulphur fuel oil (VLSFO) demand in Northern Europe. In September, the Danish giant’s oil trading arm inked a deal with Koole Terminals to produce IMO 2020-compliant bunker fuel at the Petrochemical Industrial Distillation unit at Koole’s Botlek site in the Port of Rotterdam. Maersk said the deal would enable the company to further expand its bunker supply volumes in Europe, and annual production of VLSFO through Koole is expected to cover 5–10% of Maersk’s annual fuel demand. “The fuel manufacturing process allows Maersk to produce compatible low sulphur fuels that complies with the IMO 2020 sulphur cap implementation, reducing the need to rely on 0.1% price-based gasoil and fuel oil outside the ECA zones,” said Niels Henrik Lindegaard, Head of Maersk Oil Trading. “Our activities with Koole will be an important driver in ensuring stable, reliable services for Maersk’s customers during a potentially volatile period for global shipping.” John Kraakman, CEO of Koole Terminals, added: “Koole Terminals continues to explore opportunities to contribute to a sustainable society.

One of the initiatives is to utilize our PID unit for producing environmentally friendly transportation fuels. We are proud to partner with Maersk and produce a low sulphur bunker fuel to support the reduction of sulphur emissions in order to reduce air pollution.” Koole’s PID unit will also enable Maersk the possibility to produce fuel complying with the 0.10% sulphur limit in emission control areas, the company said. It’s not just regular bunker fuel where Maersk’s been making strides in the run-up to 2020. This summer saw it launch a new pilot project with “select customers” initially, fashion chain H&M Group - offering carbon neutral shipping by using biofuel. The fuel in question is the same blend of used cooking oil and heavy fuel oil (HFO) which was tested and successfully validated in a trial in collaboration with the Dutch Sustainability Growth Coalition (DSGC) and Shell earlier this year. It is certified as a sustainable fuel by the International Sustainability & Carbon Certification body. “The biofuel trial on board Mette Maersk has proven that decarbonised solutions for shipping can already be utilized today, both technically and operationally,”

said Maersk COO Søren Toft. “While it is not yet an absolutely final solution it is certainly part of the solution and it can serve as a transition solution to reduce CO2 emissions today. With the launch of this product, Maersk seeks to help our customers with their goal of moving to sustainable supply chains.“ According to Maersk, the Roundtable on Sustainable Biomaterials will provide a procedure to ensure carbon savings are accredited to the company’s customers appropriately. When taking a full lifecycle view including all emissions from upstream production and transportation, the fuel entails carbon savings of 85% compared to conventional bunker fuel. “We believe [using pilot projects like this to build towards wider commercial decarbonisation] is the only commercially viable path to make the required investments our industry requires to reach the carbon neutral target,” Toft said. “We are so pleased to see a significant shift in sentiment and involvement from customers, fuel suppliers, equipment manufacturers, and competitors towards sustainable solutions.”

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f course, Maersk isn’t the only company interested in biofuels. This autumn, dredging and offshore firm Van Oord partnered with Shell to trial a 50/50 biofuel blend (again based on used cooking oil) on a dredging project at Cuxhaven in Germany that it says should reduce CO2 emissions by over 40%. The Dutch firm has committed to achieving a 70% carbon reduction by 2050, and said that if the pilot project was a success it would look at using biofuels on other vessels in the future. Maersk itself has gone further, and committed to reach carbon neutral operations by 2050 as well as to see the first carbon neutral commercial vessel in operation within ten years as part of a long-standing ambition to reduce its emissions footprint. The Danish group was part of the ‘Getting to Zero Coalition’ launched at September’s UN Climate Action Summit. While Maersk group had managed to reduce its carbon emissions relative to cargo moved by 41% by the end of 2017 through efficiency savings, the company says it’s come to the conclusion that efficiency measures alone are not enough to deal with shipping’s carbon output “as it can only keep emissions flat”.

“We must introduce carbon neutral propulsion technologies. The shipping industry will not be possible to become carbon neutral if we don´t find a different type of fuel or a different way to power our assets,” the company said in a statement announcing the launch of the coalition, which is a partnership between Friends of Ocean Action, Global Maritime Forum, and the World Economic Forum and includes major multinationals across a range of industries. “Maersk is in a unique position to set a visionary ambition for the future. ‘Getting to Zero’ is a great opportunity for Maersk to lead the charge for decarbonising logistics and ensure that our industry adds its strong voice to the global dialogue on climate change,” said Toft. The IMO’s greenhouse gas reduction strategy would see total carbon emissions from international shipping cut by 50% by 2050, so the group’s aims certainly go beyond the industry minimum, though the UN does recognise that shipping represents a “hard to abate” sector given the costs and time spans involved in making changes to the industry’s hardware base.

Beyond convention The Netherlands, and Rotterdam in particular, is the centre for a great deal of maritime carbon reduction efforts and in more conventional measures it continues to lead the way. In the first half of 2019, the port saw 11,000 tonnes in LNG bunker sales, more than the entire year’s total for 2018, and the port’s director has predicted that annual sales would probably hit 30,000 tonnes. In the summer, the “H-vision” project examining the feasibility of producing and utilising “blue” hydrogen - which is to say, hydrogen produced by steam reforming natural gas or fuel gas rather than through renewable electrolytic methods - in the port released its conclusions. Under the project’s frame of reference, hydrogen produced from fossil fuels would have the CO2 generated in the process captured and stored in depleted North Sea gas fields, reducing the carbon cost of the process, at least until there’s sufficient renewable energy production to allow electrolytic generation of “green” hydrogen in commercial volumes. The hydrogen itself would then be used across the port of Rotterdam.

Maersk is making sure its own VLSFO supply isn’t in doubt ©teralaser

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roject lead, logistics company Deltalinqs, was certainly optimistic about the technology. The company’s chairman Steven Lak said, “Industry has taken the lead when it comes to developing a practical solution that allows us to dramatically cut back on CO2 emissions in the short term. The hydrogen chain and the associated infrastructure for H-vision will make it easier to incorporate green hydrogen in the system over time. This means that H-vision offers two important benefits: reducing CO2 emissions on the short term and accelerating the energy transition by paving the way for the future green hydrogen economy.” “Hydrogen is essential for a CO2-neutral energy supply,” Port of Rotterdam Authority CEO Allard Castelein said. “As long as there isn’t enough green hydrogen, industry is able to cut back emissions with blue hydrogen. The availability of blue hydrogen in Rotterdam helps to limit the effects of climate change and strengthens our competitive position at the same time.”

While various designs are at different stages of production and testing, in September Netherlands-based eConowind inked a deal with Van Dam Shipping for the first commercial installation of its Ventifoil system, which had its first sea trials last year, on the company’s 3,600 dwt general cargo ship Ankie. The system should have been installed by the time this magazine goes to press. CEO of eConowind, Frank Nieuwenhuis said: “After several years of developmen t and testing we are very happy to take this next big step: a first commercial installation to show that saving energy and emissions can mean saving money at the same time. We are confident that such an innovative company as Van Dam Shipping will manage to get the most out of the system and we are really excited to share the results in the coming months.”

The Ventifoil units are modular, non-rotating vertical wings with vents and an internal fan that use boundary layer suction for propulsion. The Ankie installation features two 10m wings with 6m extensions. “We expect the reduction in fuel costs over a period of approximately three years will equal the costs of the system and thus fulfil our dream of using wind again in modern shipping, which has been 40 years in the making,” said Jan van Dam, the company’s owner. The installation will provide data for the EU Interreg-backed Wind-Assist Ship Propulsion research program, which from the time of writing will look at both the practicalities of wind-assist operation as well as the medium- to long-term savings and benefits of the technology.

The projects conclusions estimated that hydrogen usage in Rotterdam would see overall CO2 emissions reduction of 16% at a price per tonne of CO2 saved ranging from €86 to €146 depending on the economic factors. While the project was concerned with shoreside usage, albeit clearly reliant on the Port of Rotterdam for transport of gas feedstock and CO2 for storage, liquid hydrogen has been developed as a fuel for fuel cell-powered shipping on a small scale and mooted as liquid fuel for larger vessels, and if anywhere were to establish its usage as a viable commercial fuel then Rotterdam would seem the likely candidate given the scope of the port’s infrastructure. One of the oldest ways of moving ships is, of course, wind power, and it is making a comeback as a way to reduce fuel use and carbon emissions.

eConowind has booked the first retrofit for its wind-assisted propulsion system

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The consortium said fuel cell use will improve the efficiency of power plants and prevent emissions even when fossil fuels are used for feedstock (directly, unlike many fuel cell installations relying on pre-extracted hydrogen) at berth, on inland waterways and on the open sea. A further advantage, the group cites, is their almost noiseless operation which makes them fit more easily into the environment. MultiSchIBZ will develop prototypes of two fuel cell systems. The system is based on SOFC fuel cells which can be operated with low-sulphur diesel fuel or LNG as an energy source.

A fuel gas generator converts the feedstock into a hydrogen-rich gas for operating the fuel cells. Compared with conventional marine diesel oil (MDO) propulsion, the group expects to reduce emissions by 99% for NOx and particulate matter and by more than 25% for carbon dioxide (CO2). The design and technical construction of the systems will be based in part on lessons learned from two predecessor projects. The aim, the project said, is to optimize the existing components, which have already been tested in the laboratory, to further develop them for operation with LNG and to scale them up for the construction and operation of pilot plants with higher outputs. Alongside thyssenkrupp, OWI OelWaerme-Institut gGmbH and TEC4FUELS GmbH are also involved as project partners. The OWI is providing its experience with conversion of liquid energy sources and is responsible for the further development of the fuel gas generator,

hot gas recirculation and the thermal start-up concept of the overall system. TEC4FUELS is a testing and engineering company responsible for the development of an online sensor system and a forced test method for the respective operating fluids as well as material investigations that take into account the interactions with the fuelcarrying components. Once the two systems have been developed, MultiSchIBZ aims to embark on a demonstration/field trial stage in which several fuel cell systems will be installed on ships in operation. A similar trial is taking place on board the cruise ship AIDAnova under the “Pa-X-ell2” project, involving Aida Cruises, Meyer Werft shipyard, and Freudenberg Sealing Technologies. The AIDAnova is entirely LNG-powered, but the fuel cells in question are based on methanol. Aida says the trial will make the ship the first cruise vessel to use fuel cells in service.

Rotterdam could soon be as important for hydrogen as it is for LNG ©Frans Berkelaar

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In Germany, a consortium has launched with the aim of developing fuel cells for commercial maritime use. The catchily-named “MultiSchIBZ” research project aims to significantly reduce pollutants and greenhouse gases in shipping and is led by thyssenkrupp Marine Systems GmbH, which is developing the fuel cell system itself.

RUSSIA

GAZPROMNEFT LAUNCHES ULSFO LUBRICANT, INCREASES SALES

Gazpromneft Lubricants has launched a new lubricant, Gazpromneft Ocean CCL17, for engines using fuels with less than 0.10% sulphur (ULSFO). The company says the new lubricant has been approved by leading engine manufacturers and is available at more than 200 ports around the world

he Gazpromneft Ocean range now comprises15 types of lube oils. Meanwhile Gazpromneft Marine Bunker says it is expanding production and sales of ultra-low-sulphur fuel. In the first six months of this year the company’s sales of ULSFO increased by 11% to 121,400 tonnes. Most of this was delivered to ships in the Baltic region of the Russian Federation, mainly in the ports of St. Petersburg. In its half-year report the company says the total volume of bunkers delivered increased by 23% compared to the same period last year, to 1.53 million tonnes. Sales in Northwest Russia increased by 26% to 857,500 tonnes, in the Black Sea region the increase was 14% to 503,200 tonnes. Supplies to vessels in the country’s inland waterways increased by 90%, to 106,300 tonnes. The company says that it intends to continue to develop its product portfolio by increasing the sales of environmentally

friendly marine and hybrid fuels with a sulphur content of 0.50% or less, produced at Gazpromneft’s Moscow and Omsk refineries. Meanwhile Aleksey Medvedev has taken over as Gazpromneft Marine Bunker’s CEO, from Andrey Vasiliev who had run the company since its foundation in 2007. Vasiliev now plans to make a round-the-world trip on a yacht which he reckons will take about a year and a half. Medvedev was previously deputy general director. New member for bunker association Fuel Technologies LLC joined the Association of Marine and River Bunker Suppliers at the council meeting on September 25. The company, which works at St. Petersburg Oil Terminal, was established in 2002. Its main activities are bunkering services, wholesale trade and export of petroleum products, forwarding.

Pionerskoye port project delayed Construction of a cargo and passenger terminal in Pionerskoye, in the Kaliningrad region, has reportedly been delayed by 9 months. Russian shipping press reports quote Andrey Moshkov, the Deputy Director of Rosmorport North-West basin management as saying the terminal will start operations in 2021. The intention is that the new terminal in Pionerskoye become one of the largest such facilities in North-Western Russia, with an annual capacity of over 400 ships and 300,000 passengers. Yantarny bunkering hub plan in doubt Doubts are emerging whether a proposed bunkering hub project in North West Russia will ever go ahead, despite support from Russian president Vladimir Putin. Yantarny should be able to compete on price with other European ports, but at present this only partly true.

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While high-sulphur fuel oil is indeed usually cheaper than in Rotterdam, MGO is often more expensive. This has been the case in recent years and there are no obvious reasons why MGO should become cheaper at Yantarny. Given that a drop in demand for high sulphur fuel oil in 2020 is inevitable, the arguments for developing bunkering at Yantarny no longer look so convincing. Rosneft delivers VLSFO in Far East Rosneft subsidiary RN-Bunker has begun supplying very low-sulphur fuel oil (VLSFO) in the Far East. At the end of September, it carried out the first bunkering operation with 0.50% sulphur fuel (grade RMLS 40). The company says the first 200 tonnes were delivered to a bulk carrier at Nakhodka. VLSFO is also being supplied to vessels supporting the construction of the new Zvezda shipyard in Bolshoy Kamen Bay. The new fuel is being produced at Rosneft’s Komsomolsk oil refinery in Khabarovsk.

with an average age of 39 years, are in lay-up with a view to reconstructing them with double hulls. According to the Russian Bunkering Association, there are 217 bunkering tankers operating in the country. Many of these vessels were bought second hand from overseas. LNG tankers under threat of US sanctions The Yamal LNG project could lose the ability to use more than a third of its ice fleet, six Arc7 LNG tankers, due to US sanctions against the Chinese shipping company Cosco, according to business daily Kommersant. The tankers in question are owned by a joint venture of Cosco and Canadian company Teekay. Now that American companies and citizens are no longer permitted to conduct business with all these vessels, and, given the extraterritorial nature of the sanctions, the tankers have in reality been prohibited from making international voyages.

There are also five other Arc7 tankers at risk. These are currently under construction and should be delivered in the near future. This means US actions against Cosco directly or indirectly jeopardize the operation of 14 of the 15 Arc7 tankers for Yamal LNG. The only exception is Christophe de Margerie, owned by Russian company Sovcomflot. However, Kommersant says the Arc7 tankers will now trade on domestic routes within Russia, delivering LNG from Sabetta to transhipment points in Murmansk and Kamchatka. The report notes there could be difficulties with insurance and the technical management of these vessels because repairs and docking of these LNG carriers is usually undertaken at European shipyards. The report says that operator of the vessels considers these problems solvable.

In its first half of 2019 report RN-Bunker says it increased sales of marine fuel by 9% compared to the same period of 2018, up to 5 million tonnes, accounting for 24% of the total Russian bunker market in the first half of the year. The Far East is one of the company’s key business regions, where it sold 1.1 million tons of marine fuel to both foreign and domestic shipowners in the ports of Primorsky KrayRu. This is almost 16% higher than in the first half of 2018. Soviet-built bunker tankers soldier on New research has found that 69 Soviet era bunker tankers are still in operation in Russia. The number of bunker tankers built in the period of the Soviet Union has been published by the Marine Engineering Bureau, Odessa, Ukraine. PortNews Agency reports that these vessels have an average age of 36.3 years. A total of 126 dedicated bunker tankers were built in Soviet times. Of those not still in service, 33 vessels have been retired for good but 24 vessels, World Bunkering WINTER 2019/20

One of Lukoil’s range of 15 lubes

RUSSIA

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COULD PURGE OF REGULATIONS HELP BUNKERING? The Russian government has started to cut the legislative burden on business. Olga Bogacheva asks Vitaly Kovalev, the President of the Russian Association of Marine and River Bunker Suppliers whether this initiative will assist the bunker industry OB: Russian bunker suppliers often complain that the industry is overregulated. The authorities control this business on a variety of parameters, which often significantly and without any sense increases administrative costs. Some regulations are outdated, some norms are unreasonably strict, some contradict both each other and common sense. Is it possible that right now the situation will change for the better? VK: To begin with, I would like to note that extreme pressure on the transport industry in comparison with other businesses is not just our subjective feeling. Even Medvedev, Russian Prime Minister, speaking about the most regulated industries, mentioned transport in the first place. Since the very first day of existence of our Association the dialogue with the regulative authorities has been our most important activity. As a result, the situation has changed for the better in many ways. But it is still far from ideal, and the process of interaction with government agencies still needs improvement. However, now we have probably reached the turning point when years of effort will finally pay off.

The government announced its readiness to implement a sharp reduction of the number of regulations that hinder business (these are mainly by-laws orders of the ministries and departments and resolutions of the government of the Russian Federation) using the so called ‘regulatory guillotine’. The technique is not really new. It has been used many times around the world and, in theory, should provide a breakthrough in the economy of the whole country. OB: But this is not the first administrative reform, the result of which was to be “limitation of state intervention in economic activity of business entities and termination of excessive state regulation” (an exact quote from an Order the Russian government issued in 2006). Is something happening differently now and thus causing optimism? VK: The current reform is fundamentally different from all previous attempts. It seems that its initiators are quite determined and seriously intend to carry out fundamental changes. They have developed mechanisms that should eliminate the possibility of leaving the old problems in the new design.

The purpose of the regulatory guillotine is to abolish all legal provisions containing excessive, outdated or duplicated requirements that hinder business activities in all sectors of the economy from the beginning of 2021. By mid-2020, all Federal laws and other regulatory laws that establish mandatory requirements in certain areas of business should be revised and a fundamentally new system of legislative regulation should be established. Documents that have not been revised by then will automatically no longer be in force.

Vitaly Kovalev

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his is a truly revolutionary plan. Let me remind you of the logic which has been used so far in attempts to abolish excessive requirements. Experts and businesses who proposed to destroy the barriers had to prove and justify the need for the change. State agencies, as a rule, defended the necessity for all restrictions and insisted on introduction of new, even more stringent rules. I must admit their tactics worked perfectly.

It is enough to note that in the next 18 months not a single regulation of any level can be adopted without the approval of the industrial working group. The provision on â&#x20AC;&#x2DC;equality of votesâ&#x20AC;&#x2122; of the regulator and the business is also fundamental.

Now it should be the other way around. The regulator must prove necessity of a certain regulation, and it will be considered by industrial working groups reporting directly to the Government. This time, the working groups are not decorative; they have authority backed by appropriate regulatory procedures.

Vladimir Sergeev, the chairman of the Board of the Association, is a member of the working group designing the new structure of legal regulation of the water transport. The group also includes representatives of the Ministry of Transport and all port and shipping supervisory bodies, as well as representatives of industrial professional associations.

OB: How is the Russian Bunker Association involved in legislative reform? What are your impressions of the attitudes of government officials?

Besides, Vladimir Sergeev is a member of the water transport expert group, formed by the Russian Ministry of Transport at the project office for the implementation of the regulatory guillotine mechanism, to study proposals for its implementation and development of new bills. We will surely inform the members of our Association about the progress, familiarise them with the documents and strongly recommend to take part in their evaluation and formulation. I am glad that the bunker community fully supports the approach stated by the initiators of the regulatory guillotine â&#x20AC;&#x201C; any control should be carried out only if there are risks for the safety of people, objects and the environment.

St Peterburg OIl Terminal

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INDONESIA

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GREAT POTENTIAL

As a producer of low sulphur crude oil and LNG located across some of the world’s busiest shipping lanes, Indonesia could be one of the big players on the global bunker scene

ndonesia attracted international attention in July and August when its Transportation Ministry’s director of shipping and maritime affairs, Sudiono, first said the country would not enforce the IMO 0.50% sulphur limit on its large domestic fleet. He explained that production of marine fuel with a maximum 3.5% sulphur content by state-owned oil major Pertamina was still high, at 1.9 million kilolitres a year, and it would continue to be used for power generation and shipping. Within weeks he performed a U-turn and said the country would indeed comply. In his second statement Sudiono stressed that the limit would apply to “all Indonesian-flagged vessels starting 1January 2020, both for domestic and foreign shipping”. Reuters reported that the second statement was accompanied by a request to the state oil company Pertamina to increase supply of lowsulphur marine fuel in the country’s main ports. In mid-November Indonesian online newspaper Kontan reported the country’s oil and gas industry was starting to prepare to meet the new regulation. The director of major fuel logistics company AKR Corporindo Suresh Vembu was reported as saying that his company was ready to supply compliant fuel. But he added that, “unfortunately”, he could not be sure there would be sufficient demand from the shipping industry. AKR itself operates a fleet of 12 tankers and barges on domestic trades.

In the same article marine services company and offshore support vessel operator Logindo Samudramakmur’s company secretary Adrianus Iskandar admitted that the company was still studying the requirements of the new regulation. He added that buying compliant bunkers would depend on the charterers. Compliance with the 0.50% sulphur limit will, however, only be a temporary distraction. On paper Indonesia ought to be a major bunker player, with several ports well placed to tap into the global market, as Kassim Gokal, Sulawesi Bunker Terminal’s (SBT) commercial director explained to World Bunkering. He noted: “The Indonesian Archipelago consists of about 17,000 Islands, stretching from the Indian Andaman and Nicobar Islands in the West all the way to Papua New Guinea in the East. The country and its waters cover three time zones over a distance exceeding 3,000 sea miles. The Indonesian Islands form almost a geographic picket line between Australia and the remainder of Asia and China. Most of the sea traffic between Australia and North Asia has to pass through the Islands and IMO has therefore designated three Archipelagic Sea Lanes (ASL’s) to allow freedom of transit through Indonesian waters. The number of ships using the ASLs is very high, and if we apply bunkering basics in terms of volume, locations and choke points, the prospects for bunker business would seem obvious.

However bunkering opportunities for international transit traffic have not yet been taken advantage of. “Pertamina has its main mission to supply the whole country of 34 provinces and 260 million people with adequate fuel, through a network of agents, distributors and sub distributors. Physical delivery of the fuel is handled via this network which are private companies of varied capacity, including petrol station owners. Bunkering is also done via their agents, which are assigned specific areas and ports to operate. “In addition, Pertamina is responsible for distribution of subsidised fuel to the general population, where the price of subsidised diesel to the public is 50% of the price for industrial buyers and for shipping. This price difference creates a major risk of illegal activity and is therefore monitored strictly both on land and at sea, by the coast guard and other authorities. The focus of bunker agents is on supply in their respective areas and presumably on dealing with all the above matters. Licensing for fuel trading for the private sector was opened up some time ago, but the procedures which involve approval of several ministries and local authorities are cumbersome. “Those who have succeeded to obtain the license are mainly concerned with local supply to their own industrial activity such a factories or mine sites.

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BT was established in 2017 with the main purpose of development of a bunker business to cater to local shipping and to international vessels in transit. SBT was successfully fully licensed in August 2019 and is in the process of setting up operations, which will concentrate on ASL 2, which is formed by the Makassar Strait and Bali-Lombok Channel. This sea lane is utilised by capesize bulk carriers and VLOCs on the iron ore route from Australia to China and North Asia, which is the biggest bulk shipping trade in the world today, of about 750 million tonnes per year. The Makassar Strait is also used by the large number of coal vessels loading from Kalimantan going North. SBT will be placing a floating storage facility at Donggala port, near Palu on the Makassar Strait, and use bunker barges to supply to ships in transit. SBT plans to initially stock and supply MGO and then VLSFO at a later stage, which will probably be imported for supply to foreign flag vessels. SBT is fully prepared to cooperate and participate with international bunker and shipping companies who have interest to develop this opportunity.

Kassim Gokal

PT. SULAWESI BUNKER TERMINAL Indonesian Independent Bunker Company to start supply operations in January 2020.

“With the advent of IMO 2020 regulations, Indonesia is reportedly facing some issues due to production capacity of the new fuel. While Indonesia does produce sweet, low sulphur crude oil, of which residue is a good base for the new fuel, it seems there might be delay before enough comes on stream. “The government has announced its readiness to provide a quantity of 380,000 kilolitres per year of VLSFO, equivalent to about 330,000 tonnes per year which will not fulfil the demand. Perhaps remaining demand will be filled by MGO / biodiesel production which is already being used by the large number of tugs, barges and small craft in operation. Pertamina refineries also produce a large quantity of HSFO which is also used on shore. Pertamina has made an agreement with trader Freepoint to develop their large storage tanks at Sambu Island for VLSFO blending and storage however this product is likely to be destined for the Singapore bunker market.”

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• • • •

Strategically located in the Makassar Strait offering barge supply at anchorage. Ideally positioned for Australia – Asia iron ore route and Kalimantan coal loaders. Floating storage position at Donggala port, gulf of Palu, Central Sulawesi. MGO supply ex barges available by January 2020, and vlsfo supply during q2-2020.

PT. Sulawesi Bunker Terminal Pondok Indah Office Tower 3, 17th fl. Jl. Sultan Iskandar Muda V, Jakarta 12310 Indonesia T. +6221 29659090 | sulawesibunker@gmail.com www.sulawesibunker.co.id

EQUIPMENT & SERVICES

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BLOCKCHAIN MEETS DNA A recent trial of a blockchain and DNA-based marine fuels tracking system “paves way for more transparency and traceability in the marine fuels supply chain”

unker tracking company BunkerTrace, marine fuel purchasing association Cooperative Bebeka, dredging company Boskalis and bunker supplier Minerva say that they have carried out a successful pilot of BunkerTrace, a system that they describe as combining synthetic DNA tracers and blockchain to manage risk for marine fuels by creating a transparent chain of custody. The Boskalis-owned dredger, Prins der Nederlanden was bunkered with 900 cubic metres (m3 ) of fuel supplied by Minerva with a unique tracer added. The crew then successfully detected this marker with an on-board analysis case that took less than a minute, with the result of the test logged in a blockchain-based transaction record. The trial demonstrated the readiness of the BunkerTrace system to transform IMO 2020 bunker fuel compliance and increase transparency and traceability in the marine fuels supply chain. By adding markers to fuel at every stage of the supply chain and recording each transaction in a blockchainbased system, BunkerTrace creates an immutable audit trail that follows the fuel, and any changes made to it, recording all activities and sign offs by actors transacting the fuel.

By the time it reaches a vessel, crew can in seconds test for the presence of the necessary BunkerTrace markers and, if they are absent, make a decision about whether to proceed. Where the DNA provides data related to the provenance and movement of the actual fuel, the blockchain solution traces interactions that occur on a human to human level – the digital ‘handshakes’ that occur along the supply chain. This creates a powerful tool for owners, suppliers, ports and insurers to track fuels and manage the risk of non-compliant, or even potentially dangerous contaminated marine fuels, from being used on international ships. It also allows crew to test fuel before it is bunkered, rather than relying solely on lab-based testing after delivery. It also provides the basis for determining which fuel supply chains are the most reliable. Marc Johnson, CEO BunkerTrace, commented following the trial: “After last year’s ‘epidemic’ of bad bunker fuel, it’s unsurprising that owners, insurers and operators are worried about the quality of fuel available as shipping scrambles for available product post-2020 that will see more fragmentation in fuel supplies as more fuel is blended to meet compliance.

This successful trial of BunkerTrace has demonstrated that it’s an easy, reliable means of introducing a level of transparency and traceability into the marine fuel supply chain that we’ve never had before. We’ve had a high level of interest in the product so far, and this is an important step on the way to rolling this out to the market.” Harry Vasse, General Director at Cooperative Bebeka, added: “ Managing the energy procurement now and in the future has our highest priority. Energy procurement is about sustainability, transparency and environment. CSR reporting takes place at boardroom level since company reputation is at stake. With the product portfolio in the marine energy market becoming increasingly complex and diverse in the near future our focus is on expertise and continuously developing of member protection tools and this is why we fully support the BunkerTrace initiative. Combining these two revolutionary technologies will provide the Cooperative and its members with an independent and transparent method for managing fuel quality throughout the bunker chain. Furthermore, it will support us in identifying the most reliable and trustworthy supply chains and streamline compliance.”

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ablo Sansó Gil, Head of Sales (EMEA) at Minerva, said, “These are unprecedented times for the bunkering market. As suppliers, it’s vital that we can increase our levels of transparency and build trust with our customers. It’s great to see an example of a technology that is going to make it much easier to do this in action.” The trial used a tracer - added to the fuel as it was loaded onto a Minerva bunker barge, via a dosing pump on the fuel line. Bureau Veritas verified that the fuel line and receiving cargo tanks were empty. As the fuel was bunkered, the crew of the Prins der Nederlanden used an on-board sampling kit to test for the presence of the tracer. The test took under two minutes and was able to detect the presence of the DNA marker at two parts per billion in the fuel. Samples of fuel were collected before and after the tracer was added for further analysis.

Lithium-ion capacitor technology deal Following on from a product development agreement between Kawasaki Heavy Industries (KHI) and Corvus Energy that began in 2017, the two companies have reached a licensing agreement for a novel lithium-ion capacitor (LiC) technology. The LiC incorporates lithium-ion capacitor cells into an energy storage system (ESS) with high-efficiency liquid cooling that maintains an optimal temperature range at very high RMS currents and charge/ discharge rates. The LiC will safely sustain charge/discharge rates of 600 C peak and 300 C continuous, enabling both energy recapture/storage and fast discharge for high-power load handling. Corvus Energy plans to introduce a new product based on the LiC ESS technology with Kawasaki Heavy Industries, trademarked Blue Marlin and targeting the offshore sector it currently serves with its Orca and Dolphin ESSs and Moray subsea ESS. The new Blue Marlin product is expected to be available in 2020.

Geir Bjørkeli, CEO of Corvus Energy says: “Offshore producers are increasingly committed to investing in solutions that reduce the carbon footprint of their operations. We are thrilled that the progressive leadership at Corvus shareholders Equinor and Shell— whose offshore operations are the largest in the world—will help speed adoption of Corvus’ energy efficiency solutions in the Offshore segment.” Oily water discharge data collation UK-based water quality monitoring technology company Rivertrace Limited has created a subscriptionbased web-based software system for the automatic collation of MARPOL oily water discharge data. Rivertrace Connected is a software system that interprets, and records oily water discharge data received from Rivertrace’s Smartsafe ORB (Oil Record Book) Bilge Overboard Security System monitoring equipment. Data received from the ORB monitor is displayed on a “user-friendly” dashboard interface which tracks ship and fleet-level critical information for the user.

Onboard test took under two minutes to detect the presence of DNA marker

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EQUIPMENT & SERVICES

ggregated data from the fleet can be displayed on the intuitive dashboard, allowing the user to rank ships in a league table from best to worst performance. The systemâ&#x20AC;&#x2122;s vessel dashboard displays all data received for a particular ship within a specified period including amounts discharged and speed of discharge, alongside equipment details such as serial numbers, calibration, maintenance requirements, idle time, active time and prevented discharges. The system also offers a mapping function to show where discharges took place. Rivertrace says the systemâ&#x20AC;&#x2122;s features allow it to provide a fully auditable discharge data trail with timestamped entries for provision to port state control and/or other Marine Enforcing Agencies, if required. Additionally, the discharge data can be used as an automated entry into an electronic ORB.

In developing this advanced digital technology, Rivertrace has responded to industry requirement for simpler recording and reporting of discharge data for compliance. The new software removes the challenges associated with hard-to-use discharge data, commonly presented in unreadable CSV files, and offers a system that displays the data in an easy to read and interpret format. Furthermore, the software enhances the credibility of discharge data collected by minimising the risk of human error. Solar power and fuel monitoring systems integrated Eco Marine Power (EMP) says it has completed the integration of its Aquarius Management & Automation System (MAS) with the onboard fuel monitoring system installed on the large general cargo ship, the Panamana, owned by Singaporean carrier Masterbulk.

This was achieved in cooperation with Japan-based KEI System Co and German-based Hoppe Marine with additional technical services provided by Singapore-based Zeaborn Ship Management, which was responsible for technical ship management and crewing. Aquarius MAS is a fuel oil consumption (FOC) monitoring, alarm handling and data logging platform suitable for a wide range of ships. Aquarius MAS reports and logs fuel consumption in real-time, produces daily consumption reports and calculates vessel emissions (z, SOx). It can also monitor and manage renewable energy systems and onboard the Panamana, it is integrated with EMPâ&#x20AC;&#x2122;s Aquarius Marine Solar Power solution. EMP says that the integration of systems onboard the Panamana is another important step forward towards the deployment of its patented rigid sail and solar power system designed to provide zero emissions power onboard ships.

The First bunkering with BunkerTrace has been undertaken in the Netherlands

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STACKING UP THE STUDIES Proving their case has become important to both proponents and critics of the move towards LNG

ver the past few months proponents of LNG and scrubbers have been pointing to studies that support their respective arguments. In September, the LNG supporting group SEA\LNG released the findings of a new alternative fuels study that found that LNG was “the most mature, scalable, and commercially viable alternative fuel currently available for the maritime industry”. The study was conducted by Norway-based alternative fuel experts from DNV GL.

Based on existing industry and academic literature, the study evaluated the commercial and operational viability of six of the main alternative fuels: hydrogen, ammonia, methanol, LPG, biofuel, in the form of hydrotreated vegetable oil, and full battery-electric systems. It examined how they perform against LNG on a set of 11 key parameters, covering considerations such as applicability, scalability, economics and environmental performance.

The study concluded that while there are a variety of lower or zero carbon alternative fuels that could help to meet the goals of the International Maritime Organization’s (IMO) 2030 and 2050 greenhouse gas reduction targets, many of these alternatives require significant development to meet the industry’s needs. The study also noted that many promising alternative fuels currently lack the regulatory framework, production capability and bunkering infrastructure for widespread adoption, and additionally are more expensive than traditional bunkers or LNG. As such, in a period where the industry is under considerable pressure to take steps to reduce GHG and other emissions to air, LNG is a solution that could help to move the industry forward, while laying the ground work for lower or carbon neutral fuels produced from renewable or zero-carbon energy.

According to SEA\LNG Chairman Peter Keller: “Modern ships have a life expectancy of around a quarter of a century. Investors need to know how the capital expenditures for installed engines and their operational costs, including choice of fuel, will be impacted by current and future environmental legislation. With several marine fuel options to consider, SEA\LNG commissioned this study from DNV GL to support the industry in its decision-making. The study provides further backing for our belief that, in order to achieve GHG reductions and improve air quality NOW, ship owners and managers need to act decisively and invest in LNG capable vessels. Doing so will improve the long-term sustainability for the shipping industry, while safeguarding a competitive advantage for the ship owners and operators who facilitate global trade.”

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SEA\LNG and the Society for Gas as a Marine Fuel (SGMF) had earlier commissioned independent consultants thinkstep to undertake a study on the greenhouse gas (GHG) emissions associated with the use of LNG as a marine fuel. It was published in April of this year and “has been well received and we have been keen to encourage discussion of the analysis”. There has certainly been discussion about its findings. SEA\LNG asked thinkstep to reply to criticisms, which fell into three main areas: the allocation of GHG emissions to the production of traditional marine fuels, the study’s assumptions on engine efficiencies, and how it handled methane slip. One criticism was that little or no GHG emissions should be associated with the production of heavy fuel oil (HFO) at refineries (i.e. HFO is a ‘free product’ from the refining process) thereby reducing the relative emissions of HFO compared with LNG on a well-to-wake basis. The consultant responded: “This is a highly unusual assumption and not consistent with the approach taken by most life cycle analysis practitioners. So long as HFO is considered a product with a positive market value, HFO should be accountable for a certain percentage of refinery emissions and should not be considered as “free” of GHG emissions.”

LNG

he data and assumptions used by thinkstep relating to engine efficiencies were also questioned. There was a suggestion that the thermal efficiency numbers used for LNG-fuelled engines were too high compared with dieselfuelled engines, resulting in more favourable GHG emissions results for LNG. The thinkstep response was: “It is important to note that the thinkstep analysis used data, supplied by OEMs, for engines that are being sold now, whereas previous studies have analysed older engine technologies. Additionally, in contrast to other analyses, thinkstep also took into account pilot fuel usage in the dual fuel LNG engines and urea use in NOx abatement.” The consultant added: “Engine load factors and the GHG emissions at different loading levels has also been debated. While engine loading varies by vessel type, deployment, liner versus tramp itineraries, weather and a myriad of other factors, vessel owners and operators carefully specify their engine performance to avoid excess engine capacity i.e. to minimise initial capital investment and fuel consumption. Every operator looks for the most efficient operation of their propulsion systems given safety considerations. Furthermore, under the Energy Efficiency Design Index (EEDI) principle, where ships are to become ever more efficient, penalties are incurred for excessive propulsion capacity. The minimum fuel consumption for 2-stroke slow speed fuel oil engines occurs at 60-65% load, while for LNG engines this is 65-80%. Methane slip in LNG engines are lowest at high load points. So, if it is (incorrectly) assumed that LNG engines operate at the same load factor as oil-based engines, then methane emissions would be higher.” thinkstep concluded: “As more owners shift to clean, sulphur-free LNG fuel we will see the added benefits of reduced emissions of NOx and especially Particulate Matter on global air quality and we will be better able to quantify the GHG benefits through actual operational data and experience.

As this process continues we are more convinced than ever of the robustness of the life-cycle GHG emissions study that SEA\LNG and SGMF commissioned.” LNG bunkering tanker simulator enables first-of-its-kind hands-on training Reflecting a steady increase of the LNG-powered global fleet, Malaysian marine training company Kasi Group has ordered an LNG bunkering vessel simulator from technology group Wärtsilä. The simulator will be used to provide hands-on training to those who will be operating LNG bunkering services. Wärtsilä says it is the first company capable of offering such a simulator.

“As the global demand for LNG fuel for marine applications increases, the number of LNG bunkering vessels serving this demand is also increasing. To achieve best operating practices, safety and efficiency, first-rate crew training is essential,” says Captain Bo Caspersen, General Manager, Kasi Group. The demand for training services for LNG bunkering vessel simulators has been rising since 2017, when only one single LNG bunkering vessel was in service. By the end of 2018, this number had increased to a total of nine ships, and it is forecast that a further 30 of these vessels will be delivered over the next five years. The Wärtsilä package of TechSim LCHS Network Class simulators to Kasi Group comprises five work stations, one for the instructor and four for trainees.

SEA LNG Chairman Peter Keller

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LUBRICANTS ExxonMobil and Cepsa agreement

LUBRICATING 2020 Lube oil manufacturers are getting ready for VLSFO

ver the past year marine lubricant manufacturers have been busy engaging with their customers and talking through how to avoid problems when operating on new fuels, and especially on VLSFO.

we have already been anticipating in advance that with cylinder oil for all fuels up to 0.5% sulphur the crucial factor will be cleaning capability rather than neutralization.”

For example, in October, LUKOIL Marine Lubricants invited customers to a Technical Seminar in Athens. The company’s Technical and Marketing Director, Stefan Claussen, gave a presentation on the uncertainties around the marine fuel landscape after 2020 and discussed the future cylinder lubrication solutions for very-low (VLSFO <0.5% Sulphur) and ultra-low sulphur fuel oils (ULSFO <0.1% Sulphur).

“No 40 BN cylinder oil designed for pre-2020 low-sulphur residual fuels was covering distillate fuel operation sufficiently to handle 0.1%S and any 0.5%S fuels”, added Claussen, “So, we acquired major engine designers’ full Non-Objection Letters for our new extra-detergency BN40 cylinder oil NAVIGO MCL Extra on the basis of a successful field test in 2014 to 2017.” He said that excellent cleaning performances had been reported for engines running long-term on low sulphur fuel between Brazil and northern European ports.”

Claussen advised using 40 BN cylinder lubricants for VLSFO operation from 2020. He pointed out this approach was supported by engine manufacturers, a method also shared by OEMs, for example in MAN’s latest service letter SL2019-671/ JAP: “It is expected that the vast majority of all vessels with MAN B&W engines will experience a trouble-free transition to max. 0.50%S fuels. We recommend beginning with 40 BN cylinder oil and evaluating the condition continuously.” According to Claussen, “the challenge is to create a sufficient level of detergency to avoid deposits in the engine”. Kenny Park, Technical and Marketing Manager at LUKOIL Marine Lubricants explained: “Similar to 2012, when we launched our BN100 cylinder oil NAVIGO 100 MCL as a pre-emptive countermeasure against cold corrosion, World Bunkering WINTER 2019/20

NAVIGO MCL Extra is a new 40 BN marine cylinder oil for distillate, ULSFO, VLSFO and low sulphur heavy fuel oil (<1.5%S) applications. It was launched by LUKOIL Marine Lubricants in May 2017 and is approved for MAN, WinGD and J-ENG (Mitsubishi) engines. Cepsa and Mobil renew production agreement Cepsa has renewed its agreement with ExxonMobil for the manufacture, distribution and supply of Mobil-brand marine lubricants in more than 130 ports in Spain, Portugal and Gibraltar.

Cepsa produces MobilGuard lubricants at its plant in San Roque, Spain, which is close to Algeciras and Gibraltar. The company serves as an official distributor in the Iberian market and sells more than 90 products within the Mobil lubricants range and supplies nearly a thousand marine vessels annually. The relationship between ExxonMobil and Cepsa began in 1973 with the creation of a lubricant production plant near Cepsa facilities at San Roque. Cepsa has been an official distributor of the ExxonMobil range of marine lubricants in Spain since the plant was put into production in 1976. Both companies later agreed to extend their agreement to include distribution and supply to the ports of Gibraltar (1997) and Portugal (2008). Clutched gear systems oil launched Chevron Marine Lubricants has introduced a range of premium high-performance gear oils designed for use in industrial and marine clutched gear systems, where extreme load and shock load protection is required. The company says it has responded to customer and original equipment manufacturer (OEM) demand for gear box oils designed to ensure optimal performance in Renk and Flender/ Siemens, Reintjes and Brunvoll clutched gear boxes, extensively used in marine vessels.

LUBRICANTS

The Meropa MG gear oils range carry approvals from those gearbox manufacturers. The formulation of Meropa MG gear oils is said to be balanced to help provide both extreme pressure protection, while providing defence against yellow metal corrosion. Oils in the range are designed to offer long lubricant life, corrosion protection,

good wear protection with high load carrying capacity and robust micropitting wear protection. Additionally, the thermal and oxidative stability of the gear oils is intended to help minimise deposit formation, prevent varnish and sludge and keep the components clean, all of which can extend bearing and gear life.

The new gear oils are designed to be compatible with multiple types of sealant and paint coatings This minimises the possibility of leaking seals and paint blistering on the inside of the gearbox. Meropa MG gear oils are available in the ISO VG 100/150/220 viscosity range and will initially be available in Scandinavian ports. Chevron says that, depending on demand, supply areas could be expanded in the near future.

Lukoilâ&#x20AC;&#x2122;s BN40 cylinder oil NAVIGO MCL Extra has been successfully subjected to lengthy trials at sea

World Bunkering WINTER 2019/20

Additive manufacturers have been quick to offer ways to help ship operators cope with the practicalities of switching to fuels that comply with the 0.50% sulphur limit

hen the 0.10% sulphur limit came into force in emission control areas (ECA), additive manufacturers came up with products to assist the frequent, for many vessels, change over from HFO to MGO. They also gained experience with ECA-compliant ultra low sulphur fuel oil (ULSFO) being burnt instead of MGO. Now more owners are turning to additives to deal with issues arising from moving to either MGO or the cheaper option of very low sulphur fuel oil (VLSFO) to meet the 0.50% limit. World Bunkering asked additive producer Aderco what role additives could play. A spokesperson said: “The effects of the IMO sulphur cap will continue to be felt long after January 2020. Clear indications suggest that there is very likely to be an issue of fuel stability and quality, especially in the early part of the year as the new low sulphur fuels are introduced. There will undoubtedly be cases of a lack of compliant and/or low quality fuels in the early part of 2020 depending upon bunkering locations, as well as the associated risk of engine damage and contamination being of concern to both ship owners and ship managers.” Aderco highlighted one way that additives had come into their own in the run-up to 2020. “Using a compliant fuel without first having cleaned or, at the very minimum, at least flushed through the tanks prior to taking on the new fuels is considered a waste of time. Tank cleaning without the use of fuel treatment, such as Aderco environmentally-friendly technology, requires manual cleaning with all the associated time, cost and risk implications. According to some in the industry, the risks involved are evident when loading low sulphur fuel on top of existing fuel oil and gradually flushing the old fuel through the fuel system, allowing the new fuel to act as a cleaner until the sulphur content in the ship’s fuel system is compliant. There is no guarantee that the tanks are 100% clean at the end of the process.” World Bunkering WINTER 2019/20

The company noted that IBIA had advised: “It is therefore not recommended to simply load compliant fuel directly into tanks previously used for HSFO or to start flushing through the fuel oil service system to achieve compliance, without taking preparatory and precautionary steps. Operators should ensure the fuel oil tanks and systems are sufficiently clean prior to the first loading and use of compliant fuels to prevent a sudden and severe dislodging of built-up residues.” According to Aderco, with fuel stability, compatibility and quality issues anticipated post 1 January 2020, the use of fuel treatment technology will help eliminate and control these issues and, “as has been proven recently”, can help ships return to port to repair damage from contaminated fuel. The company stressed: “The industry wants to be compliant and at Aderco we want to work with all concerned to ensure vessels remain at sea and working no matter what the final bunkered fuel they use.” Another major additives manufacturer, Innospec, commented that some ship owners and operators may consider burning MGO all the time rather than switching to the new VLSFO fuels.

However, this is a costly option. The price differential between HFO and MGO is currently about US$200/tonne which equates to approximately $100,000 per 500m3 tank. It concludes: “Not surprisingly, it is expected the price differential between MGO and VLSFO will incentivise a shift towards VLSFO products. The market is forecast to use over 50% VLSFO fuels after January 2020.” It offers a range of Octamar BT-series additives for tank cleaning. Innospec pointed to the cost savings of going down the additives route. It noted: “Current estimates put the cost of manually cleaning a 500 cubic metre tank in China at US$6,000. In Singapore a ship owner or operator could expect to pay much more than this ($9,000) and that excludes sludge removal.” Innospec said using its additives to clean the same sized tank would be about $2,300.” The company also pointed out that there could be great pressure on tank cleaning facilities in the run-up to the implementation of the 0.50% limit.

Aderco additive. A small amount of additive can be a cost effective alternative to manual tank cleaning

FUEL ADDITIVES

ADDING TO 2020

LEGAL

BUNKERING AND US SANCTIONS ON IRAN The US Office of Foreign Assets Control (OFAC) has published a notice answering frequently asked questions about the implications of sanctions on Iran, including their effect on the bunkering sector

s tensions between the US and Iran have increased there has been increased focus on what sanctions mean in practice. OFAC has answered the important questions about compliance with the Iran Freedom and CounterProliferation Act (IFCA) but the complexity of the answers indicates bunkering a ship with an Iranian connection could be a legal minefield, as shown by the following edited extracts.

or petrochemical products from Iran; goods used in connection with the automotive sector of Iran; or iron, iron products, aluminium, aluminium products, steel, steel products, copper, or copper products from Iran), bunkering of that non-Iranian vessel in a country other than Iran — and related payments for these bunkering services — risk being subject to sanctions unless an applicable waiver or exception applies.

Q. Will the provision of bunkering services to a non-Iranian vessel carrying non-sanctionable goods to or from Iran be subject to sanctions? A. If a non-Iranian vessel is transporting non-sanctionable goods to or from Iran, the bunkering of that non-Iranian vessel in a country other than Iran — and related payments for these bunkering services — will not be subject to sanctions, only if the transaction either does not involve US persons (including US financial institutions) or US-owned or -controlled foreign entities, or the transaction is exempt from OFAC regulation or authorized by OFAC if it does involve US persons (including US financial institutions) or USowned or -controlled foreign entities, and the transaction does not involve persons on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List) that have been designated in connection with Iran’s support for international terrorism or proliferation of weapons of mass destruction, including designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (IRGC), or activity that is subject to other sanctions authorities.

Q. Will the provision of bunkering services for an Iranian vessel be subject to sanctions? A. Section 1244(d)(1) of IFCA makes sanctionable knowingly selling, supplying, or transferring to or from Iran significant goods or services used in connection with Iran’s energy, shipping, or shipbuilding sectors. The provision of bunkering services to a vessel flying the flag of the Islamic Republic of Iran, or owned, controlled, chartered, or operated directly or indirectly by, for, or on behalf of the Government of Iran (GOI) or an Iranian person, could be sanctionable under this authority, regardless of whether the transaction involves persons that have been determined to be part of Iran’s energy, shipping, or shipbuilding sectors pursuant to Section 1244(c) of IFCA. Likewise, pursuant to section 1244(d)(2) of IFCA, a foreign financial institution could be exposed to sanctions if it knowingly conducts or facilitates a significant financial transaction for the sale, supply, or transfer to or from Iran of goods or services used in connection with Iran’s energy, shipping, or shipbuilding sectors. Payments for the provision of bunkering services to a vessel flying the flag of the Islamic Republic of Iran or owned, controlled, chartered, or operated directly or indirectly by, for, or on behalf of the GOI or an Iranian person could be sanctionable under this authority, regardless of whether the transaction involves persons that have been determined to be part of Iran’s energy, shipping, or shipbuilding sectors pursuant to Section 1244(c) of IFCA.

Q. Will the provision of bunkering services to a non-Iranian vessel carrying sanctionable goods to or from Iran be subject to sanctions? A. If a non-Iranian vessel is transporting sanctionable goods to or from Iran (including, but not limited to, petroleum, petroleum products,

In addition, non-US persons who provide bunkering services for an Iranian vessel that has been identified as blocked property of an Iranian person on OFAC’s List of Specially Designated Nationals and Blocked Persons — or that make related payments for these bunkering services — risk being designated themselves. However, the provision of bunkering services for an Iranian vessel transporting goods subject to an exception, such as agricultural commodities, food, medicine, or medical devices, to Iran, or subject to an applicable waiver — and the making of related payments for these bunkering services — will not be exposed to sanctions, unless the transactions involve persons on the SDN List that have been designated in connection with Iran’s support for international terrorism or proliferation of weapons of mass destruction, including certain designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (IRGC), or activity that is subject to other sanctions authorities. The full FAQs are available at https:// www.treasury.gov/resource-center/faqs/ Sanctions/Pages/faq_iran.aspx#691

iStock

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COMPANY NEWS

GIBRALTAR PORT REMAINS POSITIVE The Port of Gibraltar continues to positively approach the challenges and demands being faced by this small but unique global maritime hub

ibraltar is the number one bunkering port in the Med and its bunker suppliers are well placed for the 2020 sulphur cap and the potential new business that may be generated as a result. Manuel Tirado, CEO and Captain of the Port commented that the Gibraltar Port Authority (GPA) is confident that Gibraltar’s suppliers will have the necessary product available in 2020. He added that as part of the transition to the new fuel, the GPA will also be implementing enhanced supervision and monitoring, something which the local suppliers have all been consulted on and are happy with. He noted that Gibraltar Port is often held up as an exemplar for other ports, due to the fact that we have robust monitoring systems in place. Bunkering is the key to the Port’s business and we will ensure that what is delivered is compliant with requirements. The Port’s reputation is very well known in the global bunkering industry and as regulators the priority is to make sure that reputation is protected, he added. The GPA has also been working hard to put the legal framework in place for LNG bunkering with an LNG Code of Practice also ready. During Gibraltar Maritime Week, it was announced that Shell would be applying for an LNG bunkering licence which would be issued if they met all the necessary requirements – a very exciting prospect. In fact, the Port saw its first LNG bunkering operation in September. Titan LNG supplied 3,000 tonnes of LNG by barge to Heerema’s new LNG fuelled crane ship, the Sleipnir, during the voyage to its first project in the eastern Mediterranean and was the biggest quantity of LNG supplied by barge in Europe to date.

we are already seeing strong indications that this trend will be reversed in 2020 and pre-booked cruise call visits have already surpassed 2019 booking figures. Added to the mix is the growing number of superyacht visits where Gibraltar has become more than a destination of choice – Gibraltar is becoming a destination of necessity. Maritime Week Gibraltar, which was held in June and organised in partnership with Petrospot, saw over 150 international delegates visiting Gibraltar to attend a week of events, including a conference, training and onsite activities showcasing and promoting Gibraltar’s thriving maritime sector. Maritime Week Gibraltar also saw the announcement of the establishment of a Maritime Academy in Gibraltar, to be based at the University of Gibraltar. As from September 2020, the University of Gibraltar will be offering four new undergraduate maritime degrees comprising a BSc (Hons) in Maritime Science (Nautical) with deck cadetship and a BSc (Hons) in Maritime Science (Engineering) with engineer cadetship.

In addition, the University will offer the BSc (Hons) degree in Maritime Science (Nautical) and the BSC (Hons) in Maritime Science (Engineering) entirely online so these can be undertaken through distance learning. More information on these courses can be found on the University of Gibraltar website - https://www.unigib. edu.gi/courses/ https://www.unigib. edu.gi/courses/. Manuel Tirado commented that these courses will hopefully put Gibraltar firmly on the map as a provider of ‘world-class maritime training’. Bunkering, superyacht visits and cruise calls and the potential of LNG bunkering are all important factors playing their part in keeping the Port at the forefront within the maritime world.

+350 200 46254 +350 200 51513 gpaenquiries@port.gov.gi 12 Windmill Hill Road, PO Box 1179, Gibraltar GX11 1AA

Gibraltar Port is also considered a successful destination for cruise companies with a number of inaugural cruise ship visits being hosted each year. Over 407,000 passengers visited in 2018 and while figures will decrease slightly in 2019, primarily down to repositioning of vessels mainly to the Far East where the cruise market is growing very rapidly,

World Bunkering WINTER 2019/20

COMPANY NEWS

PENINSULA PETROLEUM GROUP IS READY FOR IMO 2020 On 1 January 2020, the International Maritime Organisation’s 0.50% global sulphur cap becomes effective, marking a major change to the marine fuel environment

ver the past decade, Peninsula Petroleum Group (PPG), a leading global integrated marine fuel supplier, has further invested in and expanded its global physical supply and reselling capability. This is in line with the group’s long-term business strategy built on conservative risk management, which puts PPG in a predominant position of 2020 readiness ahead of time. Since July, PPG began successfully supplying VLSFO in Europe, the Americas and Asia to its customer base. CEO John A. Bassadone said, “To date we have delivered 500,000 tonnes of VLSFO in our physical supply ports of Gibraltar, Algeciras, Barcelona, ARA, Canary Islands, Malta, Panama, US Gulf Coast and Los Angeles. By 31 December more than 900,000 tonnes will have been delivered to our clients.” PPG’s focus on the importance of supply chain control and logistics has seen the group increase its strategic global storage positions during 2019, which today includes over 400,000 metric tons of terminal capacity in Europe and a further 370,000 metric tons across the Americas.

The group also recently acquired its first Panamax vessel providing increased operational flexibility for product procurement, floating storage and cargo transhipments. PPG have purchased and added an additional seven product tankers to modernise and upgrade their global fleet of over 30 owned and charteredin vessels. One of them, an 8,000 dwt tanker, is the first of a new building programme designed to offer more segregation, enhanced quality control and optionality.

On the product side, the business has secured the right flow of compliant fuels matching the demand of its blue-chip customer base enabling PPG to be fully prepared well in advance of 1 January. PPG’s direct relationships with oil majors, large IOCs, refiners and large global commodity traders on the supply side have allowed the implementation of a diverse 2020 procurement offering which has provided clarity to customers on product availability in each of its physical locations.

John A. Bassadone

World Bunkering WINTER 2019/20

To ensure quality control and allay customer concerns, PPG’s operations, logistics and supply chain control allow the purchase of products and components for the production and delivery of compliant fuels well within ISO 8217:2017 specifications, backed up by in-house technical expertise. Victor Morales, Global Head of Sales and Marketing commented, “By engaging our customers early on in the 2020 planning phase to better understand their fuel strategies, demands and concerns, we’ve expanded key customer relationships across our entire blue-chip portfolio.

World Bunkering WINTER 2019/20

This has enabled us to develop a comprehensive supply offering which is relevant and competitive.” John concludes, “We have been committed to growing our business in a conservative manner and we have invested heavily over the past few years in our people, especially in building out comprehensive middle and back office teams to bolster our controls and processes. Our approach has been endorsed by our stakeholders who’ve shown their confidence in our business. “In that regard we have aligned ourselves with the right strategic partners who share our vision. We are optimistic about the challenges and opportunities 2020 brings and our focus of delivering global solutions that add value to our clients remains unchanged.”

ABOUT PENINSULA PETROLEUM: Peninsula Petroleum commenced trading in 1996 and is a leading physical supplier and reseller of marine fuels operating from 18 global offices. With physical supply operations in 15 worldwide ports and global reselling coverage, Peninsula is a diversified group, covering the supply chain from cargo sourcing through to ownership and operation of a modern product tanker fleet. • Physical supply of bunkers (ship-to-ship & ex-pipe) • Reselling of bunkers (global traders) • Hedging solutions • Lubricant sales • Superyacht supply expertise • Cargo blending and storage • Product tanker owners, charterers & operators

For more information, view www.PeninsulaPetroleum.com or contact mediarelations@ peninsulapetroleum.com

COMPANY NEWS

lex Lyra, Global Head of Supply & Trading stated, “We have secured the full mix of products and availability in our physical ports from reliable partners in advance of 2020 and beyond. Our enhanced supply chain offers customers comprehensive solutions across multiple locations.”

COMPANY NEWS

THE PORT OF CEUTA The Port of Ceuta comes early with the IMO 2020 regulations

he Port of Ceuta already sells low sulphur marine fuels before the deadline to the limitations of the new IMO 2020 international standard, which will enter into force on 1st January. An unloading of this new product on 1st November and the first supply operation that took place on 7th November, mark the beginning of a new stage in the port’s strategy so as to boost bunkering at its facilities. The first unloading operation of fuel oil 0.5% low in sulphur VLSFO (Very Low Sulphur Fuel oil) in the port of Ceuta took place on Friday, 1st November at the Poniente dike, specifically in the new dock of the 3rd alignment, destined to the reception of large ships for the transport of liquid bulk. This new berthing infrastructure made the aforementioned unloading a great success; since it allowed to receive a ship of great draft and length allowing the port of Ceuta to be more competitive by increasing its capacity for this type of operations that was previously limited to smaller vessels, which eliminates the traditional restriction that existed and penalized the cost of transporting oil-bearing products to our port. The vessel Ridgebury Colette B, from Sweden, made the first deposit of this new fuel oil at the port facilities. This ship carried 34,500 tons of this low sulphur fuel that is more ecological and sustainable for the environment,

while considerably reducing the amount of sulphur oxides from ships, reporting health benefits to populations who live near to the ports and coasts. This product was stored in the DÚCAR I’s warehouses and the company VILMA OIL was the one in charge of carrying out the unloading operations that lasted 35 hours. It should be noted that this first supply highlights the involvement of the VILMA OIL company in the business of bunkering in the Port of Ceuta; since it made possible that two months before the entry into force of the IMO-2020 regulations, the port of Ceuta is prepared to supply this fuel to ships. This fact is the result of a process that began last February in London in the framework of the conferences promoted by IBIA on the occasion of the IP Week (International Petroleum Week). Simultaneously, that same day in the Levante dike, another fuel unloading took place. The ship “Sti Fulham” from Bilbao deposited 25,000 tons of diesel oil also sold by VILMA OIL for the provisioning of ships in our port. This fuel was stored in the DÚCAR I’s deposits located in San Amaro. It should be noted that the ship agent in both operations was the agency “Wave Shipping del Estrecho, Ltd.”. After the first unloading operation carried out on 1st November, the first supply of low sulphur fuel oil took place in the port of Ceuta, specifically in the Levante dike where the Turkish ship “Kurtulus”

will supply 90 tons of the aforementioned fuel. The ship “Kurtulus”, from Turkey, was the first to receive this new fuel oil at the port facilities. This vessel of 3,450 GT and 92.25 m in length also supplied 25 tons of diesel from the same supplier and “Jose Salama & Co. Ltd.” was the ship agent. In the same line, the port of Ceuta has been expanding its product offer with the new VLSFO (Very Low Sulphur Fuel oil) marine fuel provided by Vilma Oil, which is another step in the strategy of the port of Ceuta to boost its positioning as a reference of fuel supply services to ships in the Strait, as it is a key geographic-logistic core for international navigation routes. The Port of Ceuta finished the month of October reaching the figure of 665.087 tons in supplies to ships, which represents a growth of 6.22%. To all this, we should add the ability to serve ships in the bay by barge, overcoming the limitations that may exist in response to those ships anchored outside the dock. The Port Authority has been developing commercial policies focused on capturing and increasing this traffic. In this sense, the necessary steps have been taken to achieve this objective through the increase of the supply capacity and the specialization of our services, which implies an increase in traffic and, therefore, an improvement in the port results.

World Bunkering WINTER 2019/20

COMPANY NEWS

EAGLE INSURANCE

Formally known as Mauritian Eagle Insurance, it is recognised as being one of the leading insurance companies in Mauritius

ince its early beginnings in 1974, Eagle Insurance has built an extensive portfolio of customers, from private individuals to SMEs and large corporates. On the individual market, Eagle Insurance provides short-term insurance covers such as Car, Home, Accident, Health, Engineering, and Boat Insurance. With its unique expertise, Eagle Insurance prides itself on delivering an excellent level of service for its clientsâ&#x20AC;&#x2122; ultimate peace of mind.

Shareholding: We started as a joint venture between IBL LTD (80%), one of the biggest groups on the island, and South African Eagle Insurance Co Ltd, now known as Bryte Insurance Company Limited (20%). Admitted on the Official Market of the Stock Exchange of Mauritius in 1993, the shareholding profile changed to 60% of the equity for IBL Ltd. The remaining 40% of share is held by HWIC Asia Fund (15%) and the public (25%) respectively.

We have also acquired a 15% stake in H.Savy Insurance Co. Ltd based in Seychelles during the year 1996, which was subsequently increased to 20% in 2005.

Get in Touch with Us (+230) 460 9200 (+230) 460 9299 info@eagle.mu

PT. SULAWESI BUNKER TERMINAL Indonesian independent bunker company to start supply operations in January 2020. Strategically located in the Makassar Strait offering barge supply at anchorage. Ideally positioned for Australia â&#x20AC;&#x201C; Asia iron ore route and Kalimantan coal loaders. Floating storage position at Donggala port, Gulf of Palu, Central Sulawesi. MGO supply ex barges available by January 2020, and VLSFO supply during q2-2020

T. Sulawesi Bunker Terminal (SBT) based in Jakarta was established with the main aim of providing an International standard bunkering service for vessels calling or transiting through Indonesia. SBT was fully authorized by the Energy Ministry on 20th August 2019, receiving the National Fuel Trading License (INU) and approval to set up a private floating bunker storage and supply operation located at Donggala port, Central Sulawesi province. Donggala is at the mouth of the Gulf of Palu, on the Makassar Strait, which is a main sea route through the Indonesian archipelago. The Strait is deep and wide and large Capesizes and even the 400,000 dwt Chinamaxes with Iron Ore from Brazil are transiting the Lombok Channel then through the Makassar Strait, passing Donggala en route to China. World Bunkering WINTER 2019/20

Capes on the West Australia / North Asia Ore trade, as well as Coal loaders ex Kalimantan regularly use the Strait, but there has been no recognized International standard bunker service available to support commercial maritime traffic in this important sea lane.

SBT plans to commence supplying MGO ex barges in January 2020 and then VLSFO supply in Q2-2020. SBT will be happy to provide details and is open for cooperation with the bunker industry and shipping companies at this strategic bunker location in the Makassar Strait.

The only established bunker provider in Indonesia has been state owned Pertamina, which uses its local agents to handle physical delivery within ports. Now SBT has entered as one of the first fully licensed private companies to concentrate on the bunker sector. As an IBIA member, SBT hopes to have a high standard operation in line with Singapore procedures. SBT aims to offer bunker supply to ships in transit on an efficient and competitive basis minimizing delays and extra costs that often occur in Indonesia.

PT. Sulawesi Bunker Terminal Pondok Indah Office Tower 3, 17th fl. Jl. Sultan Iskandar Muda V, Jakarta 12310 Indonesia T. +6221 29659090 sulawesibunker@gmail.com www.sulawesibunker.co.id

COMPANY NEWS

SAACKE MULTISTREAM SCRUBBER Cost-effective operation and short payback period

AACKE GmbH with its approximately 1,200 employees has production sites in Germany, Croatia, China and Argentina as well as a worldwide service and sales network. As a specialist for thermal processes and plants in industrial and maritime energy management, the medium-sized family-owned company is also a global player in the scrubber segment. While the stricter environmental regulations of the International Maritime Organization, which came into force on January 1, 2020, require operators and shipping companies to act, the SAACKE Exhaust Gas Cleaning System guarantees the continued, cost-saving use of HFO safely below the required emission limits. “Many customers have already taken action, as fuel prices suggest that the use of HFO in combination with flue gas scrubbing will pay off in the medium term. Thus the installation of a SAACKE scrubber can pay for itself within one year”, explains Frank Neitzel, Sales Director EGCS at SAACKE.

The SAACKE system is also equipped with a frequency-controlled seawater pump, sensors and controls. The retrofitting of an identical SOx scrubber on the sister ship, the IONIC ALTHEA, is planned for the end of 2019. Cooperation with COSCO: Scrubber deliveries for all ship types Already in 2018 SAACKE started a cooperation with Nantong Ocean Ship Equipment Co., Ltd. (COSCO YP), a subsidiary of the COSCO Group, which includes numerous shipyards and one of the largest shipping companies in the world. The “Joint Factory” in Nantong, which exclusively processes stainless steel, produces wash towers of the highest quality, which are audited by the SAACKE quality department and distributed within the COSCO Group under the brand name COSAACKE.

“Our Exhaust Gas Cleaning System has proven itself in practice, is flexible in operation with regard to the open-loop or hybrid process and, thanks to the SAACKE Emission Control System, enables the monitoring of all data on board and also from shore. The EGC system can be operated intuitively via touch screen and records all relevant measurement data”, reports Peter Breidenich, SAACKE Director Marine Systems, who recently emphasised the good cooperation as guest of honour in his speech on the occasion of the 20th anniversary celebrations of Nantong Ocean Ship Equipment Co., Ltd. in China.

Contact information: SAACKE Marine Systems 28237 Bremen, Germany Phone: + 49 421 6495-0 marine@saacke.com www.saacke.com

Arguments that are convincing. SAACKE installed a U-Type Multistream Scrubber in open-loop design on board of the 250-metre-long crude oil tanker IONIC ANASSA. One 11,000 kW two-stroke engine and three 1,020 kW four-stroke engines are connected to the SAACKE system, which reduces the sulphur content of the exhaust gas from up to 94,140 kg/h by at least 99 %.

World Bunkering WINTER 2019/20

COMPANY NEWS

PROVIDING THE BEST SERVICES Big enough to be powerful, small enough to be agile

ur aim, at Bunkeroil, is to offer our clients a truly competitive advantage by providing the best services in terms of maritime transport, delivery & sale of oil products and the relationship between shipowners and port operations.

whilst our international expansion in the lubricant sector began in the second half of the 2000s. Today, we cover all of the world’s main ports as bunker and lubricant traders, of course with a greater focus on the Mediterranean Sea.

We offer bespoke solutions with a high added value when it comes to operational flexibility and financial conditions.

In 2018 we launched a constantly stocked lubricants storage service as leading ExxonMobil Distributors for local market in the territories of Italy and Malta.

With years of experience in the industry, we have developed a well-established network that enables us to respond to client requests promptly. We offer our clients: •

Since the company was founded in Livorno in 1980, our history has always been marked by constant growth and focus on the quality of our products and services, as well as on client satisfaction. This has made us one of the key players in bunker and marine lubricants sale, both nationally and in the Mediterranean. From the port of Livorno, our marine fuel and lubricant distribution operation began to expand into all Italian ports, in order to meet the diverse needs of our clients in an increasingly comprehensive way.

The cornerstones of our work. Being a supplier is not enough, and that is why we strive to form partnerships with our clients, through: • • • •

the best products in terms of quality; maximum operational flexibility; problem solving; bespoke financial solutions.

• •

availability of the product or equivalent alternatives; 24/7 service; the most competitive price on the market, thanks to our greater purchasing power.

BUNKEROIL CONTACTS: Address: Via Pietro Paleocapa 11, 57123, Livorno, ITALY. Phone: + 39 0586 219214 Bunker enquiries: bunker@bunkeroil.it Lubricant enquires: lubricant@bunkeroil.it Please visit: www.bunkeroil.it Follow us on Linkedin: Bunkeroil

From the outset, our shipping activity in the transportation of petroleum products in the Mediterranean has run alongside the Bunker service, and in the early 2000s we upgraded our fleet. During the same period, we launched the Clearing and Shipping Agency service in the port of Livorno, World Bunkering WINTER 2019/20

COMPANY NEWS

FFS REFINERS

FFS Refiners is an experienced, dynamic and innovative South African company that was established more than 44years ago

e process and supply a variety of liquid hydrocarbon products and related services. Until recently FFS Refiners provided a limited bunkering service to Cape Town’s local marine industry. In 2018 the Marine Division of FFS Refiners was launched to provide a complete bunkering service for international marine customers calling on the Port of Cape Town. In response to customers’ needs FFS Refiners made the transition to providing IMO2020 compliant fuels in September 2019 and we now supply the following products from our Cape Town facility: • Marine Gasoil (max 0.5% S) • ECA-compliant Low Sulphur MGO (max 0.1%S)

NEW MEMBERS

We are proud to announce that from December 2019, FFS will offer:

• Very Low Sulphur Fuel Oil (VLSFO max 0.5%S) All of our products are stored and dispatched from the FFS-owned and operated tank terminal and blend plant at Eastern Mole in the Port of Cape Town (capacity 33 000m3). Products can be dispatched via pipeline at Eastern Mole 1 and 2 as well as Tanker Basin 1. With multiple road tanker loading bays, we can deliver product directly to multiple vessels within the port. FFS Marine Our sister company, FFS Marine (formerly Calulo Marine), is a fully fledged empowerment entity, which was formed to concentrate and provide security of supply to the local marine industry. It operates out of its own or shared storage facilities in 14 South African ports and harbours making it ideally placed to service all local marine fuels, lubricant and related product requirements.

For all local bunker enquiries, contact us on localbunkers@ffs.co.za Other Services Other services that are offered by the FFS Group include: • Ship Slops Collection • Ship Debunkering • Removal of off specification fuels (which are refined and used in non-marine applications) At FFS, we pride ourselves in building and maintaining long-lasting relationships with our customers and suppliers, working with you to offer high quality, price-competitive products. Our dynamic and experienced team of professionals look forward to giving you exceptional service, and in so doing making us your preferred provider of bunkers and related products and services in the ports in which we operate.

CORPORATE Ship Manager Constantinos Capetanakis Starbulk Europe

INDIVIDUAL

Service Richard Barnes Lighthouse Maritime Services LLC Asia Trader Gherda Louw Arc Fuels (Proprietary) Limited Africa

Charterer, Supplier Ufuk Erinc Unerco Petrol Urn. Denizcilik ve Tic. A.S. Europe

Bunker Trader Kareem Osman Empower Bunker Trading Co. Africa

Trader Fabioula Antalyali Sima Petrol S.A. Europe

Financial Jesse Axelrod Axelrod Energy Projects Asia

Ship Owner Arco Parlevliet Union Maritime Limited Europe Bunker Supplier Zishan Arshad Orion Bunkers Limited Asia

Bunker Trader Kayrouz Khoury Elbeco Sal Middle East

World Bunkering WINTER 2019/20

DIARY 22 – 23 JANUARY 2020

13TH ANNUAL EUROPEAN OIL STORAGE CONFERENCE AMSTERDAM, NETHERLANDS An event for industry leading storage market insight, where you will meet with Europe’s leading bulk liquid storage players, oil majors, refiners, traders, finance, solution providers and governments. For more information: https://www.spglobal.com/platts/en/events/ emea/european-oil-storage/summary

10 – 12 MARCH 2020

IBIA & S&P GLOBAL PLATTS MIDDLE EAST BUNKER FUEL CONFERENCE DUBAI, FUJAIRAH MIDDLE EAST S&P Global Platts and IBIA are pleased to announce the new Middle East Bunker Fuel Summit 2020. This is a must attend event for industry participants in the region. Coming at a time of significant change in the industry, this participatory event builds upon our shared bunker portfolio success. This timely S&P Global Platts and IBIA conference will provide Insight on the early impact of the sulphur cap, analysis of current bunker market dynamics, supply chain challenges, through freight and across commodities, the latest information on bunker quality and regulatory restrictions, updates on fuel supply and demand fundamentals and credit markets, assessment of the opportunities and challenges in shipping and fuel industries. www.spglobal.com

3 – 6 FEBRUARY 2020

MIDDLE EAST BUNKERING CONVENTION DUBAI, MIDDLE EAST Now in its fifth year, the Middle East Bunkering Convention (MEBC) will focus on a bunker industry in transition and is well-timed to consider how IMO 2020 has impacted the marine fuel supply chain – from a regional and global perspective. MEBC 2020 will also look at how industry stakeholders will have to step up to the mark to meet the IMO’s ambitious 2050 GHG emission reduction targets.

17 – 20 MARCH 2020

For more information: https://www.petrospot.com/events/ mebc20-dubai

The third European Shipping Week will feature an array of events with high-profile keynote speakers from the world of shipping and the European institutions.

EUROPEAN SHIPPING WEEK BRUSSELS, BELGIUM

For more information: https://europeanshippingweek.eu/

24 FEBRUARY 2020

IBIA MEMBERS ANNUAL GENERAL MEETING LONDON, UNITED KINGDOM IBIA will host its AGM the afternoon prior to the IBIA Annual Gala Dinner 2020, at the same venue, the Grosvenor House Hotel in Mayfair London. Proceedings start at 3pm and all IBIA members are invited to join. Should you require further information and or updates, please contact Tara Morjaria on ibia@ibia.net

18 – 20 MARCH 2020 ASIA PACIFIC MARITIME 2020 SINGAPORE, ASIA

APM dedicates one day for industry thought leaders to discuss and debate pressing topics such as digital disruption and the various dynamics impacting businesses, IMO 2020 Sulphur Compliance, Green Shipping, Cyber Security and Decarbonisation of Fuel and Standardization of Digital Codes. For more information: https://www.apmaritime.com/en-gb/APMConference.html

24 FEBRUARY 2020 IBIA ANNUAL DINNER 2020 LONDON, UNITED KINGDOM

23 – 27 MARCH 2019

Start IP Week in style! IBIA will host its most prestigious Annual Dinner at the glorious Grosvenor House Hotel in Mayfair. Join over 1000 IBIA Members, industry colleagues and specialists at the Bunkering networking event of the year. The IBIA Annual Dinner is held on the Monday night preceding the well-attended IP Week in London and is a must attend event in the IP week calendar.

The week comprises the two-day Maritime Week Africa Conference, which focuses on African oil, shipping and bunker markets and a one-day Marine Fuels Analysis Course. Both are designed to bring together suppliers and buyers from markets in Africa.

www.ibia.net

For more information: https://www.petrospot.com/events/cat/3

World Bunkering WINTER 2019/20

MARITIME WEEK AFRICA CAIRO, EGYPT

WORLD BUNKERING

SPRING 2020... NOW OPEN FOR BOOKINGS

SPRING 2020

To coincide with the IBIA Annual Dinner 2020, our Spring issue goes to press shortly after the global 0.50% sulphur limit takes effect. World Bunkering looks at how the industry is coping with this massive challenge.

SPECIAL FEATURES: Fuel Quantity The use of mass flow metering systems on bunker barges in Singapore is being extended to distillates. There have been cases of malpractice using magnets but the use of meters has increased confidence that ships are being supplied with the full quantity ordered.

IT Over the past year blockchain technology has moved from being a potential game changer to starting be used in commercial applications We look at how blockchain can make transactions more efficient and also for tracing batches of fuel back to specific suppliers.

Lubricants Lubricant manufacturers have been busy developing lubes to meet the challenge of the complying with the 0.50% cap. We look at the wide range of new lubricants now on offer.

GEOGRAPHICAL FOCUS: Western Mediterranean Our annual look at this important bunkering region. What effect is the sulphur in fuel cap having on ports in the Western Mediterranean? Is there is sufficient availability of VLSFO? What about demand for MGO? Can scrubberequipped ships obtain HSFO? And what are the cost differentials?

Central America and Caribbean ‘Bad bunkers’ caused problems for Panama’s suppliers in 2018. Did volumes recover in 2019? Meanwhile, for the Caribbean, the gradual move towards LNG by the crucial cruise ship sector could be significant as the region start to invest in LNG bunkering infrastructure.

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

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ibia@constructivemedia.co.uk World Bunkering WINTER 2019/20

World Bunkering WINTER 2019/20