World Bunkering Autumn 2016 by Constructive Media

Autumn 2016

THE ONLY OFFICIAL MAGAZINE OF

INSIDE THIS ISSUE: Turbulent times in Middle East and Russia Singapore takes steps to stay on top Keeping sight of CO2 reductions

EDITOR’S LETTER

BUSY TIMES In the ten or so years that I have edited World Bunkering I can’t remember so much happening at the same time This is the case with IBIA and with the bunker and shipping industries in general

IBIA certainly seems to be more active than ever, and a large chunk of this issue is devoted to bringing members up to speed on what is happening with their organisation and what is being planned. When it comes to issues affecting the industry, the big one has got to be the impending International Maritime Organization (IMO) decision on when to implement the global 0.50% bunker fuel sulphur cap. In this issue our new deputy editor Unni Einemo takes an in-depth look at what is likely to happen and the implications for the shipping and bunker industries. One of the implications of the IMO cap, whenever it comes into effect, is that owners will have to decide whether to switch to using a compliant, and relatively expensive, distillate or hybrid fuel, or fitting scrubbers. The latter option is becoming increasingly popular, as noted in this issue’s update on scrubbers. As ever our News pages carry a range of reports of widely different aspects of the industry. Unfortunately one of these shows how the bunkering can acquire a poor reputation. A new study of the problem of bribery and corruption also highlights bunker fraud and pressure on engineers to become accomplices.

While this is concerning, the study does not mention the introduction of mass flow meters (MFM), a development that could effectively eliminate the possibility of quantity fraud. Anybody wishing to find out more about MFM systems would do well to attend this year’s Singapore Bunkering Conference (SIBCON). This event, previewed in this issue, includes presentations which go into considerable detail about how MFM systems are being made mandatory in Singapore and how any disputes could be resolved.

However, our report notes, the return of Iran to international markets opens up many opportunities for the bunker industry. There is much else of note in this packed issue of World Bunkering but, finally, mention must be made of the IBIA Convention, to be held in Gibraltar in November. Our editorial team will be represented at this major event and we look forward to meeting IBIA members new and old.

And on the subject of Singapore, the world largest bunkering hub features prominently in our geographical feature on the Far East. This survey of the region also reports plans by Indonesia’s national oil company, Pertamina, to win some of the Malacca Strait bunker market, primarily from Singapore. Indonesia has long eyed the large bunker market passing its coast but will these latest plans come to fruition? Perhaps they will. Indonesia is a country on the move once again. World Bunkering will keep an eye on developments. Our other geographical feature reports on the Middle East which, of course, is going through turbulent times.

David Hughes Editor

DEPUTY REPORTS FOR DUTY I certainly share David’s sentiment about busy times, and a time of change; for IBIA, for the marine fuels industry and for myself. Since joining the secretariat of IBIA in the middle of April this year, I have attended two major bunker conferences where the main theme was the IMO’s decision on the timing of the global sulphur cap. When presenting on the subject at one of them, I was asked: Does IBIA have a position on whether the cap should be introduced in 2020 or 2025? We didn’t, but it made us think deeply about this question. We came to the conclusion that there is another profound issue at stake, namely the rather unrealistic expectation that such a major shift can

World Bunkering AUTUMN 2016

happen virtually overnight. As IMO Representative for IBIA, I have entered into dialogue with other NGOs and member states to raise awareness of this after consulting our members. Keeping an eye on IMO proceedings and determining where IBIA may make a difference is a challenge, especially ahead of MEPC 70, but very worthwhile. After nearly two decades as a news writer and editor for Bunkerworld and Sustainable Shipping, it is my privilege and joy to have taken on this role for IBIA, and to support David as deputy editor for World Bunkering, IBIA’s official magazine.

Unni Einemo Deputy Editor 3

Publisher & Designer: Constructive Media studio@constructivemedia.co.uk

Editor: David Hughes editor@mar-media.com

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.

Deputy Editor: Unni Einemo unni@ibia.net

Project Consultant: Alex Corboude alex.corboude@mar-media.com

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 6BY Tel: 01495 740050 Email: ibia@constructivemedia.co.uk www.worldbunkering.com

THE ONLY OFFICIAL MAGAZINE OF On behalf of: IBIA Ltd 4th Floor 50 Liverpool Street London EC2M 4PR UK

CONTENT 7

24-27

Chairman’s Letter

Environment and IMO

Testing

IBIA’s key challenge is to focus the voice of the membership so as to make your association more relevant in influencing the way our industry is developing

Deputy editor Unni Einemo takes an in-depth look at the issues as decision time for the global 0.50% sulphur cap draws near

Shell reports high demand for its lubricants analysis service as owners seek to reduce downtime

28 - 29

Chief Executive’s Report

Independents

Passionate about people and their views

Adrian Tolson, Senior Partner, 20|20 Marine Energy looks at the prospects for the independents in dramatically changed market conditions

10-11

12-13

30 Scrubbers As a global 0.50% sulphur limit in 2020 appears increasingly likely, more owners are looking at the scrubber option

IBIA Events & New Members

31 Africa Opportunity knocks for expanding knowledge, network and meet key industry players at a range of upcoming events. Regional Manager Tahra Sergeant reports

16 - 17

56-57 Coating

58-59

Strategy Session IBIA’s new roadmap

Stephen Simms, a founding partner in US law firm Simms Showers and IBIA board member, talks to David Hughes

Middle East John Rickards reports on the challenges facing the Middle East’s bunker industry

45-47 Far East Singapore takes steps to stay on top even as some suppliers struggle .

19-21 European owners call for global CO2 deal

Two radical vessels concepts were presented at a recent seminar in the Netherlands

34-37

38-43

Industry News

Innovation

IBIA develops standard operating procedures for surveyors

Interview

Notice Board

A round-up of the latest developments on the Russian bunkering scene by Olga Bogacheva

The new antifouling coating standard, ISO 19030, is nearing publication, promising the shipping industry as much as US$30 billion in annual fuel cost savings

Surveyors

14-15

Russian Update

54 - 55

Asia Report New and existing courses on mass flow meters will reach larger audience, including bunker surveyors, cargo officers, bunker sellers and buyers

50-53

Legal IBIA says chaos caused by OW Bunkers collapse shows the need for sales terms which are fair and fully understood

60-61 Equipment and Service “Smart solution” for 2nd generation Triple-E container vessels

64 Next Issue

65 Diary

LNG New initiative aims to boost the shipping industry’s use of LNG

66 SIBCON Mass flow meters and much more

World Bunkering AUTUMN 2016

London

SEPTEMBER 6th - 9th 7th 15th - 16th 14th 22nd OCTOBER 3rd 4th - 7th 7th TBC 18 - 19th NOVEMBER 7 - 11TH

Gibraltar

Singapore

Cape Town

SMM Europe IBIA Forum at SMM IBIA in Africa Forum: Cape Town Basic Bunkering Course Aracon - Rotterdam

Hamburg, Germany Hamburg, Germany Cape Town, South Africa Cape Town, South Africa Aracon Rotterdam

Port Charter SIBCON IBIA in Asia Golf Day IBIA London Forum Africa Ports Evolution

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

IBIA Annual Convention IBIA in Africa end of year drinks

Gibraltar Cape Town, South Africa

IBIA Members drinks

London, United Kingdom

DECEMBER

IBIA’s key challenge is to focus the voice of the membership so as to make your association more relevant in influencing the way our industry is developing

The rate of change has accelerated and we have to respond on an increasing list of issues. It is important that we do this in a way that reflects your views. IBIA, as a professional industry body and not just a trade association lobbying in a one-sided fashion, is augmenting its influence and reputation by presenting balanced views on issues that are increasingly being taken account of by regulators and other industry associations. In my first introduction three months ago I laid out IBIA’s plans – I can report, thanks to increasing input from you and from the secretariat, we are walking the talk and we are moving ahead with actions in important debates at the International Maritime Organization (IMO) through a number of submissions, working with other interested parties where possible to increase our chance of being heard. Irrespective of when the global cap is implemented, IBIA considers it essential that compliance is maximised to both improve the environment and present a level playing field so that professional ship operators are not commercially penalised. There is a third reason that this is an important issue – if compliance remains low for some years it will diminish IMO’s influence not only in environmental issues but also in other areas. IBIA is working with a number of other organisations and has supported the efforts of the Trident Alliance by drafting a submission to MEPC 70 (which will take place during the third week of October) to hopefully lead to improved compliance. Many have come to realise that the switch to 0.50% bunkers from residuals can’t happen overnight. The transition has not been addressed. There is a provision in Annex VI that permits a ship to operate with non-compliant fuels if it cannot secure a supply without deviation, but unless some sensible planning is forthcoming, chaos will reign. IBIA has again been drafting a submission to MEPC 70, suggesting a number of ways to address this fundamental issue and working hard to rally the necessary support.

World Bunkering AUTUMN 2016

IBIA is a member of the Steering Committee addressing the avails question – when should the global cap be implemented? As recently reported in the press, the conclusion of the contractor assigned to this task is that the world’s refineries can manufacture sufficient lower sulphur bunkers to implement the cap in 2020. Other analysis, sometimes using well tested analysis methods, have questioned this conclusion so the Steering Committee as the “Group of Experts” will have to deliberate on the report’s conclusions prior to its submission to MEPC by 22 July. Still on the subject of MEPC 70, following a plea from concerned members, IBIA has drafted a submission to IMO to improve the BDN, making it clearer and more useful to both buyers and sellers. Here too, we are seeking cooperation with other parties. Among other activities, IBIA is also working with BIMCO to enhance their bunker contract and the charter party clauses In the light of the loss of trust resulting from the OW debacle: a further effort to represent a balanced view to the benefits of all parties in the bunker sector. The process of bringing your views to the table is through the working groups. A new subject-led WG is established as and when a distinct issue arises, usually as a result of input from the membership. Usually a member of the board is assigned to develop the debate and call for assistance from the membership and specifically those members of the association known to have insight into the specific issue. Once the initial discussion has taken place, options identified are presented to the whole membership to elicit comments and insight. This is the opportunity for the membership to strengthen IBIA’s voice and hence influence the debate. This input is then included in the deliberations which any member can be involved in, to produce documents and discussions in order to persuade regulators and other organisations to appreciate the views of the bunker industry. This is so as to improve the sector through better,

fairer business processes, cleaning up the environment, reducing complexity and ambiguity leading to a cleaner, more profitable business environment. May I encourage you all to participate. We are undertaking a wide range of activities, including training students at marine academies in the finer points of bunkering, as well organising events including the Annual Convention, which this year is in early November in Gibraltar. IBIA’s resources are being stretched, but the secretariat has been enhanced by the presence on Unni Einemo, previously chief editor of Bunkerworld who is, among other duties, shepherding our communications with IMO. IBIA has moved to much better offices in Singapore to support growing activity in Asia. Activity continues in southern Africa and interest is rising sharply in the Middle East, India and the US to embrace IBIA. We can only do this with your support, both intellectually but also financially. If you are one of the members reading this who is causing our outstanding unpaid membership fees to exceed £120,000, may I ask you to consider supporting your Association and meeting your obligation. There are tough times ahead for all of us. Bunker demand is flat; credit even more elusive, ship operators with little improvement in their prospects for some years to come and we are facing by far the greatest changes in our operating condition by the switch to predominately distillate fuels. At times like these, IBIA is of even greater use and importance to its members and the industry in general.

Robin Meech Chairman 7

CHAIRMAN’S WELCOME

WALKING THE TALK

ELECTIONS

TO THE IBIA BOARD OF DIRECTORS

Prior to the Annual General Meeting (AGM) on Monday, 20th February 2017, there will be an election to replace members of the Board whose term of office will end on 31st March 2017. These elections are an opportunity for new people with new ideas to join the Board and take part in the running of the Association. In the same way as the elected officers of the Association change, so do the Board Members on a 3 year rotational basis. Members of IBIA are therefore invited to propose candidates for election to the Board whom they think will make a worthwhile contribution to the running of the Association. Prospective Board Members should be aware that being a Board Member is not just a titular position, they will be expected to take an active part in the direction of the Association. A copy of the Guidelines for Board Members and nomination forms are available on request and on the website www.ibia.net.

CANDIDATES FOR ELECTION TO THE BOARD MUST: • Consent to stand for election • Be paid up Members of the Association • Be proposed and seconded by paid up Members of the Association • Complete and return the Nomination Form, which can be downloaded from the website www.ibia.net

NOTE: completed nomination forms must be delivered to the secretariat no later than: 24th october 2016 EITHER BY POST TO: IBIA Ltd, 4th Floor, 50 Liverpool Street, London, EC2M 7PR, United Kingdom OR BY EMAIL TO: ibia@ibia.net In both cases confirmation of receipt should be obtained from the secretariat. NOMINATIONS WILL NOT BE ACCEPTED AFTER THE CLOSING DATE

Passionate about people and their views

This edition of World Bunkering is full of perspectives. That’s not surprising as people are at the heart of this Association. What you think, what concerns you, why did you join, what do you want to know, how could technology impact your business. These are all very real questions, along with how you want IBIA to respond. The Big Picture There are four pages dedicated to IBIA’s vision and purpose – our new roadmap. Since I took up my role with IBIA it has been an objective to bring together the members’ views and the board to establish: Where are we and where we are going? Having grown so fast in such a short time - it’s good to “check the bearings and calibrate the compass”. We want to build on the following themes: • • • • •

Providing an international forum to identify the concerns of all Consolidating industry views, find a balance and build consensus Promote high standards and encourage excellent overall practices Increase professionalism, ethics and competence within the industry Provide accurate, unbiased information on which to base decisions

We also want to make IBIA more relevant to our membership’s everyday lives. Robin, in his “Walking the talk” introduction highlights his work on behalf of IBIA on the Steering Committee overseeing the fuel availability study at IMO and its implications. Unni takes this issue and explains the potential challenges for policy implementation and just what it could mean on the ground in “Chaos ahead?”. We didn’t stop there – we asked your views in a members’ survey and are shaping how we approach the IMO as a result of this.

IBIA People As Unni reports in the editor’s page, she is settling in and I for one am delighted our investment in having a dedicated IMO and Communications manager, is proving so fruitful. Communication is a key component of the Association, as is administration. World Bunkering AUTUMN 2016

Chanette, who was our first point of contact for the membership, had a key role, therefore we have spent a couple of months finding the right person to replace her. I am pleased to announce that from August we will have Tara Morjaria answering your calls. Tara is a professional administrator, with retail management experience and marketing and data management skills. Alas, Steve Hoare is moving on. A long time football coach in his spare time, he is changing professions and taking up a fulltime role in community football development for Chelsea – we hope to be able to announce a new member benefit once he has settled in!!

Regional Development Our regions continue to grow. Africa is looking to take another step, after demand from industry, to establish a West Coast sub branch - see Tahra’s report for further details. Asia - having moved to a new office in Singapore, has broken records with both the number courses run and students attending them; our plan to double our training capacity is just in time to meet the growing demand. Plus we now have a facility to deliver more efficient forums and accommodate interest groups. We have a feature on the development of standard operating procedures for surveyors, a response to concern regarding the impact of Mass Flow Meters on our members’ jobs. The development and adoption of SOP for surveyors will go a long way towards building trust in the market and underlines IBIA’s commitment to education and professional best practice and the adoption of technology. The Americas is an area that we have been looking to develop. Now, with Eugenia Benavides in the south and Steve Simms in the north, we have board representation that can support long overdue regional growth. There is an interesting article from Steve about why he joined IBIA and why IBIA matters in the Americas.

Captain Peter Hall Chief Executive, IBIA The Middle East and India region continues to grow and we have plans to develop this area further, discussions have already been held with members and potential members in Iran. We recently held a forum in Mumbai which past board member Dilip Mody and his family helped organise and facilitate, and there is potential for a conference in India in the future.

Terms and Conditions Following the UK Supreme Court’s decision in the Res Cogitans dispute, IBIA challenged the industry to “think innovatively”. Our perspective was that the chaos caused by OW Bunkers collapse showed the need for sales terms which are fair and fully understood by all parties. We have moved forward with this and established a working group (WG) with key representatives from the supply, buying and legal side to look more fully into this area, plus extended input from all IBIA’s main WG chairs to include technical, operational and commercial angles. Each WG chair group can also reach back into the membership from their particular focus. We hope that in having such a multi-disciplined and experienced input, a balanced and consensual view can be achieved. The intention is to feed this view into the BIMCO terms and conditions revision group and indeed other vehicles that are considering T&Cs. With so much going on we do need your input, and I would like to draw your attention to two opportunities. First your participation in the working groups, as we do need more experts and perspectives. Second an opportunity to stand for board election and help provide strategic input and develop our policies. We want IBIA to be run for its members, by its members.

CHIEF EXECUTIVE’S REPORT

CEO’S REPORT

IBIA ASIA REPORT

Trainees attending Refresher Course for Bunker Surveyor and Bunker Cargo Officers ©IBIA Asia

IBIA ASIA STEPS UP MFM TRAINING AND OTHER ACTIVITIES FROM NEW OFFICES New and existing courses on mass flow meters will reach larger audience, including bunker surveyors, cargo officers, bunker sellers and buyers

BIA Asia moved into new office premises on 24 June in Singapore’s central business district. The new office space has doubled the capacity both for training courses and for staff, with a classroom that can accommodate almost 30 trainees compared to maximum 16 before, and has office space for four staff. These new premises open up opportunities to significantly expand activities in training and events, and the team wasted no time in getting started. Within days of moving in, IBIA Asia conducted its first MFM Training Course at the new premises. The course, held on 28 June 2016, was attended by 24 trainees. Subsequent courses were soon seeing 30 confirmed registrations so it will be a full house going forward. IBIA Asia is in an ideal position to train and educate the industry on mass flow metering as Singapore gears up to the mandatory use of MFM systems during all marine fuel oil (MFO) bunker deliveries in Singapore from 1 January, 2017. Already since 1 June, 2016, all bunker suppliers, bunker craft operators,

and bunker surveyors in Singapore must comply with the requirements and procedures of TR 48:2015, the technical standard for deliveries of MFO when using a MFM system. Since the start of March to the end of June, IBIA Asia conducted a total of 11 courses, all attended to the maximum capacity, of its “Refresher Course for Bunker Cargo Officer and Bunker Surveyor”. The course includes an MFM training module which has been endorsed by the Maritime and Port Authority of Singapore (MPA), and is a must for all cargo officers and bunker surveyors working on-board bunker tankers operating in Singapore. At the time of writing, IBIA Asia was preparing to run a one day Refresher Course on MFM, and a two day Enhanced Bunkering Course during the second half of July. On the training side there are also plans to start a one day general course on MFM from early September. This course is aimed at all the busy industry executives who want to have a better understanding

or working knowledge of mass flow meters, but cannot afford to take more than a day out of their schedules. It will be suitable for bunker buyers, bunker traders, ship owners, technical department personnel and other interested parties. The new course, which is open to all, will be called Familiarisation on Bunker Mass Flow Metering. The course fee will be S$650.00 per person with a 25% discount for IBIA members. Simon Neo, Regional Manager IBIA (Asia), has been heavily involved with the development of the MFM technical guidelines, TR 48, and was recognised with a Merit Award in July 2016 by Spring Singapore for his work and contribution to the Technical Committee and the MFM Working Group Committees. Neo was honoured and happy to receive the award, which underlines his important role in bringing Singapore toward a new age of technological advancement that will enhance the accuracy and efficiency of the bunker fuel delivery process, increasing productivity and reducing administrative processes.

World Bunkering AUTUMN 2016

In October, IBIA Asia takes a break from teaching and education for a few days to attend SIBCON, which runs from 4 to 6 October. A highlight on the SIBCON calendar is a golf event hosted by IBIA to round off a hectic week of networking. This year’s IBIA Golf Day will be held on 7 October at Singapore Island Country Club,

Once completed, IBIA Asia will invite all the surveying companies in Singapore to adopt the SOP. The SOP is designed to work within the TR 48 technical standard and has support from the MPA.

the oldest and grandest golf and country club in Singapore with best-in-class golf courses, excellent facilities and service. The plan is for an early start, allowing the whole morning for the golf tournament, followed by lunch and presentation of prizes.

Mass flow meter model ©IBIA Asia

IBIA Asia offers a warm welcome to its new, bigger office premises, located in Singapore’s central business district with easy access to public transport. It is split in to an office with space for up to four members of staff and a larger space which can be used as a classroom, a large meeting room or to host seminars. Simon Neo, the Regional Manager IBIA (Asia) and office manager Nadiah Binte Zulkifle can be found in the office on most days. They have already hosted several courses from the classroom that can accommodate up to 30 trainees.

Nadiah, Simon, Teck Cheng and Rahul ©IBIA Asia

A WARM WELCOME TO IBIA ASIA’S NEW OFFICE! World Bunkering AUTUMN 2016

Capt. Rahul Choudhuri, Chief Operating Officer, Asia, Middle East & Africa for VPS, who currently serves as chairman of the IBIA Asia branch Executive Committee, will also frequent the new office. Lim Teck Cheng, Chief Executive of Hong Lam Marine, presented the new office with a 1:80 scale model of its 5600 dwt bunker barge MT Destine, complete with a replica of the vessel’s mass flow meter. Lim, who is currently an IBIA board member, is also a Director of IBIA Asia. 110 Robinson Road #04-00 Singapore 068901 T: (65) 6472 0916 F: (65) 6472 0919 M: (65) 96340393 Email: regionalmanagerasia@ibia.net

IBIA ASIA REPORT

Since the last issue of World Bunkering, IBIA Asia has made progress toward a Standard Operation Procedures on Mass Flow Meters for Bunker Surveyors (SOP) in Singapore. The intention of the SOP is to help bunker surveyors identify their responsibilities and roles within the MFM framework in Singapore. The guidelines have been drafted with the practical input of several bunker surveying companies. A meeting was scheduled for 22 July 2016 with representatives from key surveying firms and the MPA to discuss and work on the final draft. To strengthen work in this area, IBIA Asia has decided to set up a Working Group for Bunker Surveyors in Singapore chaired by Douglas Raitt, Global FOBAS Manager, Lloyd’s Register FOBAS.

IBIA EVENTS

AUTUMN 2016 IBIA prepares for autumn of big events

elcome to the autumn edition of the events report. Looking back over the past quarter, we can safely say it has been a busy period for IBIA board members and Secretariat, who during May have been speaking at high profile events such as the Platts European Bunker Fuel Conference in Rotterdam and at Petrospot’s Maritime Week Americas (MWA) in Florida. In June, several IBIA board members attended the Posidonia exhibition in Athens. MWA saw IBIA offer the Basic Bunker Course in Spanish and English, and we also ran the IBIA Basic Bunker Course in Ghana during Maritime Week Africa at the end of June. This autumn we look forward to an even more hectic period, participating in major events around the world before we all come together for the main event this side of the New Year; our very own IBIA Annual Convention in early November. We kick off an active autumn at SMM Hamburg, where we will be represented at a seminar on the 7th. Our involvement there will be supported by Intertek Lintec’s stand at this huge biannual maritime exhibition. In mid-September, IBIA’s Africa Regional Forum will be the star of the show, hosted in beautiful Cape Town on 14 to 15 September. There will be both training and a forum on offer - you can find more details on this and other regional activities in the IBIA Africa report in this issue.

Our Chairman, Robin Meech will be taking part in the SIBCON conference programme. A highlight on the SIBCON calendar is a golf event hosted by IBIA to round off a hectic week of networking. This year’s IBIA Golf Day will be held on 7 October at Singapore Island Country Club. We are also going to participate at the African Ports Evolution in Durban on 18 -19 October with speakers, a stand and conduct IBIA training courses, so if you are there be sure to meet us!

The IBIA Annual Convention 2016 We hope you have all marked your calendars for the IBIA Annual Convention: 7-11 November. This year we have chosen Gibraltar, one of the world’s most dynamic bunkering hubs, as the location. IBIA has hosted an event here before and we know that there is a warm welcome awaiting you as the locals - from ministers to barge crew - are ready and waiting to welcome you to the conference. Just days before the IBIA convention, the IMO’s Marine Environment Protection Committee will have debated the conclusion of the availability study commissioned by the organization to help MEPC decide if the global 0.50% sulphur cap should be introduced in 2020 or 2025. IBIA has been part of the Steering Committee overseeing the study for IMO, and we will have first-hand accounts of the proceedings and perspectives on the outcomes, the impacts the challenges that lie ahead.

For the past year, a passion of IBIA has been to encourage the leading bunker ports of the world to come together and share “Best Practice” and innovation. IBIA will present the components required for a perfect bunker hub, and the leading ports will share what they are doing and what is being considered in making their locations more cost effective and efficient. Other areas covered by the annual convention is LNG bunkering, and we will also examine the new fuels emerging, hearing from innovators in the field as well as from those who watch how these fuels behave. Last but not least we will have the “market place”, an opportunity to network and meet service providers at the Gibraltar Cruise Terminal and hear and see what they have to offer, plus delegates will be able to visit bunker barges. To compliment the formal convention programme there is also the opportunity to learn from a range of training courses. We start the week off with two days of professional training, including the IBIA Basic Bunker Course In English and Spanish (1 day), the Oxford Bunker Course (2 days) and there will be ½ day modular workshops available in bunker dispute resolution, bunker price risk management, introduction to LNG bunkering and commercial management. To book for this great event please visit www.ibiaconvention.com

September’s busy events schedule continues with ARACON on the 22nd and 23rd of the month, where IBIA will have a stand and presence Please come along and say hello if you are there. The first week of October we will be in Singapore for SIBCON, where we will hold a meeting with representatives for ports that participate in IBIA’s Port Charter initiative on Monday 3 October, the day before SIBCON starts. The world’s best attended bunker conference, which runs from 4 to 6 October, will be a good chance to meet our IBIA Asia team.

World Bunkering AUTUMN 2016

NEW MEMBERS

NEW MEMBERS CORPORATE

INDIVIDUAL

Bunker Trader

Ship Owner

Surveyor

Mohammad Shafieezadeh Petromaad

Nancy De Backer Jan De Nul N.V.

Faheem Mohammed IAMA Marine Singapore

Middle East ibia@petromaad.com

Europe nancy.debracker@jandenul.com

Asia nicole.sukii@iamamarine.net

Ship Owner

Service

Eric Ringe Chemship

Ajay Arora Seatec UK

Vassilis Koutroulis Cass Technava Maritime

Europe e.ringe@chemship.nl

Europe ajay.arora@seatec-services.co.uk

Europe projects@casstechnava.gr

Surveyor

Broker

Agent

Gabriel Chia Odessea Inspection Services PTE LTD

Christopher Schutzer-Weismann Soromet Bunkering

Graham Falero RMS - Rock Maritime Services Ltd

Asia gabriel@odessea.com

Europe bunkering@soromet-bunkering.com

Europe operations@rms.gi

Supplier

Service

Jose Digeronimo VT Sipping International

Broker

Jeff Mildner Vortex Development Group

Mary Modola East west Oil

US Gulf & Caribbean jdigeronimo@vtshipping.com

USA jeff@vortexdevelopmentgroup.com

Africa

Bunker Trader

Agent

Alexander Prokopakis Franman SA

Mark Lincoln RMS - Rock Maritime Services Ltd

Europe bunkers@franman.gr

Europe mark@worldmarineservices.com Trader

Prakesh Nair Clasis Asia

ASSOCIATE Supplier

Ciaran Kelly DCC Oil Ireland Ltd Europe ciaran.kelly@dccoilireland.com

Trader

Stephen Pollard Hanwa Co Ltd Europe stephen.pollard@hanwa.co.uk

Service

Michael Green Intertek Shipcare

Oil Major

Europe mg@lintec.com

Nozito Ncata Engen Petroleum Africa nolizo.ncata@engenoil.com

WWW.WORLDBUNKERING.COM

IBIA AFRICA REPORT

Port of Cape Town

WEST AFRICAN GROWTH AND BUNKER SURGERY IN CAPE TOWN Opportunity knocks for expanding knowledge, network and meet key industry players at a range of upcoming events. Regional Manager Tahra Sergeant reports

s we head through to the latter half of 2016, IBIA Africa is steadily growing its footprint into Africa with an introduction and more visibility on the West Coast. IBIA Africa was represented by Paul Maclons (Managing Director, SMIT Amandla Marine and IBIA Africa executive committee member) Gerad Singh (Business Unit Manager Bunker Barges, SMIT Amandla Marine) and Nigel Draffin (IBIA Board Member) at an annual week-long event, Maritime Week Africa, organised by Petrospot Limited. The event brought together local bunkers suppliers and regulators with international traders and buyers looking to develop business in Africa. With increasing interest in the region for the development of a West African Chapter, Paul Maclons comments: “Prior to the commencement of Maritime Week Africa in Accra (Ghana) over the period 28 June to 1 July this year, and hosted by Petrospot, IBIA Africa presented a successful Basic Bunkering Course, addressing the standards of the bunkering industry. The course was well attended with attendees from Ghana, Cameroon and Nigeria.

During Maritime Week Africa, it emerged that there is a need to establish an IBIA West Africa Chapter to further expand the focus of IBIA Africa. This presents a good opportunity to expand the IBIA footprint into West Africa, and establish a network in Cote d’Ivoire, Cameroon, Ghana, and perhaps further afield. IBIA’s establishment in this region at a time when the oil and gas sector is developing, and significant infrastructure investment and development in ports is planned, IBIA can play a key role in supporting the establishment of the bunkering sector.” IBIA Africa ran the Basic Bunkering Course, which was led by Paul Maclons, Gerad Singh and Nigel Draffin, with16 delegates attending the full day course. Nigel Draffin took on the Basic Bunkering Course afternoon session as part of Maritime Week Africa and had the following comment: “The hard work done by the Petrospot team to support the IBIA lecturers and to myself needs to be commended. The feedback was very positive and I found all of the delegates from both courses fully engaged and hard working.”

Over the next few months, IBIA will be establishing a sub committee in the region with the support and involvement of existing members and new members. We will be attending the African Ports Evolution West Africa event in Accra, Ghana in September to meet with the members on the ground that will establish this chapter. Moving further south, IBIA Africa are hosting a 1 day Bunkering Course and 1 day Regional Forum in Cape Town on 14 and 15 September 2016. Captain Peter Hall, IBIA CEO will be joining us in Cape Town to cover a number of topics essential to the African Region. The aim of the event is to highlight the importance of establishing a good bunkering hub. The forum will bring together the region’s bunker industry for networking, and create a platform for engagement and shared learning between industry and Government.

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Bunker Surgery

WORLD AND REGIONAL SCENE: The global and regional bunkering scene dealing with world supply and the African scene.

This session will offer a strong panel of bunkering experts who will answer questions from delegates on a wide range of subjects, including legal, operational, environmental and commercial.

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Shipping and trade overview – Captain Peter Hall (IBIA, CEO)

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Global perspective: Asia and Europe

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Regional perspective: East, West and Southern Africa

IMO and compliance •

What’s happening at IMO

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Global Cap and impacts, fuel quality, BDN, compliance and enforcement

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Managing the supply looks at the impacts of supply and finance on the bunker market.

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Ship owners’ perspective: what do they want to see in a developing country?

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Fuel supplies off shore oil and gas industry

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Oil major and local suppliers’ perspective

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Storage capacity and infrastructure

Currently port competitiveness in the African region are at a tipping point, with the number of expansion and developmental projects taking place. We encourage IBIA members from the region to join us in Cape Town on the 14th – 16th September to engage with each other as we present an engaging and informative programme.

IBIA AFRICA REPORT

Topics for the forum will include:

Should you require any further information regarding the Africa events, contact:

Tahra Sergeant, IBIA Regional Manager +27 21 7905318 tahra.sergeant@ibia.net

Bunker development and the environment •

Development of an offshore bunkering project

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Good counter pollution preparedness and marine emergency management

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International legal framework for pollution from ships and the position in Africa

AN IDEAL BUNKER PORT SYSTEM IBIA’s CEO Peter Hall will provide an insight into IBIA’s ‘Port Charter’ initiative. Nigel Draffin presenting the IBIA Basic Bunkering Course certificate of attendance ©Nigel Draffin

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INTERVIEW

DELIVERING FOR THE ‘OPPRESSED CLASSES’ Stephen Simms, a founding partner in US law firm Simms Showers and IBIA board member, talks to David Hughes

imms Showers is now a significant name on the US maritime law scene but I wondered how it had all come about.

Why did Steve get into law and, moreover, specialise in bunker disputes? He replies: “I got into law because my father was a chemist. When my high school chemistry teacher asked me what I was going to do after I graduated college, I responded that since my father was a chemist (after all it was my chemistry teacher asking the question), I was going to be a chemist. My teacher responded, ‘Steve, I like you, I think you should find another career.’ So, with that, I moved toward law.” Steve continues: “Along the way I had become interested in international studies, attending Johns Hopkins and getting a Masters degree in an accelerated program at Hopkins’ Advanced International Studies school in Washington DC. I continued the interest at Northwestern Law School in Chicago, where I served as Editor-in-Chief of its international law journal. After law school I was selected for the United States Attorney Generals Program for Honor Law Graduates, serving as a prosecutor in its international antitrust section. I’d always been drawn back to Baltimore, though, where I had started at Johns Hopkins, and so when I entered private practice,

the way into international law in Baltimore – which is one of the US’s major ports - was through maritime law. I was fortunate enough to join a firm which practiced maritime law and then, from that firm, founded Simms Showers, our own firm now about 20 years ago.” “Working in maritime law I developed an expertise helping what I call the ‘oppressed classes’ of the maritime industry, suppliers including bunker traders and suppliers, tug companies and container lessors. Each of those suppliers tend to find themselves the last paid when there is an insolvency or an economic downturn. It was serving them that I learned about the many maritime remedies available across numbers of jurisdictions to use to successfully recover.”

DH: Your website shows that marine is only one of several areas of law that you deal with. Do you have a particular interest in marine? SS: I have a particular interest in marine because, well, it’s simply interesting and also working with people across many time zones, keeps you from getting too much sleep and gives you even more reason to find better coffee to drink. Marine is interesting because there’s always something different; every situation involves a different collection of people, places and law, and presents a different challenge. There’s also nothing

like crawling around the ship engine room, figuring out how to use navigation and weather data to determine the cause of an accident, or finding new effective ways to recover for our clients. I’ve never been bored working in the maritime field, and I particularly have enjoyed the people I’ve met along the way, both those we’ve served and those we have faced off against. The maritime world gathers many courageous, entrepreneurial and forward-looking people, who also are frequently a lot of fun.

DH: Going on from that, why an interest in bunkering, and why is it worth getting involved in IBIA, to the extent of being on the Board? SS: I have an interest in bunkering because there are all sorts of elements which come together in a bunker transaction, from simply the pricing transaction of the delivery of bunkers, to the formation of the contract, to questions about bunker quality and quantity delivery. Bunkering is necessarily the centerpiece of maritime commerce, because without bunkers or fuel generally, of course, there would not be commerce. IBIA board involvement gives me the opportunity to share thoughts about the present and future of the industry with other leaders in the industry, who also think about the arcane aspects of bunkering.

World Bunkering AUTUMN 2016

DH: Do you think it is important to have a North American input into IBIA’s Board discussions? SS: North American input into IBIA’s Board decisions is essential because first, the size of the US economy, second because of US and generally North American influence in the economic world, and third because of US enforcement involving bunkering and issues of ocean pollution. It is also important to continue to encourage greater participation of North American companies in IBIA, especially as the maritime world continues to move toward international standards of fuel content and quality, and pollution reduction.

DH: What other issues concern you at present? SS: The main issue that concerns me presently, if concern is the right word, is the impending worldwide reduction in sulphur content for marine fuels, that likely will take place in 2020. This raises issues of worldwide supply, as well as enforcement, and also will further ‘fuel’ development of LNG for marine propulsion. Also, coming out of OW, there does need to be further, reliable ways that bunker physical suppliers can assure that they are paid, and that vessel owners and charterers can be assured they will not have to pay twice or more for the same supply.

DH: How would like to see IBIA develop? Do think there is much enthusiasm for joining IBIA among North American suppliers and owners?

SS: IBIA is developing fabulously and I am humbled to be invited to serve further with that. I would like to see IBIA develop, and I know my fellow board member share this, providing further services to members and also continuing coordination and communication across the international and individual governmental bodies that regulate the maritime industry. In the next year and more, IBIA members will see even further involvement of IBIA in intergovernmental and international agency deliberations, as well as educational efforts for members, including webinars and podcasts. I do think that North American suppliers and owners are continuing to be interested in becoming involved in IBIA, for all the reasons I’ve mentioned, and it’s important that they do that. That will be one of my primary commitments as a Board member in the coming months.

DH: What are you views on the OW Bunker collapse? The OW Bunker collapse is going to change the face of the industry over the next 10 years or more, and probably already has changed it. The fundamental question that has to be answered is how do the various trading and supplying entities in a bunkering transaction assure that they will be paid, and how is financing going to be done of those entities’ businesses? Already, the primary question asked in every bunker transaction is “have you paid your supplier?” The industry will have to develop reliable mechanisms to assure that suppliers, who are providing the bulk of the value to every bunker transaction, are paid. Because of the sheer number of litigations and arbitrations now going forward and the OW situation, there will be a great amount of law developing which will be what the industry looks to regulate its transactions for years to come. which will be how the industry looks to regulate its transactions for years to come. Steve Simms is a specialist maritime lawyer and IBIA board member. ©Stephen Simms

World Bunkering AUTUMN 2016

INTERVIEW

The members of the Board are drawn from a range of expertise in the bunkering industry, who have deep and long experience with the industry’s development. I was grateful to be invited to join the Board and certainly look forward to contributing and learning from my fellow Board members and IBIA members.

NOTICE BOARD

IBIA NOTICEBOARD

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New mem ber A di scou benefi effe ts c nted

Evaluate the Merits of a Bunker Claim Interpretation of specifications for bunker fuels and a guide to the question of repeatability. For sale to non-members at £35.

IBIA Glossary of Bunker and Lubricating Oil Terminology A comprehensive guide to all those complicated terms that are in daily use in the bunkering industry. For sale to non-members at £45.

IBIA Guide to Good Commercial Practice On sale to non-members at £50 per copy.

IBIA Safety Cards for vessels’ crews IBIA buyer members receive copies of the IBIA Safety Cards for distribution to their ships, giving basic, plain English advice about safe handling of bunker fuels. Please note that all of the above publications can also be downloaded by members by visiting www. ibia.net and logging into your account. Please then go to the download section of the website.

IBIA Logo Free bromide supplied for use by corporate members only.

World Bunkering AUTUMN 2016

INDUSTRY NEWS Containership Carl Schulte achieves five-star Environmental Score rating ©Schulte Group

CUTTING EMISSIONS European owners call for global CO2 deal

he European Community Shipowner Associations (ECSA) has called for a global, rather than a regional EU, response to the need to cut carbon dioxide emissions. Speaking at a symposium on decarbonisation of shipping held in Antwerp ECSA President Niels Smedegaard said that shipping, together with all other industry sectors, must be part of the solution to limit the increase in global temperature “as we clearly are a global contributor to carbon emissions”.

But he added: “The overall goal however must be a global agreement for maritime emissions, which the International Maritime Organization is moving towards. The EU has shown leadership by adopting its regulation on monitoring, reporting and verifying (MRV) CO2 emissions of shipping. Our focus should now be on ensuring the proper implementation of the MRV Regulation and make certain that the regulation is aligned with the IMO data collection system which will be formalised in October this year. This will ensure that European shipping will be covered by a single system, in an efficient manner without double work.” “The European Commission has not included shipping in its current review of the European Emissions Trading System,” Mr Smedegaard noted. “We believe this correctly reflects the reality that shipping is a global business and regional measures would have a directly distorting impact on European operators. A regional scheme would lead to carbon leakage as ships would start World Bunkering AUTUMN 2016

to avoid calling at EU ports. It would also gravely hurt the European short sea shipping sector, which would again be faced with an ‘EU only’ system,” he warned.

EU NOx levy proposal A prominent environmental lobbying group is pushing for the EU to impose a nitrogen oxides (NOx) levy on shipping. However the International Chamber of Shipping (ICS) has responded by stressing the work on NOx already underway at the International Maritime Organization (IMO) and the need to address the issue globally through IMO. Campaign group Transport & Environment (T&E) says it commissioned a study, by environmental consultancy IVL and CE Delft, that shows “a levy on nitrogen oxides (NOx) emissions with revenues earmarked to fund the uptake of NOx abatement measures is the most promising tool to reduce these ship emissions by up to 70%”. T&E says it is the first study to identify the policy options available at the EU level to regulate ship NOx emissions in the EU seas and that it compares them with the measures to be taken under the IMO. In addition to a NOx levy with a fund, the study identified two other EU-level policy tools: mandatory slow steaming of ships (with a levy and fund as an alternative compliance option) and a stand-alone levy on emitted NOx. An ICS spokesperson said: “It is simply not the case that NOx emissions from

shipping are unregulated, and an ambitious regime for reducing NOx emissions, through improvements to ships’ engines, has already been agreed by IMO through amendments to the MARPOL Convention, building on the considerable technical improvements that have already been made by engine manufacturers.” They added: “Whatever the possible merits of these suggestions – and to be clear the concept of levies and funds is highly controversial with respect to whether they genuinely reduce emission levels – shipping is a global industry requiring global regulation, otherwise we have chaos. Any such proposals – even if ever agreed and taken forward by the EU institutions – would have to be approved by IMO Member States in accordance with the international regime that applies to NOx emission control areas that have already been established in North America and North West Europe. Non EU states would likely be very much opposed to any attempt by the EU to impose unilateral measures on international shipping at variance to what has already been agreed by the international community. T&E says it published the study at an event in the European Parliament “in light of the ongoing failure by the Council to agree ambitious revisions to the National Ceilings Directive (NEC) governing land-based emissions, including NOx, thus putting greater pressure on member states to address ship NOx where abatement costs are far lower”.

INDUSTRY NEWS

Study highlights bunker fraud A new study that looks at the problem of shore-side official demanding bribes to carry out their duties, as well a catalogue of other practices that can harm seafarers, also highlights bunker fraud. The study by the Cardiff, UK, -based Seafarers International Research Centre, The relationships between seafarers and shore-side personnel: An outline report based on research undertaken in the period 2012-2016, involved researchers sailing on nine vessels an carrying out 87 interviews with seafarers onboard their ships. The study was also based on 303 interviews with seafarers while they were ashore and a questionnaire completed by a further 2,500 active seafarers. One area of particular concern noted by the study was bunker supply-related fraud which “caused a great deal of stress for chief engineers”. According to the study bunker suppliers employed a variety of techniques to allow them to charge vessels for more bunkers than they actually delivered. The study found that chief engineers had to accept fraudulent figures or risk expensive delays to the ship. It noted that bunker surveyors could be helpful by mediating between ship and bunker suppliers but local surveyors were not always seen as impartial. Short supply was often obscured on board by chief engineers routinely adjusting fuel consumption figures fractionally upwards to compensate for any deficits. But they could cover only limited volumes of theft in this way, especially when the next leg of a voyage was going to be short. The study recommended tightening up on bunkering procedures and the routine use of surveyors. However the study makes no mention of mass flow meters which accurately measure the quantity of bunkers supplied and make bunker delivery fraud almost impossible. The fitting and use of these meters are becoming mandatory in Singapore and are being adopted elsewhere on a voluntary basis.

New boxship meets “most stringent environmental standards” Schulte Group says its new 5,400 TEU containership Carl Schulte and her two sister ships, Christa Schulte and Clemens Schulte, have many environmental features as standard. Her owner, Bernhard Schulte Shipmanagement (BSM), claims to have succeeded in pushing the boundaries when it came to hull design and the fitting of one of the most efficient engines on the market. Ensuring that this work was undertaken during the design phase, they installed sophisticated software to optimise voyage planning and to measure the CO2, SOx and NOx emissions. The vessel has been graded by vetting company RightShip as A+ on the Greenhouse Gas (GHG) Emissions scale, and has been given a five-star Environmental Score rating, placing the ship in the top 20 vessels out of 76,000 ships graded by RightShip.

K Line set new emissions target Major Japanese shipping company K Line has set a new carbon dioxide (CO2) emission reduction target for 2030 after achieving the interim target in its Environmental Vision 2050 programme. The company reduced CO2 emissions by 13.6% by 2015, compared its 2011 level. It says this was due to deploying larger vessels, introducing advanced energy-saving technologies including electronically controlled engines, as well as slow steaming.Now K Line plans to cut CO2 emissions by 25%, compared its 2011 level, by 2030 as a step towards halving them by 2050. To achieve the new target, K Line says it is pursuing further CO2 emission reductions through both hardware and software. The hardware side includes deployment of energy-saving vessels, continued review on energy diversification including LNG-fuelled vessels as well as adoption of energysaving technologies to be retrofitted on existing vessels. On the software side it plans to enhance efficient operation by use of big data obtained from vessels.

Low-emission tug Offshore Ship Designers (OSD) has designed a powerful, low-emission compact tug to add to its Azistern series of vessels. OSD managing director Michiel Wijsmuller says, “The Azistern-e has the typical low resistance stable hull and all-round visibility that is associated with all Azistern designs. What makes this particular Azistern tug different is that it is driven by a revolutionary podded drive and that it has a flexible and green electro/diesel-electric configuration.” The hybrid power of the 22m LOA / 50 BP Azistern-e is generated by two 970kW variable speed gensets and is supported by two 400kWh lithium battery packs. The low-emission tug can be delivered compliant with IMO Tier 3 requirements with an after-treatment system suitable for emission control areas, and is also equipped with an innovative energy management system. The uniform and precisely optimized loading of the propulsion system ensures low maintenance and fuel costs. Transits and manoeuvring can be performed using the batteries with zero emissions.

BV’s VeriFuel joins Green Award scheme French classification society Bureau Veritas’s (BV) marine fuel testing and inspection service VeriFuel joined the Green Award program as an incentive provider in July. Green Award certified ships will receive a 5% discount on fuel quality testing and on bunker surveys, and a 15% discount on all fuel related training courses from VeriFuel. BV says becoming a Green Award Incentive Provider is in line with its policy to better protect the health and safety of its employees and subcontractors and minimize impact on the environment. The Green Award Foundation is an independent quality assurance organisation that certifies shipping companies and vessels that go beyond the industry standards in terms of safety, quality and the environmental performance.

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Singapore-based container line APL, which has now been taken over by CMA CGM, says it has reduced its fleet carbon dioxide (CO2) emissions by 45.5% in 2015, compared to its emissions level in 2009. APL attributed its CO2 reduction to improvements in operational efficiency, fleet and voyage optimisation, technical improvements, as well as a more fuel-efficient and environmentallyfriendly fleet of vessels. The company is a member of the BSR Clean Cargo Working Group (CCWG) and its CO2 emissions data was verified by Lloyd’s Register Group according to the CCWG verification protocol and ISO14064-3:2006 standard.

Fuel management e-learning programme launched Rotterdam-based Veritas Petroleum Services (VPS) and Norway’s Seagull Maritime are collaborating to bring fuel management training to the maritime industry. The first module of the comprehensive computer-based educational and training system focuses on fuel sampling, testing and bunkering. The course was first conceived to plug a gap in the knowledge and experience of ship managers and vessel crews in fuel management, but is now being developed to provide e-learning onboard and ashore. “As the leading provider of computerbased training systems to the shipping industry worldwide with 9500 user sites, it is logical for us to gravitate toward VPS, the recognised leader in fuel testing and inspection, to provide e-learning on total fuel management solutions for our customers,” said Seagull Maritime’s Chairman Oscar Johansen.

Participants from Malaysian government departments, academia and other related bodies attended the three-day MARPOL Annex VI and Technology Transfer workshop. It was co-hosted by the Marine Department Malaysia and Johor Port Authority and included a visit to the container terminal at the Port of Tanjung Pelepas, where participants learnt about the port’s energy efficiency initiatives and green policy.

Ship slops turned into bitumen Ecoslops, a technology company that upgrades ship-generated hydrocarbon residues (slops) into valuable distillates and light bitumen, has announced the signing of a long-term XFO (light bitumen) supply contract with Soprema which is the European leader in the bituminous membrane market for the isolation industry. Soprema had a €2.13 billion turnover in 2015 with more than 6,260 employees in 40 plants. Commenting on the development, Ecoslops CEO Vincent Favier said: “We have worked with Soprema since our first plant in the Port of Sinès opened, and the agreement of this contract marks a major step for Ecoslops. This partnership reflects not only the quality of our products, but also the trust that has been built between our companies. This contract will allow us to anticipate the volume and price of approximately 30% of our total sales for several years. In addition, the fuels produced have also found commercial opportunities with various traders and industrial companies.”

Light bitumen is the heaviest cut of Ecoslops’ production. The company says that it has very good technical characteristics for the construction industry and its market has the benefit of often being local.

New lubes Russian-based LUKOIL Marine Lubricants has launched two new products, NAVIGO 6 CO crankcase oil and NAVIGO 70 MCL AW cylinder oil. The company says it has focused research and development activities during the last two years on enhancing its standard crankcase and cylinder oil portfolio, which includes 100 BN cylinder oil and is now introducing the newly formulated NAVIGO 6 CO crankcase oil and NAVIGO 70 MCL AW cylinder oil. With newly designed additive packages, both products offer additional benefits with regard to thermal and oxidation stability, corrosion prevention and wear protection. NAVIGO 70 MCL AW is a cylinder oil for marine two-stroke engines covering a wide field of applications and fuel sulphur contents between 0.5% and 3.5%. The new cylinder oil is based on the same additive technology that has proven successful for NAVIGO 100 MCL. NAVIGO 6 CO is a crankcase oil developed by LUKOIL Marine Lubricants for the latest design two-stroke engines. LUKOIL says that both lubricants have been extensively tested and approved by all major OEMs.

IMO workshop promotes energy efficiency measures An International Maritime Organization (IMO) workshop to raise awareness of the UN agency’s regulatory regime dealing with improving energy efficiency and the control of GHG emissions from ships took place in Johor, Malaysia in May. The event was organized under IMO’s GloMEEP project, which is supporting uptake and implementation of energy efficiency measures for shipping in developing countries. Malaysia is one of the 10 GloMEEP lead pilot countries. K Line’s new LNG carrier Bishu Maru. The company has set a new carbon dioxide (CO2) emission reduction target ©K Line

World Bunkering AUTUMN 2016

INDUSTRY NEWS

APL cuts CO2 emissions

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ENVIRONMENT

International Maritime Organization

CHAOS AHEAD? Deputy editor Unni Einemo takes an in-depth look at the issues as decision time for the global 0.50% sulphur cap draws near

he Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) is expected to decide on the timing of the global 0.50% sulphur cap for marine fuels in October this year. Such a major decision, with far-reaching consequences, should not be taken lightly. Regardless of the date MEPC chooses, the change from the current 3.50% to a 0.50% sulphur limit is a seismic shift on an unprecedented scale in the history of refining and shipping, and it seems unrealistic to expect to successfully achieve this shift overnight. MEPC 70 will have before it the result of a low sulphur fuel availability study required under MARPOL Annex VI. At the time of writing it was not yet available to the public, but in May this year, the consultancy employed to undertake this assessment on behalf of the IMO, CE Delft, gave a conference presentation hinting very strongly that the study’s conclusion will support a 2020 introduction. There are, however, other assessments that do not share that view, so discussion at MEPC 70 is likely to be lively as some may have more faith in those than the study led by CE Delft.

The case for 2020 CE Delft’s study for IMO suggests that global middle distillate production capacity will grow faster than demand, meaning there may be sufficient refining capacity to produce enough compliant marine fuels by 2020. This could persuade most of the 87 signatories to MARPOL Annex VI at the IMO to go for 2020.

The outcome is widely expected to be a political decision – so unless the availability study clearly says 2020 is impossible, most observers believe it will be 2020 as that is the signal from those member states that have expressed an opinion. The CE Delft study has made a number of marine fuel demand projections from 2012 to 2020, as per the table below showing heavy fuel oil (HFO), marine diesel oil/gas oil (MDO/MGO) or other low sulphur oil-based fuels coming into the market for 2020, and liquefied natural gas (LNG) demand in million metric tonnes (mt). The figures for 2020 assume ships will only use fuels with maximum 0.10% sulphur within emission control areas (ECAs) or in small engines, and use fuels with up to 0.50% sulphur outside ECAs.

The CE Delft study also assumes that 3,800 ships will have exhaust gas cleaning systems (EGCS, or scrubbers) installed by 2020, allowing ships to use some 36 million mt of HFO accounting for 11% of global shipping’s total energy demand. The Exhaust Gas Cleaning Systems Association (EGCSA) has predicted a lower 2020 scrubber installation number than the CE Delft study, but nevertheless says that the exhaust gas cleaning industry is ready for 2020 both in terms of systems and installation capacity. It also stresses that delaying the global 0.50% sulphur cap “will kill today’s innovation and investments in developing emission reduction technology,” and hinder research into alternative fuels.

DEMAND IN MILLION MT

2012

2020

HFO

228

36 (scrubbed)

MDO/MGO

39 (max 0.10% S)

(or other LS fuels for 0.1% S and 0.5% limits)

233 (max 0.50% S)

LNG

TOTAL

300

320

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ENVIRONMENT

2020 sceptics Several number crunchers do not share CE Delft’s view on the feasibility of introducing the global 0.50% marine fuel sulphur cap in 2020, either because they have different forecasts or because they have doubts about the modelling used. Robin Meech, IBIA Chairman and head of Marine and Energy Consulting explains: “The analysis undertaken for the IMO hinges on linear programming refinery models. The contractor has split the world into several regions and assumed each can be represented as one optimised refinery with intermediate streams flowing freely between refineries within each region. There is one “tank” for each region into which all the blend streams are directed to create the required 0.50% sulphur marine fuels. This ‘one region, one refinery’ model assumption may not be realistic and result in over-optimisation. Producing sufficient 0.50% bunker fuel by 2020 may be technically feasible but not economically viable for refiners, resulting in a shortfall.”

The 2020 jump in MGO demand, from 0.7 million b/d to 2.7 million b/d, will result in a supply gap, leading to a big distillate deficit in Europe, while Asia will go from a 1 million b/d surplus to a 0.5 million b/d deficit if Singapore is to retain its current position as a major bunkering hub, the IEA told the Platts conference in May. The IEA’s predictions assume that scrubber uptake prior to 2020 will be limited due to the low price of MGO and relatively narrow price differential between HFO and MGO. It predicts that 2020 will be the peak year for MGO demand, as post 2020 scrubber uptake will increase due to higher HFO/MGO price differentials. LNG uptake has likewise been slowed by low oil prices, but is expected to increase rapidly.

Also in the camp of 2020 sceptics is the International Petroleum Industry Environmental Conservation Association (IPIECA), which told the Platts conference that essentially all major refinery production facilities that will be operational by 2020 are already known by now through project announcements. IPIECA pointed out that the refining industry is already reducing residual production and increasing output of distillates to address rising demand for the latter, but this is a linear, gradual process. The shift from HFO to distillates and/or desulphurised HFOs in 2020 would see demand for these product groups jump by 3 million b/d or more, compared to an increase of less than 0.5 million b/d in 2015 when the ECA switch took place. IPIECA based this assessment on combined data from BP, Marine and Energy Consulting, IEA and OPEC.

Meech has previously calculated that full compliance with the global cap in 2020 means that demand growth for distillates will be equivalent to 9 years of average increases. Even assuming 30% non-compliance the 2020 increase would still equate to 6 years of average demand increases occurring overnight. The International Energy Agency (IEA) estimates that shipping will go from accounting for 3% of global distillate demand in 2015 to 9% in 2020. The majority of 0.50% fuels would need to come out of the distillate supply pool and it estimates that a 2020 implementation date would see 2 million barrels per day (b/d) of marine fuel demand switch from HFO to MGO, leading global demand for distillates to jump from 28 to 30 million b/d. By comparison, it estimates the fall in the ECA sulphur limit from 1.00% to 0.10% in 2015 led to a 0.1 million b/d switch from HFO to MGO. The decision on the global cap lies with IMO’s Marine Environment Protection Committee © International Maritime Organization

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ENVIRONMENT

IPIECA and others have also stressed that refining is a complex integrated business that caters to a range of product demands, and that refinery unit utilisation and investment decisions are made by individual refineries, not by the industry as a whole. Even if assuming that the capacity exists globally to produce sufficient marine fuels meeting a 0.50% sulphur limit, refineries will not necessarily be geared towards the marine fuels market.

Yet this is what MARPOL Annex VI requires, a drastic change in marine fuel quality, or a radical change to alternative fuels like LNG and methanol, or the installation of scrubbers.

Little thought given to shift from 3.50% to 0.50% sulphur fuels

Furthermore the abrupt shift from mainly high sulphur HFO to low sulphur products will involve an enormous logistical undertaking that will require not only refiners, but other links in the supply chain to adapt in order to store and deliver distillates or other low sulphur fuels on a broader scale.

There is one aspect of the global cap that IMOâ&#x20AC;&#x2122;s MEPC, in its deliberations, appears to have largely overlooked. Regardless of the date, shifting global bunker supply from residual fuel to 0.50% sulphur fuels, which are expected to be principally distillates, cannot happen overnight. Because of the higher cost of the new lower sulphur fuel, owners will want to hold off on making the shift for as long as possible, but this is not a â&#x20AC;&#x2DC;flick a switchâ&#x20AC;&#x2122; process. Implementation of the global 0.50% sulphur limit in 2020 would likely be more challenging than 2025 from an overall supply/demand balance standpoint as more refinery upgrades could be complete. A delay to 2025 would nevertheless bring a number of transitional challenges. Shipping has undergone a fuel paradigm shift before, from coal to diesel in the 1920s and from diesel to HFO in the 1950s, but it happened gradually, not overnight. During the last 30 years we have also seen changes in the specifications and quality required for inland fuels, including sulphur limits. These were not always smooth transitions, with refineries and fuel distribution sometimes lagging behind demand resulting in cost going up for consumers. Such fuel specification changes have been applied in limited geographical locations (cities, regions and countries) and staggered over time, never across the globe from one day to the next.

Assuming that in 2020 or 2025, the capacity exists globally to produce sufficient marine fuels meeting a 0.50% sulphur limit, we would likely see regional and/or local disparities with some ports facing shortfalls.

Some may argue that there is no issue as evidenced by how well the industry coped with the 2015 change from 1.00% to 0.10% sulphur fuel in emission control areas (ECAs), which was a shift from mainly HFO to mainly MGO. However, the additional annual volumes involved are of a completely different magnitude.

Market upheaval The refining industry, and the market, absorbs incremental annual demand growth for distillates, but an abrupt major increase like the one associated with a global shift to 0.50% sulphur fuels for shipping will very likely cause a period of supply shortages in some regions, which in turn would have an impact on distillate product prices globally. A distillate shortage and hence price inflation in one sector, like shipping, could impact inland markets such as road transport fuels and heating oil. Some may again argue that the anticipated price increase in MGO when the ECA sulphur limit dropped to 0.10% in 2015 did not materialise. This was, however, a result of a sharp fall in global oil prices in the run-up to 2015. The price difference between MGO and HFO did, in fact, increase in relative terms from a 50-60% premium to 100% or more, and there is no guarantee that the introduction of the global cap will coincide with a similar period of low oil prices.

Some bunker suppliers have pointed out that if demand for HFO is limited to vessels equipped with scrubbers, demand would shrink dramatically with HFO becoming a niche market compared to the main market for 0.50% sulphur fuels. Suppliers would need to segregate high sulphur HFO from the lower sulphur fuels and many may stop offering it. This could potentially make HFO unavailable except for in selected ports where market conditions (i.e. regular calls from ships with scrubbers) make it viable. If fewer suppliers are willing to offer it, there is a risk that supply of HFO will begin to disappear just as more ships are installing scrubbers.

Compliance issues for ships Initial distribution and availability of 0.50% sulphur fuels is likely to be uneven with frequent shortages of compliant fuels in some ports resulting in widespread instances of non-compliance. Moreover, a weak global cap enforcement regime combined with a significant premium for compliant versus non-compliant fuel could result in an imbalance in competitiveness between ship operators. This in turn could motivate further non-compliance and this downward spiral could undermine the use of compliant fuel outside of monitored waters, and set a precedent which could take some time to correct.

Potential strategies to ease the transition There are numerous challenges for global shipping associated with an abrupt shift from fuels with up to 3.50% sulphur to maximum 0.50% sulphur that would likely lead to a period of significant disruption and market distortion. IBIA believes it could serve global shipping if the IMO signatories to Annex VI were willing to consider strategies to mitigate these disruptions, while still achieving the desired environmental benefits in a realistic but nevertheless ambitious timeframe, and has outlined several options that may be considered on their own, or in combination.

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The initial increase in demand for 0.50% fuels would be significant, but much more manageable than a global requirement, especially if introduced region by region over an agreed timeframe. As a growing share of ships’ operations fall within low sulphur zones, it should incentivise additional uptake of abatement technology, thus achieving the IMO goal of both reduced SOx and NOx emissions whereas a global shift in fuel sulphur levels would only reduce SOx. The main difficulty with this approach would be to decide the timing for expanding the 0.50% cap from one region to the next, and then beyond the EEZs. It would also cause increased operational complexity for ships as they would face three different sulphur limits (0.10% in ECAs and in many ports, 0.50% in EEZs and 3.50% globally) for a limited period.

Options may exist for agreeing to an interpretation of the regulation that gives some flexibility in timings and enforcement of the global cap. For example, Annex VI already allows for exemptions for up to 5 years for ships to undertake ship trials of emission reduction technology. This has been taken a step further in the US, where authorities have given exemptions from meeting the ECA sulphur limit for ships operating in the US provided the owner has committed to retrofit solutions that will achieve an equivalent or better emissions profile

within a given timeframe, like installing scrubbers or fuel systems geared toward alternative clean-burning fuels such as LNG or methanol. This could help ensure the appropriate level of HFO supply remains available in the marine fuels market as ships that will be able to use HFO after installing a scrubber, within a given timeframe, would be able to continue to use HFO in the interim. MEPC 70 has a big decision to make on the global cap. Whichever date it decides, the impact on global shipping and bunkering will be profound.

It may be possible to phase in the introduction of the 0.50% sulphur cap by ship type, such as cruise ship, container ships, crude tankers, bulk carriers etc. This approach would have the advantage of spreading out the demand growth but nevertheless give a clear framework for the timings and associated distillate demand growth. The main issue with this approach would be to decide ‘who goes first’. Such staggered introduction would require amendments to MARPOL Annex VI so unless MEPC 70 agrees to start that procedure immediately, there would not be enough time to agree and adopt such amendments by 2020.

Member states will meet at IMO’s HQ for MEPC 70 in October ©International Maritime Organization

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ENVIRONMENT

Perhaps the most attractive approach would be to first introduce a 0.50% sulphur limit for ships when sailing in the Exclusive Economic Zone (EZZ) of Annex VI signatory countries, similar to the US/ Canada ECA zone. This would achieve the main health benefits intended by the regulation by reducing emissions of harmful air pollutants near populations.

INDEPENDENTS

A NEW WORLD Adrian Tolson, Senior Partner, 20|20 Marine Energy looks at the prospects for the independents in dramatically changed market conditions

t would be a huge underestimation to say that the bunkering industry is experiencing significant transition. What is happening is seismic. This is not just about dwindling margins and profits. It is not just about increased regulations, or the aftermath of the OW Bunker collapse. It is an amalgamation, and a perfect storm of everything, which is serving to utterly transform bunkering as we know it. The reality is that the market has hit rock bottom. While this would normally signal that the only way is up, this will only happen for the businesses that are progressive enough, and have the foresight to fundamentally change with it.

Firstly, the traditional back-to-back, standalone trader model is in real peril, as evidenced by the results and shrinking margins of those that report their financial performance. Serious questions have been raised in the past, and more recently following OW Bunker’s demise, regarding the future of traders in this rapidly changing market. While this has been a contentious debate, there is also a real, and genuine belief in the importance of traders within the bunkering and shipping industry, particularly in a market of high fuel prices, where credit is a serious commodity.

Three decades ago the market was dominated by the majors. The independents rose on the back of oil and shipping crises, de-regulation and higher fuel prices, and a desire to do things a bit differently with more innovation and flexibility. The independents realised success and wealth on the back of increasing global trade and a burgeoning shipping market that delivered 90 percent of it. It would not be unfair to say that this wealth creation acted as a catalyst for complacency and cutting corners, which continue to dominate comment and opinion in the industry today. However, on the back of seven years of highly volatile oil markets, and depressed shipping markets, underpinned by increasing environmental regulation, a demand for more sustainability in the whole industry, and a fundamental shift in the relationship between the ship owner and fuel supplier, the old world of the independents is now well and truly over.

Generally, an analysis of the legal implications of OW Bunker’s collapse suggests that it has enhanced the legal right of the bunker trader (OW Bunker was one of those and the court battles being won by ING are good for traders), which is in the most part to the detriment of the physical supplier.

Naturally this is not the case in every situation and some courts may reverse decisions in the future. However, there is no doubt that many fuel buyers are looking to a more direct way of conducting their business, cutting out the people in the middle – the traders – and dealing just with the physical suppliers, in order to reduce the transaction chain and the perceived risks associated with fuel procurement. In the current market, it is hard to see how the smaller trading houses will survive.

In theory, this would suggest that the physical suppliers, particularly the independent ones with the flexibility, financial strength and global reach would be primed to seize upon a market of opportunity. However, this is not necessarily the case. For the short-term there may be benefits in terms of increases in enquiries as fuel buyers cut out the traders. However, for the medium to long-term, they need to adapt their business models and the way that they sell, moving from a straight transactional commodity approach, to one of relationship-building and counsel.

Adrian Tolson

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Selling is done in a sporadic, non-strategic way, where often, customers are acquired by accident rather than through a targeted approach and not with a view to securing long-term relationships and partnerships. Not only is this strategically naive, commercially, given the current market dynamics, it also often results in margins being eroded due to poorly chosen channels.

Decisions therefore need to be made, and given the lack of knowledge, and a sense of apathy amongst ship owners, physical suppliers should be getting closer to their customers to provide counsel. They need to help them develop strategies on a vessel-by-vessel, and fleet-by-fleet basis that reduce risk, ensure compliance, and are fit for purpose in terms of their business operations and trading routes. Physical suppliers, who have more control over the end-to-end supply chain need to ensure that they have the capabilities and internal infrastructure to deliver this. Currently, the majority do not.

So, while the market feels like it is in peril, for many different reasons, there are opportunities to be had, particularly for large, well-capitalised physical independents. But they need to start scrambling; effectively positioning themselves as voices of authority on the changing dynamics of the market; companies of integrity that conduct business in the right way; that have the intelligence, experience and knowledge to provide strategic counsel and develop fuel procurement solutions; and have the infrastructure, and capabilities to invest, in order to deliver it. This is what the very near future will look like. Those that understand this will reap the rewards.

But change they must. Ship owners and operators do not fully understand the new complexities within the fuel supply chain. When the global 0.5% sulphur limit is implemented – most likely in 2020 – and in the build-up to that date, owners need to define what their compliance strategies will be; distillates, scrubbers or LNG. While the impact of the 0.1% ECA was diluted through low crude and fuel prices, we can be fairly sure – as anyone can be – that crude will rise over the next three and a half years. Indeed, the International Energy Agency (IEA) forecast in May 2016 that the price of crude will rise to circa $77 per barrel by 2020 as supply and demand balance each other out. Clearly this will have an impact on distillate prices. While they won’t hit the highs of $1,000 per tonne that was the catalyst for predicting ship owner Armageddon on the implementation of the 2015 ECA regulations, they will certainly hit a point that hurts, and impacts profitability.

OW Bunker’s collapse was just one of the factors creating a ‘perfect storm’ for independents ©Blue Communications

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INDEPENDENTS

For the majority this does not come naturally. Many simply do not know who their final customers are. The sell side of the industry shows a considerable lack of sophistication when it comes to simple principles of business development, marketing, sales channel analysis, customer segmentation, key account management and customer relationship management (CRM) systems that drive relationships and engagement.

SCRUBBERS

DECISION TIME LOOMS As a global 0.50% sulphur limit in 2020 appears increasingly likely, more owners are looking at the scrubber option

ake your mind up time up is getting close for shipowners weighing up their options when the 0.50% global sulphur in emissions cap comes into effect, quite possibly in 2020. Stena Group’s vessel design subsidiary Stena Teknik’s technical director Harry Robertsson was quoted by Motorship recently as favouring the the use of scrubbers. He said that even with carbon tax and other fees added to fuel prices, heavy fuel oil (HFO) bunkers with sulphur scrubbers could be shipowners’ most cost effective option for Emission Control Area (ECA) compliance, the reports. Mr Robertsson was quoted as saying that although other fuels might play a growing role, it is likely that Stena Group’s fleet would use HFO with scrubbers over the next 15 years. He added that LNG may be a viable alternative in 15 years time. Stena is also experimenting with using methanol as a fuel.

While may shipowners are still considering their options, scrubber manufacturers moved into top gear with new developments to their range of products. Fore example German-based Saacke has unveiled its Exhaust Gas Cleaning System (EGCS) Configurator that allows the optimum design of a scrubber system to be determined in advance. The tool uses the input ship and operating data to calculate details concerning the system design, such as the dimensions, number of components or the size of the pump system. All other relevant indicators can also be freely configured, depending on the application profile and deliver important findings for subsequent system operation in the early planning phase, such as the maximum length of zero-discharge phases to comply with the regulations in the zero-discharge zones or the return on investment (ROI). The configurator also uses a new calculation model to determine the pH value at the washing water outlet. Saacke says that the EGCS Configurator increases transparency and planning reliability from the first customer meeting. Installation space and necessary installation measures in the ship can be directly estimated based on a visual representation. It notes: “Of particular interest for ship operators is the ROI for the entire system based on current fuel prices as it assists with the investment decision. The EGCS Configurator is a fixed part of the Saacke scrubber system design.”

Alfa Laval’s PureSOx U scrubber. ©Alfa Laval

“We have a strategy of continuous development for the Alfa Laval PureSOx platform,” said René Diks, Manager Marketing & Sales, Exhaust Gas Cleaning at Alfa Laval. “We launched our inline I-design in December 2015, and we are pleased to follow it so soon with significant advances in our U-design.” In another development, DuPont subisidiary Belco Technologies Corporation (Belco) is to fit scrubbers on two more or US-based laker operator Interlake Steamship Company (Interlake). Interlake now has all five of its eligible Great Lakes Bulk Carriers contracted for exhaust gas cleaning systems with DuPont. Three of the ships already have the units installed and operating. Finding the room to put scrubbers on is going to be a issue with many conversions and, for these retrofits, Belco says it worked closely with Interlake to provide a system with optimised equipment and auxiliaries based on the space limitations aboard the ships. The scrubbers will use a common effluent treatment system to meet all US Coast Guard, US Environmental Protection Agency and International Maritime Organization (IMO) wash water emission standards. The system will allow Interlake to meet all North American ECA and IMO Annex VI sulphur and wash water requirements while continuing to operate on HFO.

Meanwhile Alpha Laval has also been working on fitting scrubbers into space available onboard. Its PureSOx scrubber is now available in a U-design with greatly reduced dimensions.

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SURVEYORS IBIA develops standard operating procedures. ©D Hughes

STANDARDISING BEST PRACTICE IBIA develops standard operating procedures for surveyors

he Asia branch of the International Bunker Industry Association is developing Standard Operating Procedures (SOP) for surveyors in Singapore, a first step toward IBIA’s long term goal of producing a global standard for surveyors. The intention is to help the industry manage new challenging regulations, standardise best practice and build trust in the market.

The new MFM requirements will increase the overall efficiency of the bunker fuel delivery process, while improving the port bunkering capacity and port efficiency, increasing productivity and reducing administrative processes. IBIA says that while Singapore has implemented the changes now, ports around the world will follow.

These initial, Singapore-specific IBIA guidelines have been drafted with the practical input of several international bunker surveying companies. By opening the SOP developed for Singapore to broader consultation, the intention is to develop a broader SOP that can be promoted and adopted as operational best practice across the industry.

While not prompted by it, the IBIA move comes as a new report from the Seafarers International Research Centre (See News page 19-21) highlights the importance of the surveyor’s role in preventing malpractice and, especially, improper pressure on chief engineers. The study recommended the routine use of surveyors.

IBIA also cautions that the transition will be challenging, which is why it has developed the SOP for bunker surveyors in Singapore to support the new regulatory requirements and to standardise practice for bunker delivery by mass flow meter to vessel.

The standard operating procedures and the requirements will not supersede any agreement or guidelines contained in any contract, or applicable recommended practices of regulatory or standard bodies, they will not conflict with safety and environmental considerations or local conditions, they are simply to develop and promote industry best practice.

The initial SOP has been developed in direct response to the introduction of the Singapore Mass Flow Meter (MFM) Technical Reference or TR 48:2015 which was launched on 16 February 2016, in support of the mandatory use of MFM systems for all marine fuel oil (MFO) deliveries in Singapore with effect from 1 January 2017. The Marine and Port Authority of Singapore (MPA) requires all bunker suppliers, bunker craft operators and bunker surveyors to comply with the requirements and procedures of TR 48:2015 as of 1 June 2016 when using bunker tankers where MFM systems are already installed. World Bunkering AUTUMN 2016

IBIA’s CEO Peter Hall says: “The development and adoption of SOP for surveyors will go a long way towards building trust in the market and underlines IBIA’s commitment to education and professional best practice. The draft document was presented at the MPA Singapore Bunker Forum on 22 April 2016. This is the very first time such guidelines have been developed for surveyors and the feedback is positive. We hope to push this forward quickly as it really will add significant value and improve working practices across the industry.”

Mass flow meters will change the role of the surveyor. ©CYE Petrol

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STRATEGY

IBIA’S VISION AND PURPOSE E

very business and organisation starts out with a purpose. Every so often they need to take a long, hard look at themselves and evaluate if that original purpose is still the same, or if it has evolved and changed due to internal and/or external circumstances. IBIA started this evaluation process a year ago with a consultation exercise asking the board what they thought as individuals, carrying out a member’s survey, and getting opinion from other associations and marine industry stakeholders. The plan was that armed with the data gathered a day would be set aside in May to hold a ‘blue sky’ strategy session led by an external consultant, and attended by board members, secretariat and IBIA’s CEO Peter Hall coming together to discuss how to further develop the Association. IBIA has grown significantly over the past 3 years, and the purpose of the day was to build on the sound principles, act on the survey findings, identify what we can and should do, and how to do it better. Here we share the outcomes and set out a new roadmap for IBIA’s ambitions as we move forward.

IBIA – past to present The International Bunker Industry Association was conceived in 1992 by a group of highly experienced industry professionals who saw a need for a forum dedicated to this part of the global maritime sector, the very lifeblood of shipping. The original aim of IBIA was to educate, communicate and inform through a recognised focal point that would be more effective and formalised than informal networks. These pillars have been a solid foundation upon which the association has been built. From our relatively humble beginnings and a membership consisting mainly of bunker suppliers, traders and brokers, IBIA has grown to become a truly global organisation which currently represents close to 800 companies and individuals across 91 countries, from the wellhead to the funnel. IBIA’s annual Gala Dinner now regularly attracts around 1200 guests and has become a social highlight during IP Week. With the growth in worldwide membership to include bunker consumers and a full range of bunker industry service providers,

IBIA now provides an international forum to address the concerns of all sectors of the international bunker industry, and has expanded its scope and reach significantly. An important part of our work is to represent the industry in discussions and negotiations with national and international policy makers, legislators and other industry bodies. IBIA gained consultative NGO status at International Maritime Organization (IMO) in 2005 and has “liaison status” with the International Organization for Standardization (ISO). Today, IBIA seeks to increase the professional understanding and competence of all who work in the industry, through our regional forums, training programmes, publications and Annual Convention. We provide services and facilities for members and stakeholders. Above all, we want to motivate and involve our members to work with us to stake out the right course for the global bunker industry for the coming decade. Consequently, earlier this year, we set in train a new work group structure that would enable greater participation from the membership as a key vehicle to drive forward to our new destination.

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STRATEGY

WHY WE NEED IBIA The bunker industry faces a multitude of issues and challenges

ome are old and familiar and never seem to be fully resolved, such as disagreements over fuel quantity and quality, or terms and conditions in bunker transactions. But they evolve over time, and if we do not accept the status quo there is always room to improve. Other challenges are more recent, such as the impact of regulations and new technologies. They affect a range of stakeholders in different ways and it is too simplistic to address the needs of one group while ignoring the needs of another. We are co-dependent.

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This means that we need: •

An international forum to identify the concerns of all stakeholders

•

Consolidation of industry views, to find a balance and build consensus

IBIA can help bring all this together by connecting the links in the global bunkering chain: •

Ship owners and charterers

•

Oil majors and independents

•

To promote high standards and encourage excellent overall practices

•

Suppliers, barge operators, traders and brokers

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To increase industry professionalism, ethics and competence

• •

Ports authorities, agents and storage providers

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Accurate, unbiased information on which to base decisions

•

Credit reporting companies, lawyers and P&I Clubs

•

A powerful, unified voice to represent our industry

•

Lenders, insures and hedging providers

•

Fuel testers and surveyors

•

Equipment manufacturers and technology providers

•

Trainers, consultants and media

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Shipping Associations and NGOs

•

IMO, regional bodies and governments

STRATEGY

IBIA’S VISION AND PURPOSE Bearing in mind where IBIA came from, where we are now, and where we want to go

earing in mind where IBIA came from, where we are now, and where we want to go, the ‘blue sky’ strategy day had a long discussion about the vision and purpose of the Association. It took a while, but eventually they crystallised as follows:

•

CHAMPION INDUSTRY PROFESSIONALISM AND CREDIBILITY

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Positively influence standards and practices Encourage standards setting and adherence Educate and train

• •

•

PROVIDE FACTUAL, ACCURATE AND BALANCED INFORMATION

•

Knowledge exchange between members, experts and regulators Consolidate and review information to ensure it is accurate and unbiased

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FORM AN EFFECTIVE ALLIANCE BUILT ON CONSENSUS

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Engage with members to identify the concerns of all sides Find a fair and balanced approach based on solid information Mediate differences from micro to macro levels

• •

•

REPRESENT THE INDUSTRY

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A powerful and consistent voice to lobby regulators Strong links with other industry associations

•

BUILD CONNECTIONS

The WGs and the current chairs are:

• •

Create and maintain industry networks Bring people together

Commercial. Subjects include Terms & Conditions, Ethics Chair: Mustafa Muhtaroglu, Energy Petrol: mustafa@energypetrol.com

These are lofty goals – how can we live up to them? We discussed that too and agreed to create processes and guidelines for how to deliver. Much work is needed to meet these ambitious; work that will involve the Secretariat of IBIA, its Board members, and the support of our members. IBIA’s working groups (WGs) are a key element. We have reviewed the process for how to pick our battles, and encourage members to participate more actively to help shape the future of our industry. The WGs are forums where IBIA members, IBIA board members and the Secretariat come together to look at specific issues affecting the industry, allowing us to discuss and consider them and decide on a way forward. Participation in the WGs, and proposals for what subject to pursue, are open to all IBIA members and any member could become a ‘champion’ for a specific project, if the board gives its approval. IBIA currently has five main external-looking ‘parent’ WGs, plus one for IBIA events, each chaired by an IBIA board member. Each of these parent WGs cover specific areas, and whenever a new issue or subject comes up that may require IBIA’s attention and participation, the relevant WG chairs are asked to coordinate the relevant support from within their WG. Some subjects, like environmental issues, may fall under the remit of more than one WG, in which case all the relevant WG chairs would be invited to participate and help identify the right resources.

Education. Also covers Training Chair: Michael Green, Intertek Lintec: mg@lintec-group.com Legal. Subjects include Legislation/ Regulation, Rapid Resolution Scheme Chairs: Patrick Holloway, Webber Wentzel Attorneys: Patrick.Holloway@webberwentzel.com Steve Simms, Simms Showers LLP: jssimms@simmsshowers.com Operational. Subjects include Safety, Port Charter, Standards, Environment Chair: Bob Sanguinetti, Port of Gibraltar: Bob.Sanguinetti@port.gov.gi Technical. Subjects include Fuel quality, Alternative fuels, LNG, Environment Chair: John Stirling, World Fuel Services: jstirling@wfscorp.com Events. Subjects include IBIA Annual Convention, Annual Dinner, Forums Chair: Eugenia Benavides, Terpel: eugenia. benavides@terpel.com The Chairman of the Board, Robin Meech of Marine and Energy Consulting, and IBIA’s CEO Peter Hall are ‘default’ members of all the WGs. Unni Einemo acts as WG coordinator and takes a lead on subjects relating to IBIA’s involvement at the IMO.

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STRATEGY

It is not realistic for the chair of each ‘parent’ WG to take the lead on each and every subject that falls within their remit, so there is a sub-structure where each subject has its own sub-WG and chair within the parent WG structure. This allows us to designate sub-WG chairs that will be champions for their particular subject, which has two advantages; it eases the burden on the parent WG chair, and the sub-WG chairs are given scope to drive the work on something that they really care about. Feel free to contact the WG chairs to offer your support for one or more of the ‘parent’ WGs, or subjects where you have special skills and interests to make sure you play your part in forming the future. Or contact Unni Einemo onunni@ibia.net to register your interest or raise subjects you think IBIA should look into and try to influence the direction of travel.

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Take part to have your say IBIA has come a long way since its inception, carving out an increasingly important and influential role to serve and represent the industry globally, regionally and locally. We can only do this effectively with the support and input of our membership. So join us, and work with us, for the benefit of all.

•

IBIA publications including World Bunkering magazine, newsletters, special member notices and membership directory

•

Multiple membership benefits, including discounts on IBIA training courses and events

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Setting the agenda and driving change through participation in dedicated working groups

•

Access to the right channel to have your views heard where it counts

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A direct line to IMO decision making

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Opportunities to play your part in improving the industry

What’s in it for you: •

•

Access to a wide network of industry professionals Access to, and support from, industry experts on technical, legal and commercial matters Access to IBIA events including the annual dinner, convention, forums and training courses

IBIA - STRONGER TOGETHER

MIDDLE EAST

TURBULENT TIMES John Rickards reports on the challenges facing the Middle East’s bunker industry

he oil-dependent economies of the Middle East have experienced a turbulent year so far to say the least, and the effects of the challenges faced by the region’s energy industry as a whole on the local bunker market are still being felt. Egypt has long been viewed as a market with great potential for growth, and with the political instability of recent years abating and the new, wider Suez Canal opening for traffic there have been plenty of players, both national and multinational, eyeing port expansions and supply concessions at either end of the waterway. Sluggish growth or even falls in international trade, particularly on the main Asia-Europe container trades that drive so much of the waterway’s earnings, has meant that the Suez Canal Authority’s predictions of a traffic boom along the route has failed to materialise. Market analysts were already saying that the SCA’s predictions of US$13 billion annual toll revenue by 2025 were wildly unlikely within a month of the Canal’s opening, and by the end of 2015 annual revenues were not only failing to meet expectations, but for a great part of the year fell year-on-year. Eventually, 2015 traffic was up by only 2%. By December, a month after local banks were reported to be considering a further $300 million loan to cover the Canal’s running costs on top of the $1 billion it had already received, the Bank of Alexandria was touting the time (down to 11 hours from 18) and cost savings (between five and 10%) of the new transit. By the spring of this year, the SCA was angrily denying that shippers were taking advantage of low bunker prices to head instead via the Cape of Good Hope, avoiding transit fees, and pointing to stronger year-on-year increases in vessel transits and tonnage than those seen in 2015. The SCA has issued two sets of temporary toll discounts this year for container ships bound from the US East Coast to Asian ports, and in June SCA chairman Mohab Mameesh said that first quarter revenues had edged marginally

up on the year before, reaching $1.239 billion, a rise of $3 million on Q1 2015. Given the slower start and the continued turmoil in global trade and the oil markets through 2016, it should come as no surprise that Egypt’s bunker sector has been unsettled. The country unveiled its ‘Suez Canal Axis Plan’ last year, designed to boost the maritime fuel sector and energy industry, particularly through the SUMED pipelines in the Gulf of Suez and new LNG and bunker facilities in Ain Sokhna. The Egyptian General Petroleum Corporation, which controls IFO and MGO supply in the country, was also reported by Platts last autumn to be considering opening up the market in a bid to lift the sector. The plan was followed up in February this year with a consortium made up of the European Bank for Reconstruction and Development, the International Finance Corporation, and the Commercial International Bank of Egypt handing Sonker Bunkering Company a $341 million development loan to upgrade the country’s oil and gas infrastructure by adding floating regasification and storage units to Ain Sokhna.

The port is due to have a new harbour come the end of the year through a joint development between Sonker and DP World and Egyptian interests that will, among other things, see better bunkering facilities. Sonker MD Ossama Al Sharif said: “Foreseeing the growing local demand for energy, the Egyptian authorities, supported us in developing this first bulk-liquids terminal on the Red Sea, as a successful public-private partnership project.” “The Sonker Project will ensure a constant supply of energy to our burgeoning economy and will certainly transform the Red Sea area into a regional hub for trading petroleum products, not only for the Egyptian market, but also for East Africa and Europe.” World Bunkering approached Sonker regarding the development and the wider implications for Egypt’s bunker market, but the company declined to comment.

The expansion of the Suez Canal has not yet had the impact Egypt hoped. Suez ©JG Morard

Mashreq Petroleum has been trying to negotiate its way out of a new bunker concession in Port said ©JG Morard

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Again, this magazine reached out to Qalaa to try to find out how negotiations had proceeded and what the current state of the development was, but again the company did not comment. If one side of the Arabian Peninsula has been dominated by the travails of Suez and its tentative growth, the other has been dominated by the reemergence of another producer state as a major economic force: Iran, and the ending of sanctions at the start of this year. The return of Iran as a legitimate force in the region (sanctions-busting illicit cargoes have been available since the door originally closed) has had a huge impact on the bunker and wider energy industry. Fujairah, for instance, has seen improvements in overall bunker fuel quality as Iranian-produced fuel tends to be straight run and hence low in cat fines.

Equally, the country’s two billion barrels per day in oil exports has been one of the factors responsible for plummeting oil prices and heavy oversupply this year, driving down bunker prices and hitting traders’ margins as a result. With OPEC unable to settle on a production freeze or similar measure to stabilise markets, and with oil prices further knocked by the Brexit referendum in June, it’s not been an easy year so far for the Gulf states. This hasn’t stopped some traders acting fast to reestablish links with an Iranian market left untapped thanks to the sanctions that have kept the country’s energy sector off-limits. In May this year, Italy’s Fratelli Cosulich announced it was in talks with IRISL to develop a bunker alliance serving ships calling at Bandar Abbas similar to an existing arrangement the company has in Singapore. World Bunkering spoke to Fratelli Cosuluch CEO Timothy Cosulich to find out more.

WB: What is it that makes Iran an attractive market to move into? Its location, the opening of the market following the end of sanctions? TC: Iran has historically been an important market for Fratelli Cosulich. Before the sanctions were imposed on Iran, Bandar Abbas used to be our main supply port (as a trader) and we used to be the ship agent for IRISL in Italy.

As we all know, sanctions made it impossible for us, and many others, to continue to do business with Iranian parties and we therefore had to stop all these profitable and legitimate activities. In view of the lifting of the sanctions, I started travelling to Tehran approximately one year ago with the goal of re-establishing the relationship we had with IRISL and with the hope of being able to develop such relationship further. Our discussions were very constructive and useful from the start and we have recently reached an agreement to set up an important physical supply location in Bandar Abbas, together with a third partner which – for the moment – I cannot yet disclose. Iran is a very interesting market, with a large, young and educated population and a good work ethic, which for us is a key factor being a family business that puts service quality and reputation at the top of our priorities. I cannot say Iran is an easy market to do business in, but I am not aware of many easy markets out there…!

WB: How soon would you hope the joint venture to go into operation if talks go well? TC: My personal goal is to be able to start supplying sometimes between Q3 and Q4 of this year. Having said that, setting up a reliable physical supply operation is a complex task which we want to do well. I want to make sure we are able to offer our clients the same service quality that we offer throughout our network of offices.

WB: Will the venture supply only IRISL’s own vessels, or will it offer bunker supply to any customer calling at Bandar Abbas? TC: IRISL vessels will certainly be amongst our clients but our vision is for Bandar Abbas to become a key port in the region, able to attract significant volumes thanks to the quality of the product as well as the quality of service.

Fujairah has so far weathered the year’s upheavals reasonably well. ©Michael Gaylard

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Cosulich’s view of Iran as an “interesting” market is one shared, one way or another, by plenty in the industry. With its energy industry under economic sanction, Iran was forced to diversify and its economy is less dependent on

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The development is of particular interest because an expansion at Port Said first announced in 2007 and already long-delayed is reported to be under threat. Mashreq Petroleum, part of sprawling Egyptian conglomerate Qalaa Holdings, announced to the Egyptian stock exchange late in 2015 that it was negotiating with the General Authority of the Suez Canal Economic Zone to terminate its contract to build, operate and transfer a storage and bunker facility in East Port Said. Building work started in 2013.

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oil exports than many of its neighbours. he IMF’s Aasim Husain said as much at a conference in London this summer, although Amir Mehran, head of foreign assets and investment management for Iran’s Bank Pasargad sounded a note of caution: the country doesn’t yet have the contacts needed to fully capitalise on its return to the international fold, with many of the major global banks still refusing to take Iranian business. The International Energy Agency, meanwhile, said this summer that Iran still needed billions of dollars of investment to overhaul its production plants. Nevertheless Iran is certainly less exposed to current oil price weakness, exposure that has seen Saudi Arabia refuse to cut production despite plummeting values, in fact quite the opposite as it bids to retain market share at all costs against shale exports from the US. Saudi’s difficulties saw its oil minister for two decades, Ali bin Ibrahim al-Naimi, ousted by royal decree in May in favour of Saudi Aramco chairman Khalid al-Falih, and the kingdom hardening its position within the cartel under deputy crown prince Mohammed bin Salman. The country reportedly needs oil prices to hit $66.70 a barrel to break even, with Iran lower at $61.50, and the more exposed smaller members of OPEC requiring prices over the $100 mark. As well as feeding the main regional hub at Fujairah, Iran is also ramping up its domestic bunker offerings. This summer saw plans announced for Khalij Fars Oil Port to take on much more of the bunkering activity in the Strait of Hormuz and serve much larger vessels. The port’s storage capacity is to be massively increased from 300,000 tonnes to 1.8 million tonnes following a reported $260 million investment from 27 private companies. At a June visit to the port, Mohammad Saeednejad, managing director of Iran’s Ports and Maritime Organisation, said: “Turning Khalij Fars port into an energy and fuel hub in the Persian Gulf marks a major policy pursued by Iran’s PMO.

will replace the current 7,000 tonnes ships in the port. Given the private sector investment and bank support, storage tanks, transmission pipelines, fire extinguishing facilities as well as mooring docks are being constructed.” Plans for a new oil terminal on Qeshm Island are also going ahead, according to stories appearing in Russian media this summer. Iranian and Chinese companies are due to start work on the first phase of the $550 million project following an official decree. The eventual 30 million barrel storage terminal for light, heavy and ultra-heavy crude fractions from the West Karoun fields is also reported by various sources to include major bunkering operations, possibly up to 700,000 tonnes per year. Observers do say, however, that until Iran’s domestic production reaches full capacity, the new terminal may not have as much impact on bunkering in the Strait as it could. Not to be outdone, IRISL and Iranian Offshore Oil Co have signed a preliminary agreement with Hyundai Mipo for $2.4 billion in new ships, although as of the time of writing financing hasn’t been secured. The exact makeup of the new orderbook hasn’t been revealed, but is thought to be a mixture of different types as both companies attempt to overhaul their ageing fleets. The region’s traditional bunkering centres haven’t been standing still either, of course. Qatar’s long-standing interest in promoting LNG as a fuel saw Qatargas, United Arab Shipping Company and Shell

sign an MOU in the spring to explore the development of LNG bunkering in the Middle East. The partners will explore the development of new markets for LNG bunkering and the conversion of UASC’s newest generation of box vessels to LNG/dual-fuel, something they were designed for with DNV GL’s GAS READY notation, with gas supplied by Qatargas 4, a joint venture between Qatar Petroleum and Shell Gas. Qatargas chairman Saad Sherida Al-Kaabi said: “This agreement between Qatargas, Shell and United Arab Shipping Company demonstrates our commitment to building LNG-fuelled vessels and the supply system to support it. Further to our commitment to pioneering new LNG applications and in preparation to fulfilling any upcoming regulatory requirements, we believe that this direction by Qatargas and its industry partners is the right path to support a cleaner environment.” UASC CEO Jorn Hinge added: “We have seen an increased demand on green shipping from our customers in recent years and a focus on how the eco-efficient technologies on our new vessels can help them achieve their own sustainability strategy. Stricter environmental regulations are also expected, something we are well prepared for. Many organisations have already included stricter requirements in their tenders and evaluation criteria, meaning only those carriers with optimum environmental credentials will qualify or be shortlisted.” And lastly Michiel Kool, MD and chairman

Iran is hoping that the end of sanctions may allow it to take a significant portion of bunker trade in the Strait of Hormuz. ©Michael Gaylard

Ships with a capacity of 50,000 tonnes

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Fujairah’s bunker operators traditionally don’t reveal their volume sales in such a tightly competitive market, but probably the most reliable indicator of the general state of the market post-Iranian resurgence at the time of writing comes from the most recent Aegean Marine Petroleum Network Inc earnings call in May. Aegean president E. Nikolas Tavlarios said: “In our Fujairah oil terminal, our storage facility continues to operate at strong efficiency levels and is now performing at 100% capacity. The bunkering market in Fujairah faces headwinds due to low prices, driven primarily by the supply of Iranian oil and strong competition in the market. However, the market remains an

important part of our global supply network.” The oversupply of Iranian oil was “a dynamic that has played out since, say, the early part of the year,” he said. “I think the changes in sanctions — the US sanctions potentially coming out in July… could stabilize that set of circumstances.

Iranian production to peak earlier than previously expected, and the Iranian government has asserted at times that it might support a freeze at around its existing levels, with past customers taking longer to return to the fold and oversupply across the region making it harder to secure orders.

But that has definitely had an adverse effect on some of that region.” “We maintain that the fundamentals that caused the oil price to fall more than $60 per barrel are still very much in play, and we expect prices to remain low and volatile in the near term. In regards to the marine fuel environments for 2016, we see market conditions improving slightly as incremental demand growth outpaces incremental supply growth throughout the second half of the year.” “Oil prices have risen recently, but we expect ongoing volatility to continue to affect the industry, and persistent oversupply to continue to pressure crude oil price in the medium-term.”

What the exact knock-on effects of such a slowdown on the region’s fuels market might be is very hard to predict, particularly if there’s a further normalisation between Iran and the US. Early in the summer, predictions were that if oil prices hit $60, as some anticipated on the back of expected US demand, then average 380 cSt prices across the region would rise by around 20% to around $275 per tonne. That was before the further uncertainty in oil prices and the overall global economy following on from the Brexit vote in June, so whether the vaunted $60 mark is remotely achievable now (at the time of writing, WTI crude prices are just under $47) remains very much to be seen.

Aegean CFO Spyros Gianniotis added: “We are also cautious of the uncertain economic environment.” Some industry analysts are expecting

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of Qatar Shell Companies said: “Shell has been a pioneer in this area with our investments in LNG for transport infrastructure in Europe and the US, and we look forward to now deploying our expertise to create a regional hub in the Middle East in collaboration with two very strong global partners based in the region, Qatargas and United Arab Shipping Company.”

PAKISTAN

PAKISTAN STAYS UPBEAT One country whose largest bunker supplier remains bullish about the future is Pakistan

orld Bunkering caught up with Orion Bunkers director Adil Sher and marine bunker sales manager Zeeshan Arshad.

WB: What’s the current state of the bunker market in Karachi and Port Qasim? AS: Currently Pakistan is sailing smoothly after almost two years of very low volumes. Now we have supplied some good volumes of bunkers over the last few months in Port Karachi and Bin Qasim. Availability and price, along with excellent service, have enabled us to get the bunker world’s attention again. ZA: Karachi Port has been very busy and active for bunker services in the past year, as has Port Qasim. As the Fujairah bunker sector emerged with better services like massive bunker tankers with high pumping rate and availability of 380 cSt, this hurt the Karachi market. However, Orion has done SWOT analysis and improved our services by adding big barges to its fleet with high pumping rate, its own offshore storage tanks and own trucks to become the number one bunker supplier in Pakistan and to compete with offshore players as well.

WB: What are the main challenges facing the Pakistani fuel industry in the near future? Has Pakistan been affected by global oil price uncertainties and the re-emergence of Iran as a trading rival?

Although the global law and order situation is not very impressive anywhere, the ‘high alert’ label is still on us, but for the last four years things have been getting better and better here. Iran is not a threat as a trading rival because our bunker industry was never affected by Iran, only Fujairah. IFO 380 cSt is not available in Pakistan and I think it’s a worry for us. ZA: Quality issues [in Pakistan] persisted for just a short span of time when some fishermen acting as suppliers came and vanished from market. As Orion was selling under the ISO 8217:2005 specs, we kept our high standards and that is why our customers never complained and stuck with us. AS: Some seasonal, unprofessional, unlawful elements try to enter this industry (these kinds of people are everywhere in the world) and they hurt the industry by offering extremely low prices which should not be accepted by anyone because oil can’t be sold on water or sludge levels. Anyway it was obvious that in these cases product quality and services were compromised, with the inevitable results. Orion Bunkers has, is and always will work for quality product with better service. Pre-bunkering lab reports, drip sampling during loading and post-bunker lab testing of our product is more than welcome.

WB: How has Orion’s business developed over the past year or so? What are your hopes for the coming months? AS: I became involved in the industry in 1999 and Orion Bunkers started its journey in 2004. We never look back but always try to go beyond our limits. Orion never breaks a promise with our friends (as I call our customers). Now our bunker barge fleet is the biggest in the country and we are the only bunker supplier to have our own tank lorry fleet as well. We have own offshore tanks and our availability is better than anyone else’s. Our focus on better than the best service enables us to keep trying for better and better. Now we are moving to our new port, Gwadar, and hopefully soon we will supply bunkers there as well. ZA: The China Pakistan Economic Corridor is going to be game changer for the entire region. Therefore I foresee massive investments in Pakistan’s energy and marine fuel industry in the near future. Moreover, Orion is on the mark and waiting for Gwadar port to be operational by the end of 2016. This will give us the chance to spread our wings there and aid our customers by offering bunker services with the best quality product and upgraded infrastructure, with more big barges for back-to-back supply, in the near future.

AS: Strategically, Pakistan is almost the centre of the world and very important for everyone, so yes price uncertainty affected us too but we came out of it quickly.

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ORION BUNKERS

ORION BUNKERS Orion Bunkers Limited has grown and captured 75% of Pakistan bunker industry

rion Bunkers Limited has grown and captured 75% of Pakistan bunker industry by giving excellent services with competitive prices. By following our business model, we kept improving services and became the only bunker supplier in Pakistan with largest barge fleet, off shore storage tanks and trucks. Moreover, Orion become the sister concern of Pakistan 3rd largest and growing OMC Hascol Petroleum Limited. On the other hand, rumors have been spread in the market of bad quality fuel and we deny such rumors as nothing affected Orion customers because we have been supplying quality fuel under the ISO 8217:2005 specs since 2004. However, there were active fishermenâ&#x20AC;&#x2122;s acting suppliers survived for short span of time have put bad impact of Karachi market by supplying off spec products

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and disappeared in couple of months. However, we are glad to say that our customers trust us, and still lifting good number of volumes which makes Orion to keep its monopoly and market share at the same time. Furthermore, we are pleased to announce that Gwadar Port (game changer) is going to be operational by end of 2016 and Orion would be the first supplier to get access of Gwadar after completing feasibility and necessary requirements. In addition, we are looking forward to step in in the new era of business and thankful to our customers for helping us to reach milestones and we also welcome new customers to join us and be part of Orion Bunkers Limited family.

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MPA Singapore

SINGAPORE EMBRACES LNG The confident Asian shipping and bunkering hub continues to grow even as some suppliers struggle

n July Singapore’s top port official gave firm backing to the development of LNG. Maritime and Port Authority of Singapore (MPA) CEO Andrew Tan announced: “As the world’s largest bunkering port with annual bunker sales showing positive growth, we are committed to provide a broad range of solutions to meet the energy needs of the global shipping industry, including the anticipated uptake of LNG as a marine fuel.” In an address at the Port of Yokohama LNG Bunkering Mini Seminar in Singapore Mr Tan sketched out the increasingly tough environmental regulations affecting shipping including the International Maritime Organization’s global sulphur in emissions cap of 0.50%, due to come into effect in 2020 or 2025. He then said: “Such developments necessarily drive demand for solutions to meet the requirements, of which LNG has been identified as a marine fuel of choice. The very characteristics of LNG lend itself to being a viable choice – it virtually eliminates sulphur emissions, with significant reductions in both NOx and CO2. Further to this, there is good track record of LNG being transported as cargo and used as fuel in LNG carriers. This gives confidence to the industry that LNG can be widely adopted as a marine fuel going forward.”

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However the MPA head did acknowledge the challenges that faced greater use of LNG at sea. “Nonetheless,” he said, “it is clear that the implementation of LNG as a marine fuel is not easy and will take some time. The dramatic collapse in oil prices in the past year has narrowed price differentials, relative to other low sulphur solutions. The shipping community has also demonstrated less enthusiasm in putting forth investments into building of LNG-fuelled vessels with the current weak economic conditions.” He said that the MPA and the shipping industry would “need to work together to tackle the chicken and egg dilemma that stands in the way of the development of LNG as a marine fuel”. According to Mr Tan, Singapore will launch its LNG bunkering pilot programme in 2017 and “continue to work hard towards making LNG bunkering a reality on a larger scale”. He stressed: “We recognise that it is important to work together with other global ports to drive this effort, for the shipping industry is one that is global. As such, we have reached out to key ports in both the East and the West, including the Port of Yokohama, to find ways to work towards driving the LNG bunkering agenda collaboratively.”

Mr Tan’s remarks came shortly after Keppel Corporation and Shell announced the setting up of a joint venture (JV) company to establish an LNG bunkering business in Singapore. A statement said that the 50-55 principal business activities will be to “supply LNG bunkering operations services in Singapore to ships and any other marine vessels in the Singapore port and other related services”. Singapore’s approach to LNG typifies the country’s confidence in remaining at the top the league in bunkering. “Positive growth” was a reference to the strong year-on-year performance of the Singapore bunker industry in 2015 when nearly 45.2 million tonnes of marine fuel were sold, compared to 42.4 tonnes in 2014. The upward trend has continued this year. MPA statistics show the top five bunker suppliers last year as being: Chemoil International, BP Singapore, Sentek Marine & Trading, Transocean Oil and ExxonMobil Asia Pacific. Chemoil took over the top position from BP which had led the field for 11 years. At 12th place was Searights Maritime Services, up from 14th the previous year. The company has being going through a difficult time. In November last year Cecil Cheong, its CEO and well-known figure within Singapore bunkering circles, died.

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Since then it appears to have been struggling financially. It denied filing for bankruptcy in May but in July one of its vessels, the Giselle, was arrested in pursuit of outstanding debts to a supplier of some S$15 million (US$11 million). It was reported that the 2009-built, 9,100 dwt vessel is worth about US$10 million and also that two other Searights vessels were under threat of arrest. Missing of course from the 2015 statistics was the number 11 player in 2014, OW Bunker, whose bankruptcy has caused major problems for suppliers and others in Singapore. In another development, Brightoil has announced that its Singapore subsidiary has decided to cancel a S$84 million order for 10 bunker tankers. The company has been quoted as saying the outlook for the marine bunkering business in Singapore is still very positive and that the company would still need six extra bunker barges to meet the future demand. However, “to optimize the existing fleet of five bunker barges operating in Singapore and consider better utilization of the company’s working capital, the management decided to be more conservative towards of the size of the fleet at this stage”.

Meanwhile the MPA has cracked down on two suppliers found breaching its regulations. In April it revoked the bunker craft operator licence of Seaquest Tanker Pte Ltd and the bunker supplier and bunker craft operator licences of Vermont UM Bunkering Pte Ltd, with effect from 26 and 27 April 2016 respectively. The two companies are no longer allowed to operate as bunker suppliers and bunker craft operators in the Port of Singapore. According to MPA, separate investigations into the two companies revealed discrepancies and wrongful declarations in the records kept on board their bunker tankers. There were also separate incidences of transfers of bunkers between bunker tankers that were conducted without MPA’s approval. In other enforcement action, reported by Straits Times, the country’s Police Coast Guard arrested four men after about 25 tonnes of marine gas oil (MGO) was found hidden in the tanks of a tug. The vessel was seized by the authorities for investigation. Police Coast Guard Commander Hsu Sin Yun said that the illegal transaction of MGO was a serious offence and strict action would be taken against offenders.

On the wider shipping scene, Singapore continues to strengthen its position as a global shipping hub. Even the sale of national carrier NOL to French-based CMA CGM has been viewed with equanimity. CGM CMA reassured the Singapore shipping community in a statement saying the company attaches significant importance to Singapore and the region for the deployment of its strategy in Asia. The combined entity would reinforce Singapore’s leadership in the maritime and shipping sector as the city-state seeks to increase maritime services and transportation volumes, including committing more volumes through Singapore. CMA CGM will also contribute to reinforce Singapore as a center of excellence in the field of maritime activities as the major carrier plans to use Singapore as a key hub in Asia. In this regard, CMA CGM plans to establish its regional head office in Singapore. “This consolidation of CMA CGM’s longstanding presence in Asia in Singapore aims at providing efficient and quality services to customers in the region,” it said. While the NOL sale was going on, however, a Singapore organisation was negotiating to take over a prestigious London-based body. Singapore Exchange (SGX) was exclusive discussions to buy London’s Baltic Exchange. The discussions were extended to 31 August.

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Ship emissions have been a controversial issue in Hong Kong several years as they are seen as a significant cause of the chronic air pollution in the Special Administrative Region. Hong Kong has taken a number of steps to reduce ship-sourced air pollution. To control emissions from local vessels, the government capped the sulphur content of locally supplied marine light diesel at 0.05% in April 2014. In addition, from July last year, ocean going vessels have been required to switch to fuel with sulphur content not exceeding 0.5% while at berth. The government has also collaborated with the authorities in the rest of the Pearl River Delta (PRD) to explore measures to reduce vessel emissions in the region. Now, Hong Kong looks set enforce China’s new emission control area (ECA) regulations in the Pearl River Delta (PRD) which are due to come into effect in 2019, according to the local press.

MISC cuts GHG emissions Malaysia’s largest ship operator, MISC Berhad (MISC) says it has avoided some 33,000 tonnes of carbon dioxide (CO2) emissions through application of technology. The Petronas subsidiary made the announcement in its 2015 Sustainability Report, published in June this year.

MISC’s President / Group Chief Executive Officer Yee Yang Chien said that sustainability remained an integral part of MISC’s operations, from the way business is conducted, to how employees are managed, environmental impact reduced and positive impact is created for local communities. The report says that MISC will continue to largely focus its efforts on energy efficiency measures as the primary method of reducing environmental impact. The company is expecting the delivery of five new Moss type LNG Carriers which are currently under construction at Hyundai Heavy Industries shipyard in Ulsan, South Korea. The five newbuilds will have “green” technologies and features designed for energy efficiency, emissions reduction, biodiversity management and end-of-life disposal. The ships are also designed to meet the requirement of emission control areas (ECAs) by burning low sulphur fuel of no more than 0.10% sulphur content. Installation of selective Catalytic Reduction systems will enable them to meet the IMO NOx Tier III emission requirement. In addition, the newbuild LNG Carriers are also able to operate in 100% gas burning mode during maneuvering and stop condition. MISC says that by installing the Mitsubishi Ultra Steam Turbine, energy use is cut 13% compared to the a conventional steam turbine.

The major shipowner will continue to largely focus its efforts on energy efficiency measures as the primary method of reducing environmental impact. It said: “This is because energy use and climate change is a significant material issue for our business in energy transportation and offshore solutions. Any steps taken towards becoming a more efficient user of energy will undeniably result in cost savings from lowered energy consumption as well as lowering our carbon footprint as a Group.” MISC’s Energy Efficiency Unit has been monitoring the ISAVEFUEL Software System on board all MISC-owned vessels “after the successful initiation of Phase II of the programme in 2014”. In 2015, ISAVEFUEL was improved to further refine data and reporting accuracy. The improvements included introducing revised fuel savings calculation methodologies with new baseline derived from five-year dock-to-dock data, incorporating the new LNG Charter Party Baseline into the system and setting new limits for Specific Fuel Oil Consumption (SFOC) for chemical vessels’ auxiliary engine. As well as incorporating energy saving features into its newbuildings MISC has refitted several of its existing fleet to improve fuel efficiency, with low friction anti-fouling paint on three LNG vessels and propeller boss cap fins on a total of six vessels.

Pertamina aims for up to 10% of Malacca Strait bunker market The head of Indonesia’s state oil company says a new subsidiary company will aim to capture up to 10% of the Malacca Strait bunker market. Pertamina’s president director, Dwi Soetjipto, has been quoted in the Indonesian press as saying new bunkering operation Pertamina International Downstream Services (PIDS) must be set up by September. The move goes hand in hand with the completion upgrades to Pertamina terminals at Sambu Island, Batam, and Tanjung Uban, Bintan in the Riau Islands. Pertamina’s marketing director, Ahmad Bambang, added that PIDS will become the operator of Pertamina’s Sambu Island and Tanjung Uban terminals.

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HK set to impose Chinese ECA

LNG

BIG NAMES BACK GAS New initiative aims to boost the shipping industry’s use of LNG

ver a dozen major shipping sector companies are behind a new cross-industry initiative, SEA/LNG, to accelerate the use of LNG as a marine fuel. The new body’s founding members are: Carnival Corporation & plc, DNV GL, ENGIE, ENN, GE, GTT, Lloyd’s Register, Mitsubishi Corporation, NYK Line, Port of Rotterdam, Qatargas, Shell, TOTE Inc. and Wärtsilä. It claims LNG offers significant environmental advantages over heavy fuel oil. LNG significantly reduces SOx, NOx and particulate emissions, and can also contribute to the reduction of CO2 emissions.

Explaining the coalition’s objective its chairman, Peter Keller, said: “We recognise the need to work closely with key players across the value chain, including shipping companies, classification societies, ports, major LNG suppliers, downstream companies, infrastructure providers and OEMs (original equipment manufacturers) to ensure an understanding of the environmental and performance benefits of LNG as a marine transport fuel. SEA/LNG aims to address market barriers and help transform the use of LNG as a marine fuel into a global reality.”

Tom Strang, senior vice president, Maritime Affairs, Carnival Corporation & plc said: “By working together proactively across the whole marine LNG value chain we can make the transition to a lower emission marine sector a reality. We are proud to share this aim and to align ourselves with other innovators in this field.”

LNG for dry bulkers

“This new cross-industry initiative is good news,” said Lauran Wetemans, Shell’s general manager downstream LNG. “To make the transition to LNG as a fuel happen it needs close collaboration with key players across the full value chain. SEA/LNG aims to promote the benefits and potential of LNG fuel, and create a level playing field for LNG with other fuels. It will complement the work being done by other organisations like the Society for Gas as a Marine Fuel.”

Project Forward is led by Athens-based Arista Shipping. It began officially in May 2015 with the aim of developing a commercially feasible LNG powered dry bulk carrier design capable of complying with the International Maritime Organization’s (IMO) Energy Efficiency Design Index 2025 standards, as well as with all relevant emission reduction regulations. In addition to Arista Shipping, the other parties involved in the project are Finnish ship designer Deltamarin, the Houston based classification society American Bureau of Shipping (ABS) and GTT, the French LNG membrane containment system designer.

“The ground work has been laid for LNG to thrive, but we need a cross-industry approach to realize the full potential of LNG fuelled shipping. Having been at the forefront of LNG fuelled shipping since its beginning, DNV GL is proud to work with innovative partners to help LNG take its place as a key fuel for the future,” said Tjerk-Johan de Vries, region manager West

Europe & Africa at DNV GL. However, while LNG is a competitive fuel relative to current alternatives, LNG infrastructure is needed in ports around the world to enable quick, safe and cost effective bunkering. In parallel, there remains a price premium for LNG-fuelled vessels which can make investment decisions challenging. Furthermore, regulation is not yet globally consistent, which constrains incentives for investment in the sector. SEA/LNG aims to address and help overcome these and other challenges. Philip Olivier, CEO of ENGIE Global LNG, commented: “Everybody is calling for alternatives to reduce environmental impacts. That’s why we have joined forces to actively promote LNG as a key fuel in maritime transport. LNG has the potential to take a 10% market share of global bunker demand by 2030. ENGIE will contribute to achieving this target.”

Leo Karistios, gas technology lead, Lloyd’s Register added: “LNG fuelled shipping has mainly been for the visionaries and, until now, concentrated in specialist ship sectors – short sea shipping and ferries, mainly sailing between two fixed ports. We want to help drive the expansion of LNG as a marine fuel of choice, with not just more short sea and local ships burning gas, but also the deep sea trades”.

Meanwhile in another, separate, initiative Wärtsilä is to team up with an international group of shipping industry companies and organisations in a project to develop a concept for equipping future dry bulk carrier vessels with LNG propulsion.

The Wärtsilä 31DF dual-fuel engine is likely to form the basis of the concept’s propulsion system. Introduced in June 2015, the Wärtsilä 31 has been recognised by Guinness World Records as being the world’s most efficient 4-stroke diesel engine. The DF version allows the use of either LNG or conventional marine fuel oils. While 2-stroke engines are the conventional choice for vessels of this type, the manufacturer claims the “supreme efficiency” of the Wärtsilä 31 engine makes it a competitive and viable alternative option.

World Bunkering AUTUMN 2016

TESTING DRAIN OILS Shell reports high demand for its lubricants analysis service as owners seek to reduce downtime

s of April this year, Shell Marine Products (SMP) had analysed over 50,000 cylinder drain oils samples through its Shell Rapid Lubricants Analysis (RLA) service. Shell RLA identifies potential oil or equipment issues before they become critical. Shell says that “many leading shipping companies” use Shell RLA as an important part of their planned maintenance regime to help to deliver greater equipment reliability and reduced downtime. According to the company, this service has grown rapidly in recent years with manufacturers including MDT and Wärtsilä recommending cylinder drain oil analysis for both new design engines and older models which have been economy tuned. Shell claims: “With the evolution of engine design and increased performance, and slow steaming practices being the norm, Shell Marine’s RLA Cylinder Check is a must for those who want to extend engine life and reduce operating costs.” SMP’s Global Technical Manager, Marcus Schaerer, says: “Ship operating profiles have changed due to various external complexities which have an impact on marine engines. Therefore, we worked with customers to identify the right maintenance strategies to optimise their operations and tailor our services around their requirements and needs.”

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The RLA service currently has over 1,200 customers, with more than 9,000 vessels. SMP receives over 200,000 oil samples every year, and analyses them in six ISO-accredited RLA marine laboratories across the globe. A dedicated team is made up of lubricants scientists and chief engineers who personally analyse the received samples.

Claudio Cocco, Technical Lead for Shell Lube Monitor says: “All findings are delivered in an easy to read report and include a complete engine overview, historical data from both onboard and laboratory; but most importantly, are the comments from the Shell Lube Monitor experts highlighting areas for concern or possible places for optimisation.”

Damir Blazina, who leads the RLA diagnosticians team explains: “The number of samples has been increasing year-on-year and we would expect to analyse somewhere around 18,000 cylinder drain oil samples in 2016 alone. With the advent of cold corrosion, the advice that the diagnostician team gives is more important than ever. In the last couple of years we have diagnosed and offered individually tailored advice for nearly 2,000 critical samples.”

Shell Lube Monitor is scheduled to roll out across Shell Marine Products’ global network in the 2nd half of 2016.

Dr Blazina adds: “Think about it, we have offered advice on how to help in more than 2000 instances. It is critical to get the right advice as corrosion or scuffing can destroy a cylinder liner very quickly.” Shell is set to introduce a new service later this year, Shell Lube Monitor. This will be a cylinder condition monitoring service that runs in tandem with the Shell RLA cylinder check. RLA data and data generated onboard from Shell’s Onboard Alert iron analyser and Shell’s Onboard Plus BN test kit will be evaluated to ensure Shell Lube Monitor customers get the right advice to strike the best balance between cost reduction and reliability.

RUSSIAN UPDATE

DOWNBEAT MOOD AT BUNKER FORUM A round-up of the latest developments on the Russian bunkering scene by Olga Bogacheva

ptimism was in short supply at forum held in June in St Petersburg on The Current State and Prospects for the Development of Russian Bunker Services Market – 2016 . Players in the Russian bunker market gather annually in St Petersburg to discuss the problems in the industry, exchange opinions about current events and to look to the future. This year spirits were not high. For the first time in its history the market contracted significantly, by 12.5%. Vitaliy Kovalev, President of the Russian Association of Marine and River Bunker Suppliers, considered the past year the hardest for bunkering businesses ever. Negative trends were strengthening, he emphasised. Several well respected independent companies previously thought to be successful had ceased operating in recent months. Several firms had suspended operations until the market improved. Total bunker fuel sales in 2015 in Russia were down 13% year-on-year to 14.79 million tonnes, or only 3.5% of the world market. All Russian regions saw sales dip: North-West of Russia by 4.15 million tonnes (-13%), Russian Far East by 6.7 million tones (-17%), Southern Russia by 3.4 million tons (-1%) and inland waters by 680 thousand tonnes (-13.5%).

Reflecting the introduction of the 0.10% sulphur limit in the Baltic Emission Control Area at the start of 2015, the composition of sales in the Baltic Sea has changed. Until recently 90% of all fuel sold was heavy fuel oil (HFO) and only 10% distillate. Now HFO comprises 55% of the market, while marine gas oil (MGO) accounted for 30%, and new products with ultra-low sulphur content accounted for 15%. St Petersburg port, the largest in North-West of Russia, has lost 17% of its bunkering market in the past year. This was due to reduced container and Ro-Ro traffic, which had previously been at high level, partly due strong demand for high tech goods. In addition the price difference between Rotterdam and Saint Petersburg dropped from 36% to 21%, obviously hitting St Petersburg bunkering services’ competitive position. The Far Eastern region, which had been growing rapidly, suffered a sharp drop bunker sales in 2015 and first half of 2016. Vladivostok port sales were down by a third in January to April this year compared to the same period in 2015. The sales crash in the Far East was partly caused by the general economic situation but also by enforcement action by the Russian customs authorities. Attractive prices always had always been the Russian ports’ main competitive advantage.

However, the price difference with competing bunker ports has reduced significantly recently. In fact, in December distillate prices were actually higher than in Singapore by US$50 to $60 a tonne. The governmental efforts to suppress illegal oil export, misdeclared as bunkers, has finally succeeded. Now custom bodies calculate the amount of fuel necessary for a vessel’s voyage and impose duties on additional quantities of fuel. This has badly hit the bunkers-only business which had previously brought in significant revenues. The Azov and Black Sea ports were less affected by the world market trends. The difference between prices in Novorossiysk, Piraeus and Istanbul remained significant enough to keep the drop in sales to only 1%.

Artificial island for transshipment berths St Petersburg-based Baltic Fuel Company (BFC) and Rosmorrechflot have agreed to develop a part of the city’s Turuhtannye Islands Terminal site. A BFC statement said the agreement covered the construction of an artificial land plot with the Federal Agency of Sea and River Transport (Rosmorrechflot). Kontur LLC is acting on behalf of BFC.

World Bunkering AUTUMN 2016

Rosneft’s first LNG shipment

The project is a part of a larger oil terminal project within St Petersburg port. Currently it is a 7.3 hectares terminal with two berths used for transshipment of oil products. In 2017 the terminal’s annual turnover will rise to 2.4 million tonnes, and is expected to increase further 4 or 5 million tonnes by 2020.

Rosneft launches new marine fuels

New LUKOIL Austrian river terminal LUKOIL says it has launched a new river terminal for transshipment and storage of motor oils in Vienna (Austria), LUKOIL media service reported. The project on Danube bank, which includes construction of a tank farm and berthing complex, is the second stage of Austrian LUKOIL Lubricants Europe’s modernisation plan. The company was acquired by LUKOIL in 2014.

Rosneft subsidiary Rosneft Trading delivered its first shipment of LNG to Egyptian Natural Gas Holding Company. The Golar Ice discharged her LNG cargo at Ain Sukhna port under the terms of a contract signed in August 2015.

Komsomolsky oil refinery, a subsidiary of Rosneft in Komsomolsk-na-Amure, Far East, has started production of DMF marine fuels type I with sulphur content of up to 0.1%. The fuel conforms with international standards and may be used in emission control areas (ECAs). The company also produces RMG 380 and RMG-700 marine fuels at Rosneft Saratov Refinery. The main purchasers of these products are large modern vessels equipped with low or medium revolution power units. The move is in line with Rosneft’s long-term program for the development and production of modern marine fuels.

LNG-powered ferries for St-Luga-Baltiysk route

“The opening of the Terminal in Vienna will optimize deliveries of basic motor oils from Russia and enhance the competitiveness of finished products in Europe,” a LUKOIL spokesperson said.

Three LNG-powered ferries are planned to be built for the St-Luga-Baltiysk route, Port News press agency reported, quoting Andre Bag no, the Director-General of rail-ferry operator BFI.

New oil spill response vessel for Ust-Luga

The company expects the ferries to be built by 2018. The total investment in their construction is 12.6 billion rubles.

Ust-Luga oil terminal has taken delivery of a new oil spill response vessel, built by Damen Shipyards Gorinchem, Netherlands. The craft will deploy booms during loading of tankers at berths owned by LLC Ust-Luga Oil and LLC Nevsky Pipeline Company. Damen’s Stan Tug 1606 Ice is 16.8 metres long and intended for operating in ice conditions. Ust-Luga Oil owns and operates the transshipment terminal in Ust-Luga port. The complex is the largest terminal in Russia engaged in transshipment of oil products from rail to ships. The potential annual capacity of the terminal is 30 million tonnes. Its tank farm is designed for storing of 960,000 cubic metres of liquid cargo.

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The Ministry of Finance of Russia is expected to allocate 5.1 billion rubles as subsidy for the construction of the vessels. The remainder of the 7.5 billion rubles is expected to be covered by a leasing scheme.

The ferries will be built at Russian shipyards. Preliminary negotiations with United Shipbuilding Corporation (USC) have taken place. Negotiations are also underway with Gazpromneft Marine Bunker to establish the necessary infrastructure for LNG bunkering. Building of specialised bunker tankers will be necessary. The single-deck ferries will have a capacity of 66 conventional cars, conform with ice class regulations, and have have a service speed of up to 21 knots.

Bronka port began passenger service Finnlines’ ferry Finnstar, sailed from Helsinki to Bronka on 30 May in the inaugural service to use the new multipurpose maritime transshipment complex, Bronka MMTC, St Petersburg. Bronka management strives to expand regular passenger services between St Petersburg, Helsinki and German Baltic ports, where Finnlines maintains scheduled routes. Feedback from the first trip was positive. The authorities enabled a swift disembarkation of the 28 passengers.

Gazpromneft Marine Bunker supplies first stem at Bronka Gasprom Neft subsidiary Gazpromneft Marine Bunker carried out its first bunkering operation at the refuelling berth in Bronka port in June. Previously bunkering operations at Bronka port only took place at anchor in the roads. Finnstar, a 9,653 deadweight tonne cargo and passenger ferry, was the first vessel to be served at the berth. The ship is operated by Finnlines Plc and performs regular services between Travemünde (Germany) and Helsinki (Finland). The ferry accepted 750 tonnes of heavy fuel and 80 tonnes of diesel fuel.

RUSSIAN UPDATE

The contract for the construction of the artificial island site, with an area of 1.43 hectares, specifies completion within 30 months. BFC undertook to release the project working documentation, to dredge the area and replace soil and to build man-made ground.

RUSSIAN UPDATE

VNV IS A KEY GLOBAL BUNKERING AREA Nayada Co is a large independent company based in Russia’s Far East that joined the Russian Association of Marine and River Bunkering Suppliers in June this year

ayada’s first deputy director Leonid Bogaevsky presents his business and his region to Olga Bogacheva.

OB: The Far East is a huge region with a very long coast. What are the special features of the bunker market of this region? Is it really a linked-up region or does each port have its own special characteristics? LB: The ports of Vladivostok, Nakhodka and Vostochny ports account for most of the region’s bunker sales. They are collectively referred to by the industry as VNV. Our ‘fuel triangle’ is fully integrated into the global bunker market and in this sense doesn’t differ much from any other place.

the coastal storage tank farms. Deliveries to the storage tanks takes approximately three days if everything goes according to schedule, without accidents, jams, or natural disasters. Weather is severe in our region, snowstorms sometimes stop railway services. Under these circumstances, delays in fuel supplies sometimes occur and we suffer from temporary shortage of cargoes. Alternative fuel producers are located even further away, to the west of the Lake Baikal in Siberia.

Logistics is the common problem of all eastern and north-eastern territories of Russia . All fuel to these places, Sakhalin, Kamchatka, Chukotka, is delivered by tankers from coastal oil depots at Primorsky Kray. For example, oil is produced at the Sakhalin shelf. You would suppose that there should be abundance of oil products of any kind and quality. But it is not true. Fuel is actually produced at the two Far Eastern oil refineries mentioned above and arrives to Sakhalin only through bases of the Primorsky Kray.

But, of course, the Far East has its peculiarities because of its geographical position and size. Firstly there is the logistical issue of obtaining our supplies of bunker fuel. Most petroleum products are delivered by railway. There are two large refineries in the area, NNK’s Khabarovsky and Rosneft’s Komsomolsky, located respectively in Khabarovsk and Komsomolsk-on-Amur. Both are situated approximately 1,000 km from

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The Vladivostok free port project, with adjacent zones of prioritised economic development, inspire optimism and generate great hopes for the rapid development of the region, especially in the industries related to transport.

OB: What is happening today? Are there changes for the better? LB: It is no secret that in every region the authorities interpret laws to their convenience. Sometimes that costs businesses a lot. The investor is turned off by such pressure because ambiguity in our laws and overall instability creates too many risks. Bunkering companies are not yet showing any interest in participation in the free port project.

One thing can be said for sure. The Far East’s potential is vast. If development programmes are implemented step by step the bunkering industry would boom. Nayada Co. Ltd was established in 1998. It provides bunkering services in ports of the Primorsky Kray: Nakhodka, Vostochny, Kozmino, Vladivostok, Slavyanka, Zarubino, Posyet, Korsakov, Vanino, Bolshoy Kamen, Preobrazheniye, Olga, Rudnaya Pristan. Nayada also provides oil transportation services across all Far East and South-East Asia. The company’s fleet consists of seven tankers and two tugs.

OB: There has been a HFO shortage in the Far Eastern market for several months already according to the news agencies. Why is that? LB: However paradoxical it sounds, the key reason is the increase of oil prices in the domestic market, which prompts refineries to cut production. Of course, we are speaking about prices nominated in rubles. The same situation occurred with HFO. Its price in rubles is not falling, it’s rising. Reduced oil processing leads to reduced HFO output for bunkering. As to Siberian refineries it is more profitable for them to export their products through the Baltic and Black seas. Modernization of refineries also has an effect. Previously oil cracking in Khabarovsk was about 50%. Now it has reached 75%. As a result HFO output dropped by 25%.

OB: And how do you see the future? LB: The VNV bunker market depends on the global situation. There are many signs that it will improve. When the European demand stabilises oil prices will go down and refineries will again turn to the Far East. I believe the amount of bunkers delivered to Far East will be 350,000 to 400,00 tonnes a month this year. Nayada’s first deputy director, Leonid Bogaevsky ©Nayada

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RUSSIAN UPDATE

For example, Nayda owns the tanker Zaliv America which is time chartered by RN-Bunker. The latter company uses it to deliver oil from from Nakhodka oil depots to Sakhalin shelf platforms. There is another unique characteristic of our bunkering ports. Together all the coastal terminals of the Primorsky Kray are unable to process more than 20,000 tonnes of petroleum products daily, which is 600,000 tonnes monthly. In 2014 monthly sales in the VNV ports sometimes exceeded 900,000 tonnes, which made our bunker triangle one of the largest bunker markets in the world. In that period we could bring resources by tankers from the Black Sea to meet the demand. The situation justified such arrangements.

INNOVATION

AMBITIOUS DESIGNS Two radical vessels concepts were presented at a recent seminar in the Netherlands

n the Summer issue of World Bunkering we featured Flettner rotors which have been fitted on a commercial vessel and are significantly reducing fuel consumption now. There are though much more ambitious plans in the pipeline. The Natural Propulsion Seminar, held in May as part of Blue Week, at the Maritime Research Institute of the Netherlands (MARIN) at Wageningen, looked at the challenges and innovative solutions for offshore wind and ‘blue technology’ at sea. Among the presentations were outlines of two radical projects. The Peace Boat Ecoship‘s propulsion features comprised a combination of wind energy, anti-drag elements and cleaner fuels. “The Ecoship’s propulsion system will combine some of the most forwardlooking elements that the industry has developed and, without any doubt, break new ground in how natural propulsion is perceived in cruising,” said Ecoship Project Director Andrés Molina. Peace Boat Ecoship Project was described as a “transformational programme to construct the planet’s most sustainable cruise ship, an ocean-going 55,000 GT vessel with a passenger capacity of 2000. Inspired by nature in its design and technology, its eco-features combine radical energy efficiency and a boundary-defying use of renewable technology”.

The design of the Ecoship has been developed by a team of over 30 engineers, scientists and thinkers from the fields of ship-building and “cuttingedge eco-technology”. It was claimed that that, cumulatively, it would achieve 20% cuts in propulsion energy, 50% cuts in electricity load and a 40% reduction in CO2 emissions in comparison with similar ships built before 2000. Ecoship will be fitted with its 10 retractable and photovoltaic sails that are expected to push the vessel with an average of 10% of the propulsion power at a speed of 17kN and with a wind speed of 40kN with winds from 20 degrees off the bow to the same angle off the stern. Wind energy will be harnessed as well though its 10, also retractable, wind turbines that will deliver 300kW with a wind speed of about 12 metres per second. This energy will be mainly used when alongside, to minimise carbon emissions in the ports of call. The brainchild of Peace Boat, a Japan-based NGO that has been running educational voyages for peace and sustainability since 1983, the Ecoship will also embody sustainability efforts through its activities. It will sail for Peace Boat’s around the world educational voyages carrying 6000 people per year; host exhibitions of green technology in up to 1000 ports annually; and serve as a floating sustainability laboratory able to contribute to research on the ocean, climate and green marine tech.

“Peace Boat’s 2020 launch of the Ecoship offers a vision for a climate-friendly future and can lead the way towards a green cruising model that can also impact the wider shipping industry. The industry must adapt to the planet’s needs.” claimed Peace Boat’s Founder and Director Yoshioka Tatsuya. Meanwhile the designs for a “multi access zero emissions cargo ship” were also unveiled at the seminar. The Fair Winds Trading Company (FWTC) said it was in the research and design stage for this state of the art zero-emissions, low impact sail cargo ship capable of transporting from remote low infrastructure points of production, such as very small ports, estuaries and beaches, to points of purchase. Its designs are based on the ancient prao, a multi hull cargo sailing ship of the South Pacific. The company plans to initially transport goods between their sustainable development project in West Africa and Argyll, Scotland. Their long-term vision is to assist Small Island Developing States (SIDS), and coastal communities in the least developed countries in acquiring their own ships and establishing their own trade routes. “Our aim is, not only to achieve a zero negative impact method of sea transport, but also to demonstrate to commercial shipping and the market that this is not only do-able but desirable.” said Madadh MacLaine, founder and CEO of Fair Winds Trading Company. World Bunkering AUTUMN 2016

Caterpillar Marine claims its new hybrid thruster concept offers “dramatic savings in cost of ownership for offshore operators”. Caterpillar Marine recently delivered the first Cat Marine Hybrid Thruster system. The first system was being delivered to an undisclosed ship yard in Singapore. The new propulsion set-up is said to outperform diesel mechanical systems in all partial load conditions, and offers improved fuel economy and substantial through-life savings for a variety of offshore support vessels (OSV).

For vessels spending a high amount of time in standby or DP service, the annual fuel savings can be as high as 35% calculated across the entire operating profile of the vessel. The performance achievements are the result of Caterpillar’s holistic approach to optimizing vessel operations and reduced total cost of ownership for owners. Typically, the Cat Marine Hybrid Thruster system could be used to downsize a vessel’s main engine so that engine load is optimized, while also allowing the vessel to switch to diesel electric mode for low DP operations or in standby.

A standard 7,000 hp standby support vessel featuring conventional powering would require 2x MaK 8 M 25 C main engines at 2,666kW at 750rpm and a pair of cat C18 gensets. With the new Cat hybrid thruster system the same vessel could instead use smaller 6 M 25 C main engines at 2000kW @ 750, and two booster motors mounted on the back of the Cat MTA 730 CP azimuth thrusters powered by twin Cat C32 generator sets. The booster motors and drives are controlled directly from the Caterpillar MPC 800A control system which also performs all mode selections, interfaces with the vessel’s PMS and provides a single point interface for the operator. Caterpillar Marine says that the Cat Marine Hybrid Thruster represents a significant new market contender, either for retrofit or installation at newbuild stage. In transit operations and in diesel-mechanical mode, the smaller engines run at higher loads, consuming less fuel. In low-speed transit, either one or two gensets can power the main azimuth thruster in diesel-electric mode giving typical fuel savings of 10 to 15 % at speeds in the 7-9 kN range, depending on hull profile. However, the biggest savings are made during standby and DP operations where the vessel would operate in diesel electric mode with the main azimuth propellers running in the most efficient variable speed mode. Commenting on the development, Jonas Granath, Manager Electrical Design, Caterpillar Marine Solution Center said: “The efficiency gains are remarkable. Of course, they differ from ship to ship depending on the ship service and OSVs come in a wide range of types and sizes. Typically, though, OSVs with DP capability spend a considerable amount of time in standby or in various levels of DP. With this new system, they will be able to use the diesel electric mode and run off the smaller gensets with the propellers operating economically at a very low rpm. It is in exactly these conditions where our new Marine Hybrid Thruster system offers the greatest benefits.” “We see significant market potential for the new set-up on board both existing and new ships to meet the increasing need for operational efficiency and reduced operating costs,” Jonas Nyberg, Regional Sales Manager South East Asia added.

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INNOVATION

Hybrid thruster concept for offshore vessels

COATING

COATINGS MATTER The new antifouling coating standard, ISO 19030, is nearing publication, promising the shipping industry as much as US$30 billion in annual fuel cost savings

t’s taken 12,000 hours of development work, involving 53 expert stakeholders, across more than three years, but ISO19030 is finally nearing publication, in a move that has the potential to save the shipping industry as much as U$30 billion in annual fuel costs, according to coatings manufacturer Jotun. The Norwegian-based company says it has adapted its Hull Performance Solutions (HPS) guarantee to ensure it is fully ISO/DIS-19030-2 compliant. The standard, which prescribes practical methods for measuring changes in ship-specific hull and propeller performance, has now been approved by the ISO’s Draft International Standard (DIS) ballot, with 93% of country representatives voting in its favour. This resounding approval rate paves the way for final publication, with ISO19030 expected to be publicly available at the end of Q3 2016. Geir Axel Oftedahl, Jotun’s Business Development Director, Hull Performance Solutions, managed the project on behalf of the International Organization for Standardization (ISO) and is clear about its importance. “Poor hull and propeller performance is estimated to account for around 10 % of the world fleet’s energy costs (US$30 billion),” he notes. “There are very effective solutions for improving performance but, until now, no globally recognised and standardised way for measuring this and

providing return on investment for ship owners. ISO19030 satisfies that demand, prescribing measurement methodology and defining performance indicators for hull and propeller maintenance, repair and retrofit activities. “We believe this will provide much needed transparency for both buyers and sellers of fuel saving technologies and solutions, and, in doing so, enable the industry to operate with genuinely enhanced efficiency and environmental performance.” Since 2013 Oftedahl has managed a project involving 53 experts in an ISO working group convened by Svend Søyland of Nordic Energy Research in a bid to develop a standard that is comprehensive, accurate and workable worldwide. This wide-ranging group encompasses ship owners, ship builders, class societies, paint manufacturers, performance monitoring companies and research institutions. With the standard now on the cusp of final approval, Jotun says it is moving to ensure that the HPS offering is fully compliant. “The standard gives customers peace of mind and we’re acknowledging that by refining our HPS High Performance guarantee,” Oftedahl comments. HPS is Jotun’s market leading solution combining SeaQuantum X200 silyl methacrylate antifouling coating technology with a full suite of sensors to measure hull performance and speed loss.

“Previously we used our own methodology as the basis for the guarantee, promising to refund customers the cost of the HPS upgrade if their vessel hulls failed to meet performance targets,” Oftedahl explains. “However, now that a universal standard is so close to publication, we will use it as the foundation for the guarantee, effectively leading the industry with the first ISO/DIS19030 compliant performance promise.” Jotun says that HPS, which was launched onto the market in 2011, has proved its efficacy in delivering long-term efficiency and performance gains. In March the company released data for its the first ever five year dry-docking of a vessel treated with the solution, Gearbulk’s Penguin Arrow, showing that it recorded a fuel saving of US$1.5million, cutting CO2 emissions by some 12,055 tonnes, across the 60-month period.

EU funding for coating project The EU is funding a project development group including US-based chemical company PPG, MACtac, Meyer Werft/ ND Coatings, VertiDrive and Hamburg Ship Model Basin HSVA working together to establish an automatic application process for a PPG Sigmaglide self-adhesive/fouling release film to be used on commercial sea-going vessels.

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PPG Product Manager Christophe Cheikh says: “The eSHaRk (eco-friendly Ship Hull film system with fouling Release and fuel saving properties) project aims to bring to the market a fouling protection technology which not only maintains the current state-of-the-art fouling protection standards but is superior to existing paint-based solutions in terms of eco friendliness, easiness of application, robustness and drag reduction effects, all of which will lead to fuel savings and the reduction of GHG emissions.” PPG says the system incorporates a fine-tuned fouling release system, based on its premium 100 % silicone binder technology, and a self-adhesive film specially designed by MACtac for underwater use.

As part of the eSHaRk project, new, robotized application technology is being developed by VertiDrive which will be used to apply the film on large commercial vessels in an automated way. Furthermore, the surface morphology of the film will be optimized to enhance drag reduction, fuel savings and emissions reduction benefits to a level previously unattainable. After extensive laboratory testing, including flow channel drag reduction experiments conducted in a state of the art flow channel at HSVA, several small scale in practice applications have been successfully conducted and PPG is now looking for full scale testing and validation in operational conditions before market entry with the support of ND Coatings/Meyer Werft. The PPG Sigmaglide fouling release film solution under development within the eSHaRk project has a targeted launch date of 2018.

Hempaguard’s first 500 Marine coatings manufacturer, Hempel, says that its new fouling release product Hempaguard has now been applied as a full vessel coating to 500 ships. This milestone was reached this spring with the coating of a 61,614 dwt, 2011-built, container vessel. Hempel says that its new fouling release product Hempaguard has now been applied as a full vessel coating to 500 ships. The company notes: “Environmental obligations are at the top of the agenda for all responsible shipping companies and Hempaguard was introduced to the shipping industry against a backdrop of rising bunkering costs, tightening environmental regulations and the introduction of mandatory Ship Energy Efficiency Management Plans (SEEMP).” Originally launched in 2013 as a new innovative low cost fouling defence product, Hempaguard has, Hempel says, shown an outstanding resistance to fouling during idle periods of up to 120 days, providing shipowners with full trading flexibility. Unlike regular hull coatings that, in general, are specified to a vessel’s speed and activity level, Hempaguard retains its effectiveness when switching between slow and regular steaming and so is said to be suitable for all vessel types. This, according to Hempel, has been a major contributor to its success – alongside proven fuel efficiency levels of around 6%. Commenting on reaching the 500 ship milestone, Claes Skat-Roerdam, Hempel’s marketing manager, Fouling Control, said: “Hempaguard’s success is a true testament of how well our coating has been received by shipowners. The combination of silicone-hydrogel and biocide science has revolutionised antifouling technology to deliver excellent fouling resistance. We are delighted to reach this incredible milestone after such a short space of time which proves the value of our coating. Our aim is to continue to connect with our customers to develop trusted solutions that match their evolving ship operating patterns”.

Jotun’s HPS applied to the Penguin Arrow is reported to have saved her operator Gearbulk US$1.5 million over five years ©Jotun

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Hempaguard is the first product to use Hempel’s patented Actiguard technology that integrates silicone-hydrogel and full diffusion control of biocides in a single coating. So confident is Hempel of its performance that the company offers the industry’s first performance satisfaction guarantee.

COATING

This process will allow shipowners and operators to enjoy the superior fouling release properties and drag reduction capabilities of the PPG SIGMAGLIDE® self-adhesive film.

LEGAL

Blue Communications

OW SAGA CONTINUES IBIA says chaos caused by OW Bunkers collapse shows the need for sales terms which are fair and fully understood by both parties

ollowing the UK Supreme Court’s decision in the Res Cogitans dispute, IBIA is calling for the industry to “think innovatively” to overcome the unfortunate situation that has arisen as a result of the OW Bunker collapse, leaving end buyers vulnerable to multiple demands for payment for the same stem. The Court ruled that the owner of the vessel Res Cogitans should pay OW’s assignee ING Bank, in a case where OW acted as a trader rather than the physical supplier. The case did not directly address whether the physical supplier, which was never paid by OW, also has a right to make a claim against the vessel owner, leaving the status of suppliers with outstanding payments unresolved. IBIA says that, historically, the legal framework the bunker industry operates within has always been uncertain due to the international nature of bunker supply and shipping, meaning they are dealing with a multitude of legal regimes.

According to IBIA, the Res Cogitans ruling in the UK, along with rulings emerging from other countries in connection with the OW insolvency, highlights the need for continued, effective industry-wide cooperation to develop sales terms which are fair and fully understood by each participant in the fuel sale process. IBIA expects that the various legal outcomes relating to OW will encourage focus and hopefully cooperation between all parties, including lenders, to develop

greater uniformity and predictability of bunker sales and credit practices. Meanwhile, major legal costs insurance provider UK Defence Club has warned shipowners to review their bunker contracts. The club noted: “The Court has held that the contract between the owner member and OW was not a contract for the sale of goods, but simply a contract which entitled the member to use the bunkers, with a corresponding obligation to pay for them. The Sale of Goods Act therefore does not apply to this type of contract.” It added: “Although a disappointing outcome, the UK Defence Club, which has supported its member throughout this case, has been committed to resolving this extremely important point for this member and for the industry generally. Given the outcome of this case, members and other operators will need to carefully review their bunker contracts in order to protect themselves from such situations arising in the future.”

Hope for owners from UAE ruling The UAE Federal Supreme Court has ruled, in an OW Bunker related claim, that physical suppliers of bunkers have no right to recourse against owners or charterers. Law firm Ince & Co notes that, in the first decision on the issue from the most senior court in the country, the UAE Federal Supreme Court has decided that physical suppliers of bunkers have no right of

recourse against owners or charterers where there is a contractual sale and purchase chain. Ince & Co partners Rania Tadros and Mohamed El Hawawy acted for the successful owners. The Supreme Court has concluded that there are two separate contracts. One contract between owners/charterers and the OW entity pursuant to which the owners/charterers must make payment and a separate contract between OW and the physical supplier pursuant to which OW must make payment. Where there is such a chain, the owners/charterers had no liability to make payment to the physical suppliers directly. The Supreme Court held that the delivery of the bunkers by the physical supplier to the vessel did not create any obligations between the physical supplier and the owners/charterers. Whilst it was recognised that the physical supplier delivered the bunkers to the vessel, it was held that they did so to the order of OW. Ince and Co says that the ramifications of this judgment are far reaching for bunker suppliers in the UAE. It adds in a statement: “This judgment is certainly good news for ship owners who have found themselves exposed to double or even triple payment following the collapse of OW. If the Judgment is followed, ship owners will have good defence to claims in the UAE from physical suppliers where there is a contractual sale and purchase chain.

World Bunkering AUTUMN 2016

LEGAL

Ince & Co points out that “the UAE legal system is a civil law system and accordingly, whilst the judgment of the UAE Federal Supreme Court is of persuasive value, it is not binding”.

Rotterdam rules? Bunker suppliers have a means of arresting vessels throughout the EU, according to Rotterdam-based law firm AKD. It says suppliers of goods and services to the international shipping industry, such as bunker suppliers, can modify the jurisdiction clauses in their standard terms to explicitly include the Rotterdam Court, thereby making it possible to apply to the Rotterdam Court to issue trans-border arrest orders against debtors’ assets.

“Indeed, the willingness of the courts in the Netherlands to allow seizure of assets in EU Member States other than The Netherlands was underlined very recently when the arrest of a seagoing bulker in the port of Castellon, Spain was authorised within a matter of hours. Last year, the Rotterdam Court also granted leave to arrest an inland barge in either Germany or Austria in a dispute involving non-payment of hire under a time charter. “These decisions confirm that the courts in the Netherlands will not hesitate to issue trans-border arrest orders in the same way that they issue domestic arrest orders, the only proviso being that the

courts in the Netherlands have jurisdiction on the merits of the case. For these reasons, suppliers around the world are therefore expected to modify the jurisdiction clause in their standard terms to include the Rotterdam Court, at least as an alternative forum. “Once the Rotterdam Court has been added as a competent forum, creditors can arrest ships throughout the EU by making use of the efficient and liberal arrest procedures in Rotterdam and thereby avoiding the need to go through the less favourable arrest procedures applicable in some other EU Member States.”

AKD partner Haco van der Houven van Oordt says: “Suppliers to the shipping industry are facing difficult times due to the present economic environment. Invoices remain unpaid and creditors, such as bunker suppliers, are often left with no option but to consider taking action against the ships to which they have supplied goods. It is, however, not possible or attractive to take action against ships in every jurisdiction. Significant counter-securities and all sorts of formal requirements are often necessary, meaning that it is not an option to arrest a ship. “There are a few arrest paradises in the world, however, and the Netherlands is certainly one of those. In the Netherlands, no counter-securities are required and applications are commonly granted in a matter of hours without the need for the formalities required elsewhere. Thus it has been long possible to arrest, quickly, ships calling at Rotterdam and Amsterdam, and also those sailing to the port of Antwerp, which must first pass the River Scheldt in the Netherlands. “EU Regulation 1215/2012, which provides for even further integration of EU jurisdiction, now makes it possible to also apply to the courts in the Netherlands to issue an order for a ship arrest elsewhere in the EU, an order which is to be recognised and enforced immediately in any other EU Member State, without further local court intervention.

World Bunkering AUTUMN 2016

AKD partner Haco van der Houven van Oordt

EQUIPMENT & SERVICES

GE SYSTEM FOR MAERSK “Smart solution” for 2nd generation Triple-E container vessels

E’s Marine Solutions is to supply auxiliary electric systems to container shipping giant Maersk Line. The company’s new Power Take Off/Power Take In (PTO/PTI) technology consists of two drives, two induction motors and a power management system. GE says that the system is a “smart solution that provides excess power on demand while reducing fuel consumption.” When not being used to propel the vessel, the PTO/PTI technology uses the surplus energy to power onboard systems and equipment.

According to GE, its entry into the container ship industry also marks its intention of “contributing to the technological advancement of the industry at large”. The global container ship industry continues to grow at a steady rate, as around 90% of the world’s trade is carried across the sea. International shipping connects countries, markets, businesses and people, allowing them to buy and sell goods on a scale not previously possible. As consumers, we have become used to seeing goods from all parts of the globe readily available in the stores we visit.

The PTO/PTI solution provided to Maersk Line for 11, 2nd generation Triple-E container vessels with a capacity of 19,630 TEU, comprises a shaft generator motor installed between the main engine and the propeller. It acts as either a generator or a booster to generate electricity from slow streaming speeds all the way up to the design speed of the vessel. The PTO/PTI technology will be installed onboard vessels built by the DSME shipyard in Korea, with which GE has had a long-standing relationship. Commenting on GE’s role in the project, a spokesperson from DSME said: “Our relationship with GE has been enduring and fruitful. We admire GE’s professionalism and ingenuity and are once again delighted to partner with them on this key project.” The PTO/PTI technology harnesses the mechanical energy of the vessel’s drive shaft to convert it into electrical energy. This excess energy is then directed to onboard systems when it is required, which diminishes the need to burn fuel to power these systems. The result in fuel savings is significant, especially when coupled with improved operational flexibility. GE notes: “Unlike its competitors, the electric machine is equipped with induction motors instead of synchronous motors. By removing transformers, it offers a simpler design and therefore reduces the complexity of the system, making it more reliable and requiring less CAPEX. The arrangement of induction motors reduces the frequency and extent of maintenance, and combined with the system’s fuel saving characteristics, bringing down the operational expenses for customers.”

World Bunkering AUTUMN 2016

Lube oil additive “cuts fuel consumption” Nanol Technologies says that its patented high-performance lube oil additive achieved a 2% reduction in fuel consumption when used in the main engine of the ro-ro cargo ship Seagard Cargo Vessel, with use of its technology in the main engine. According to Nanol, statistical analysis and verification by maritime data analysis, software and services provider NAPA demonstrated that use of the additive delivered savings during the testing period. The test was overseen by Lloyd’s Register. In a project commissioned by the charterer and operator of the ship, Transfennica and owner-operator Bore, ClassNK-NAPA GREEN vessel performance monitoring collected data over a fourmonth period during which the vessel operated along the same route and with the same engine settings. Two-months of data collected during the control period was compared to a two-month period with the recommended levels of Nanol’s lubricant additive present in the system. Advanced algorithms were used to take into account fuel calorific value, operating conditions and typical engine load range. This analysis showed a statistically significant reduction in fuel consumption between the two periods, averaging a 2.01% reduction in fuel use when Nanol was present in active quantities.

Nanol was selected from over 1,200 applicants as one of only 50 businesses to be invited to Start-Up Fest’s Investor Tour in Amsterdam. Johan von Knorring, Founder and CEO, Nanol Technologies commented: “Based on previous test results by more than ten shipping companies and more than 13,00 hours of operational use, Nanol has long been convinced that our patented lubricant additive delivers immediate economic benefits in terms of fuel-efficiency as well as the longterm gain of prolonging key engine component lifetimes. With the support of Transfennica, Bore and NAPA we now have independently verified proof that this is the case for first time. While Nanol brings significant savings to our customers, we are very proud that we can help to save the environment by reducing emissions.” Transfennica’s Operations Manager, Rogier Heijnsbroek, commented: “Transfennica is committed to meeting high environmental standards, reducing emissions and improving the energy efficiency of our fleet. With this in mind we always give consideration to operational tools and technologies that can help us meet these goals. However, we require investment certainty to enable us to make these decisions. Analysis gives us the tools for this decision making, and it is our intention to continue testing Nanol’s technology based on verifiable facts.

It adds: “Everything is streamlined with predictable pricing for a clear set of deliverables, and no hidden extra fees.” WSS estimates that there are over 80,000 bunker-only port calls each year. Although these are relatively simple operational tasks, they come with a complex web of administrative and qualitative considerations. WSS Ships Agency Business Manager Daniel Wikstroem says: “Bunker-only calls can be a real headache for ship operators used to high quality, efficiency and performance driven day-to-day operations. Typical bunker calls include up to 40 lines of communication, between an array of parties – including port agents, bunker brokers and bunker surveyors – up to two separate financial transactions, and an excessive administrative workload checking disbursement accounts. Multiply this on a global level, on a portby-port basis, and there is huge room for unpredictability – in terms of the complex delivery chain – and a massive man-hour inefficiency. And it goes without saying that time is money.”

WSS’s ‘one-stop shop’

He adds that a uniform global bunkering routine ensures that each call runs smoothly, with, amongst other things: pre-arrival formalities and ISPS requirements completed 24 hours prior to arrival; bunker suppliers, surveyors, port authorities and pilots always given vessel ETA updates; service boats always ready for bunkering surveyors upon arrival, and completion; and a strict following up of all bunkering progress.

Norway-based Wilhelmsen Ships Service (WSS) has launched its new “one-stop shop” approach to bunkering which, it claims, “delivers better quality, efficiency and value”. The global ship’s agent says that its Bunker Service Agreements ensure efficient communication, minimised administration and high standards.

Wikstroem claims that by switching to the WSS bunkering solution, a typical client performing around 100 annual bunker calls, would save over US$20,000 a year through reduced bank transactions and paperless disbursement account handling alone.

The verification of the results of Nanol’s technology has lead Transfennica to continue further testing of its use on the M/V Seagard and consider expanding it to other vessels in its fleet. The ground breaking results have also helped Nanol secure the opportunity to meet with 100 venture capitalists to support its future growth and development. World Bunkering AUTUMN 2016

EQUIPMENT & SERVICES

Commenting on GE’s partnership with Maersk Line, Tim Schweikert, president & CEO, GE’s Marine Solutions said: “Based on our long legacy of engineering expertise and innovation, GE’s Marine Solutions continues to offer world-class capabilities in solutions that serve a wide range of marine segments. Having Maersk as a partner, our entry into the container ship industry could not be more impactful. GE is continuously investing and developing solutions for the marine industry, and with our PTO/PTI technology, we are reinforcing our intention of driving the industry forward.”

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COPEC

COPEC MARINE FUELS Company Profile

he Group’s principal activities are fuel distribution, forestry products, fishing activities, and mining and electricity investments and Research and Development (R&D).

Our compromise to be the “first in service”, has led us to be able to demonstrate concepts such as JIT (Just in time) and Kaizen (CONTINUOUS IMPROVEMENT).

Our Fleet The fuel sector distributes fuels in all its forms: gas, fuel and lubricants. Copec controls approximately over 64% of the fuel market through more than 650 gas stations as well as industrial customers. Copec started as a petroleum company in 1934 and initiated its bunker service in 1970. At first, deliveries were by truck; however, in 2000, Copec incorporated bunker supplies by barge, consolidating our market position. Today, Copec Marine Fuels has barges of last generation and leads the bunker market with over 70% of the Market Share. Copec Marine Fuels became a member of the IBIA Corporate Association on 21 December 2004.

Copec operates 3 bunker ships : Doña Ana (3,200 MT IFO 380 + 610 M3 MGO LS), Don Gonzalo (4,100 MT IFO 380 + 720 M3 MGO LS) and Don Pancho (4,100 MT + 720 M3 MGO LS) which cover central and south ports of Chile. For other ports, Copec Marine Fuels offers the service of trucks and pipelines with the purpose to supply any enquiry it may have along the coast of Chile.

This year Copec Marine Fuels, will increase its fleet with one more Bunker Ship that will supply vessels in the extreme south of Chile. The purpose of this new Bunker Ship named Tamina, is to supply vessels, specially cruises that navigates through Ushuaia, Antarctica, Punta Arenas and the Falkland islands. This Lady Ice Class with double hull, will increase the opportunity to Bunker MGO LS and DAO, with a maximum Capacity of 1450 Cubic meters. Puerto Williams is 40 kms far away from Ushuaia and it’s a very safe port for bunkering. For cruises with less than 150 mts of length, BT Tamina will be able to bunker at berth. For bigger cruises BT Tamina is able to supply in 4 different anchor points.

Our Service COPEC MARINE FUELS has always been leader of the Chilean fuel market as it has given its customers the best service and quality of its products. Today´s successful operations rely on highly competent service. We realize that buyers and supplier are closely related, COPEC offers round the clock service, as you needed. Our operation have become a performance and standard and reached a leading market position, through trustworthy and solid business relationships.

World Bunkering AUTUMN 2016

NEXT ISSUE

WORLD BUNKERING WINTER 2016... NOW OPEN FOR BOOKINGS

SPECIAL FEATURES: Blending Straight-run HFO is becoming a rarity. This, combined with regulations on limiting sulphur in fuel content worldwide and, more stringently, in ECAs, is having n impact on blending. We look at the implications.

Fuel Additives As owners look to cut fuel costs and keep maintenance expenses to a minimum the manufacturers of additive are offering a wide range of products. What is on offer and how effective can additives be?

Barge Design Our annual look at bunker tanker designs comes at time when there is pressure to modernise barge fleets and as the need to bunker the small but growing LNG fuelled fleet presents new challenges.

GEOGRAPHICAL FOCUS: Northern Europe We look at the major ARA bunkering ports but also report on the bunkering scene around the UK and the Baltic coasts of Europe and Scandinavia.

Africa West Africa continues to be challenging for global bunker operators, hijacking and lawlessness remaining serious problems. But we also look at positive developments within the region. In southern Africa we report on developments at the main ports along the Cape.

Australia The enforcement of environmental regulations, and particularly the mandatory use of 0.1 percent sulphur fuel while alongside has been controversial. We report on the current situation.

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

WWW.WORLDBUNKERING.COM ibia@constructivemedia.co.uk 64

World Bunkering AUTUMN 2016

ARACON 2016 – ROTTERDAM ARACON is the longest-running and biggest bunkering conference in the Amsterdam-Rotterdam-Antwerp region. Its no-nonsense conference programmes attracts all the main bunker suppliers and barging companies in the ARA and Northwest Europe as well as shipowners and managers from throughout the region. www.petrospot.com/events

DIARY 27-29 MARCH 2017 FUJAIRAH BUNKERING & FUEL OIL FORUM

4-7 OCTOBER 2016 19th SIBCON 2016 RESORTS WORLD SENTOSA, SINGAPORE The Maritime and Port Authority of Singapore is pleased to announce that the 19th Singapore International Bunkering Conference and Exhibition (SIBCON) will be held from 4 October to 7 October 2016, Resorts World Sentosa, Singapore. A refreshed and invigorated programme will include new formats, cutting edge presentations, innovative exhibition hall features and as always, opportunities to do business. www.sibconsingapore.com

8-11 NOVEMBER 2016 IBIA 2016 CONVENTION, GIBRALTAR The association’s international annual gathering will be held in conjunction with HM Government of Gibraltar and the Gibraltar Port Authority, following the successful IBIA Regional Forum held there in February last year. IBIA Chief Executive Peter Hall says: “Gibraltar, Algeciras, Tanger Med and Ceuta together handle the vast majority of the bunkering in the Mediterranean –making it an excellent location for our biggest annual event. Our decision to hold the annual convention in Gibraltar follows our successful event there last year, and with the support and partnership of the Gibraltar Port Authority and HM Government of Gibraltar, we believe that this will be our most successful and productive convention yet.” www.ibia.net/ibia-2016-convention-gibraltar

1-2 DECEMBER 2016 S&P GLOBAL PLATTS MEDITERRANEAN BUNKER FUEL CONFERENCE Returns for its 5th year in the great city of Athens. This year will once again bring together the region’s leading bunker fuel suppliers, traders, brokers, refiners, ship operators, owners, and other marine fuel industry organizations to discuss the changing landscape of the Mediterranean heading towards 2020. http://www.platts.com/events/emea/ mediterranean-bunker-fuel/index

World Bunkering AUTUMN 2016

The 9th International FUJCON 2015 organized by The Conference Connection Inc, under the auspices of the Government of Fujairah with the Patronage of His Highness Sheikh Hamad bin Mohammed Al Sharqi, Member of the UAE Supreme Council & Ruler of Fujairah, was successfully held in Fujairah, UAE from 23 to 25 March 2015. http://www.fujcon.com

27 FEBRUARY - 3 MARCH 2017 EUROPEAN SHIPPING WEEK 2017 BRUSSELS European Shipping Week is intended to be a platform where policy-makers from the main EU institutions will meet and engage with European shipowners and other stakeholders from the shipping sector. The focus is on shipping, in all its different aspects. This week-long series of high level events – features a major conference and Gala Dinner – bringing together the major players in the shipping industry with the primary aim of promoting the strengths of European shipping to legislators in Brussels such as the European Commission, European Parliament and the Council of Ministers. www.petrospot.com/events

11-15 SEPTEMBER 2017 LONDON INTERNATIONAL SHIPPING WEEK 2017 This will be the ‘must attend’ event of 2017, offering over 160 industry functions and unique networking opportunities for leaders across all sectors of the international shipping industry – regulators, charterers, ship owners, ship managers, bunker suppliers, lawyers, ship brokers, bankers, insurers, insurance brokers, commodity traders and brokers, ship suppliers, port operators, shipping service providers and many more. The sell-out one-day LISW17 Conference and Gala Dinner, to be held on Thursday September 14, will attract the very highest level government and shipping industry leaders from the UK and around the world to crown what promises to be another amazing week. www.petrospot.com/events

DIARY

22-23 SEPTEMBER 2016

SIBCON

SIBCON 2016 Mass flow meters and much more The mandatory use of mass flow meters (MFM) for bunker deliveries in Singapore port will be one of the key issues under discussion at this year’s Singapore Bunkering Conference (SIBCON). SIBCON’s organisers point out that the local industry has responded positively with over 60 tankers already fitted with a Maritime and Port Authority (MPA)-approved MFM system for MFO delivery in the Port of Singapore. However they say that technical and operational benchmarking is critical and that some answers are still being sought. That is why the SIBCON Leadership Dialogue will be on ‘Mass Flow Metering - Dealing with post implementation challenges’. This session will deal with: approved delivery procedure; ensuring the integrity of the MFM system; dispute scenarios and industry concerns; how a discrepancy in volume will be investigated; the roles of the surveyor and MPA and P&I clubs’ assessments of claims. The dialogue on MFM will include input from Parry Oei, Director (Port Services), Maritime and Port Authority of Singapore, Timothy Cosulich, Managing Director, Fratelli Cosulich, Teo Choo Wee, Executive Director, Pacific International Lines and Simon Neo,

IBIA’s Singapore-based Regional Manager. They will tackle questions including: What are recent implementations telling us? What is the nature of disputes we have seen? What is MPA’s role in the process? How can the surveyor add value? SIBCON will, though, be much more than a discussion on MFM, as important an issue as it is. A number of strategic keynote addresses will hear global suppliers share insight on energy markets, oil economics and a longer term view of the marine fuels industry The programme includes: Ship Owner Perspectives - How is the balance shifting in trade routes? What is the impact on buyers’ demand for fuel? What are the quality issues, and expectations from the bunker industry? Delegates will hear from top ship owners and be able to understand what influences their bunker procurement strategy. Senior decision makers from suppliers, traders and buyers will debate the latest trends in the bunker sector. They will consider the progress being made towards using LNG as marine fuel and also provide updates on other alternative fuel.

The programme also includes a Market Watch slot which considers the key issues of fuel availability review, regulatory drivers, quality trends and changing market structures. The discussions will be led by top-level industry professionals who will challenge traditional perspectives and project real world scenarios. Of course SIBCON is more than just a conference. It also hosts a concurrent Trade Exhibition for product showcases and demonstrations. Together both events make for an ideal networking opportunity. The organisers say that they expect more than 150 ship owners and operators from 22 countries and over 100 other bunker related companies to attend. Over 200 participants are booked in for the pre-conference symposium while in excess of 1,600 participants from over 70 countries are likely to be at SIBCON. The organisers say it is the world’s largest gathering of bunker suppliers and traders under one roof. As one senior shipping executive put it: “SIBCON is an excellent opportunity to meet most of the bunker world at one event.”

World Bunkering AUTUMN 2016

IBIA (ASIA) ANNUAL GOLF 2016 THE SINGAPORE ISLAND COUNTRY CLUB, ISLAND COURSE FRIDAY, 7 OCTOBER 2016. 7.00 AM â&#x20AC;&#x201C; 2.00 PM SHOTGUN STARTS AT 7.30 AM

PER TEAM OF FOUR - LUNCH INCLUDED IBIA MEMBERS: SGD $1200.00 | NON-IBIA MEMBERS: SGD $1500.00 IBIA (Asia) | +65 6472 0916 | regionalmanagerasia@ibia.net | nadiah@ibia.net World Bunkering AUTUMN 2016