World Bunkering Winter 2015 by Justin Ives

WINTER 2015

WORLD BUNKERING

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INSIDE THIS ISSUE: Letter to the Editor â&#x20AC;&#x201C; brokers deserve a fair deal LNG - bunker barges are on their way Legal - shocker over Sale of Goods Act

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Editor’s letter

Will the cap fit?

mong the many topics discussed at the IBIA Convention at Cancún was the possibility that the Paris Climate Talks may take action that affects shipping. In fact, if it does so, it will probably look at aviation and shipping in very similar ways, which may not be good for our industry. In a nutshell, although shipping accounts for less than 3% of global carbon dioxide (CO2) emissions now, that percentage is expected to increase significantly as other sources of CO2 emissions are cut back and as world trade increases. Just how large a proportion of total global CO2 emissions will be produced by shipping in the future is a matter of considerable debate. However, the environmental lobby, the European Parliament and some sovereign states – notably the Marshall Islands – want action at Paris, and the talk is of a global cap on emissions and a levy on bunkers. Actually, it is unclear what is really expected of shipping: that it cuts its emissions even at the expense of hitting world trade; or that, in the words of the International Chamber of Shipping, the industry will become a ‘cash cow’ expected to provide a disproportionate share of a Green Fund aimed at mitigating the effects of climate change. We consider some of the arguments in this issue’s Environment feature. As is now usual, there has been a steady stream of new innovations, equipment and services, which all, in some way, cut fuel consumption and help our little industry do its bit to save the planet. But I did do a double-

World Bunkering Winter 2015

take when the story ‘New concept uses combined gas and steam turbine’ crossed my desk. New concept? I clearly remember sailing down the Clyde in the very early seventies, before the first oil shock of 1973-74. I was on a lovely, old-fashioned, quiet, steam-turbinepowered, 1950s-built general cargoship. We all sort of knew even then that steam turbines were on their way out, even though the first-generation large containerships were being built with steam propulsion. But we had a glimpse of the future, we thought, as we sailed past a brandnew gas-turbine-powered containership that plied the Atlantic trade at great speed. It was not long, of course, before that advanced but terribly expensive machinery propelled the same ship up a breaker’s beach. So it was with some fascination that I read that LNG containment manufacturer GTT, container shipping company CMA CGM and classification society DNV GL have come together with a project that combines LNG fuel and electric propulsion, which have been seen as belonging to the future, with steam and gas turbines, which definitely have not been seen in that way. There is long way to go before the concept turns into steel and floats, but organisations like those involved in this project are not prone to spending

huge sums on a whim. And it is just one of many developments that look set to greatly change the face of shipping and the bunkering sector. But this issue also covers the challenges of the here and now: of using new fuels to meet regulations; how additives can help; the vagaries of the markets in Northern Europe and West Africa, and significant legal developments in Australia, the UK and elsewhere. Cancún was one opportunity for IBIA members to meet up, but we are rapidly approaching the next one: the IBIA Dinner on 8 February in London. This is another instance of back to the future, with a return to the Grosvenor House Hotel, Park Lane. See you there.

WINTER 2015

Publisher: W H Robinson Editor: David Hughes editor@mar-media.com

Deputy Editor: Sandra Speares sandra.speares@mar-media.com

Project Director: David Scott david.scott@mar-media.com

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

Designer: Justin Ives

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WINTER 2015

IBIA REPORTS Editor’s letter 1 Chairman’s introduction 7 Chief Executive’s report 9 Africa report 11 Asia report 15 Convention report 16 New members 21 Noticeboard 23 Events report 25 Nominations 26 51

FEATURES Industry news 31 Environment 36 Letter to editor 38 New fuels 40 Fuel additives 42 Barge Design 44 GEOGRAPHICAL FOCUS Northern Europe 47 Africa 51 Australia 55 Scrubbers 56 LNG 58 Testing 61 Lubricants 63 Risk management 65 Russian update 67 Innovation 72 Legal 74 Equipment and services 76 Diary 84

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o here we are at the end of 2015. What a year it has been! For IBIA, so much has happened. I won’t try to go through everything in detail here – there wouldn’t be space. But, in short, 2015 has been a very good year for IBIA, although a difficult one for our industry. Casting my mind back over the past 12 months, some serious issues and challenges come to mind. IBIA played its part at various discussions at the International Maritime Organization (IMO). On some fronts, we were successful; less so on others. But IBIA makes its mark and represents you wherever important decisions are made. It is widely known that I think IMO should have a role in regulating bunker quality, and the IBIA Convention report in this issue has more on that. Turning to an event that has caused significant problems and distress for both companies and individuals, the IBIA Convention 2014 was just ending as news of the OW Bunker collapse started to emerge. This caused shockwaves throughout the industry, and the ramifications continue. IBIA gave what help it could with advice to individuals who suddenly found themselves on the job market. It appears most are again working in our industry. But the financial fall-out has been severe and, inevitably, there are legal cases under way that could go for some time. There is also the uncomfortable prospect of some companies having to pay twice for the same bunker stem. Again, you will find more on this on our Legal pages. A positive development has been the progress in Singapore towards mandatory use of mass flow meters. We were fortunate that Md Elfian Harun, assistant director, bunker services, at the Maritime and Port Authority of Singapore, was able to come to Cancún to join us for this year’s IBIA Convention

World Bunkering Winter 2015

and update delegates on developments in this important project. Liquefied natural gas (LNG) is, of course, a hot topic now, and it was also very useful to have a presentation at the convention on how LNG bunkering can be developed in association with other projects. As Gibraltar Port Authority’s chief executive, Bob Sanguinetti, explained, bunkering in the territory could be possible in conjunction with the development of a new power station. We will be hearing much more about LNG bunkering in the coming year. As I have already mentioned, this has been a good year for IBIA. It started with a record attendance at our annual dinner in February. Throughout the year, we have delivered a strong programme of seminars and training courses at various places around the world. Then, of course, in what I see as a very positive move, IBIA returned to London. That has already proved to be highly beneficial, and I know that members are now getting into the habit of ‘popping in’ to our office right at the business heart of the UK capital. I write this shortly after returning from our Cancún convention. That was another success story, and was undertaken in cooperation with Petrospot. At this point, I must thank the staff at IBIA, our board and Petrospot for their professionalism and support. Without your hard work, we could not have achieved this success. As it was, the convention went off perfectly. Numbers were higher than expected, to the extent that extra chairs were required. The only element that worked against us was the weather, forcing our two dinners inside instead of in the Live Aqua hotel’s lovely grounds, but we were at least able to host a delightful welcome reception outside. The convention’s programme was excellent, comprehensively covering the

current market. The presentations were of a high standard, as were the forums and discussion sessions. There is a more detailed report on the convention in this issue. We also held an IBIA board meeting in Cancún, and I am glad to announce that Robin Meech will follow me as chair in March. Michael Green will be vicechair. I am delighted to hand over to such experienced and well respected people. Please bear in mind that our famous IBIA dinner takes place on 8 February. I understand that tickets are selling very quickly. Now, lastly, I would like to wish you and your families a Merry Christmas and Happy New Year. Thanks for a fantastic 2015. Please remember – keep smiling.

Chairman’s welcome

A memorable year

Jens Maul Jørgensen, chairman, IBIA

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he 2015 convention was held in Cancún, Mexico, with the title “The Americas: a continent of opportunities”. Some 400 years ago, the term New World was coined to describe the Americas, a region that required pioneers and settlers. Has anything changed! Cancún was chosen as the location because of its growing bunker business potential. Mexico is a significant producer of crude and refined products, but regulation has hampered the development of the bunker sales market. However, new reforms being pushed through now offer many opportunities for private companies to own and operate bunkering facilities. Michael Green, Intertek ShipCare’s technical manager, told delegates that fuel sample testing results indicated that fuel quality had increased significantly since the introduction of the 0.10% sulphur in fuel limit for ships in emission control areas (ECAs) in January this year. He also noted that hybrid fuels were gaining market share, but added that there was still significant life in residual fuels. IBIA vice-chairman Robin Meech stressed the need for “level playing” once the global sulphur cap of 0.5% comes into force in 2020 or 2025. He went on to suggest that IBIA proposes to the International Maritime Organization (IMO) that all countries signatory to MARPOL Annexe VI should enforce a new regulation prohibiting vessels from having onboard fuel that cannot be burnt in compliance with MARPOL. Jens Maul Jørgensen, IBIA chairman, called for “open and honest discussions” in the industry. As “the voice of the industry”, we need to continue to push the boundaries, promoting business opportunities, challenging standards and questioning the status quo, while monitoring and reporting on the issues of today, being both pioneer and settler.

World Bunkering Winter 2015

It is against this backdrop that the IBIA annual convention serves its purpose in bringing together thought leaders, to help inform you and support you with the strategic decision-making that is needed to navigate through these times of a changing environment. The presentations to the convention are available to members on the IBIA website.

Membership

The board also agreed to define a corporate member as being a member in that country. This will support communications, enabling information such as World Bunkering magazine and regional information to be sent directly to the country office. 2016 events

The IBIA board meets in person at least twice a year and every month by teleconference, and it takes advantage of the annual convention to hold one of these face-to-face meetings. This offers opportunities to re-evaluate policy and assess where the association is at. The convention board meeting elected both the chairman for 2016 – Robin Meech – and the vice-chairman – Michael Green.

A calendar of events has been produced for 2016, with a focus of “meeting membership needs” through regional meetings, lunches and forums, along with IBIA’s presence at major conventions. The events timetable also supports the membership request for good-quality training. Of particular note, we plan to build on the success of our regional forum in Gibraltar by holding the 2016 IBIA convention there in the week commencing 7 November.

Strategic review

Working groups

IBIA’s three-year business plan is coming to the end of its life and we plan to hold a ‘blue sky strategy day’ with the board and secretariat to consider the way forward and plan for the next period. The day will be informed by a full membership survey, which is about to be undertaken. I would ask that you fully partake in the survey, as we do want your views on what you think about key areas, such as: • Delivering value for money for our members, growing the membership in order to deliver sustaining value • Whether to continue with our regional events, addressing topical issues in particular locations, or whether to develop larger conventions, or both • Providing stronger representation and active lobbying at industry regulatory organisations and forums • Developing education and training, ultimately culminating in accredited qualifications for IBIA members • Improving communications throughout the association

The association’s work groups continue to be very active, covering a wide range of issues. These include legal, fuel availability, fuel quality, new fuels, safety, IMO legislation, enforcement and compliance, education and training, publications, strategy, and more. With this growing list, we would welcome volunteers.

Board meeting

Chief executive’s report

An era of opportunity

Board elections

Last but not least, a reminder that the board elections will take place in January, offering a final opportunity to take part in the governance of the association. Nominations close on 31 December. There are a number of things to do, but 2016 is waiting for us, with plenty of opportunities to achieve our goals. I hope you all have a great break, leaving you refreshed for the New Year ahead. Best regards Peter Captain Peter Hall, chief executive, International Bunker Industry Association

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Successful end to 2015 IBIA has been busy in Africa and Mauritius over the past few months, as Tahra Sergeant reports

s we enter into the last quarter of 2015, IBIA has successfully supported training in Africa. Attendance at the first-ever regional forum in Mauritius marked another high point, with well over 120 delegates and government officials present. IBIA partnered with independent logistics group Celero, based in Mauritius and Madagascar, to present the event, which was entitled “Mauritius – A Bunker Hub: Driving the Ocean Economy”. Held in October at the Labourdonnais Waterfront Hotel in Port Louis, the one-and-a-half-day event was preceded by two days of tailored training, covering basic bunkering and the structure needed for bunker operations development. The training courses set a record for IBIA, attracting 53 delegates. This reflects the widespread and very real interest in this new initiative. The event consisted of schoolroomstyle plenary sessions running over oneand-a-half days with 16 speakers. This was supported by a welcome cocktail evening, networking sessions and VIP gala dinner. The Honourable Premdut Koonjoo, minister of ocean economy, marine resources, fisheries, shipping and outer islands, and the Honourable Ashit

World Bunkering Winter 2015

Kumar Gungah, minister of industry, commerce and consumer protection, opened the forum. They delivered keynote speeches highlighting the government’s support of the growth of Mauritius as a bunkering hub, describing its ambitious plan to transform the port into a business-friendly, industry-leading petroleum and bunkering centre. The bunker trade has been liberalised, with government incentives provided through the reduction and removal of charges and duties and an improved quicker process for issuing bunkering licences and import permits. Topics covered during the forum included “Mauritius as a growing bunker supplier and hub, “The world and regional bunkering scene”, “What’s happening with regulation and quality in the fuel supply chain” and “A modern look at the bunkering business”, with regional bunker suppliers explaining their operations and short presentations by the principal bunker suppliers providing an overview of capability in the region. The education minister responsible for training and development, the Honourable Leela Devi DookunLuchoomun, delivered a speech and took the opportunity to urge the younger generation to seriously consider the range of career opportunities on offer in this growing sector.

IBIA Africa report

Record number of trainees for the Regional Training in Mauritius

The last session of the forum focused on business social responsibility and career development and was attended by the universities of Mauritius and their students. The session looked at capacity building, using the Lawhill Maritime Centre, in South Africa as an example. The centre provides industry-focused education offering students specialised knowledge and skills, making it possible for them to build successful careers in the maritime industry. Owing to the great success of the forum in Mauritius, we have seen 76 new members sign up to IBIA, more than doubling the African membership. This has led to the beginnings of discussions about a sub-branch in Mauritius, which would assist in servicing the Indian Ocean region, comprising Mauritius, Madagascar, Seychelles and Reunion. We have to thank the Mauritian government for its contribution to the success of this event, Celero Training for its on-the-ground expertise, and all the sponsors of this event: Mauritius Commercial Bank; Mauritius Freeport Development; Vivo Energy Mauritius; State Bank of Mauritius; Mauritius Ports Authority; Mauritius Union Group; The Board of Investment; the Mauritius Cargo Community Services Ltd (MACCS); Indigo Hotels and Amoil.

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Danielle Wong Ng (Celero), Honourable Premdut KOONJOO, Minister of Ocean Economy, Marine Resources, Fisheries, Shipping and Outer Island, Honourable Ashit Kumar GUNGAH, Minister of Industry, Commerce and Consumer Protection, Captain Peter Hall (IBIA)

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World Bunkering Winter 2015

IBIA Africa report

Delegates at the first Africa Regional Forum in Mauritius

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IBIA Asia report

A busy scene IBIA has been active in Singapore over the past few months, organising informative seminars and also social events, as Asia regional manager Jason Leong reports

he second half of the year has been busy. Back in late July, IBIA Asia organised a cocktail reception at a marina on Keppel Island, far away from the bustle of the busy city. IBIA arranged for a 40-seat catamaran to be berthed right beside the cocktail area so that guests could have time out and relax. The event was attended by 112 guests, including Captain M Segar, assistant chief executive of the Maritime and Port Authority of Singapore (MPA), and his deputies from the marine services department. Hosted by Douglas Raitt, chairman of the IBIA Asia executive committee, the event marked the end of the Bunkering in Asia Conference in Singapore. One aim of holding the event was to build membership. Existing members invited non-members so they could get to know more about IBIA in Asia. In fact, the majority of attendees were non-members, and their responses were encouraging. A very special thank you to the

World Bunkering Winter 2015

sponsors – VPS, Hong Lam Marine, Hempel and Sentek Marine & Trading – and also to all those who purchased tickets to support this event. IBIA Asia made a donation from the event’s takings to the Straits Times School Pocket Money Fund. More recently, on 25 November 2015, IBIA Asia held a bunker forum, entitled “Singapore bunkering scene – looking ahead”. Held at the STI Auditorium, Capital Tower, the event was supported by MPA, Singapore Maritime Foundation, Singapore Shipping Association and the General Insurance Association of Singapore. The forum attracted an overwhelming response, well exceeding the venue’s maximum capacity of 230. Sorry if you missed out, please register early next time. Dr Parry Oei, director of port services at MPA, gave the keynote speech, which was followed by two presentations on fuel quality and a panel discussion on mass flow meters (MFM). From 1 January 2017, it will be mandatory for

all bunker tankers licensed to operate in Singapore to be fitted with MFM. By the end of October, 41 bunker tankers had been approved by MPA for bunker delivery using MFM. In other news, it has been announced that, as of August 2015, the number of accredited bunker suppliers in Singapore stood at 59, compared with over 80 a few years ago.

IBIA convention

Cancún success Delegates ponder the IMO ‘level playing field’ initiative at the IBIA annual convention

any delegates from the Americas were among the 100 or so who attended IBIA’s highly successful 2015 convention at the Live Aqua Hotel in Cancún, Mexico, in early November. Opening the convention, IBIA chairman Jens Maul Jørgensen called on delegates to use the event to “get closer to each other” and understand each other more. He told delegates that they should engage in “open and honest” discussions over the next two days. In his keynote speech, entitled “Oil prices below $60 a barrel until 2030: what this means for shipping and bunkering”, IBIA vice-chairman Robin Meech noted that the crude oil market had changed from being cartel-controlled to being supplydemand based with increased volatility – but in a range of US$50 to $70/oil barrel (bbl) for Brent. He expected that there would be reduced investment in conventional exploration, that the Organization of the Petroleum Exporting Countries (OPEC) would be less influential and prices would continue to be influenced by politics and disruptions. Meech also stressed the need for “level playing” once the global sulphur cap of 0.5% comes into force in 2020 or 2025. He mooted that IBIA should propose at the International Maritime

Organization (IMO) that countries signatory to the MARPOL Annexe VI Prevention of Air Pollution from Ships regulation should enforce a new regulation prohibiting vessels from having onboard fuel that they cannot burn in compliance with MARPOL. Introducing the wide range of topics being covered, Jørgensen said that quantity and quality remained an area where as an industry “we never learn”. But, he added, “we have to”. This year’s event focused on “The Americas: a continent of opportunities”. In her report on the market in Mexico, Leonor Mondragón López, directorgeneral of Navalmex Combustibles,

explained how regulation has effectively prevented the country from taking advantage of its position as a substantial producer of crude oil and refined products. Although private companies have been allowed to operate in the sector since 1994, state-owned oil company Pemex retains a dominant position but has little interest in selling bunkers. Consequently, very few bunkers are sold at present. However, Lopez said that reforms now being pushed through offered a promising future with much greater freedom for private companies to own and operate bunkering facilities. Niki Vukelja, vice-chair, Panama Maritime Chamber and chief executive

World Bunkering Winter 2015

the major oil companies were expanding their bunkering operations, reversing a trend seen since the 1970s. On the same day, Muchamed Elfian Harun, assistant director bunker services at the Maritime and Port Authority of Singapore (MPA), gave an overview of the Asian bunkering hub. He stressed that MPA’s mission was to promote Singapore as a “safe and trusted” bunkering port. He said that the move to mandate the use of mass flow meters (MFM) by 2017 would make the market more transparent. A technical reference on MFM would be published in January next year. Residual fuels have not reached the end of the road yet, Intertek Shipcare’s technical manager Michael Green told delegates. He looked at how the make-up of fuel samples submitted to Intertek for testing had changed since the introduction of the 0.1% sulphur in fuel limit for ships in emission control areas (ECAs) in January this year. The most dramatic change had been the almost total disappearance of 1.0% sulphur fuels, which had previously been ECA-compliant. Green noted that this had been accompanied by a significant increase in fuel quality. This was because the blending and/or treatment of residual fuel to meet the 1.0% limit led in some cases to high levels of cat fines

IBIA chairman Jens Maul Jørgensen: “Do we get what we pay for? No!”

World Bunkering Winter 2015

within fuels, increased stability-related issues and chemical contamination. Immediately after the introduction of the new ECA limit, the proportion of distillate samples increased considerably. Clearly, this coincided with increased use of distillates to comply with the 0.1% limit. However at the same time, samples of ‘hybrid’ fuels started being submitted in increasing numbers. These fuels meet ISO2817 specification for RMD 80 and have few quality issues, as they are produced by oil majors in refineries. Based on the experience of use of residual fuels in ECAs as hybrid fuels, and the prospect of the widespread use of scrubbers to meet the likely introduction of a global 0.5% sulphur cap, Green said residual fuel use was not about to wither and die. He asked whether this was the end of the road for residual fuel and answered his question with an emphatic “No”. During his presentation, Jørgensen, who is also the director of Oldendorff Carriers’ bunker department, answered a different question – “Do we get what we pay for?” – with an equally definite “No”. “The quality is bad,” he added. With Oldendorff’s substantial timechartered fleet of dry bulkers, he said that a third of the problems lay with the ship, caused by mistakes often owing to inexperience. The same issue

IBIA convention

of Maritime Advisors & Developers, emphasised that the country had a large reserve of storage capacity, with only about 10% being used. He explained that the Panama Bunkering Procedure was one of several major bunkering projects under way, to coincide with the opening next year of the Panama Canal expansion. While Suez had taken some bunker sales from Panama, Vukelja said sales were up about 25% in 2014 over the previous year. He added, however, that, as a result of the expansion, it could be that fewer, larger vessels would use the canal. What effect that would have on bunker sales remained to be seen, although some observers expected a dip in volumes. Presenting an overview of the Caribbean market, Anne Ghent, chief executive of Trinidad’s Ventrin Petroleum, noted that although the region had a small bunker market, it had a strategic position on important trade routes. She pointed out that there was a fair amount of storage, but little refining capacity. Independent consultant Nigel Draffin reported on the situation in Europe. He stressed how financial difficulties were causing business failure. Some companies had gone down, but other problems were bubbling along under the surface. He noted also that

IBIA vice-chairman Robin Meech: prohibit non-compliant fuel onboard

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APM 2016 visitor registration now open. Register now!

T: +65 6780 4586 E: apm@reedexpo.com.sg W: www.apmaritime.com

Marina Bay Sands

IBIA convention

Independent consultant Nigel Draffin: oil majors reversing a trend with bunkering expansion

of inexperience was why another third of problems were down to surveyors. “There are too many inexperienced surveyors who do not know what they are doing,” he said. But the remaining third of bunkering issues, according to Jørgensen, were caused by suppliers. Undersupply was a problem, as was poor quality caused by blending. He said that the ISO specification system was not effective and he repeated a call he has made on previous occasions for IMO regulation of fuel quality. On the second day of the convention, the majority of delegates thought that the global 0.5% sulphur cap would come into force in 2020. During a lively and wide-ranging forum session, a straw poll showed that some 80% believed that political pressure meant the cap would not be delayed until 2025, even if an IMO study found there would not be sufficient distillate available. Other topics discussed in the forum included the possibility of using biodiesel as a marine fuel. Draffin emphasised that there was no problem in principle in burning biodiesel, but that there were issues of bacterial contamination and sludge formation if water was present and the fuel was stored for a long time. For that reason, the industry was

World Bunkering Winter 2015

IBIA chief executive Captain Peter Hall: “Avoid a disagreement becoming a dispute”

particularly concerned about possible biodiesel contamination of marine fuel. Another topic that provoked lively discussion was pour point and moves to lower it from 60°C. It was noted that the US and Canada were keen to reduce flashpoint to 52°C. In Canada’s case, it was because the higher the flashpoint, the higher also cold flow, an important consideration in the Arctic. US-based lawyer Steve Simms, of Simms Showers, said that could be an issue with casualty insurance if it was found low-flashpoint fuel had been used. Draffin said reducing flashpoint to 55°C or 52°C was not a technical or operational issue, but a serious commercial and legal one. The International Convention for the Safety of Life at Sea (SOLAS) stipulated a minimum flashpoint of 60°C. If a lower flashpoint fuel was used by a vessel, it would be regarded by the classification societies as out of class. The ship would then be uninsurable. Pointing to another complication, Green said that fuel testing could come under the Carriage of Dangerous Goods regulations. In his presentation, IBIA chief executive Captain Peter Hall outlined IBIA’s new dispute resolution package,

something which World Bunkering will look at more closely in the spring issue. He stressed that it was far easier to avoid a disagreement than to try to resolve one afterwards. He urged delegates to “be familiar with your contracts and terms and conditions”, warning them to “avoid a disagreement becoming a dispute”. Fortunately, there was little sign of disagreements or disputes in Cancún during the many opportunities for networking. On the evening before the convention, the Live Aqua was able to demonstrate how its outdoors areas were perfect for a welcome reception barbecue. Many delegates discovered that Mexican food and tequila went extremely well – and continued to enjoy the combination for the remaining two nights of the convention, including the gala dinner on the Thursday. Unfortunately, the Mexican weather was not kind and the events on both nights had to held indoors. Nevertheless, with traditional entertainment aplenty, both evenings were enjoyed by all. The gala dinner wrapped up this year’s convention, which yet again combined in-depth consideration of the main issues facing the industry with a chance to meet friends old and new from across this global industry.

“There is Posidonia, Nor-Shipping and CMA Shipping”

SAVE THE DATE!!

March 21, 22 & 23, 2016 The Hilton Hotel, Stamford, CT, USA

For more information contact: Lorraine Parsons, CMA Event Director at Tel. +1.203.406.0109 ext. 3717 Fax. +1.203.406.0110 • Email. conferences@cmaconnect.com OR visit us at www.cmashipping2016.com

CORPORATE

CORPORATE ADDITIONAL

PABLO TORRES SEA ENERGY COMPANY INC.45

NOORUL AZIZ PETRO INSPECT (MIDDLE EAST) FZE

EMMANUEL IHENCHO GENTEC MARINE & JETTY SERVICES

KAIVAN CHINOY PETRO INSPECT AMERICAS (ALSO BUNKER DETECTIVE)

INDIVIDUAL EVGENII MOROZ MESOS CO. LTD THEODOROS MOTSENIGOS MOHAMAD FITRI MOHD JAMIL COSHIN PTE LTD

CAPTAIN DANIEL HEERAMAN DE CHERMONT AND PARTNERS LTD. CINDY CHUNG-FAT EASY-FORWARDER RICARDO AIMEE ENGEN PETROLEUM (MAURITIUS) LTD FERIEL J. AUMEERALLY HAREL MALLAC GROUP

J STEPHEN SIMMS SIMMS SHOWERS LLP

YASVIN BUCKHOREELALL HORIZON ENERGY

GERALD YEE CLYDE & CO. CLASIS SINGAPORE PTE LTD

ALLEN CHETTY SEYCHELLES PORTS AUTHORITY

OLIVIA LEBLOND COPEMER

CAPT. A. COOPEN INDIAN OCEAN COMMISSION

LOBINE KHUSHAL L&P LAW PARTNERS LTD LEROY BASSON AFRICA BUNKERING AND SHIPPING CC PATRICE FRANCOIS AIRPORTS OF MAURITIUS LTD CHRISTINE JOHN-CHUAN BARCLAYS BANK MAURITIUS LIMITED AVINA UCKIAH C & A LAW GOINSAMY CHINIEN C & A LAW KELLY LI C & A LAW NIZAM GOOLAMHOSSEN CELERO SHIPPING RISHIKESH BROJMOHUN CONSULTEC ENGINEERING LTD

DJAZIMATI DJAMAL INDIAN OCEAN COMMISSION JAMIE FORMERT INDIAN OCEAN COMMISSION KIRAN SHAMLOLL INDIAN OCEAN COMMISSION RIJA JIMMY RAJAONARIVONY INDIAN OCEAN COMMISSION SAID ALI HAMIDOU INDIAN OCEAN COMMISSION SOLOFOSON JEAN RABARY INDIAN OCEAN COMMISSION RICHARD TOULOUSE SMITHA BISSONAUTH INTERCONTINENTAL TRUST LIMITED WINSON CHAN IRELAND BLYTH LIMITED NICOLAS SAINT OLIVE JOVENNA MADAGASCAR YVETTE DE KLERK MARINE CREW SERVICES SA (PTY) LTD.

DOMIQUE BECHARD CONSULTEC ENGINEERING LTD

ASHVIN DEENA MAURITIUS COMMERCIAL BANK

CAPT. MAHENDRA BABOOA DE CHERMONT AND PARTNERS LTD.

KOOMAREN CUNNOOSAMY MAURITIUS COMMERCIAL BANK

World Bunkering Winter 2015

New members

New Members

New members

LINDLEY PERRINE MAURITIUS COMMERCIAL BANK

VISHALI NYNAN SBM BANK (MAURITIUS) LTD

NICHOLAS RAMA MAURITIUS COMMERCIAL BANK

SARAH ROMAIN SEYCHELLES PETROLEUM COMPANY LIMITED

DIMITRI LAGESSE MAURITIUS FREEPORT DEVELOPMENT

AMISHA SEERPUTTEE SGS

DOMINIQUE DE FROBERVILLE MAURITIUS FREEPORT DEVELOPMENT HANS HERCHENRODER MAURITIUS FREEPORT DEVELOPMENT JEAN FRANCOIS HENRI MAURITIUS FREEPORT DEVELOPMENT JEAN-ALAIN SEERUNGUN MAURITIUS FREEPORT DEVELOPMENT RÉNÉ LECLEZIO MAURITIUS FREEPORT DEVELOPMENT SHANE RAMBURN MAURITIUS FREEPORT DEVELOPMENT DHAN BEEHARRY MAURITIUS FREEPORT DEVELOPMENT CAPT. K. NEWOOR MAURITIUS PORTS AUTHORITY CAPT. L.G. BARBEAU MAURITIUS PORTS AUTHORITY

BALRAM ASYRIGADOO STATE TRADING CORPORATION PRITHIVIRAJ SOOBARAH STATE TRADING CORPORATION VIKASH SOOREEA STATE TRADING CORPORATION BRUNO NALLETAMBY SWAN GENERAL LIMITED HEMANDRA KUMAR HAZAREESING THE MAURITIUS COMMERCIAL BANK LIMITED DR. BHISSAM NOWBUTSING UTI (MTIUS) LTD PATRICK BOUQUET UTI (MTIUS) LTD

D. SEEVEN PILLAY VALOO MAURITIUS SHIPPING CORPORATION LTD

MARCEL LAGESSE VELOGIC LIMITED (ROGERS SHIPPING)

TASLEEMA MOKADDAM LOWTUN MAURITIUS UNION GROUP

GEENESH DUSSAIN VIVO ENERGY

LAURENT RAJAONARIVELO MINISTERE DE L'ENERGIE ET DES HYDROCARBURES

JENNIFER FAUVRELLE VIVO ENERGY

MRS PREEYADARSHANEE DASSAYE MINISTRY OF INDUSTRY, COMMERCE AND CONSUMER PROTECTION

MEI YOKE WONG VIVO ENERGY

NOORMOHAMAD RAFFIQUE MINISTRY OF INDUSTRY, COMMERCE AND CONSUMER PROTECTION MEENAKSHI BHIRUGNATH-BHOOKUN MINISTRY OF OCEAN ECONOMY, MARINE RESOURCES, FISHERIES, SHIPPING AND OUTER ISLAND

GULSHAN JUGROO SOUTHBOND SHIPPING AGENCY LTD

NAZIHAH TIMOL VIVO ENERGY MOHAMMAD AFSAR SOOBADAR VIVO ENERGY ASHVIN SAMIR RAMDENEE VIVO ENERGY MAURITIUS LTD

NIVEDITA MALLIGA HOSANEE MINISTRY OF OCEAN ECONOMY, MARINE RESOURCES, FISHERIES, SHIPPING AND OUTER ISLAND

RISHI RONOOWAH MAURITIUS SHIPPING CORPORATION LTD

IAN ROGERS PETRO CONTRACTING LTD

DANIEL NG CHEONG HIN MAURITIUS CARGO COMMUNITY SERVICES LTD

ASLAM MOHAMUD HASSIM TAHER SBM BANK (MAURITIUS) LTD

SHEKAR SUNTAH MAURITIUS PORTS AUTHORITY

ATISH DOORGAKANT SBM BANK (MAURITIUS) LTD

RAVI DHALIAH STATE TRADING CORPORATION

PAULINE SEEYAVE SBM BANK (MAURITIUS) LTD

LADIS KONSTANTINOS B&L TRANSOIL (HOLDINGS) LTD World Bunkering Winter 2015

Benefits to members as of 1 December 2015

MEMBERSHIP COSTS

Individual membership: £200 Corporate membership: £995 Corporate additional membership: £200

These increases took effect on 1 August 2015. Additional The Board has also decided that the present practice of listing Corporate have Members does not properly and fairly meet members’ needs and some changes ship member of therefore been introduced that will more accurately match the benefits iat. Secretar to its cost; affected members will be contacted directly by the If you have any queries or comments about these changes, then please contact ibia@ibia.net or telephone: +44 (0) 20 3397 3850.

IBIA PUBLICATIONS AND BENEFITS IBIA World Bunkering Magazine – free copies for Members of IBIA

Please note non-members are requested to subscribe to the magazine at a cost of Pounds Sterling £45, £60 or £80 depending on location. Up to 20 additional free copies of the magazine are offered to buyer members of IBIA for forwarding to their vessels. IBIA World Bunkering Magazine – discounts on advertising

Discounted advertising rates are available for members with savings dependent on the advertisement size. Please contact the Advertising Sales Team at Maritime Media London on + 44 (0)20 7386 6100 IBIA List of Members

If your details are not correct, please log on to our new website and update them on your members page. The new website is designed so members can easily access and change their own information. This publication is only available to IBIA members. IBIA Guide to In-Line Blending

Available free of charge to members IBIA Guide to Avoiding and Resolving Bunker Disputes

IBIA members receive their personal copy free, but the report is offered for sale to non-members at £50.

World Bunkering Winter 2015

NEW MEMBER BENEFIT S

• A discounted travel clu b that offers cost effective flights • Multiple year discounts 15% discount for 3 years memb ership, (Paid in one instalm ent) – Guarantee no members hip increases for the next 3 yea rs • Meeting location in Cen tral London, with secretarial services (at cost effective rates) • Plus new benefits to be announced in the coming weeks 'Careers and Job informatio n' Further information on me mber benefits is available on our websit

Noticeboard

IBIA noticeboard

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.

London

Gibraltar

Singapore

Cape Town

2016 EVENTS PROGRAMME JANUARY Cocktail Evening - Singapore, Asia FEBRUARY 8th 8th 8th 10th MARCH 10th 10th 18th 18th 21st 23rd APRIL

Board Meeting - Naval Club, London, United Kingdom AGM - Naval Club, London, United Kingdom IBIA Dinner - Grosvenor House Hotel, London, United Kingdom IBIA Basic Bunkering Course and (Seminar) - London, United Kingdom IBIA in Africa AGM and Exco Meeting - Cape Town, South Africa IBIA in Africa - Members Dinner - Cape Town, South Africa IBIA in Asia Golf Day - Singapore, Asia IBIA in Asia Forum - Singapore, Asia IBIA in the Americas Membership - Forum and Drinks - Connecticut, United States of America Mediterranean Forum Membership luncheon Drinks - Houston, United States of America IBIA Board Meeting - London, United Kingdom IBIA in Asia Dinner - Singapore, Asia European Members Lunch

MAY

24th 25th JUNE 7th 23rd JULY 21st AUGUST SEPTEMBER 6th - 9th 13th - 15th 13th

Maritime Week Americas (BBC) - Fort Lauderdale, United States of America IBIA (American Members Lunch) - Fort Lauderdale, United States of America IMO Lunch - London, United Kingdom Basic Bunkering Course - Ghana, Africa Membership Luncheon - Ghana, Africa Middle East Forum - Dubai, United Arab Emirates Mediterranean seminar - Posidonia - Athens, Greece IBIA in Africa Membership Drinks - Cape Town, South Africa IBIA in Africa Membership Drinks - Durban, South Africa

IBIA Europe Forum at SMM - Hamburg, Germany IBIA in Africa Forum: Cape Town - Cape Town, South Africa Basic Bunkering Course - Cape Town, South Africa Basic Bunkering Course - Aracon Rotterdam Membership Luncheon - Houston, United States of America IMO Luncheon - London, United Kingdom

OCTOBER SIBCON - Singapore, Asia NOVEMBER 7th

African Ports Evolution - Durban, South Africa IBIA Convention - Gibraltar IBIA in Africa End of Year Drinks - Cape Town, South Africa

DECEMBER IBIA Members drinks - London, United Kingdom

* For up to date details, please consult the website.

TRAINING IBIA Asia carries out a variety of training courses throughout the year Monthly ‘Basic Bunker Training to SS600 Standard’ and ‘Advanced Bunker Training’ courses result in Cargo Officer certification. We also run a course on Quality and Compliance in Bunkering 17020. Basic and advanced bunkering courses are held around the world for ship owners and operators.

www.ibia.net

For further details, please email ibia@ibia.net or call us on +44 (0)20 3397 3850

A snap shot of 2015 Events manager Steve Hoare outlines many opportunities to fill your schedule

s another year comes to a conclusion it is time to reflect on what has been a great year for IBIA events and look forward to what we have in store for you in 2016. The year started with a successful annual dinner, held at a new venue, the Park Plaza Westminster Bridge, with over 1,100 guests in attendance, plus the singing waiters! This was closely followed by a Mediterranean forum in Gibraltar. With the backing of the Gibraltar Port Authority and Her Majesty’s Government of Gibraltar, IBIA put on a multi-site event. This made use of some of the unique local assets, with training and a forum onboard the Sunborn Gibraltar floating hotel and an exhibition and presentations at the cruise terminal, which also gave attendees the unique opportunity to go onboard bunker barges to see them at firsthand. London International Shipping Week saw us hold a “Bunkering with New Fuels” forum, with industry experts speaking about the implications of new fuels to an audience of 60 members. Then IBIA in Africa put on a regional forum in Mauritius, backed by Mauritius Ports Authority and the Mauritius government, attracting 130 attendees. The event included two days of training and a one-and-a-half day forum at which

World Bunkering Winter 2015

the Mauritius Government Ministers providing the keynote speech. November saw us put on our annual convention in Cancún, with over 100 people in attendance at the Live Aqua hotel. There is a full report elsewhere in this magazine. Training has been a feature of this year’s events. It formed an integral part of our regional forums, and IBIA in Asia continues to provide a range of courses, including mass flow metering and the IBIA basic bunkering course. Added to all this was the opening of our new offices in the heart of the City of London. We are now more accessible to all of our members and would welcome anyone who would like to pop in. The office, at 50 Liverpool Street, also gives us the opportunity to offer high-quality meeting rooms in a central location for two to 25 members. Just give me a call for further details.

House Hotel, Park Lane, London, on 8 February 2016. Planning is well under way for this event, and tickets and tables are selling fast – nearly 50% of available tables have been sold already. So don’t leave it until the last minute – book now. I am also able to announce that following the successful regional forum in March, next year’s convention venue will be Gibraltar in early November 2016. We have secured the backing of Gibraltar Port Authority and Her Majesty’s Government of Gibraltar for what is promising to be a great event. Keep your eyes on our website for details and to register your interest.

IBIA events manager report

IBIA Chief Executive Capt Peter Hall was one of several expert lecturers running training courses at Cancun

Events in 2016

So, now onto the programme for next year. We are looking to build on the successes of this year with regional forums in Asia, Africa, Europe and the Americas (please see the events calendar). As with last year, the successful formula of combining some thought leadership, such as a forum or lunch, alongside IBIA training is to be continued. So, too, is our successful annual dinner, with a return to the Grosvenor

It just remains for me to wish you all compliments of the season and to wish you all a very successful 2016. I hope to see you at an IBIA event then. Steve Hoare

Elections

Elections to the IBIA board of directors

rior to the Annual General Meeting (AGM) on Monday, 8th February 2016, there will be an election to replace members of the Board whose term of office will end on 31st March 2016. 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

COMPLETED NOMINATION FORMS MUST BE DELIVERED TO THE SECRETARIAT NO LATER THAN 31 DECEMBER 2015 EITHER BY POST TO: The 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. World Bunkering Winter 2015

AGM Annual meeting

The 22nd Annual General meeting of the Association

Will be held at:

The Cunliffe-Owen Room The Naval Club 38 Hill Street London At

15.30 On

Monday, 8th February 2016 EVERY MEMBER HAS THE RIGHT, UNDER THE COMPANIES ACT 2006, TO APPOINT A PROXY. SHOULD YOU WISH TO DO SO PLEASE CONTACT THE IBIA ADMINISTRATION TO OBTAIN A FORM By order of the Board Jens Maul Jorgenson, Chairman

World Bunkering Winter 2015

Individual Membership • Work groups that tackle emerging issues and offer advice. • Regional networking events, that are both social and inform on emerging issues. • Access to IBIA training courses and events at discounted rates • Discounts to industry events. • Discounted publications and IBIA specific publications that are down loadable.

Why Join IBIA? Are you a bunkering professional Involved in the supply of bunkers to vessels Want a direct line to IMO decision making Want network access to over 700 professionals and their organisations Access to industry experts on a range of subjects Recognition for your expertise

Join today online at

www.ibia.net/membership

• Opportunity to participate in IBIA work groups and governance • Networking: member rates at the IBIA Annual Convention, and the ability to buy tickets for the IBIA Annual Dinner during IP week each February. Discounted or free attendance at IBIA forums around the world. • As a member you have access to various industry organisations including IMO, where you voice is heard. • Access to our network of members in your region and across the globe. • Individual subscription to our quarterly magazine World Bunkering, that details the latest information in technology, regulations, the markets and other developments. • Access to technical information and Support of industry experts. • Arbitration and Resolution service, IBIA provides an arbitration and resolution service for its members which is very cost effective to mediate disputes between members. For further information visit our website. PLUS NEW BENEFITS: • New member benefits. • A discounted travel club that offers cost effective flights. • Multiple year discounts 15% discount for 3 years membership, (Paid in one instalment) – Guarantee no membership increases for the next 3 years. • Meeting location in Central London, with secretarial services (at cost effective rates). • Plus new benefits to be announced in the coming weeks “Careers and Job information”. • Further information on member benefits is available on our website.

Corporate Membership ALL OF THE ABOVE PLUS

Membership Options Individual: £200.00 p.a Corporate: £995.00 p.a

(e) ibia@ibia.net (t) +44 (0)20 3397 3850

• Register up to two other offices. • Discounts on IBIA training courses (For employees). • Discounts to IBIA Events (For employees). • Discounts to selected Industry events (For employees). • Discounts on advertising with World Bunkering. • Book tables at the IBIA Annual dinner. • Use of IBIA Logo on stationary.

IBIA Annual Convention Gibraltar November 2016 www.ibia.net/ibia-convention-2016/

Global news

Looking ahead Singapore launch for GloMEEP

The Global Maritime Energy Efficiency Partnerships Project (GloMEEP), which aims to support increased uptake and implementation of energy-efficiency measures for shipping, was formally launched in September in Singapore, at the joint International Maritime Organization (IMO)-Singapore conference, Future-Ready Shipping 2015. The project is being undertaken by IMO with funding support from the Global Environment Facility (GEF) and in partnership with the United Nations Development Programme (UNDP). Entitled “Transforming the Global Maritime Transport Industry towards a Low Carbon Future through Improved Energy Efficiency”, it will focus in particular on building capacity to implement technical and operational measures in developing countries, where shipping is increasingly concentrated. Funding for the two-year project was agreed in July. It marks the beginning of a new blueprint for creating global, regional and national partnerships to build the capacity to address maritime energy efficiency and for countries to bring this issue into the mainstream within their own development policies, programmes and dialogues. Attending the GloMEEP launch were representatives of the lead pilot countries for the project: Argentina, China, Georgia, India, Jamaica, Malaysia,

World Bunkering Winter 2015

Morocco, Panama, Philippines and South Africa. The lead pilot countries will be supported in taking a fast-track approach to pursuing relevant legal, policy and institutional reforms, driving national and regional government action and industry innovation to support the effective implementation of IMO’s energy efficiency requirements. Mandatory technical and operational energy-efficiency measures were adopted by Parties to Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL) in July 2011 and entered into force on 1 January 2013. These regulations made mandatory the Energy Efficiency Design Index (EEDI) for certain types of new ships, and the Ship Energy Efficiency Management Plan (SEEMP) for all ships. Since 2013, further work has been undertaken to extend the scope of application of the EEDI to include several additional ship types, to further develop guidelines to support uniform implementation, and to promote technology transfer. California sulphur warning

The California Air Resources Board (ARB) issued an advisory to vessel operators using ultra-low-sulphur fuel oil (ULSFO) to comply with the state’s ocean-going vessel fuel regulation. ARB staff found potential violations of the fuel sulphur limit when using these

fuels. It is possible that some of the violations were owing to contamination of ULSFO at or near the 0.1% sulphur limit by higher sulphur fuels remaining in tanks, piping and associated fuelhandling equipment onboard the vessel. The advisory provides guidance that vessel operators can consider, in consultation with vessel manufacturers, fuel suppliers, and others, to reduce the likelihood that ULSFO will exceed the 0.1% sulphur limit as used on the vessel. Wind and solar power system

Eco Marine Power (EMP) says it has been granted a patent in Japan related to its innovative wind and solar power solution for ships, the Aquarius Marine Renewable Energy (MRE) system. The company says Aquarius MRE is an advanced integrated system of rigid sails, solar panels, energy storage modules and marine computer platforms that will enable ships to tap into renewable energy by harnessing the power provided by the wind and sun. The rigid sails that will be used by the system are based on EMP’s EnergySail technology, for which a patent is pending. This has already passed feasibility and function testing at the Aquarius Innovation Lab in Osaka, Japan. Earlier this year, it was announced that Teramoto Iron Works in Onomichi, Japan, would be the production centre for the EnergySail.

Global news

In addition, the marine solar power component of the Aquarius MRE System was successfully evaluated this year onboard the high-speed car and passenger ferry Blue Star Delos. Commenting on the approval of the patent, Greg Atkinson, chief technology officer of Eco Marine Power, said: “The granting of this patent, which covers much of the core technology behind the Aquarius MRE System, is another major milestone for Eco Marine Power. It will help clear the path towards full commercialisation of the system and allow us present to shipping companies and shipyards a viable renewable energy system for ships.”

from the Gibraltar-San Roque refinery to Maersk ships, following the installation of an MSAR® manufacturing unit at the site. Installation and operation permits are currently being sought for the new unit. The trial programme is expected to run until the end of 2016, or early 2017, when engine tests on the fuel will be completed. Subsequently, fuel from the refinery would go on sale, following regulatory and commercial approvals.

“We are delighted to have this opportunity to meet the fuel requirements of a leading partner in the marine industry with Maersk, using a pioneering technology from Quadrise. Cepsa has been a leader in marine fuel technology for many years, and this agreement will help to consolidate our position,” said Federico Molina, head of Cepsa’s refining unit. Cepsa is a leading supplier of bunker fuel worldwide, with over 75 years

Emulsion fuel trials

Spanish oil company Cepsa and emulsion fuel developer Quadrise are to supply alternative marine fuel in trials with Maersk. Cepsa’s Gibraltar-San Roque refinery will install a manufacturing unit to provide alternative marine fuel. Trials are due to begin in the first half of 2016, and will see the fuel supplied

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World Bunkering Winter 2015

Bunkers International seeks new cash

US-based supplier Bunkers International (BI), which filed for bankruptcy protection in August, is looking for new sources of financing. According to press reports, the company had about US$40 million of debts, including to companies in Venezuela, Curacao and Singapore. The move to Chapter 11 came after PNC Bank stopped funding when BI

reportedly failed to meet the terms of its credit agreement. BI’s lawyer, Scott Shuker, was reported as saying: “The company didn’t miss payments, it was a technical default. The lender cut off funding, which forced the company to shrink. If we didn’t file for bankruptcy, some of the ships that were recently fuelled could have been seized.” The company reported revenue of US$740 million for 2014 and has been expanding globally. In September, BI took court action against the bulk carrier Wuchow and its owner China Navigation Co, alleging an unpaid bill of over US$139,000 for bunkers supplied in August. ClassNK verifies Iino Marine Service’s GHG emissions

Japanese classification society ClassNK has carried out the independent third-party verification of Iino Marine Service’s greenhouse gas (GHG) emissions inventory based on a reasonable level of assurance. ClassNK’s verification was performed according to the requirements specified in ISO14064 and under the observation of a registered accreditation body. ClassNK says that more companies are now going beyond regulations such as the Energy Efficiency Design Index (EEDI) and are making an effort to voluntarily reduce their emissions footprint even further.

Iino Marine Service drew up an emissions report (from 01/04/2013 to 31/03/2014) based on ISO14064-1, which quantifies the total emissions from the 50 or so vessels it manages and the Iino Marine Service office. ClassNK then carried out the verification of this report in line with ISO14064-3 (specification with guidance for the validation and verification of greenhouse gas assertions).

Global news

of experience, and operates in the world’s busiest waters in Gibraltar, the Canary Islands, Africa and the Middle East through installations in Morocco and Fujairah, and the Panama Canal. Last year, Cepsa launched DMB 0.1%, a low-sulphur marine fuel to meet new sulphur emission control area (SECA) standards. Quadrise has developed the fuel to provide an alternative for shipping, refining and power generation markets. The MSAR® oil-in-water emulsion fuel technology makes heavy hydrocarbon residues easier to use by producing a lower-viscosity oil mixed with water. Alternative fuel emulsions, which are water in oil, are produced from heavy fuel oil. By emulsifying refinery residues, as opposed to heavy fuel oil, the refiner is able to create more value, and also a lower-priced fuel, by selling the distillates that would traditionally be blended into its heavy fuel oil.

“K” Line awards for speed reduction

Kawasaki Kisen Kaisha (“K” Line) received awards for achievement of high compliance rates for its vessel speed reduction programmes in 2014 from the ports of Los Angeles and Long Beach. Both port authorities have a voluntary speed limit of 12 knots in force within the designated coastal sea area in order to reduce emissions of exhaust gas when arriving at or sailing from the ports. “K” Line was commended for its voluntary participation in both programmes as one of the top performers, based on 170 ships, representing 323 qualifying legs within 40 nautical miles during 2014. The company was granted the Vessel Speed Reduction Program award by the Port of Los Angeles for the seventh consecutive year, and the Green Flag Program award by the Port of Long Beach for the 10th consecutive year.

Port of Long Beach

World Bunkering Winter 2015

Panama Canal: opportunities and threats

The expansion of the Panama Canal presents both opportunities and threats, according to one of the country’s major barge owners. Nick Vukelja, vice-chair of Panama Maritime Chamber and co-owner of Terramar Oil & Services, told delegates at the IBIA annual convention in Cancún in November. Among the opportunities, Vukelja noted: new business from LNG carriers; services with bunker-only stops at US West Coast (USWC) ports may bunker in Panama en route to the US East Coast (USEC) or US Gulf Coast (USGC); the potential return of some services lost to Suez; the projected container port in Corozal and other projects; dedicated low-sulphur fuel oil (LSFO) facilities; blending and heating capabilities and the possibility of offshore bunkering for post-panamax ships in Cristobal. On the other hand, the delayed canal expansion, possibly to be completed by June 2016, was having a negative effect on the canal. While there were hopes of increased bunkers from more ships using the waterway, it was also possible that Asia/ USEC / USGC services could choose to bunker closer to their destinations. In the same vein, post-panamax vessels were likely to spend less time waiting before transits. Although more tonnage was expected to use the canal, the number of transits could increase more slowly than transits. The expanded canal could also stimulate the expansion of competing regional ports. In the background,the possible threat of a Nicaragua Canal remained. Meanwhile, tonnage using the canal has continued to grow. Following the close of the 2015 fiscal year (FY), the Panama Canal Authority (ACP) announced a new historical tonnage record, with 340.8 million Panama

World Bunkering Winter 2015

Canal Universal Measurement System (PC/UMS) tons passing through the canal. This represented a year-on-year increase of 4.3% and highlights the canal’s value and significance to global maritime trade. The previous record was set in FY2012, when the canal experienced 333.7 million PC/UMS tons. This year’s record surpasses that amount by more than 7 million PC/UMS tons. “The Panama Canal continuously works to provide its customers with reliable, first-rate service in response to evolving global shipping and maritime needs,” said Panama Canal administrator and chief executive Jorge L Quijano. “This milestone attests to this commitment, which will only continue to increase after the opening of the expanded canal.” The Panama Canal noted that containerships registered the most total tonnage, followed by dry bulk, liquid bulk and car carriers. Compared with the other segments, liquid bulk saw the most notable boost, reporting an increase of 23%, or 11.9 million PC/ UMS tons, owing to booming diesel, gasoline and propane exports from the US Gulf Coast to South America and Asia. The containership segment also recorded positive results, seeing a 3.7% increase in PC/UMS tonnage yearon-year. Seven new liner services were introduced in January this year, which also contributed to the increase in cargo passing through the canal: five in the US East Coast–Asia route; one US West Coast–Europe route; and another one on the North-South route. In addition, the car carrier segment recorded an increase of 5.2% as a result of exports from Mexico’s West Coast destined for the US East Coast. The Panama Canal’s 2015 fiscal year ran from 1 October 2014 to 30 September 2015.

Increasing trading activity between North and South America is good news for Caribbean-based bunker suppliers because of their strategic location, according to Ventrin Petroleum’s chief executive, Anne Ghent. Speaking at the IBIA annual convention in Cancún, she also pointed out that increasing volumes through the Panama Canal had given rise to transshipment opportunities in the region. She added, however, that bunker buyers worldwide are largely price driven. “Comparison of price at present and next port is an ongoing exercise.” For the Caribbean, the next port could be Singapore, Rotterdam, US East Coast (Mobile, Houston, Savannah), Brazil, or Africa. “If cheaper bunkers can be sourced at the next port, owners may just top up in a local port,” she said. Eastbound liquefied natural gas (LNG) cargoes may choose traditional bunker fuel, or, alternatively, use LNG boil-off gas as fuel, depending on relative prices. Ventrin is a subsidiary of Suriname’s Staatsolie, supplying bunkers to vessels calling at ports and anchorages throughout the island of Trinidad. Based in the port of Point Lisas, Ventrin delivers bunkers primarily along the western coast of Trinidad in the normally calm waters known as the Gulf of Paria. Ghent noted that the estimated bunker market in the Caribbean was about 15 million tonnes a year. The region’s main competition came from Panama, US Gulf, Rotterdam, Singapore and South American ports such as Cartagena.

Global news

Increased trade "to boost Caribbean"

Environment

DFDS is chairing a working group on the energy reporting of ro pax ships like the Pearl Seaways

Carbon debate hots up As the Paris climate talks approach, environmental groups have been racking up the pressure on the shipping industry

hree connected issues have come to the fore as crucial climate talks in Paris draw closer: whether there should be a cap on the level of CO2 emissions that the industry can produce, however much world trade may increase; whether shipping should pay a levy on its CO2 emissions; and, thirdly, if so, how much the levy should be. In 1992, the Rio Convention adopted the UN Framework Convention on Climate Change (UNFCCC). This convention sets out a framework for action aimed at stabilising atmospheric concentrations of greenhouse gases (GHGs) to avoid “dangerous anthropogenic interference with the climate system”. Almost all countries, 195, are now parties to the UNFCCC, which entered into force on 21 March 1994. Every year there is a Conference of Parties (COP) is to review the convention’s implementation. The first COP took place in Berlin in 1995, and significant meetings since then have included COP3, where the Kyoto Protocol was adopted, and COP17 in Durban, where the Green Climate Fund was created. This year’s COP21, also known as the 2015 Paris Climate Conference, could be decisive if it fulfils its aim to achieve a legally binding and universal agreement on climate, with the aim of keeping global warming below 2°C. The big question for shipping is whether the

industry will be specifically included in any deal. A preliminary meeting in Bonn a few weeks before COP21 came up with the following form of words: “Parties [shall] [should][other] pursue limitation or reduction of greenhouse gas emissions from international aviation and marine bunker fuels, working through the International Civil Aviation Organization and the International Maritime Organization (IMO), respectively, with a view to agreeing concrete measures addressing these emissions, including developing procedures for incorporating emissions from international aviation and marine bunker fuels into low-emission development strategies."

IMO Secretary General Koji Sekimizu

In September, IMO secretary-general Koji Sekimizu issued a statement saying that the UNFCCC discussions would be “pivotal for the sustainable future of mankind”. He said: “Everyone must play a part in this effort – no industry or sector can be excluded, and that applies to shipping, too. As the industry that physically delivers around 90% of global trade, and a key driver of the world’s economic engine, it is incumbent on shipping to make its own contribution.” Sekimizu referred to action already taken by IMO to reduce airborne emissions from ships. He noted that IMO took a major step forward in 1997, with the adoption of the Protocol to the International Convention for the Prevention of Pollution from Ships, known as MARPOL Annex VI, which currently regulates air emissions from 95.4% of the worlds’ shipping tonnage. He said: “It is important to stress that IMO is, to date, the only international organisation to have adopted global legislation to significantly reduce CO2 emissions from a particular industry. Nothing similar exists for any other industry or business sector. IMO has consistently and successfully, over time, explored new possibilities to improve upon existing technical, operational and management measures to reduce vessel-source air pollution, including greenhouse gas emis-

World Bunkering Winter 2015

would be almost three times higher than the carbon price paid by shorebased industries in developed nations. It added that about 70% of the world merchant fleet is registered in UNFCCC ‘non-Annex I’ developing countries, and that maritime trade is of vital benefit to rich and emerging economies alike. ICS emphasised that shipping is committed to reducing CO2 and has a responsibility to contribute to the achievement of the United Nations 2°C climate change goal. But, it continued, “the UNFCCC recognises that developed and developing nations should accept differing commitments, and shipping is no different, especially in view of its vital role in the movement of about 90% of global trade.” An ICS statement said: “While China and India, for example, have already made positive CO2 reduction commitments to COP21, these will not deliver absolute CO2 reductions for several years. Some richer nations, however, consistent with the UNFCCC common but differentiated responsibilities (CBDR) principle, have made more ambitious commitments. Shipping, meanwhile, has already reduced its total CO2 emissions by more than 10% (2007-2012) and CO2 per tonne-mile by around 20% (2005-2015). It is therefore on course for carbonneutral growth.” “While shipping may currently have CO2 emissions comparable to a major OECD economy, it is inappropriate for the ITF to propose that the industry should be treated like an OECD economy,” said ICS secretary-general Peter Hinchliffe. ICS also said that the ITF was incorrect to state that a proposal by the Marshall Islands to discuss the development of a CO2 reduction target for shipping “was not acted upon within the IMO”. “The issue was placed on the agenda of the next IMO Marine Environment Protection Committee, and will be debated fully by IMO in April 2016, taking account of the outcome of the UN Climate Conference in Paris.” ICS said it “plans to respond positively during the IMO debate about possible targets, taking account of the significant reductions that will be delivered by the Energy Efficiency Design Index for new ships (already a binding measure agreed by IMO) as well as

further operational measures and the impact of new technology”. On the levy, ICS stated: “The position of ICS remains that if IMO member states should decide to adopt a shipping market-based measure (MBM), the industry’s clear preference is for a fuel levy, rather than an emissions trading scheme or other complex alternatives that would distort global shipping markets. However, if a levy was developed by IMO, ICS believes that any money collected should be proportionate to international shipping’s share of the world’s total CO2 emissions (2.2% in 2012, compared with 2.8% in 2007), not the US$26 billion a year suggested by the ITF.

Environment

sions. IMO continues to contribute to the global efforts to reduce greenhouse gas emissions in the context of the climate change debate.” The IMO head said that the UN agency’s regulations that were already in force would ensure that emissions per ship will be significantly reduced. He added in what has been seen by environmental groups as a highly controversial statement: “But what they [regulations] cannot do, and what shipping cannot do, is control the total, global demand for cargo to be carried. This is directly related to growth in the global economy. Of course, in a future, low-carbon society, the growth of demand for oil, coal and gas may fall. This, in turn, may serve to limit overall emissions from the shipping sector. But, if the global economy grows, demand for shipping will grow as well; which means that, even though emissions per ship will be greatly reduced under established IMO measures, the overall emissions from the sector may actually increase. History is certainly on the side of growth – seaborne trade has grown more than three-fold during the past four decades. This may give rise to calls for other measures, beyond those already adopted, or currently under consideration, by IMO.” The foreign minister of the Marshall Islands (RMI) responded by asserting that the IMO secretary-general’s words were “a danger to the planet”, because of his call “for global leaders at COP21 not to intervene and not insist that the IMO now set a clear and ambitious sector target for shipping”. In October 2015, a policy brief issued by the International Transport Forum (ITF), which is affiliated to the Organisation for Economic Co-operation and Development (OECD), asserted: “Greenhouse gas emissions of shipping are considerable and would need to halve by 2050 for attaining the goal of keeping global warming within a 2°C pathway. Instead, they are set to rise substantially, and the industry will have to take additional actions.” ITF said that shipping should pay a carbon price of US$25 per tonne of CO2. The International Chamber of Shipping (ICS) responded by saying this

Interferry initiative on ro-pax MRV

In an initiative led by trade association Interferry, a special correspondence group has been formed to recommend sector-specific metrics for ro-pax vessels under pending implementation rules for European Union (EU) legislation on the monitoring, reporting and verification (MRV) of carbon dioxide (CO2) emissions. From 1 January 2018, the legislation – designed to gauge the energy efficiency of a ship’s ‘transport work’ – will require all vessels of more than 5,000gt operating to or from EU ports to document and report their fuel consumption on an annual basis. Ro-pax operators have argued that mixed cargoes demand a more appropriate metric than current proposals, such as ‘passengers carried’ for cruise ships and ‘deadweight carried’ for general cargo vessels. Interferry made the suggestion for a dedicated correspondence group during its work with the MRV monitoring subgroup of the European Sustainable Shipping Forum (ESSF), where members represent the 28 EU member states and various organisations, including owners, operators, suppliers and classification societies. Danish ferry operator DFDS, which represents Interferry in the subgroup, is chairing the correspondence group, which has now been tasked with recommending the relevant parameter – or more than one if justified – for expressing the passengers and cargo carried by ro-pax ships.

Letter to the editor

Respect and honor in business is our business From Irene Notias

ear Editor, The terms honor, trust, integrity, teamwork, respect and gentlemen’s agreement refer to qualities increasingly missing in today’s bunker business, but nevertheless everyone claims to adhere to them. Customers look for reliable suppliers while suppliers look for financially stable customers. Brokers connect the two and act in the best interests of both parties. Yet they seem to be underestimated and occasionally “used” or “overlooked” without anyone really acknowledging the ethical commitments towards a reliable broker. Maybe we need brokers contracts? Bunker brokers serve a distinct purpose in the bunker chain. They connect end-users to the bunker supply chain, fuel traders and physical suppliers, and they must be alert, aware, totally informed, transparent and remain independent at all times. In order to do this well, they must work diligently and effectively, aiming for long-term relationships. This takes time, energy, and financial resources. A reputable bunker broker is all of the above and will have years of documented experience of effective work for a portfolio of reputable clients. In addition, they must have established long-term relationships with all members of the industry, sustaining a pristine reputation for

credibility plus know-how of bunker industry dynamics. In order to achieve this and hence provide this assistance to the rest of the industry, it is imperative that their diligent work is not interrupted and the relationship is not trespassed. Of course, credit information is available from business analysts’ reports, which are easily purchased, but the actual experience of a broker with a long-term successful client relationship is undeniably the best referral, and it is free. This year, we have seen growing incidents of bypassing and misuse of a broker’s services, upsetting this balance of trust. As world trade slows and demand decreases, competition has reached crazy levels. So much so that some would risk their integrity to save or gain a buck. It is understandable that some owners often allow suppliers to come directly to them, because they think that by bypassing the broker they save on commissions. From experience, such thinking is misguided. As previously mentioned, the broker is instrumental in shielding an owner from many unknowns. They offer relatively free support from the beginning to the completion of the bunker inquiry process, alongside their whole network – without which the buyer would not have known who to contact or who they were contacting reputation-wise.

In an article entitled “Why use a Bunker Broker?” in the December 23 2009 issue of Dockwalk magazine for captains and crew, technical editor Bransom Bean states: “But there are times when do-it-yourself is not the best idea. Buying bunkers is perhaps one of them, especially if you happen to be in an unfamiliar port or up against a tight schedule.” A bunker broker service can also assist suppliers and traders for the same obvious reason – it helps clients, mainly by screening potential customers and providing information on payment performance based on actual experience with a creditworthy customer. Bunker brokers are filters for suppliers and traders, weeding out the troublemakers or losers. In 15 years as a bunker broker, I have provided ample reliable credit information to the bunker sales sector about several esteemed Greek and New York shipowners and companies. In some cases, we have been able, on our word, to secure credit for owners who have been late paying owing to interruptions in their cashflow from weak freight markets and/or non-performing charterers. In today’s difficult times, a broker is an important voice on behalf of an owner. Brokers monitor payments for both supplier and clients to ensure smoother payment performance. They are like the chorus in a Greek tragedy, reminding every one of the rules and dynamics.

World Bunkering Winter 2015

be of no concern to the owner, but the broker’s reputation is what helped the owner get the service and best price in the first instance. Maybe a broker should not make any good faith effort to enhance owners’ reputations and buying power through face-to-face meetings with suppliers. On one occasion, a supplier was invited by the broker to attend a meeting for the purpose of building a business relationship with a particular owner. Appointments were arranged, an agenda was put forth, spelling out the purposes of the meeting as well as ideas to build upon a longstanding relationship for both parties, all instigated by the broker. The face-to-face meeting was successful. The broker’s prior efforts to establish credit lines and put the owner in the best light with the supplier were rewarding for the owner, just as the request for the supplier to travel thousands of miles was also rewarding for the supplier. Yet, after the meeting, the buyer secretly communicates with the supplier and they agree to cut out the broker. Customers say it’s not their fault, because the supplier approached them. And suppliers claim it’s not their fault, because the customer approached them. For sure, the standard is that it is ultimately the customer’s choice. These excuses should not be acceptable. Why would a professional, reputable broker give up valuable time to connect worthwhile customers with reputable vendors? Does this volatile, fragile market we are experiencing have any more room for misuse and mistrust? There are possible solutions to avoid this bad business of bypassing. If the broker’s client communicates directly with the supplier, then the supplier can make it standard practice to offer the price via the broker, explaining to the new customer that they honor the broker’s introduction and the existing business relationship by offering the same price to both. That way, there is no cost burden and, in fact, you get the added value of a broker’s service. But an owner would be wiser to pause and think about the action they are about to undertake and ask not only if it is the moral thing to do but what is truly achieved. On a positive note, suppliers who honor the channels that bring them

business and offer only via the broker (the original channel) contribute to a healthier business atmosphere. They help by stopping the disorder that is currently going on in the market. However, many suppliers are not keeping to ethical standards and are offering deals to everyone in a hit or miss style. Just leaving it to chance by seeing who will bring them the business, even competing against themselves, creates confusion and disharmony. As members of IBIA, we must influence and encourage values and worthwhile common-sense practices to create harmony that will instigate more successful deals. Knowing the valuable role of a broker and the differences from a trader, and showing more respect to the work of our colleagues, would all help the bunker market operate more smoothly. We must bring back respect and honor to the bunker business – without them, the industry has no proper foundation. Sincerely,

Letter to the editor

Besides offering port information, price indications and port comparisons, they do all the follow-up and after-sales work, including claims handling. While an owner may silently participate or proactively seek to cut out the broker, the savings are minimal and lost in so many other ways. The owner may have saved 50 cents on a bunker stem, but overpaid for the stem itself. In speaking with a shipowner on whether they would bypass a broker who showed them a cargo from a shipper that was known to them, their response was enlightening. The owner said “No” and went on to explain that it is, in many cases, better to have a person in the middle, because it allows for better negotiations on the freight and it also is valuable in the event of a dispute. Nevertheless, it is becoming more and more prevalent today to find owners and suppliers bypassing the bunker broker. There are different types of bypassing. The first is the “white” kind, where the customer either wants to or must cut costs by cutting out middlemen. Then there is the “orange” kind, whereby salespeople are instructed to “go direct”, thus bypassing the middleman who introduced the client, or take it on themselves to do it “accidentally” . This is a frustrating event. We know of two major fuel companies who did exactly this. They reached out to the customer of an authorized broker and, bypassed their own colleague pointblank, hurting the broker’s business and the major oil companies’ reputations for ethical conduct. The “red” kind of bypassing, which is the premise of this article, is when all the homework and legwork has been done by brokers without compensation, then the owner turns and gives the business to someone else. Like the jungle, it’s survival of the fittest. But this in the end is defeating to the owner. There is a reason why an owner went to a particular broker to get the legwork done in the first place – the broker’s contacts, reputation and ability to procure the best results. Did the owner think of the consequences? It is frustrating to the broker, demotivating to its staff and damaging to its reputation. This may

Irene Notias

Managing director Prime Petroleum Services, Inc. (as brokers only) 85 Vouliagmeni Ave, Office # 309 (City Plaza) Glyfada, 16674 Athens, Greece Tel: +30-210-963-9140 Cell:+30-6944382533 E-mail: inotias@primeinc.gr

Editor’s note: World Bunkering welcomes Letters to the Editor that add to discussions on topics affecting the industry. Readers will notice the spelling reflects Irene’s transAtlantic English. That is a one-off to add emphasis to Irene’s view. The editor reserves the right to decide whether to publish letters and to edit and abbreviate them.

New fuels

How low can you go? Seatec’s Anil Balan explains what precautions to take with ULSFO, and possible pitfalls

ith the implementation of the new sulphur limits (0.1 % mass) as of 1 Jan 2015 in the emission control areas (ECAs) and the availability of ultra-low-sulphur fuel oil (ULSFO), shipoperators are facing new challenges with regards to the storage and handling of these fuels. In this article, we share the experience of some vessels using such fuels and look into the three most important properties to promote better understanding of ULSFO. We also examine the reference data from vessels using the hybrid fuel. The three parameters which will be discussed are pour point, compatibility and kinematic viscosity. Pour point

Pour point is the lowest temperature at which the fuel continues to flow. The pour point of the ULSFO samples tested so far by SeaTec is in the range of 3°C to 27°C. It is observed that, in most of the cases, pour point is above 18°C. This indicates that special care should be taken to maintain the fuels at a temperature above the point where the problems occur owing to wax crystal formation. This parameter can vary according to the supplier. The major limitation of a pour point test is that it only measures the lowest temperature at which the fuel

continues to flow and does not give an indication of the temperature at which filtration issues may occur owing to wax crystal formation. Ideally, we should be able to store the fuel above the cold filter plugging point (CFPP) so that we can avoid waxing of fuel and hence fuel starvation. In most cases, the CFPP test is not performed routinely by laboratories, and storing the fuels 10°C above the pour point is generally suggested. If there are any limitations with regards to heating capabilities onboard, consider applying pour point /CFPP additives for safe operation in colder regions, or, if possible, purchase fuels with better cold flow properties. It is very important to note that the additives are only effective before crystallisation has occurred in the fuel. Based on the data collected, most of the vessels had stored fuels above 35°C to 40°C to avoid problems related to cold flow, and additives were not used. There are also onboard pour point analysis kits available, which can assist the operator in taking necessary precautions in storage and handling. Compatibility

Compatibility of fuels is one of the most important parameters to take note of while using ULSFO. Make sure that the compatibility test is performed onboard in the ratio that you are intending to

blend the fuel. The testing should be in accordance with the ASTM D 4740 Standard Test Method for Cleanliness and Compatibility of Residual Fuels by Spot Test. Ideally, the rating should be below 3, where there is no well-defined inner ring, which would indicate that the fuel is compatible. The tanks should be cleaned before the bunkering of ULSFO in order to ensure that no residue or small quantity of the previous bunker remained. If you are mixing fuels, the previous bunkers should be kept to a minimum while using ULSFO fuels to avoid compatibility issues. There might also be increased sludge and carry-over of contaminants from the settling tank, owing to the cleaning effect of these fuels. Keep a close watch on purifiers, drain tanks more often, look for any symptoms of excessive sludge and, in short, closely monitor for any abnormal conditions. Kinematic viscosity

The kinematic viscosity of the ULSFO fuel samples tested so far by SeaTec is in the range of 6 cSt to 42 cSt at 50°C and has an average of 20 cSt at 50°C. This, as in the case of pour point, can vary depending upon the supplier. Awareness of this test is required to maintain the proper viscosity at the engine inlet, as well as deciding upon their storage and handling temperatures.

World Bunkering Winter 2015

Vessel B

Vessel C

Vessel D

Vessel E

Vessel F MAN B&W 9S90ME-C8.2

Engine model

MAN B&W 6 L70MC

SULZER 9RTA84C

MAN B&W 6S70MC-C

Grade mentioned

RME180

RMD 80

RMG 380

ULSFO

Location

St-Petersburg

Rotterdam

Antwerp

Density at 15°C, kg/m3

865.5

890

889.4

911

906.9

902

Kinematic Viscosity@50°C,cSt

6.81

14.71

13.79

21.95

35.6

41.05 0.1

Sulphur, % mass

0.09

0.06

0.1

0.04

Cat fines (Al+Si), mg/kg

Pour point, °C

Seawater temperature, °C

Any mixing of fuel

A little mixing with MGO in the ME & AE service system

15% with previous bunker 0.1 % Sulphur RME 180

Compatibility test carried out

Yes

Pour point/CFPP additives used

Increase in sludge due to cleaning effect of fuel

Initially excessive sludge formation, later after overhauling and adjustment of HFO purifiers normal sludge formation

Storage tank temperature, °C

47-50

Settling tank temperature, °C

65-70

Service tank temperature, °C

75-80

Purifier heater temperature, °C

80-83

Engine inlet temperature, °C

78-82

Engine inlet viscosity, cSt

BN of cylinder oil, mgKOH/g

Any anomalies noted

It should be noted that the fuel is not overheated and the viscosity does not drop below 2 cSt. The laboratory report would normally indicate the injection temperatures required, based on the tested viscosity. In the above table, reference data from vessels using ULSFO has been provided. The typical parameters, fuel characteristics and precautionary measures maintained by the vessels while using these fuels can be noted. Precautionary measures that should be taken by vessels using ULSFO tanks cleaned before the bunkering of ULSFO in order to ensure that no residue or small quantity of the previous bunker remains • Keep ULSFO separate – the distillate fuel line should be used as a bunker/ transfer line in order to avoid mixing ULSFO with a high-sulphur fuel oil (HSFO) • Permanent heating should be maintained, including all bunker and transfer pipelines. In case the fuel becomes mixed, a compatibility test should be performed to avoid any cases of incompatibility

• Store fuels above 35°C to 40°C to

• Ensure availability of onboard test

avoid the possibility of fuel waxing and to ensure better cold flow properties Avoid overheating the fuel so that the kinematic viscosity does not drop below 2 cSt When ULSFO is to be used in an auxiliary boiler burner, the low fuel temperature trip may need to be adjusted Check if any adjustments in the purifiers are necessary owing to the difference in density, as ULSFO samples have relatively low density when compared with conventional residual fuels Initially excessive sludge formation can be expected during operation, so a close watch should be kept on purifiers for any abnormal conditions Kinematic viscosity at the engine inlet must be maintained as per the recommendations of the engine manufacturer Ensure that a cylinder oil with proper base number (BN) is used in the main engine while using ULSFO. In most cases, oils with a BN of 25 mgKOH/g can be used

kits (pour point/CFPP, compatibility, etc) as necessary Awareness of the quality of the fuels helps in ensuring the problem-free operation that can be easily achieved while using ULSFO, once a proper risk assessment is carried out during changeover. In general, all the vessels that have used these fuels so far have been able to deal with the changeover quite satisfactorily. It should be noted that, currently, only 5% of the samples tested with SeaTec are using ULSFO. The remainder are using other alternative fuels and technologies (marine gas oil, marine diesel oil, scrubber installation, etc) while operating in ECA regions. However, interest in these fuels is increasing. The above recommendations are based on our experience, and users are recommended to strictly follow the fuel supplier and /or engine manufacturer recommendations provided while using ULSFO.

•

• Service/storage

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•

New fuels

Vessel A

Anil Balan is a tribologist at Seatec condition monitoring. He can be contacted at anil.balan@seatec-services.com

Additives

Cold flow concerns Recent changes in refining have increased wax content in distillate fuel and caused cold flow issues

he recent shift to lowersulphur fuels has had many operational consequences, according to marine fuel technology specialist Innospec. But in its quarterly publication, Marine Fuel Watch, the company cautions that the consequences for refining, where demand has changed too, should not be overlooked. It says that, in the case of marine distillate fuel, there appears in certain regions to be a notable trend in fuels supplied with higher wax contents. This is being reported by both fuel-testing laboratories and operators, who cite worsening cold temperature operability. Further, as marine gas oil (MGO) is now being stored in onboard tanks, which are more exposed to ambient conditions, the risks increase also.

Innospec notes that assessing cold flow is not made easy, as an ISO8217 analysis will only provide information on pour point – the temperature at which a fuel becomes solid. To assess operability, however, the cold filter plugging point (CFPP) must be known, and no correlation exists between the two. The International Council on Combustion Engines (CIMAC) recently published a recommendation on the matter, where additive application is listed as a solution to the issue. Innospec’s response has been to develop Octamar™ Winter, which it describes as an “inexpensive and effective means of improving safety, reliability, integrity and efficiency”. Recently, as the cold season in the Northern Hemisphere closed in, and cold temperature operability issues continue to rise, the new product has

been verified independently by Lloyd’s Register, and has been demonstrated to reduce pour point and cold filter plugging point (CFPP) by an average of 15°C and 10°C respectively. Innospec says these results bring about many safety and financial benefits to the end-user, including: • Reduced risk of fuel waxing and solidification – a risk in cold and even temperate climates • Maintains pumpability, filterability and operability, avoiding fuel starvation and loss of propulsion • Improves reliability of lifeboats and other emergency equipment • Treats MGO storage tanks and may reduce or even eliminate heating requirements • Available in 25-litre pails for easy handling and application

World Bunkering Winter 2015

Adding something?

Additives

Innospec’s director of marine specialities, Giorgio de Leonardis, said: “Our wide client base was consulted in the development of this new product, and demand is proving to be high. Innospec has unrivalled expertise in the field of fuel cold flow through its refinery operations, and applying this to marine fuels was a natural process. The result is an extremely effective and bespoke product. As with many Octamar™ products, the Lloyd’s Register verification provides assurance on performance that cannot be obtained anywhere else.” Octamar™ Winter has a standard dosage rate of 1:1,000 (1 litre to 1 tonne). Meanwhile, the company also reports that environmental legislation in Hong Kong has driven a surge in additive demand. Innospec says it is providing the solutions the marine industry requires to mitigate the fuelrelated risks brought about by recent legislation in the territory. In April 2014, a rule was introduced in Hong Kong, which specifies that the maximum sulphur content of MGO for sale in the territory is no more than 0.05%. This lower sulphur level increases the risk of lubricity issues dramatically. Innospec says that its Octamar™ LI series of fuel additives provides the solution. Innospec also says that operators using its Octamar™ combustion improver additives have few issues with assuring compliance with the rule regulating smoke emissions from vessels in Hong Kong waters, which came into effect in July 2014. Any vessel with an emission of shade 2 or greater on the Ringelmann Chart that has lasted continuously for three minutes or more will be in breach of this rule. On 1 July, a new rule came into force, specifying a maximum sulphur content of 0.5%, to be used at berth in the port and one hour either side of arrival and departure. Innospec says that, in all likelihood, operators will use 0.1% sulphur gas oil, as is used inside sulphur oxide emission control areas, to avoid storage of an additional grade. Again, the company says its Octamar™ LI series of additives will eliminate the associated risks from such fuels.

There are mixed feelings in the industry about the use of additives but they have a long history, many users and a number of major producers who serve a growing market

ccording to US-based company Bell Performance its founder Robert J Bell, a prolific inventor and innovator, formulated the first fuel additive in history in 1909. It was a treatment to clean and restore the engine performance of the new Model T. By 2006 the company had rebranded and was producing single function, problem-solving treatments for diesel, bio-diesel and ethanol-blend users. The company says that its current range of marine heavy fuel products prevent acid emissions, cold corrosion damage, sludge drop-out in fuel delivery systems and incomplete fuel combustion producing soot emissions as well as boosting fuel efficiency. It currently offers ATX-1004DSC and ATX-1005SSD marine heavy fuel additives. The company says: "These ATX multfunctional formulations effectively address the most common problems that marine users experience while using marine heavy fuel oil. They combine proven effective organometallic combustion catalysts with acid and deposit neutralizers and effective surfactant components in one seamless formulation. Marine users of ATX-1004DSC and 1005 SSD will save fuel costs and reduce costly maintenance expenditures while improving overall environmental friendliness of their systems." Meanwhile Wilhelmsen Ships Service (WSS) says that it aimed to lead the way when it comes to low sulphur fuel treatment. It launched a complete range of distillate-specific products well ahead of the creation of a 0.1% sulphur limit for Emission Control Areas (ECAs) in Europe and the US on 1 January 2015, WSS says its Unitor branded DieselPower series of products are "tailor-made" to address the unique problems associated with the use and changeover to low sulphur distillates. The range includes lubricity and stability enhancers, a liquid biocide and, meeting current industry concerns, a cold flow improver. "Proven to vastly improve the cold flow properties of distillates", WSS says its DieselPower CFPP delays paraffin crystallization, allowing treated fuels to flow unhindered at lower temperatures, extending their cold filter plugging point (CFPP). Typically, the difference in CFPP values between treated and untreated fuels is between 2 and 12 degrees Celsius. "This could be difference between unhindered cold weather operations and a costly and a potentially dangerous loss of power incident," WSS notes. With its additive product range manufactured in own factory in Tønsberg, Norway, "to ensure consistent, controllable quality", WSS emphasises that it has worked with a number of engine manufacturers, independent testing facilities and fuel companies to develop their fuel treatment products.

Barge design

Barging into LNG As the use of LNG continues to be encouraged as a means of dealing with environmental legislation, particularly in ports, a number of designs for bunker barges have been developed. Sandra Speares reports

he American Bureau of Shipping (ABS) has been selected to class an LNG bunker barge under construction in the US at Conrad Orange Shipyard, a division of Conrad Shipyard, for WesPac Midstream and Clean Marine Energy (CME). The 2,200m3 barge is scheduled for delivery in mid-2016 and will initially be deployed in Tacoma, Washington, to service shipowner Totem Ocean Trailer Express’s Orca class ro-ro vessels. The unit will then be relocated to Jacksonville, Florida, to serve parent company TOTE’s Marlin class dual-fuel container vessels and other vessels powered by liquefied natural gas (LNG) in the Port of Jacksonville. “ABS continues to be instrumental in supporting supply chain development for LNG as fuel in North America,” says ABS chairman, president and chief executive Christopher Wiernicki. “Our work with industry, regulators and local stakeholders seeks to safely nurture innovation and helps to reduce the impact of maritime activity on the environment.” Designed by Bristol Harbor Group, the barge features a single tank equipped with the Mark III Flex cargo containment system supplied by GTT North America. The barge will also feature the GTT-developed REACH4 bunker mast to ensure safe and efficient transfer of LNG fuel to the receiving vessel.

WesPac/CME plans to exercise its options with Conrad to construct additional LNG bunker barges to serve other North American ports. GTT has recently received approval in principle from Bureau Veritas and Lloyd’s Register for its 4,000m3 bunkering ship concept, using the Mark III Flex cargo containment system in tanks that can be operated with a vapour pressure of up to 2 bar(g). Increasing the upper limit on the pressure value to 2 bar(g) gives more operational flexibility, according to GTT. “The boil-off-gas (BOG) management during loading and bunkering operations is made more flexible thanks to this larger operational range of vapour pressure. Vapour can be buffered and condensed in the tanks to help the fuelled ship or feeding facility handle the excess vapour. When needed, condensation is performed by spraying LNG into the vapour phase. “In addition, the duration of bunkering operations is optimised by increasing loading flow rates. Finally, during voyage and stand-by mode, the time before gas pressure reaches the upper limit is longer. This improves the holding time when there is no BOG consumption and reduces the use of any possible reliquefaction plant, thereby diminishing costs. This development will contribute to the current development of LNG as a fuel market. Further studies are carried out with NO96 technology and also for bunker tanks for LNG-fuelled vessels.”

The approval in principle follows a joint research and innovation programme between GTT and Lloyd’s Register, investigating cargo containment behaviour and looking at strength aspects in various applications, sizes and at different pressures. The close collaboration between Lloyd’s Register and GTT experts, through workshops using experimental and analytical results and data on internal pressures occurring in LNG tanks, studied the maximum compressive strength of the containment system on LNG carriers. Higher vapour pressures in carbon capture and storage (CCS) are relevant for gas-fuelled ships and small-scale LNGs – especially for LNG bunkering, to help manage boil-off gas. Strengthening the hull offers additional safety within the tank to withstand boil-off gas generated. The project required a clear engineering understanding of the membrane technology as well as the fundamental principles of applicable rules and regulations in order to maintain the required safety and reliability levels when implementation of membrane containment systems goes beyond atmospheric pressure applications. Dariusz Boryszewski, senior specialist for ship structures at Lloyd’s Register, said: “The potential use of such applications in the gas as fuel and small-scale LNG market are many. This approval in principle opens the route to progress further with GTT towards project-specific applications.

World Bunkering Winter 2015

there is growing demand for efficient bunker and feeder vessels. Wärtsilä has both the technology and the experience necessary to meet the needs of this market,” says Jan Valkier, chief executive of Anthony Veder. When delivered, the ship will be operated on a long-term charter by Skangas, a leading player in the Nordic and Finnish LNG markets. Sirius Veder Gas AB, owner of the new vessel, is a joint venture formed between Sirius Rederi of Sweden and the Netherlands-based Anthony Veder Group. The Wärtsilä equipment is scheduled for delivery in 2016, and the vessel is due to be delivered in February 2017. Meanwhile, Crowley Maritime Corporation subsidiary Jensen Maritime has announced the development of two new LNG bunker barge concepts. The first concept involves outfitting an existing barge with an above-deck LNG tank. The concept can be further modified to accommodate more than one type of product, if a customer has a need for multiple liquid transfers. Advantages of this design include a fast turnaround and a reduced need to invest in specialised assets if a customer has short-term LNG requirements, according to Crowley. The second concept is for a purposebuilt new bunker barge. Offering greater carrying capacity and improved visibility, the design features a larger LNG tank that is nestled inside the barge. This new barge will also feature the latest safety features and efficiencies. “We understand that customers have very different needs when it comes to LNG,” said Jensen vice-president Johan Sperling. “Whether LNG is required for the long or short term, or in larger or smaller quantities, Jensen has a bunkering solution. We are proud to continue leading the way with LNG marine solutions.” In addition to offering maximum flexibility and top safety features, all Jensen designs are developed using the company’s proprietary production engineering capabilities, which make outfitting, construction and assembly more efficient. Bunker barges offer an innovative solution for the maritime industry, which is currently struggling with the decision over which to develop first – LNG infrastructure or vessels. These barges are an ideal resource for those who have LNG needs at ports that are not located near an LNG terminal, or as an alternative to over-the-road transportation, the company adds.

Bunker movement

Omanoil Matrix Marine Services (MXO), has announced the expansion of its physical infrastructure in Oman with the deployment of a new bunker barge in the Port of Sohar. The new barge, Stephanie, with a deadweight tonnage of 7,535 is providing both heavy fuel oil – IFO 380 RMG 2010 – and marine gas oil to customers at all locations within the Port of Sohar and anchorage areas. MXO now has two dedicated bunker barges, providing exclusive supply, following the earlier deployment of Azalea in August 2014. This development is in line with the company’s strategy to expand its physical operations on a global basis, building closer relationships with its customers, and ensuring the highest quality of bunkering services and products. “Developing our physical infrastructure means that we have more control over the end-to-end bunkering supply chain, from order through to final delivery,” said Stephen Robinson, managing director of MXO. “This enables us to ensure the quality and quantity of products, the reliability of supply, as well as minimising costs and maximising operational efficiencies within the bunkering process. Despite the drop in global oil prices, marine fuel remains a significant proportion of a vessel’s operating costs. We are therefore working closely with our customers to provide the optimum bunker solution, creating real value for them when it comes to marine fuel procurement,” continued Robinson. MXO has an experienced team in the Port of Sohar, where it has had a presence for a number of years, as it is an ideal location to serve vessels on trade routes between Europe and Asia. The company is also in discussions to offer ex-pipe deliveries from the Oiltanking Odfjell terminal to further expand its physical offering for customers. “Sohar has grown exponentially as a shipping hub over the past five years, and we are confident that it will continue attracting the world’s biggest shipping lines. Our new barge will extend and increase the efficiency of movements in the port during peak hours. Over 2,000 ships called at Sohar last year and, as commercial shipping continues to relocate from the capital Muscat to Sohar, the importance of a quick turnaround for vessels and their cargo cannot be overstated,” added MXO commercial director Murthed Al Kharusi.

Barge design

This study, carried out by our specialists and GTT’s, was an effective marriage of our organisations’ capabilities. Getting to approval in principle with the novel idea of pressurised membrane tanks is a real achievement. Our review identified areas that can be engineered to help ensure the ship’s structure effectively supports the CCS.” David Colson, commercial vice-president of GTT, commented: “Thanks to our extensive knowledge and experience, GTT, together with Lloyd’s Register, has been able to demonstrate the feasibility of operating membrane tanks at higher pressures. This is a significant step in increasing the use of membrane tanks.” Meanwhile, a new 5,800m3 LNG bunker and feeder vessel, being built for Sirius Veder Gas AB at Royal Bodewes, Hoogezand, in the Netherlands, will be powered by a Wärtsilä propulsion solution. The contract with Wärtsilä was placed in September. The Wärtsilä propulsion package will comprise a six-cylinder Wärtsilä 34DF dual-fuel main engine capable of running on either LNG or diesel, a reduction gearbox with power take-off (PTO), a shaft line suitable for use with environmentally friendly lubricants and equipped with a Wärtsilä Airguard aft seal that allows zero emissions, and a Wärtsilä controllable pitch propeller. Wärtsilä has unequalled experience in providing dual-fuel propulsion solutions for the LNG shipping market, and the latest Wärtsilä 34DF engine version features high power output and reduced fuel consumption in both gas and diesel modes. In gas mode, the vessel will comply with the International Maritime Organization’s Tier III nitrogen oxides (NOx) emission regulations without need of secondary exhaust cleaning systems. “Since Wärtsilä introduced dual-fuel engine technology, more than 1,300 Wärtsilä DF engines have been ordered. Similarly, bunkering and feeder vessels such as this one are also increasingly taking advantage of our proven technology. This extensive experience adds tremendous value, as it allows us to provide expert engineering and project support to the yard, which importantly saves time and reduces risk,” says Göran Österdahl, general manager, Wärtsilä Marine Solutions. “We are committed to developing energy-efficient solutions for small to mid-size LNG shipping. The use of LNG as a marine fuel is rapidly increasing, and

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Confusion reigns supreme

North Europe

Methanol trials on the Stena Germanica are said to be progressing well

European countries are going separate ways when it comes to enforcing the emission control area sulphur limit, as John Rickards reports

year into the new sulphur limit across northern Europe and the spotlight is now very much on the enforcement of the regulation and the penalties faced by shipoperators. Unlike in North America, where there are only two larger jurisdictions to deal with, European waters are far more complex, and EU lawmakers have left penalty schemes up to individual states to determine. The results have left shipowners dealing with a confusing mess of different regimes and different costs if their vessels are found to be in breach. Some countries have no fixed penalties but will wait until cases come to court to set fines. States like Lithuania and Germany have set relatively nominal charges of just a few thousand Euros at most. The UK has an upper limit in the middle of the range at around £70,000, while the Netherlands and, even more so, Belgium will apply very high penalties against any ship. In Belgium’s case, these penalties also apply to the ship’s master and any complicit officers (all of whom face fines of tens of thousands of Euros) caught breaching sulphur rules. It’s perhaps unsurprising that some owners, and in particular Maersk and the Danish Shipowners’ Association (DSA), have voiced concerns about the disparity in penalties for noncompliance, the level of enforcement in most coastal states and the chances that

World Bunkering Winter 2015

some operators may see deliberately ignoring the limit as a viable economic choice on many routes. Maersk’s head of regulatory affairs, Niels Bjørn Mortensen, has claimed that a ship ignoring the limit could save up to US$100,000 on a single voyage – a claim similar to that of the DSA’s Jesper Stubkjaer. The senior adviser told a conference in Riga this autumn that a 10,000 teu boxship could save US$175,000 by burning heavy fuel oil (HFO) rather than marine gas oil (MGO), making most penalties an inadequate deterrent. He added that the reliance on port inspections to determine compliance gave authorities little clear indication of what ships were actually burning at sea. Mortensen has also said that it is still unclear if a port state can issue a fine for any non-compliance committed beyond its territorial waters, or whether the onus would fall on flag states. “There is a lot of money to be made in circumventing the requirements of the directive, and that makes effective international enforcement crucial,” Stubkjaer said in a statement from the DSA. “Without enforcement, we risk losing the environmental and health related improvements. Similarly, lawabiding shipping companies will suffer from unfair competitive disadvantages, and will lose out to those who cheat.” Denmark’s own attempt to offer a form of emissions monitoring separate

from port inspections – a ‘sniffer’ on the Great Belt Bridge, which measures sulphur stack emissions from ships passing beneath, became active this autumn, and the country’s environment ministry and maritime authority are planning to expand such sniffer use to drones. While other coastal states don’t enjoy Denmark’s position straddling the entrance to the Baltic, the country is unlikely to be the only one considering such options for at-sea monitoring. European politicians’ eyes are on another form of emissions control at the time of going to press, however. Two months before the opening of COP21, the latest round of UN climate talks in Paris, heads of seven of the eight groups in the European Parliament’s environment committee put their names to a letter sent to all EU environment ministers calling for shipping – like aviation – to be included in any CO2 emissions cuts arising from the meeting. The European Commission has subsequently handed the International Maritime Organization (IMO) a deadline of the end of 2016 to come up with CO2 reduction measures. Latest IMO study figures project shipping carbon emissions to rise by up to 50% by 2050 depending on trade levels, but shipping has been left out of international commitments since the 1997 Kyoto Protocol. Maersk, whose own efforts to cut the line’s carbon emissions are well docu-

North Europe

mented, has come out in broad support of a carbon levy on the industry’s emissions, the option that many see as a likely instrument to emerge from the Paris talks. However, it stipulates that any such scheme must be global, not depend on flag states and offer incentives for those owners who meet requirements early on. Hoping to be one such owner would be Sweden’s Stena Line, whose work on the use of methanol as a viable alternative fuel has continued apace. Despite a steep drop in the price of MGO, it has been trialling the use of methanol on one of its ferries. Since the spring of this year, Stena Germanica has operated solely on the experimental fuel as the company seeks technological answers to future demands for CO2 cuts. The company’s chief executive, CarlJohan Hagman, told this September’s International Chamber of Shipping conference in London that the industry had fallen 10 years behind through fighting regulations rather than seeking answers. And while methanol wasn’t necessarily the answer, he said: “We are sure we will get CO2 regulations, so we need to be ahead of the curve.” Methanol isn’t the only non-fossil alternative under development, of course. This October saw the launch of a three-way collaborative project between Boskalis, Wärtsilä and Netherlandsbased GoodFuels Marine, a company with roots in commercial aviation biofuel development, to produce and market drop-in biofuels for shipping. The three companies are launching a two-year pilot programme to acceler-

ate development of commercial-scale affordable biofuels for shipping by developing a sufficient feedstock chain, securing certification for the new fuel and “preparing the building blocks” for large-scale production. The group will also launch a global scalability study into the possibilities for widespread supply and use of biofuel. Boskalis chief operating officer Theo Baartmans said: “We strongly believe in the need for sustainable ‘drop in’ marine biofuels and their potential as part of the long-term fuel mix, as we see them as an important means of improving the sustainability of the industry. Participating in this pilot and making our vessels available is in line with Boskalis’ approach to seeking innovations that work hand in hand with sustainability.” GoodFuels Marine chief executive Dirk Kronemeijer added: “We believe that the international shipping market is now ready and well placed to embrace truly sustainable, long-term alternative fuels that can meet all stringent technical, economical and sustainability standards, similar to the sustainable jet fuel market five years ago. As the shipping industry seeks means of contributing towards carbon and wider emissions reduction, we are excited to be part of such a strong consortium with the expertise and motivation needed to establish this new market.” The consortium will test several next-generation biofuels at the Wärtsilä laboratory in Vaasa, Finland, before sea trials are carried out on various vessels within Boskalis’ global fleet.

The consortium enjoys the support of the ports of Rotterdam and Amsterdam. With importance of the Amsterdam, Rotterdam, Antwerp (ARA) area as a bunkering hub and the long history that Rotterdam, in particular, has of exploring green measures and alternatives, this support is perhaps unsurprising. The port is already attempting to accelerate the use of liquefied natural gas (LNG) on the back of the opening of the Gate LNG import terminal at Maasvlakte, operated by Vopak and Gasunie. With LNG transshipment growing in Rotterdam and the construction of Europe’s first LNG bunkering site for inland vessels at Seinehaven – not to mention a hybrid power barge running on LNG that is due to be launched in 2017 to supply electricity to moored cruiseships and winter heat to shore facilities – the port is pushing hard for greater gas usage across all sectors. It is offering financial incentives for Green Award-certified vessels over 20,000 dwt running on LNG. It is also planning an LNG breakbulk facility to support bunker tanker loading. It’s not all about alternatives, though; regular fuel oil and distillate traffic through Rotterdam has been surging in the past full year’s figures, rising 50% through 2014 to 11 million metric tonnes on the back of open arbitrage pricing arrangements that saw a sharp rise in exports to the Far East. That, in turn, came on the back of an increase in refining in northwest Europe and Russia, leading to an oversupply of fuel oil. LNG movements, of course, also saw a rise, with the port claiming that they more than doubled in the first six months of the year: “The principal reasons for this

World Bunkering Winter 2015

Even though the parent company had seen its range of inspections drop as high-sulphur fuel oil (HSFO) disappeared from the market, an increase in customer base and greater demand for inspections had made up for that, he said. Both TMF and Van de Laarschot were confident of expanding their business further over the coming year. New players continue to surface in the region on the supply side too, of course, and existing companies are expanding their low-sulphur options. Belgium’s Ocean Energy took two barges on time charter this summer to launch MGO deliveries from Antwerp; the company had previously offered only intermediate fuel oil (IFO) grades. Cockett Marine Oil opened a new office in Rotterdam this September to offer a direct point of contact for its reselling business, having offered physical supply in ARA through V-Marine Fuels for years. Former OW Bunker Netherlands managing director Vincent de Vos launched Phoenix Oil, a new physical supply company serving ARA, in the spring, alongside three other industry veterans, to offer a full range of grades delivered via dedicated barges. Germany’s Bomin launched physical supply operations across Belgium from Antwerp, with a mass-flow-meterequipped barge offering IFO, ultra-lowsulphur fuel oil (ULSFO) and marine diesel oil (MDO). The company said it was a continuation of its expansion strategy. Trefoil Trading and SK Energy Europe formed a joint venture in the

spring to supply 0.1% low-sulphur fuel oil (LSFO) across ARA in a grade that the companies claim allows for easier fuel switching between deep-sea HFO and ECA-compliant fuel with less risk of engine problems owing to a claimed higher viscosity than standard LSFO. “All vessels that have been supplied with this ULSFO are burning this product without any problems and the general feedback that was received is very positive,” the companies said in a statement. And this January will see Peninsula Petroleum’s Antwerp arm celebrate its first year in the market, with four barges again offering a range of fuel oil and MGO across Belgium and the Netherlands, described by the company as “a huge market”. Outside the ARA region, it’s not just Trefoil and SK Energy working on new fuel types. Hamburg-based Blue Ocean Mineralöl launched two ECA-compliant MDOs in April this year, both of which again feature higher viscosity for better operation in injection. The company’s DMB fuel has a maximum viscosity of 11 cSt, compared with 6 cSt for regular DMA-grade MDO. Its DMC offering is higher, at 14 cSt at 40°C. And it’s not just Belgium and the Netherlands seeing fresh supply options either. Aegean Marine Petroleum started bunker deliveries from Nordenham in Germany following the opening of a tank-unloading facility on the port’s rail link. Aegean is only storing and supplying HFO at the port, with deliveries being made by barge.

North Europe

were the gradual decline of the LNG price in Asia and the increase in the re-export of LNG to industrial clusters in Europe, where there has been a shift from fuel or gas oil to LNG as the fuel for production processes.” ARA’s location at the heart of the sulphur emission control area (ECA) is also driving conventional bunker businesses on both the supply and evaluation sides of the chain. Late last year, bunker inspection firm Van de Laarschot launched a new subsidiary, Transmarinefuels (TMF), in Brielle, near Rotterdam. Headed by industry veteran Jan-Piet Oosterlee, TMF offers a “totally inspected supplies” service for operators loading MGO in Rotterdam and Europoort to ensure compliance with the sulphur cap and quality standards. With the company’s first 12 months under its belt and sulphur compliance as hot a topic as it’s ever been, World Bunkering asked Oosterlee how difficult it had been to break into a highly competitive region. “It was not easy to break into the market, as most shipowners are used to buying their bunkers at the lowest possible price,” he said. “The interest of getting all the product onboard is more of interest to the chief engineer or master of the ship instead of the bunker purchaser. However, the introduction of Transmarinefuels opened new markets and brought new customers to our mother company, Nautisch Expertisebureau Van de Laarschot, executing bunker inspections in the ARA region, among others.”

©: August Brill Rotterdam is becoming more and more involved in the development of alternative fuels and infrastructure.

World Bunkering Winter 2015

Africa

©: Warren Talbot The government of Cape Verde has been keen to improve its oil facilities

Challenging times John Rickards looks at what is happening in the West African bunker scene

he challenges facing bunker traders working in West Africa have been thrown into sharp relief in the past year. The Nigerian government has put in place in various measures to reduce oil theft, both from ships and onshore, where there have been around 4,000 attempts to steal from pipelines over the past 12 months. These measures have been met with a mixed reception from the industry. In July, President Muhammadu Buhari’s government issued a blanket ban on over 100 tankers over apparent suggestions that they had in some way been involved in oil theft. Industry members were confused by the move, in part because the ban seemed to have little backing it up, and in part because some vessels listed had not traded in Nigerian waters for years, with others being listed several times. That ban was apparently lifted within a couple of months, according to some observers, although the government continued to insist at the time that it had “no plans” to do so. In addition, in September, it was reported that owners were being required to sign letters indemnifying the government and the state oil firm against illegal ship use. This pushed up rates and caused a sharp drop in export traffic, with owners unwilling to pick up Nigerian crude for fear of falling

World Bunkering Winter 2015

foul of local law breaches and being charged penalties without the government needing to prove fault. That’s not all, though. Nigerian National Petroleum Corporation (NNPC) head Emmanuel Ibe Kachikwu has announced further measures to combat theft, including the use of drones to monitor vessel movements within Nigerian territorial waters. He was quoted by Agence France-Presse as saying that the company would work with the Nigerian Navy and was considering changing staff at crude export terminals every 90 days, so that by June 2016 the country would be “free from the vices of oil theft”. NNPC says that with pipeline infrastructure worsening, more crude is being transported by sea, where barges then transfer stolen oil to tankers offshore for sale in foreign markets. The country allegedly sees 250,000 barrels per day stolen and sold off. This amounts to an eighth of its production. In October, the News Agency of Nigeria reported that five small vessels were seized in Port Harcourt for transferring 108,000 litres of marine diesel oil (MDO) into barges without a licence. The Nigerian Navy boarded the boats at a private jetty. Local authorities claimed the operators were working in conjunction with two companies based in the port, although no names were given. In addition, the

Nigerian Army has urged people living in the Niger Delta to report illegal bunkering and oil theft to the troops serving there under Operation Pulo Shield (OPPS), the government’s military mission to protect oil installations from sabotage. The ongoing problems over fuel theft and fraud in Nigeria have spurred more than one company to offer solutions to ship operators. Diesel engine specialist Royston announced this summer that sales of its enginei® fuel management system are rising in Nigeria. The system – nominally a fuel usage, bunkering accuracy and efficiency monitoring platform – also enables operators to “identify and overcome fuel security and potential pilferage issues”, with 25 installations already carried out in Nigeria and roughly the same number planned. “Access to reliable fuel consumption data is taking on even greater importance for a wide range of fleet management and fuel security issues,” said Damian McCann, product manager for fuel management systems at Royston. “Our upgraded enginei® fuel management system has attracted considerable interest from shipping operators in Nigeria, and we have responded by setting up special arrangements to ensure that all installations are carried out by our own skilled and experienced engineers.”

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Inter Maritime Services Limited has been well established, since long before the discovery of Ghanas first commercial oil field in 2007, as a leading provider of fuels, lubricants and related technical services to the shipping industry through a network that stretches around Africa. The company supplies about 200 customers involved in a broad range of shipping operations, including ocean going tankers, containerships, dr dry bulk commodity carriers, cruise liners, ferries, fishing vessels as well as specialized offshore exploration and production vessels, dredgers and salvage vessels. Apart from the shipping industry the company has also focused on oil rigs, vehicle engines, heavy duty and industrial machines. Now, Inter Maritime is deploying its vast expertise and experience for the benefit of Ghanaâ&#x20AC;&#x2122;s oil and gas industry, providing services, facilities and infrastructure. In this regard, the company offers upstream oilfield services for exploration and prodution. The companyâ&#x20AC;&#x2122;s oilfield services cover virtually every area of activity including Hydro graphic Surveys, Site Surveys, Pipeline and Cable Route Surveys. Also it offers High Precision Positioning Systems, Rig and Seismic Vessel Positioning, Labour supply and management, Bunkering, Project and personnel logistics, Pocurement services and Offshore delivery services. Add to all these, Warehousing, Equipment sales and rentals, Environmental sales and rentals, Environmental services such as conducting impact assessment, equipment supplies and consultancy, as well as Rig and vessel security.

Leveraging its partnership with Africa Fidelity International Limited, the company offers the highest international service standards. This hasmade Inter indust leaders, evidenced by the projects it Maritime industry has executed for some of the leading corporations in Ghanas petroleum sectorsuch as Shell, Tullow Oil, Kosmos Energy, Transocean, Stellar Logistics, Seadrill, Menergy and the Environmental Protection Agency. Importantly, the companys dedicated offshore operations team offers specialist services in marine agency and logistics support. Their expert knowledge and experience in the offshore industry is available to clients 24 hours a day, everyday of the year. This includes thorough knowledge of customs formalities. Inter Maritimes Materials Procurement Department provides procurement and supply chain services to se support customers. These services include supply chain management, purchasing, subcontracting, expediting and vendor assessment services. The company ensures that goods and services are delivered to the right quality standards, on time and within budget.Crucially, Inter Maritime regards deadlines as vital and unfailingly se delivers its products and services within the agreed deadlines.Over the past few years the company has invested deeply in dedicated infrastructure to cater to the demands of its widening customer base by opening branches across Ghana. Inter Maritimes corporate se mission is to deliver services to customers specifications, fit for purpose, on schedule and to right quality. This is exactly what the company offers its customers.

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info@imsghana.com

life of existing national-flag single-hull tankers, including ship-to-ship bunker barges, operating within Nigerian waters for a further five years, taking their phase-out date to the end of 2020. Nimasa said the move would “sustain the development of the Nigerian maritime industry and enhance the gains of the cabotage laws and Local Content Act”. It added that there would be no new registrations allowed under the scheme, which applies strictly to Nigerian trade only. Heavy grade oil is already banned from single-hull vessels. Ship-to-ship (STS) transfers in Nigeria remain a feature of local bunker trade, despite the risk of piracy that has plagued the country, and its neighbours, in recent years. The Nigeria Shipowners’ Association said that the move would limit the impact of the single-hull phase out on the local economy. Fears of tanker hijacking in Nigerian waters, spurred by high demand for oil products and mixed security responses, have pushed some bunker sales away. In general, the market has become increasingly challenging for all those involved in any kind of energy trading, including bunker suppliers. For instance, the last financial year saw supplier Endofa record a deficit after the failure of the company’s West African supply joint venture with Dan-Bunkering. The venture had been offering physical supply from offshore Nigeria since the end of 2013.

Endofa’s failure to break into the market left Denmark’s Monjasa Group as the remaining major multinational force in the regional bunker sector, and even Monjasa has endured a difficult year struggling with national regulatory demands. In February, Angolan authorities detained the company’s tanker San Padre Pio over alleged infractions under national law, despite being seized outside the 12-mile limit. It was eventually released, but then, in June, Anuket Emerald was detained and its crew arrested in international waters. In theory, this was part of the government’s crackdown on oil theft, although Monjasa has been adamant that the charges are baseless. In a statement on the case, Monjasa Group chief executive Anders Østergaard said: “The important thing for me is to stress that there is nothing to this. Our ship was boarded by the Nigerian Navy as they wanted to see whether we were carrying Nigerian crude oil onboard. All cargo was tested and the results confirm that the oil is, first of all, not crude, but fuel and diesel oil (bunkers), and that the oil is not Nigerian.” “Unfortunately, the local authorities are now trying to charge us with operating in Nigerian territory without permission, even though the ship was beyond the 12 nautical mile radius, thus located in international waters [in the] exclusive economic zone (EEZ). But this case, along with the recent one in Angola, illustrates clearly that several sovereign states are trying to claim rights to the EEZ zone.”

Africa

The company claims its flowmeter and sensor system has a “tamper-proof armoured cable and a unique tamper prevention tape for flanges and electrical cabinets”. In the meantime, Nigerian firm Citracks has become the country’s first company to offer mass flowmeter (MFM) fuel management services to the national market. The company signed a deal with Singapore’s Ascenz as its technical partner in August to launch its ‘Fuel Master’ Coriolis-based MFM. The real-time monitoring system is designed to tackle fuel pilferage and thus reduce operating costs by immediately alerting the operator if theft is detected. It also provides the usual array of consumption and performance readings. Citracks’ chief operating officer, Ayoola Olaitan, told Nigeria’s Business Day newspaper: “The biggest cost for a shipowner is fuel. When people charter your boat and the crew are stealing your fuel, you will not be making money. Therefore, the solution enables you to monitor your fuel on the bunker to know how much is consumed and how much is remaining onboard. “Fuel usage is critical, and its growing [contribution] to shipping companies’ total operating cost, coupled with volatile prices, requires real-time, transparent information on bunkering and fuel consumption to optimise cost.” The Nigerian Maritime Administration and Safety Agency (Nimasa) has also made use of a provision in MARPOL Annex I to allow it to extend the working

World Bunkering Winter 2015

Africa 54

The case is still ongoing at the time of going to press, with Monjasa, the ship’s crew and energy trader Glencore all in the dock. But the circumstances of the seizure are likely to give foreign companies pause for thought if they are considering entry into the Nigerian market or other countries where moves to control shipping activity in the EEZ are increasing. It hasn’t all been bad news and difficulties for Monjasa’s African operations, however. The company’s joint venture with Manica Group Namibia – a subsidiary of Bidvest Namibia, set up in summer 2014 – has continued to operate quietly on a local level, extending the company’s dominance over much of the continent’s western coastline. Overall, Monjasa’s supply volumes along the West African coast are reported by the press – although not by the company itself – to be at least 70,000 metric tonnes per month, and possibly as much as 80,000 metric tonnes. This gives the company, by many estimates, over 50% of commercial bunkering marketshare across the region. Late last year, Monjasa shifted control over its African operations from Denmark to Dubai. World Bunkering asked the company how business was faring in what at times has been a challenging market. “Currently, we operate between 15-20 supply vessels in the West African region,” Monjasa said. “Overall, the bunkering market remains rather volatile. Further, we have experienced increased competition during the past two years.” While many of its multinational competitors have found West Africa a tough market to crack, the company said that its local knowledge and extensive operating experience are what have enabled it to thrive. Nevertheless, moves like the Nigerian government’s oil theft crackdown continue to offer ongoing challenges. “Over the past years, we have seen the West African market place growing increasingly complex,” Monjasa told World Bunkering. “In particular, we are witnessing new local maritime jurisdictions emerging and sovereign nations claiming extended rights to the EEZ zone. Furthermore, local content requirements are becoming increasingly important factors to consider when doing business in the region.”

“For our own part, important developments are happening too… We are investing in building strong local partnerships and opening local offices in the region – eg Namibia. [Secondly]for quite some time now, we have felt a strong wish to move further across the value chain and into oil trading. And, as of this year, we are able to move own cargo – partly to our own operations, but also to third parties across the region and the rest of the world. We have already received positive market feedback on engaging in oil trading, because it immediately represents extended supply chain reliability to our clients and other business partners.” There have been moves, too, in the local supplier market. This summer Nigerian energy group and important national bunker supplier Oando sold a majority stake in its downstream business to a joint venture between Helios Investment Partners, a Helios affiliate company, and Vitol for US$276.8 million. The deal will lead to “accelerated expansion” and investment in the industry. “This transaction is testament to Oando’s indigenous commitment to building the downstream sector,” the group said. “Furthermore, this tripartied alliance is poised to bring investment to the sector and further expand Oando Downstream’s operations whilst assuring business continuity.” In Ghana, this year saw state oil firm Ghana Oil Company Limited (GOIL) promoting itself hard as a “leader” in the local bunkering market, despite claims in some quarters than underinvestment and poor management have left GOIL unable to meet demand. In an interview with local press in the spring, managing director Patrick Akpe Kwame Akorli said that GOIL’s “extensive experience” in the market had turned it into a “premier bunkering operation with a global footprint”. It’s not the first time that GOIL has made similar claims, though. Ghana’s bunkering market has been in the doldrums since oil majors Shell, Total and Mobil sold their shares in Ghana Bunkering Services (GBS) to GOIL at the turn of the millennium. The company is still using its old storage farm in the port of Takoradi – although GOIL insisted at the start of last year that it would invest US$10 million

in new tanks of unspecified capacity, the construction of which remains unconfirmed as yet, and a further US$4 million in improvement works to the existing facilities. There have been numerous local press reports from private firms relying on GBS supplies that the company’s fuel stocks are unreliable, harming the local industry. Calls for the Ghanaian government to step in and reorganise GBS or to open it up to private investment have fallen on deaf ears. Ironically, it has been the opening up of the country’s bunker sector that GOIL itself has generally blamed for the sometimes shaky performance of its own bunker storage facility. Last year, Akorli told local television that the National Petroleum Authority’s (NPA)deregulation of the industry had forced it to offer use of the GBS facility to its competitors. He said that 22 of the 100-plus companies reportedly licensed to sell fuel oil in the country use the facility without having to contribute to investment in it – and that NPA-set rents were unfavourable to GOIL and Total. Question marks clearly remain over the capacity of GOIL to serve as a reliable supplier for vessels visiting Ghana. Ongoing criticism of the performance of the company and GBS, coupled with GOIL’s unwillingness to date to invite outside expertise and investment, continues to cast a shadow over the Ghanaian fuel market. Takoradi Port is in the midst of a US$450 million expansion and upgrade programme, which includes new breakwaters, dredging, quay wall and an oil berth, with most of the remaining work due to be completed early next year. The government said this autumn that it needs US$1.5 billion annually to bring the country’s infrastructure up to standard. Shipoperators might hope that a shift in its bunker provisions will not be far behind. In Cape Verde, there has been no such foot-dragging over bunker investment. This spring saw the completion of a new oil terminal for the port of Mindelo, operated by state fuel company Enacol. The new dock and terminal took a year to build and cost the company US$1.9 million. According to the government, it will boost the islands’ oil and bunkering industry.

World Bunkering Winter 2015

Australia New ruling on bunker claims Reversing the previous situation in Australia, ships can now be arrested in Australia in pursuit of overseas bunker claims

athan Cecil, a partner in Australian law firm Holding Redlich, published an article on the firm’s website (www.holdingredlich.com) highlighting the significance of a judgment in the case of the Sam Hawk, which, for the first time in Australia, upheld an arrest on the basis of a foreign maritime lien for the supply of bunkers. Following the decision, the firm says it has seen a small surge in arrest actions relating to outstanding OW Bunker claims. The arrests appear to be based on two main arguments. 1. The bunker supply contract was made with owners, or owners ratified the contract at the time of supply. 2. The bunker supply contract provided for a foreign maritime lien, which, following the Sam Hawk, will now be recognised under Australian law. Cecil writes that, in Australia, an arrest and demand for security will be upheld where there is at least a reasonably arguable case. For example, it would therefore be necessary to consider whether there is any support for the argument that the owners are party to the bunker supply contract. It would also be necessary to consider as a threshold question whether it is reasonably arguable that any purported foreign maritime lien actually exists. If, according to the law that governs the foreign maritime lien, no such lien would arise in the particular circumstances of the bunker supply, then there would be no foreign maritime lien to be recognised

World Bunkering Winter 2015

in Australia. As a result, it may be possible to apply to have the arrest set aside. In the Sam Hawk judgment, delivered on 11 September 2015, the Federal Court of Australia upheld the ship’s arrest in respect of a claim for a foreign maritime lien arising from the supply of bunkers to the vessel. Cecil notes: “The practical effect of this decision is that the claims in respect of which vessels can be arrested in Australia has now expanded significantly, meaning that Australia is an even more arrest- and enforcement-friendly jurisdiction.” The Sam Hawk was owned by SPV Sam Hawk Inc and time chartered to Egyptian Bulk Carriers. The charter party contained a ‘no lien’ clause. Egyptian Bulk entered into a bunker supply contract with Reiter Petroleum, of Canada, to stem the vessel in Istanbul, Turkey. The bunker supply contract was expressly subject to Canadian law, purported to grant a contractual maritime lien over the vessel, and was also said to be subject to US law in relation to the existence of a maritime lien for the supply. Reiter Petroleum entered into a separate arrangement for the supply with KPI Bridge Oil, with the ultimate physical supplier being Socar Marine. The owners were not privy to, or a named party to, the supply arrangements. However, the owners did ask Egyptian Bulk for the identity of the bunker supplier and were given Socar Marine’s details. Prior to the supply, the owners sent a ‘no liability’ notice to Socar Marine, advising that the owners accepted no

liability to pay for the supply and that payment was the sole responsibility of Egyptian Bulk. Socar Marine refused to sign and return the notice. However, the master of the bunker barge did accept, sign and return an identical notice prior to stemming the bunkers. Egyptian Bulk did not pay for the bunkers, as a result of which Reiter Petroleum arrested the vessel at Albany, Western Australia. The owners provided security for the release of the vessel under protest and commenced these proceedings, seeking that the arrest be struck out and the security returned. Australian law does not recognise a maritime lien for the supply of necessaries, including bunkers. However, a recent High Court of Australia case held that matters which relate to a party’s rights fall to be determined by the proper law of the relevant contract, transaction or circumstances, which may not be Australian law. In resolving these questions of substance, Australian law may recognise and give effect to rights existing under foreign law. Cecil observes: “Unless resolved by agreement, the matter will proceed to a final hearing in the usual way, at which time we will know whether Reiter Petroleum’s claims for a maritime lien are held to be valid.” But he adds: Regardless of the final outcome, this decision means that Australian courts will uphold the arrest of a vessel in Australia in respect of an arguable claim based on a foreign maritime lien.”

Scrubbers

Scrubbers gain ground While not favoured by the environmental lobby, more owners are seeing abatement technology as a practical way of complying with sulphur limits

assionate debate continues as to whether the shipping industry should wholeheartedly embrace liquefied natural gas (LNG) as the marine fuel of the future or whether abatement technology (scrubbers) will allow continued use of heavy fuel oil for a long time to come. LNG enthusiasts such as Angus Campbell, managing director of Bernhard Schulte Shipmanagement UK, are very dismissive of scrubbers. Speaking at the Gastech conference in Singapore, he said: “Scrubbers may seem a simple alternative, but the cost benefit calculation is actually very complex – with no guarantees that this will be accepted as a long-term method of emission reduction.” Interestingly, the US Department of Transportation’s Maritime Administration (MARAD) appears to be backing both horses. It announced recently that it will provide over US$1 million to support the development of two new emissionreducing maritime solutions. The first is a “cutting-edge” LNG conversion demonstration project, but the second is “modification of an onboard air pollution control device that will aid the United States’ maritime industry’s ongoing effort to decrease its environmental footprint”. MARAD will provide $500,000 to retrofit the Great Lakes bulker Lee

Tregurtha with exhaust gas-scrubber technology. The vessel’s owner, Interlake Steamship Company, will provide MARAD with pre- and post-installation air emissions data, and information on the lessons learnt on scrubber installation and operation from the trials. The US agency also recently announced the fourth edition of the “Exhaust Gas Cleaning Systems Selection Guide”, developed by the Ship Operations Cooperative Program with MARAD funding. MARAD says the new edition provides shipowners and operators the latest available information on scrubber technology to assist the industry in meeting new sulphur emissions standards. It includes guidance on regulatory requirements and compliance options, life cycle analyses for various vessel types, review of scrubber technology and technical insight into integration, operations, and maintenance challenges. Meanwhile, orders for scrubbers for ocean-going ships are building up. Manufacturer Clean Marine will supply scrubbers for two reefer/fishing support vessels, which are currently under construction at Chinese yard Huanghai Shipbuilding. The contract also includes an option for delivery of additional scrubbers on two identical sister vessels. The vessels are owned by EF Transport (Malta) Ltd, whose fishing

fleet is primarily engaged in the NorthEast Atlantic and so has to comply with the 0.1% sulphur level in air emissions in emission control areas (ECAs). Clean Marine notes that, with scrubbers installed, vessels can burn cheap and readily available heavy fuel oil instead of marine gas oil. It adds: “Operating costs will stay low and there is no need for complex and risky fuel-switching.” From 2020, the global emission level must not exceed 0.5%. The company says this also makes scrubbers an attractive solution for vessels trading mainly outside ECAs. The Clean Marine system supplied to Huanghai Shipbuilding is a Multistream scrubber designed to clean 30,000kg of exhaust per hour. The scrubber will remove both sulphur oxides (SOx) and particulate matter from the emissions from one main engine and two auxiliary engines. The system is a hybrid type, which can operate seamlessly in both open loop and in closed loop (zero discharge) mode. Installation is scheduled to take place in 2016. Clean Marine chief executive Nils Høy-Petersen says: “Clean Marine has again proven its technically superior and commercially competitive product. These contracts confirm the growing market demand for Clean Marine’s Allstream exhaust gas cleaning system (EGCS). We are very pleased to be working closely with Huanghai Shipbuilding to deliver

World Bunkering Winter 2015

Juha Kytölä, vice-president, environmental solutions, at Wärtsilä, says: “Repeat orders are always very satisfying, as they represent confirmation that the performance of the systems delivered earlier fully meets the owner’s needs and expectations. Wärtsilä is the market leader in scrubber systems for marine applications. We have a very strong track record in enabling shipowners and operators to comply with all SOx emission regulations.” The system selected for the three vessels is Wärtsilä’s hybrid inline scrubber system. This system configuration provides the flexibility to operate in both open and closed loop modes. The manufacturer says the compact inline version provides an efficient space- and weight-saving solution. Returning to the US scene, EnSolve Biosystems has won a $500,000 Phase IIB

National Science Foundation (NSF) grant to continue commercial development of its EnScrub scrubber technology. The first EnScrub system was installed in early 2015 on a ship operating in the Great Lakes and is successfully treating and legally discharging scrubber water. The funds from the NSF grant will be used to gather additional technical and economical data in an effort to further refine and improve the EnScrub technology. “We are getting a tremendous response to the EnScrub technology,” says Jason Caplan, president of EnSolve. “The fact that we are legally discharging the majority of scrubber water processed by the EnScrub system provides shipowners a significant cost savings option compared with off-site transportation and disposal of such wastes. For this particular ship, we are estimating cost savings of $800,000 to $1,000,000 per year on behalf of the shipowner.” The company says it is in discussions with a number of scrubber companies about possible inclusion of the EnScrub technology in their scrubber product lines. EnScrub models are now available for closed-loop, open-loop or hybrid applications. Meanwhile, the Exhaust Gas Cleaning Systems Association (EGCSA) says it has three new member companies: Ionada, Fuji Electric and PureteQ. Ionada has developed a “gamechanging technology” for the EGCS industry. It says its Membrane Scrubber is smaller and more energy efficient than competitive wet scrubbers. Fuji Electric has developed the SaveBlue compact scrubber system, described as “the world’s smallest SOx scrubber and laser gas analyser”. The PureteQ Maritime Turbo Scrubber is a high-alloy scrubber system using hydrodynamic fluid distribution. The company specialises in ships with limited available space and a requirement for a lightweight, high-efficiency system.

Scrubbers

a cost-effective solution to help the owner comply with existing and pending emissions regulations.” Major ro-ro and passenger vessel operator Finnlines, which runs services in the North and Baltic Seas, has contracted Wärtsilä to supply three of its vessels with scrubber systems. Finnlines is part of the Grimaldi Group. This is a repeat order, as in 2014 Finnlines placed a similar contract to have six of its ships fitted with a Wärtsilä EGCS. The equipment is scheduled for delivery in early 2016. “We are very pleased to call on Wärtsilä again to provide us with the latest emissions abatement technology and knowhow,” says Tapani Voionmaa, group general counsel at Finnlines. “This is an important step towards having our entire Baltic fleet scrubber equipped and in fully operational service.”

LNG Smaller and specialist vessels are leading the way when it comes to using LNG as fuel. The Scheldt River will be the world’s first dual-fuelled dredger, capable of using LNG or distillate. © Wärtsilä

LNG: fit for the future Sandra Speares reports on recent developments in the use of LNG as a marine fuel

he issue of liquefied natural gas (LNG) as fuel is one that is increasingly on the agenda, but it does present many challenges, as highlighted by speakers at a recent LNG conference organised by Bernhard Schulte Shipmanagement. Mark Bell, general manager of the Society for Gas as a Marine Fuel, said that so far as the industry was concerned there were a number of issues that were coming up time and time again. One such issue concerns rules and regulations, he told delegates at the conference during London Shipping Week, both as far as they relate to the ship itself but also to handling the commodity. In terms of safety, the track record of the industry is second to none, he said, and this needed to be maintained. Another issue is which class of ship will be using gas as a marine fuel first, whether short sea, on inland waterways or deep sea. In general, short sea tends to be the first sector taking advantage of this commodity, he explained. Although a good deal has been said about technology, he said that “technology is pretty much a given – this is a known commodity, we know how to handle it and we know how to use it”.

Performance benefits, he believed, had not quite been realised yet. Shipowners are thinking about price in the first instance and not necessarily about the downstream cost savings that can be made, including longer maintenance periods and better operation of machinery. “Initial findings from the industry on vessels that are using this are very good”. Cost and availability are two key issues. Whether to operate a newbuilding or a retrofit also needs to be considered. Experience suggests that so far it does not make much sense to retrofit vessels, he said, unless it is in specific cases like, for example, the lakes in North America. A good number of newbuilding contracts include the possibility of operating with gas as fuel, he added, which shows that owners are thinking about what they should be offering to their marketplace in the future. Competition for the gas itself is fierce, and the maritime industry will have to work “pretty fast” to get its share. Another issue to be considered is public perception of how dangerous it is. “There is a job to be done by this industry to maintain its safety record”. The fuel has significant benefits so far as environmental performance is concerned. Although regulation takes care of the ship in terms of safety,

transferring the fuel and getting it to the ship is a major issue. One question for the future is whether the price of crude will be directly related to the price of gas. The differences between using the two have been partially eclipsed by the fuel price drop, he told delegates. “The danger is [in] waiting while the fuel price remains at current levels. Crude prices are likely to begin to rise, and what will happen to the price of gas when they do?” Gas prices vary widely across the globe and “I think that will continue to be the case”, he said. So far as availability is concerned, “it is everywhere and nowhere,” he said. A lot of projects that he sees at the moment are ones where the owner has to supply the gas and get it to the ship. Gas bunkering is very capital intensive, he added. Other fuels will also be coming on stream increasingly in the future. There are studies coming up by both the International Maritime Organization (IMO) and the EU on fuel availability prior to the 2020 global sulphur cap deadline. The word is that the EU will be against any extension of the deadline, and could introduce a Europe-wide emissions control area if an extension is granted. The number of ships burning gas as a fuel is very small in comparison

World Bunkering Winter 2015

LNG

to the world fleet. According to recent studies, the uptake of gas by ships over the next 10 years is liable to be in the order of 1,500 ships. A shift to gas by 250 to 2,500 ships in a five- to seven-year period would represent a 9,000-fold increase over the number of transactions taking place at the moment (assuming this shift happened overnight). The main driver of gas as a marine fuel to date has been subsidy, he said. Geography is going to have an important part to play, particularly for the development of ports like Singapore as a gas hub – notably where they source their supplies. Mats Fagerberg, partner at Affinity Shipping, told delegates that LNG has been a “frustratingly slow-growing business”. It is a very concentrated one, he explained. Typically, vessels are around the 7,000-8,000m3 size needed to service projects and with some ability to bunker. Aside from northern Europe, there are some projects in the US and Canada. In the Caribbean, there is AES Dominicana, but there is a need for customers, he says, and Carnival is one company signing up to use the fuel in the future. So far as newbuildings are concerned, LNG bunkering demand is insufficient to justify the need for dedicated bunker vessels. Companies like Shell are important in development. The key to growth is to find projects around which LNG can be based. Building the business will be a challenge. Potential clients include ferries, cruiseship, and river barges, which offer good opportunities, and other short-sea shipping operations. “There is more than enough to bite into.” There are LNG-ready designs to cater for the demands of the fuel, although some issues remain, such as cargo capacity and placement of bunker tanks, for example. Retrofits, he said, are going to be “very challenging” and costly to run on a daily basis. Enforced legislation will help not only the development of LNG but also the economics to support it. Regulatory changes are happening, but

World Bunkering Winter 2015

are not yet in place, so there is not much incentive. A high oil price would help support things as well. According to John Eltringham of Bernhard Schulte Shipmanagement, “if you mess with gas you must get yourself a technology partner”. Deep pockets are also necessary to fund the research and development, he said. Pressing ahead with LNG in Singapore

Andrew Tan, chief executive of the Maritime and Port Authority of Singapore (MPA), stressed the importance of LNG development as part of other green initiatives during a recent visit to Busan in Korea. “Looking beyond 2015, Singapore has started planning for its Next Generation Port 2030, or the NGP 2030 initiative. This initiative is reinforced by four key thrusts, covering an efficient port, an intelligent port, a safe, secure [and clean] port, and, finally, a green and communityoriented port,” Tan explained. “MPA is working closely with our stakeholders in identifying new areas of strategic opportunity for our Next Generation Port (NGP). Some of the key elements being explored for the NGP include next-generation vessel traffic management, single-window port clearance, and use of an automated storage and retrieval system for containers to further increase the yard storage capacity. In addition, as part of the NGP 2030 initiative, Singapore will also be providing cleaner sources of fuel, such as LNG.” He explained that, to prepare for the future, Singapore was taking steps to prepare itself to be a LNG bunkerready port when LNG becomes more viable as an alternate fuel. “This will enable us to service a range of vessel types and sizes seeking to take LNG as a marine fuel. Singapore will be commencing its LNG bunkering pilot programme in 2017 as a platform to test LNG bunkering procedures in Singapore,” he added. “LNG has been touted to deliver impressive reductions in emissions, whether SOx, NOx or CO2, and has seen gradual adoption to that end. Currently, around the world, there

are already 48 LNG-fuelled vessels operating on dual-fuel or tri-fuel diesel electric propulsion engines, with another 85 on order,” Tan continued. “Some 48 ports around the world are also either LNG-bunkering- ready or have plans to [be] so. However, in Asia, we are still relatively behind other parts of the world, but there is great potential for LNG bunkering, considering some of the most important trade routes traverse the region. “However, the high costs involved in building or retrofitting LNG-fuelled vessels, and the need for further development of LNG bunkering infrastructure in ports, necessitates governmental intervention to make LNG widely adopted as a marine fuel. For example, the European Union (EU) is providing significant funding under its Trans-European Transport Network that has seen support of various LNG-fuel related projects. Looking to the East, countries such as China, Korea, and Singapore have made commitments to further develop LNG bunkering infrastructure and/or support the building of LNG-fuelled vessels.” Tan said that MPA has been collaborating closely with industry partners and stakeholders, as well as the ports of Antwerp, Zeebrugge and Rotterdam, to harmonise LNG bunkering procedures. It has already received proposals from potential LNG bunker suppliers and plans to issue LNG bunker supplier licences by 2016. “While LNG bunkering is likely to take off for short-sea voyages in its initial stages, MPA hopes to promote greater discussions and cooperation amongst global hub ports interested in providing LNG bunkering for short-sea and ocean-going vessels. We could leverage existing platforms, including the Port Authorities Roundtable, which the Port of Busan participated in this year, as well as the Singapore International Bunkering Conference 2016, to exchange ideas, share best practices and even develop a regional roadmap for LNG bunkering.”

The Leader in Fuel Testing & Inspection

Veritas Petroleum Services (VPS) delivers solutions that help ship operators achieve measurable improvements to fuel management, fuel cost, operational efficiency and compliance with marine fuel regulatory requirements.

We introduced the first commercial bunker fuel testing programme for ships in 1981. Today, customers remain at the heart of our business.

Veritas Petroleum Services Group

Europe Rotterdam Zwolseweg 1 2994 LB Barendrecht P.O. Box 9515, 3007 AM The Netherlands T + 31 (0) 180 221 100 E rotterdam@v-p-s.com

www.v-p-s.com

We operate a global network of technical experts and offices, four specialist and wholly-owned fuel testing laboratories strategically located in Rotterdam, Singapore, Houston and Fujairah, with access to 200 key bunkering ports worldwide for bunker quantity surveys.

Asia, Middle East & Africa Singapore 27 Changi South Street 1 Singapore 486071 T + 65 6779 2475 E singapore@v-p-s.com

Americas Houston 318 North 16th Street La Porte, Texas 77571 USA T + 1 281 470 1030 E houston@v-p-s.com

Testing

Ron Pluut

Flash point warning VPS reports significant increase in bunker alerts issued for distillates

esting services provider Veritas Petroleum Services (VPS) reported that the first half of 2015 showed a significant increase in bunker alerts for distillate fuels, compared with the same period last year. The total number of bunker alerts issued for distillate fuels in the first half of 2015 was 20, compared with 7 in the first half of 2014. VPS notes that 17 of these 20 bunker alerts were related to low flash point deliveries, while three were for low viscosity. VPS warns that there is a high possibility that fuels intended for the automotive market are being supplied as marine fuels, because automotive fuels normally have a flash point of less than 60°C, and the viscosity of these fuels is also often lower. However, VPS advises, fuels with flash point below 60°C are in violation of the International Convention for the Safety of Life at Sea (SOLAS chapter II-2, Reg. 4), which requires a minimum flash point of 60°C for marine fuels. Based on VPS statistical data for the first half of 2015, 11% of the tested distillate samples were off spec, with flash point, pour point, visual appearance and fatty acid methyl ester (FAME) given as the top four reasons. The testing company concludes: “It is thus obvious that shipoperators and fuel buyers should be aware of the

World Bunkering Winter 2015

possible issues and risks associated with distillate fuels, and take precautions by testing fuels before usage.” Meanwhile, VPS has appointed Ron Pluut as managing director for Europe. Prior to joining VPS, Pluut headed the global business unit in combustion pressure sensing at Sensata Technologies – a world leader in automotive sensors – where he was responsible for global strategy, marketing, sales and customer services. He started his career at AkzoNobel and worked for 15 years in various commercial and business management roles in the chemicals industry before joining Sensata Technologies. “We are very pleased to have Ron, with his solid track record in strategy development and vast international experience in helping clients improve their businesses, join our management team at VPS,” said Gerard Rohaan, chief executive at VPS. “Ron fully understands the value that an excellent service and top quality supplier can add to a customer’s business and intends to apply this knowledge to take VPS to the next level.” LR combines testing providers

Lloyd’s Register (LR) has merged its Fuel Oil Bunkering Analysis and Advisory Service (FOBAS) and recently acquired Guardian Marine Testing (GMT) to form Lloyd's Register GMT. LR says the new company will “offer comprehensive

solutions to the challenges associated with the management of fuel quantity and quality”. LR acquired the remaining 80% share of UK-based fuel testing company GMT in March this year. LR and GMT previously had a longstanding relationship, with testing for LR making up around 80% of GMT’s workload. In a statement, LR says: “In addition to providing a range of marine testing services, LR GMT provides access to a network of highly skilled ship performance consultants, providing unique and impartial advice to shipowners and operators to help save fuel, reduce emissions and lower operational costs.” LR GMT managing director Andrew Shaw commented: “Bringing together Guardian Marine Testing’s efficient operation with Lloyd’s Register’s leading technical expertise will enable us to expand our fuel testing business, and assist our clients further with their challenges. As one combined team, I look forward to us working together to deliver the world’s best marine testing service.” Gwynne Lewis, global head of marine consulting at LR, added: “The acquisition and integration of the two businesses to form Lloyd’s Register GMT Ltd provides enhanced service levels and real advantages to existing customers of Lloyd’s Register’s Fuel Oil Bunkering Analysis and Advisory Service (FOBAS) and Guardian Marine Testing.”

Testing

Cat fines detection

Global asset control and protection technology provider Parker Kittiwake says it has made a breakthrough in the early detection of catalytic (cat) fines with the launch of its Cat Fines Test Kit. It says: “This simple, wet chemistry, onboard test identifies the presence of abrasive silicon and aluminium fines in heavy fuel oil (HFO).” The company says that the quality of fuel brought onboard has always been difficult to determine at point of loading, and, as such, Kittiwake has developed many fuel property test kits over the years to ensure the end-user is getting what they pay for. Until now, the detection of cat fines in fuel oil was only possible using laboratory analysis techniques. The Parker Kittiwake Cat Fines Test Kit provides accurate results in a matter of minutes, potentially preventing critical damage before it occurs. Earlier this year, fuel testing and inspection company Veritas Petroleum

Services (VPS) raised concerns that even when the ignition and combustion characteristics of a fuel have been tested and proven to meet specification, cat fines can still remain undetected in the fuel and consequently enter the system, potentially causing a total loss of propulsion. In parallel, underwriters are increasingly insistent on enforcing compliance with the guidance they issue on reducing the risk of cat fines, which means that owners who do not take sufficient steps to reduce their exposure to this hazard will find their claims much less likely to succeed. As more emission control areas (ECAs) come into operation, there are growing concerns around fuel quality, and the number of engine wear situations related to cat fines are increasing. Research has shown that even small cat fine particles of below 10 micron contribute to significant wear. Incidences of excessive cylinder liner wear have been recorded, even though the bun-

kered fuel oil was within the limits of the ISO8217:2005 specification, which dictates a maximum of 60ppm. This is why cat fines are causing such problems for shipowners.” The use of non-ISO compliant fuel, faulty fuel purifiers, and/or rough weather kicking up fines from the bottom of the settling tanks are all capable of introducing these suspended particles into the fuel system. The Parker Kittiwake Cat Fines Test Kit provides early forewarning of these destructive particles and give a vessel’s crew maximum opportunity to take corrective steps.” Parker Kittiwake says that the Cat Fines Test Kit is an important addition to the company’s comprehensive suite of condition-based maintenance products, underlining its commitment to developing tools and technology that address the challenges faced by today’s shipowners and marine engineers.

USA: +1 281 971 5600 ASIA: +65 6322 8215 UK: +44 1325 390180 E-MAIL: marine.services@intertek.com WEB: www.intertek.com/marine

Profitable voyages depend upon bunker fuel quality. Staying in business means staying on schedule. Poor-quality bunker fuel represents one of the biggest threats to keeping your schedule and profitability intact.

Intertek ShipCare provides fast, accurate testing for bunker fuel quality, helping avoid costly repairs and downtime.

World Bunkering Winter 2015

Lubricants

Complex issues Changes in sulphur limits and the need for switching between fuels have thrown lubricants into the spotlight

perators of ships that are big consumers of lube oils saw a decline in overall operating costs of nearly 2%, according the latest “Ship Operating Costs Annual Review and Forecast 2015/16” report, published by global shipping consultancy Drewry. Shipping accountant Moore Stephens’ “OpCost” study reported a similar fall. Both, however, see a rise in the two years. Moore Stephens notes: “The increase in outlay for lubricants, meanwhile, is predicted to be 1.1% and 1.7% in 2015 and 2016 respectively.” So cost is a major issue, but not the only one. ExxonMobil has been backing up its marketing with detailed analysis of the issues involved. It says: “Purchasing marine lubricants and fuels requires more than an assessment based on price. Procurement professionals need to consider the total cost of ownership, including overall system performance and legislative constraints.” The company claims that a major shipping company “more than tripled its engine’s expected ring replacement period by switching to ExxonMobil’s MobilGard 570 cylinder oil in combination with the MobilGard Cylinder Condition Monitoring (CCM) programme”. The container vessel managed to extend its piston overhaul intervals from 16,000 hours to more than 55,000 hours.

World Bunkering Winter 2015

ExxonMobil says: “In order to choose the most appropriate product, it is essential that a range of issues are considered – of which, upfront cost is just one. The most appropriate product will ultimately be one that maintains optimum system performance, keeps vessels operating reliably, offers a favourable return on investment and that meets or exceeds any applicable legislative constraints, such as mandated environmental impacts.” It continues: “These need not be conflicting requirements, but, in order to best balance these demands, it is essential that purchasing personnel have pertinent technical knowledge and work with a supplier that can offer the most appropriate products for any given application. When it comes to choosing lubricants and fuels, there is no substitute for a thorough understanding of the total cost of ownership, as this will enable procurement professionals to turn what are often deemed commodity purchases into strategic advantages.” While that is sound advice, all the competing lubes manufacturers will say that applying this approach will lead to the customer buying their particular products. Lubes certainly become more prominent recently. In October, a lubricant supplier won the Technical Innovation Award for the first time at the Seatrade Maritime Awards ceremony in Dubai.

Lukoil Marine Lubricants won with its iCOlube® ‘intelligent’ cylinder oil lubrication unit, which tailors the alkalinity reserve of the cylinder oil in use to engine load and fuel. The feed rate does not have to be adjusted, but always stays at optimum level, while only the fuel sulphur content needs to be entered. Lukoil says: “This maintains the engine in best condition, reduces oil costs, saves fuel, is environmentally friendly and ensures easy and time-saving engine operation.” Cepsa has launched three new marine lubricants especially for large two-stroke crosshead engines. The company says it aims to fulfil the demand for lubricants for these motors. Key benefits claimed include a higher heat resistance and better protection against corrosion. Cepsa says that these new lubricants come at a time when there are new fuel qualities available and ships must change fuel and lubricants depending on the voyage they are undertaking. The products allow engines to adapt to new legislation that aims to improve control over emissions. The three products are made using high-quality base oils and specific additives that provide a high heat resistance, as well as better protection against corrosion generated by sulphur in the fuel, high temperatures and the pressures of today’s engines. “As such,” Cepsa

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says, “demands for high durability are guaranteed in these lubricants.” Cepsa Gavia 7050 is a lubricant aimed at engines that use fuel with a sulphur content between 1% and 3.5%. Cepsa Gavia 2550 is aimed at ships navigating in sulphur emission control area (SECA) zones that require fuels with a maximum of 0.1% sulphur. Both products have a viscosity level of SAE 50, and are manufactured using the highest quality refined base fuels that produce a tougher wearing film of lubricant on the surfaces where they are working. The other product, Cepsa Ciconia, is designed to lubricate the full range of two-stroke engines. It has a viscosity of SAE 30, which is suitable for lubricating and cooling bearings. Its high level of balanced detergency also allows it to neutralise the acid components that can reach the system from the cylinders, protecting the system against corrosion. Meanwhile, Chevron Marine Lubricants’ 100BN cylinder oil, Taro Special HT 100, has received approval for its use in engines made by Winterthur Gas & Diesel (formerly Wärtsilä Switzerland). This follows similar approval last year from MAN Diesel & Turbo (MDT). Chevron says a latest-generation Wärtsilä engine has satisfactorily completed a 4,000-hour shipboard testing programme conducted by Chevron and reviewed by the original equipment manufacturer (OEM). After examining the results for the Wärtsilä 8RT-flex82T engine and analysing samples of the lubricating oil, Winterthur

Gas & Diesel has now issued a full ‘no objection’ letter (NOL) covering the use of the lubricant. This approval allows the use of Taro Special HT 100 oil in Wärtsilä RTA, RT-flex and W-X engines, as well as in Sulzer 2-stroke engines operating on fuels with sulphur contents in the range of 2.0% to 3.5% on a continuous basis. “This is a further piece of excellent news for Taro Special HT 100, particularly given the exacting testing regime demanded by Winterthur Gas & Diesel Ltd. This development will help broaden the appeal of our new lubricant to an even wider group of global shipowners,” said Rafael Teodoro, Chevron Marine Lubricants’ marketing manager. Earlier this year, in April, Total Lubmarine participated in the World Day for Safety and Health at Work by running several safety awareness initiatives. These included the production of a video for its global workforce, explaining and demonstrating the steps needed to ensure safe delivery of marine lubes. Issues covered include constant monitoring of weather and sea conditions, mooring, lighting and compliance with terminal regulations. The theme of this year’s World Day for Safety, run by the International Labour Organization (ILO), was the building of a culture of prevention on occupational safety and health. Dominique Bigault, global supply chain director at Total Lubmarine, commented: “Whether the workplace is at sea or on land, educating staff and customers is always the best way to ensure safety. Managing marine

lubricants is becoming ever-more complex, so it is important to have a day focusing on a pure and simple aim – the continuous drive towards safety. For Total Lubmarine, the relentless improvement of health and safety standards is not just an obligation to fulfil but a crucial aspect of our staff care and customer service.” The company says it has rigorous internal procedures that integrate health, safety, environment and quality (HSEQ) considerations with all its research, production, delivery and endof-product-life processes. Risks have been carefully analysed and mitigated against throughout Total Lubmarine’s supply chain, and crisis scenarios mapped out and prepared for. According to Total Lubmarine, an important aspect of ensuring health and safety is the vetting of vessels receiving marine lubricants. A Total Lubmarine vetting team inspects all vessels, regardless of their size, carrying lubricants in their tanks. Responsibilities of the supplier (Total Lubmarine), distributors and receivers are clearly mapped out, and the operational implementation of these responsibilities is ensured by customised checklists that must be completed prior to product transfer at any stage. To ensure that all these processes, procedures and guidelines are well enforced, Total Lubmarine regularly audits subcontractors in charge of manufacturing, transporting, storing and delivering its lubricants all over the world.

World Bunkering Winter 2015

Owners and operators face a number of risks – from lack of proper management systems to cyber attacks. Sandra Speares reports

new report from marine mutual insurer The Swedish Club shows that incorrect maintenance and repair continues to be the most frequent cause of main engine damage – a trend that has continued unabated since the club began monitoring the issue nearly 10 years ago. The club’s “Main Engine Damage” report investigates more than 1,000 hull and machinery claims relating to over 5,400 vessel years of statistics, and its findings make interesting reading. “Main engine damage makes up nearly 35% of machinery claims costs,” says Lars Malm, director of strategic business development and client relationships for The Swedish Club. “It is the most expensive category of claim, with an average cost of over half a million US dollars per claim. Yet most engine damage remains related to incorrect repairs and maintenance. Numerous cases have been noted where damage occurs shortly after the engines have been overhauled by ship or shore staff.” With an average cost per claim of US$926,000, lubrication failure is the most costly cause of damage to the main engine, owing to consequential damage to expensive parts such as crankshafts etc. “We are seeing crew with insufficient experience and training;

World Bunkering Winter 2015

experts not in attendance at major overhauls; contaminated lubrication oil and contaminated bunkers; and engine components not operated or overhauled as per management instructions,” explains Malm. “It is a catalogue of errors that can only be remedied by the implementation of a proper management system, backed up by comprehensive audit and inspection.” The report contains good news for the Korean shipbuilding industry. It points out that vessels built in Korea, which account for almost 31% of the club’s entries, have contributed to only 12% of the total cost of main engine claims in the past three years. Despite technical advances since the club’s last report in 2011, vessels with low-speed engines still suffer proportionally fewer claims than those with medium- and high-speed engines, with 57% of club entries in this category responsible for only 40% of main engine claims cost. IACS priorities

Christopher Wiernicki, chairman, president and chief executive of the American Bureau of Shipping (ABS), has set out his priorities as incoming chairman of the International Association of Classification Societies (IACS). He emphasised the unique role the organisation plays in promoting global safety and security, explaining

Risk management

At risk that IACS’ strategic plan has been designed to address the current and future needs of the shipping industry by focusing on three key areas: structural, machinery and cyber-system integrity. “By focusing on these three legs of the safety stool, I believe we can build on IACS’ recent achievements and set out an agenda that addresses existing and emerging challenges,” Wiernicki says. “My priorities for 2015-2016 strike a balance between the completion of ongoing projects and the need to look forward and formulate the next generation of IACS guidelines, unified and procedural requirements.” In the coming year, Wiernicki’s focus areas also include smooth completion of the initial round of audits for the International Maritime Organization (IMO) goal-based standards process. He will also advance the creation of a cyber-system safety framework that addresses control systems, software quality assurance, data integrity and cyber security, enhancing the initiative that was commenced in 2014. Wiernicki will further seek to ensure that the IACS Quality System Certification Scheme (QSCS) remains the ‘gold standard’ for classification society performance. Wiernicki, who assumed the role of IACS chairman in July, singled out the importance of IACS in supporting the industry at a time when more stringent

Risk management

regulatory requirements are being formulated and implemented. “IACS’ relationships, extensive technical knowledge, experience and independence place it in a unique position to work with regulators and industry,” he says. “IACS will continue to reach out and strengthen relationships with all parties, [demonstrating] that its commitment to safety, quality and environmental protection are more important than ever.” Cyber security guidelines.

Leading shipping organisations will be publishing guidelines on cyber security onboard ships, the Standard Club mutual insurance association reports in an alert. The guidelines are expected to be issued by the Round Table of international shipping associations, comprising the Baltic and International Maritime Council (BIMCO), the Cruise Lines International Association (CLIA), the International Chamber of Shipping (ICS), the International Association of Dry Cargo Shipowners (Intercargo) and the International Association of Independent Tanker Owners (Intertanko). The aim is to adopt and harmonise guidelines that can be followed globally, in a way similar to those for “Best Management Practices for Protection against Somalia Based Piracy”. The new guidelines will be submitted to the IMO’s Facilitation Committee and Maritime Safety Committee in April and May 2016 respectively. The expectation is that the guidelines will make it unnecessary for individual states to impose their own diverse national regulations, which would make compliance difficult because of the lack of uniformity. Guidelines are also thought more dynamic as they can be more easily and quickly adapted to changes in technology and threats.

and comprising Tim Jones of Barry Rogliano Salles (BRS), Bob Bishop of V.Ships, Bjorn Tonsberg of Wilhelmsen Ships Service and Paul Herring of Ince & Co – was asked to debate “The Realities of Risk” and what kept them awake at night. Tim Jones referred to a case where a junior broker reportedly concluded a fixture using social media. A dispute arose post-fixture on the terms of the agreement but, since the broker had left the company by this time, it was not possible to obtain the information from the social media site. Jones emphasised that BRS’s policy is to only use company emails when negotiating fixtures. Bob Bishop observed that it was relatively easy to monitor the performance of machinery and that problems could be predicted and fixed. Monitoring the performance of staff was harder, but an essential task in managing a service company. He added that training is vital to ensure that the younger generation has the knowledge to avoid the mistakes of the past. Bjorn Tonsberg emphasised that risk management is a key factor, an important part of which is to carry out due diligence, in order to establish exactly who one is dealing with. Commenting that he was aware of shipagents offering to act for agency fees far lower than commercial rates, Tonsberg stressed that it was essential for owners to carry out due diligence on the agent, including whether that agent had professional indemnity insurance in the event of a loss. Paul Herring noted that good contractual management, including the use of standard trading conditions, enabled businesses to sleep better at night, a sentiment with which all the panel were in agreement.

cleaners and others to commit fraud or behave corruptly.” Types of fraud mentioned by Moore Stephens include: misrepresentation in bills of lading; agency/subcontractor fraud; import/export port and border control; licensing/permits; and fuel bunkering/pumping/expansion. “Documentation plays a key role in either the committing of or controlling fraud. Documents are often genuine but suffer subsequent fraudulent action by a third party in respect of goods, or are fraudulent from the outset in respect of inferior quality, non-existent goods or short supply. It can be difficult to check the provenance of any such documents, primarily signatures. It is especially important to be able to make as many checks as possible. As much as IT is used to perpetrate fraud, it is also extremely useful in corroborating hardcopy documents with emails, scans, telephone calls or video-conferencing. It is worth taking a moment to consider how you check your documents and what extra controls and checks you could enforce to future-proof your current systems.” Repairing and maintaining engines requires knowledge and experience – qualities that can be in short supply

Fraud complexity warning ITIC priorities

The need for proper training, sound risk management and contractual expertise were among issues identified as essential to commercial success in a panel debate following the annual board meeting of the International Transport Intermediaries Club (ITIC) in Athens recently. The panel – moderated by ITIC’s underwriter for Greece, Robert Hodge,

Financial accounting company Moore Stephens has warned that “complexity is the friend of the fraudster”. It highlights that an international trade transaction involves multiple parties: buyers, sellers, shipowners, charterers, ships’ masters or crews, insurers, bankers, brokers or agents. “One also has to consider the opportunity for cargohandlers (loading and unloading), government officials, security staff, inspectors, surveyors, hold

World Bunkering Winter 2015

Russian update

Good to talk Olga Bogacheva reports on the latest news from the Russian bunkering and maritime sectors, including the annual St Petersburg conference

State approval of oil spill response plans “should be abolished”

The first meeting of a technical advisory group for monitoring legal practices and enhancing competition in sea port services was held on 16 September 2015 in Moscow. The group was established by the Russian Association of Marine and River Bunker Suppliers, and is an integral part of the Maritime Board, which coordinates maritime affairs in the Russian Federation. The board’s role is to solve cross-sectoral issues relating to the shipping industry and shipbuilding, and to coordinate ocean research, including in the Arctic and Antarctic. The group will act as a tool that allows the association to solve policy problems at a national level quickly and efficiently. Vladimir Sergeev, chairman of the Russian Association of Marine and River Bunker Suppliers, was the main speaker at the group’s first meeting, which discussed compliance with existing environmental laws, including approval of bunker suppliers’ oil spill response (OSR) plans. Currently, according to Russian law applying to the continental shelf and inland waters, bunkering companies must submit their OSR plans for state approval. It is a very expensive, long and excessively complicated procedure. For example, it includes public hearings, which the bunkering industry regards as absurd.

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Bunkering vessels are clearly not ports or oil terminals, which were the intended subject of the laws. Including bunker barges within the remit of these laws was simply a technical error. But amending federal laws is a complicated bureaucratic procedure that includes approval from several ministries. So far, the association has been working to solve this problem for two years. The advisory group, which includes representatives from all the relevant departments, agreed that the requirements for state approval of bunkering companies’ OSR plans should be removed. The relevant documentation will have to be approved by all these departments. However, policy experts say the problem will be solved by the end of this year. ZIM bunkers in Slavyanka

Containership operator ZIM Integrated Shipping Services has started buying bunkers at Slavyanka port (Primorsky Kray), reports Transit-DV media service. Previously, ZIM bunkered at Vostochny. “More attractive conditions were the major reason [for] this switch: lower harbour dues, diesel fuel prices, quality and service time as well as opportunity to handle containers at the roadstead,” a press release stated. In July, the Zim Haifa became the company’s first vessel to call at Slavyanka.

At the same time, handling procedures for transhipment containers passing through Slavyanka port in transit have been greatly improved. Now it is possible to send a container from Hunchun in north-eastern China to Slavyanka in a day. The new transhipment arrangement started in the middle of June. Two loaded containers dispatched from Hunchun at 10:00 by a Transit-DV agent were delivered to the Zim San Francisco container carrier, berthed at Slavyanka harbour, by 20:00 on the same day. In one day, the cargo crossed the state border, was delivered to Slavyanka, passed custom clearance, was handled at Tor handling complex, transported to the harbour and loaded on the vessel. The containers were bound for Ningbo in southern China. This example proves that transporting containers from north-western China to southern China through Slavyanka is feasible. Multi-purpose vessel for Tuapse

The multi-purpose bunker tanker Ecolog was launched at Oka shipyard, Nizhegorodskaya Oblast, on 16 September. The ship has been built for the Tuapse seaport –TMTP – part of UCL Holding, and will be used for collection of waste oil and contaminated water and oil spill response as well as bunkering. The Ecolog is 41.3m long, 8m wide, has a total tank capacity of 400m3 and can reach a speed of 10 knots per hour.

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Bunker with Confidence! Where we work: We supply fuel at the following ports of the Russian Far East: Vanino, Kozmino, Vladivostok, Korsakov, Vostochniy, Nahodka, Zarubino , Posyet, Slavyanka

What we supply: Intermediate Fuel Oil (RMB 30, RMD 80, RME 180, RMG 380) and Marine Diesel Oil (DMA). All types of fuel are complient with ISO 8217:2012

What we guarantee: Quality, availability, flexibility

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The Archangelsk regional government has announced that Chinese company Poly Technologies is considering constructing a deepwater port near Archangelsk. Representatives of Poly Technologies, a subsidiary of China Poly Group Corporation, enquired about the financial and economic model to be used in the implementation of this project. The company is due to make a final decision by the end of this year. The new deepwater port would be built through a public private partnership. “The outlook for this project is bright, so we are interested in participating,” said Sun Lin, deputy chief executive of Poly Technologies, at a meeting with acting governor Igor Orlov. He added: “Our company has sufficient funds and experience in construction of port infrastructure in other countries.” The new port is to be built on Mudjug Island in the White Sea. It is intended to serve a new railway line, with annual capacity expected to be 25 million tonnes. The deepwater area would be suitable for large vessels of up to 100,000 dwt. The new port would cut distances for cargo transport significantly. For example, the distance from China to European countries via Archangelsk is 40% shorter than the traditional route through the Suez Canal. Construction of the deepwater port is included in policy documents on Russian transport strategy and the socio-economic development of North-West Russia. In addition, the regional government has applied to Russia’s Transport Ministry to include this project in the state programme for the socio-economic development of the Russian Arctic. Construction of a new transport hub is also planned as part of the Belkomur project, which involves construction of an Archangelsk-Syktyvkar-Perm railway. This will connect the Urals and Komi Republic with the non-freezing ports of Archangelsk, Murmansk and Northern Europe. A 715km railway line will be built from scratch and will link up with existing lines, which will be reconstructed and expanded. In future, the new railway will provide the shortest route to Northern Europe, Siberia, Kazakhstan and Asia.

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Floating LNG terminal projections

Gazprom Marketing & Trading (GM&T) and Gazprom Flot, both Gazprom subsidiaries, have signed an agreement to design and build a floating liquefied natural gas (LNG) terminal for gas storage and regasification. According to GM&T, a floating storage facility will be built at Hyundai Heavy Industries, Korea, and then delivered to the Kaliningrad region by November 2017. The storage facility will supply gas to the region to replace supplies currently coming through Baltic countries. In future, it may also be used for LNG bunkering along with Gazprom bunkering business development in the Baltic Sea. Previously, TASS Agency had reported that Gazprom planned to start LNG supplies in Kaliningrad at the end of 2017. Vasily Tkachenko of Gazprom Neft Shipping also announced plans to launch LNG bunkering services in the Baltic basin in 2017. Gazprom Neft Shipping was founded in December 2008 to manage the fleet owned by Gazprom Neft Marine Bunker. Gazprom Neft Shipping offers bunker supplies and oil transportation services. Gazprom Neft Marine Bunker’s volumes increase

Gazprom’s marine fuel subsidiary Gazprom Neft Marine Bunker has reported sales of 1.57 million tonnes in the first six months of this year, up 3% on the same period last year. Sales grew particularly strongly in the Far East and the Black Sea. There was also an increase in supplies by the company’s Estonian operation. The company’s share of the Russian market was 20.9%. Novorossiysk replaces Ukrainian ports

Russian president Vladimir Putin has ordered his government to propose measures for expanding capacity Novorossiysk port, Kommersant newspaper reported in mid-September. These are likely to include improving port infrastructure and increasing the draught to allow larger vessels to use the port. Novorossiysk, which is controlled by Transneft and Ziyavudin Magomedov’s Summa Group, was also instructed to build a dry cargo handling area in Taman port. The move follows the deterioration of the political situation in Ukraine. The expansion of Novorossiysk will require terminal modernisation as

well as construction. For example, it is planned to increase grain-handling capacity by 5 million tonnes annually. Other plans include the construction of a fertiliser terminal In addition, the transport infrastructure will have to be improved. Novorossiysk railway station is already being rebuilt, while a new motorway needs to be constructed. The president approved funding to increase throughput capability by 59.8 million tonnes by 2020. Kommersant’s source reported that once Novorossiysk has been expanded, the Taman port project, to increase capacity to 91 million tonnes, may go ahead. But currently the future of Taman remains uncertain, partly owing to uncertainty over whether there will be sufficient demand. Earlier, Novorossiysk Marine Shipping Company (NMP) and Taman were competitors. Now, if NMP becomes a concession operator with a share in Taman port, vessels could call at either port, the source explained. Experts say that Ukrainian ports have already started to lose cargo traffic, and dredging will increase calls at Novorossiysk. It is understood that the development of Taman is not seen as conflicting with NMP’s interests. Novorossiysk is the largest Russian port on the Black Sea and has the country’s largest throughput. In the first eight months of this year, cargo throughput totalled 84.26 million tonnes or 19.3% of the Russian total.

Russian update

Archangelsk’s potential Chinese investor

Crimean shipyard development

Leningrad-based shipbuilder Pella has signed an agreement with the Russian Ministry of Industry and Trade on the modernisation of the Feodosia PO More Shipbuilding Yard in Crimea. Total investment is expected to be about RUB500 million (US$7.7 million). The funds will be used for renovation of equipment and workshops. Then Pella will transfer part of its orders – for example, construction of aluminium passenger catamarans – to the shipyard, which was seized by the Russian-backed State Council of Crimea in June last year.

Russian update Bright prospects for LNG-bunkering Management company LNGGorskaya is overseeing the construction of a Russian liquefied natural gas (LNG) terminal, which is expected to supply LNG to European customers and to provide bunkering services in the Finnish Gulf, using its own specialised fleet. The terminal is located near Gorskaya railway station, in the vicinity of St Petersburg. Olga Bogacheva interviews Kirill Lyats, the terminalâ&#x20AC;&#x2122;s chief executive. OB: Your project is the first attempt by a Russian private company to build LNG bunkering infrastructure. How did this idea emerge?

KL: The idea originates from our own LNG production technology. My major business is gas, chemical and process engineering. In 2011, we designed a cost-effective LNG producing plant for one of the Gazprom subsidiaries. After I found out about new shipping rules in the Baltic Sea, during a conversation with Maksim Sokolov, Minister of Transport, we decided to merge two tasks and build a LNG-producing plant specially for bunkering services. OB: No gas-powered ships have been built in Russia yet. What are the shortterm prospects for LNG bunkering in the Russian part of the Baltic Sea?

KL: I think the future is bright. We hear about the construction of new LNG-powered vessels every day. The EU continues financing LNG-bunkering infrastructure projects in the Baltic Sea within the framework of the TEN-T programme. The Russian Baltic is part of the same sea. Foreign ships call here regularly. Soon a significant proportion of those ships will be gas-powered. Next year, the US and Canada are going to introduce similar shipping rules in their countries. It means that LNGpowered ships will call at St Petersburg port as well. So our ports are destined to become leaders in environmentally friendly shipping.

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OB: Economics are the foundation of any business plan. What makes your project economically viable? KL: The main goal is to build a highly efficient plant with low capital expenditure, which is integrated into the European LNG-bunkering chain. Currently, there are problems with gas exports in our country. I always thought, and said publicly many times, that Russian law governing gas export is detrimental to our country’s economy. But we have to live with it. So we hope to provide services to several LNG-powered shipping lines and seek arrangements with foreign partners. It may help us to minimise our net exports. OB: Can you give me some details about the Gorskaya project – what this complex will comprise and whether there are any plans for further development? KL: Gorskaya project consists of three parts: 1. Gas area. This is the part of the port located at the furthest point from the shore. Here, LNG production and loading on bunkering tankers will occur. We plan to build three jetties. Each consists of one floating LNG plant, with an annual capacity of 420,000 tonnes, and three bunkering tankers, with capacities of 3,000 tonnes each. The first stage will also include a gas pipeline from the Konnaya Lahta gas distribution station and necessary surface infrastructure. 2. Port facilities. This will be the second stage. The port is shallow, so we expect that the development will focus on sea-river transportation. River- and sea-going vessels will deliver cargo from St Petersburg to Moscow and Murmansk. These routes will draw cargo traffic from motorways. Moreover, we expect to launch express ferry services from our port to the capitals of the Baltic

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countries: Tallinn, Helsinki, Stockholm and Riga. The ferry to Helsinki or Tallinn will take about four hours. Those vessels will also be gaspowered. We will position Gorskaya as the leading gas port in Russia. Yachts and solar-powered boats will also be welcome. 3. Development of Gorskaya port area. We are also considering the idea of accommodating the Makarov marine university campus in Gorskaya. A discussion has been already held with the University’s board. We are sure such cooperation will provide a unique synergy of education, science and industry in Gorskaya. As well as the university, exhibition facilities and hotels would be located on the site.

OB: How will you organise LNG production? KL: Production will take place on a floating LNG plant, or, more accurately, on three plants. They will be moored to special harbour booms in Gorskaya port and supplied from the coast. Our technology is almost independent from energy supplies because we use gas power. After almost a year of analysis and negotiations, we signed a contract for basic technical equipment with General Electric. All machinery was designed by our specialists. OB: Are you going to provide bunkering services abroad? KL: Only if we have sufficient resources. We would have rely more on our foreign partners. It is easier for us to organise LNG supplies to them.

OB: Why did you choose this location to start LNG production and terminal construction? What advantages did you see? KL: The site was chosen because it is located in the vicinity of the Konnaya Lahta gas distribution station, from where we are going to receive gas. Besides, a port with five berths and an approach canal exists here already. Currently, it is an abandoned site suitable for development.

OB: How is your collaboration with French engineering corporation GTT going? KL: In a positive way. We decided that membrane technology will be used in the bunker tanker holds. We have not yet decided on the technology to be used in the floating plants. We might use a traditional storage technology in isolated tanks there. The tanks are expected to be manufactured by Izhorskiye Zavody.

OB: Are you going to export LNG? KL: We intend to. But, as I mentioned earlier, it is not easy to do that. Owing to our current legislation, it is possible only in cooperation with Gazprom Export. But we are looking for alternatives.

OB: Is the current political situation affecting your business relationships? KL: The political situation affects everything. But our project in not included in the sanctions list yet. We hope that will never happen. Financial issues also depend on politics, but we are capable of solving these problems.

OB: How will that happen? Who are your potential partners and how will you develop these relations? KL: Our potential partners are shipowners and bunker suppliers in Europe and other regions. All of them are ready for cooperation and we are in continual contact with them.

Russian update

OB: Are you going to build your own bunkering fleet? How far have you got with this? KL: Yes, we are. There will be nine bunkering vessels, with a capacity of 7,300m3 of LNG each. We have signed a contract for the building of three vessels with United Shipbuilding Corporation. Currently, design work is under way. The Vympel design bureau in Nizhny Novgorod is working on it.

OB: When will the complex start operating? KL: That depends on financing issues. Our project team expects it will happen in the middle of 2017. Right now, we are on schedule.

Innovation

Back to the future New concept uses combined gas and steam turbine

iquefied natural gas (LNG) containment manufacturer GTT, container shipping company CMA CGM and classification society DNV GL have released a technical and feasibility study for a new mega-boxship – the Piston Engine Room Free Efficient Containership PERFECt. The concept vessel is LNG-fuelled, powered by a combined gas and steam turbine, and is electrically driven. Exploring this novel configuration resulted in the partners identifying and analysing a propulsion concept that has the potential to offer a more efficient, more flexible and greener boxship design than current 20,000 teu ultralarge container vessels driven by twostroke diesel engines. “The shipping community has realised that LNG enables the implementation of new propulsion concepts, such as demonstrated by the PERFECt design, that can increase a vessel’s efficiency, reduce fuel consumption and therefore offer a commercially interesting solution. I am confident that the utilisation of LNG as ship fuel will increase over the next few years,” says Remi Eriksen, group president and chief executive of DNV GL. “The impulse behind this study was our interest in seeing how a modern ultra-large containership design could benefit from utilising COGAS, which is a system for combined gas and steam

turbine power generation,” adds Gerd Würsig, business director for LNGfuelled ships at DNV GL – Maritime. “A modern, land-based, combinedcycle, LNG-fuelled power plant will reach fuel-to-power efficiency ratios of up to 60%, which is higher than conventional diesel engines, which can achieve up to 52%. In addition, the power density by volume and weight is much higher for a COGAS system.” “CMA CGM and its subsidiary CMA Ships position themselves as pioneers by contributing to this worldwide leading innovation. This concept rethinks the ship’s design. The COGAS system with electrical propulsion gives us a great deal of freedom in the general arrangement and in tailoring the installed power to the actual operational requirements,” says Jean-Baptiste Boutillier, technology and information director at CMA Ships. “The lower footprint of the machinery system and increased flexibility of the electric propulsion system means we can increase the capacity of the vessel, despite LNG tanks requiring more space than traditional fuel oil tanks, thereby generating greater revenues and reducing the payback time for the additional capital expenditure required.” “Gas turbines associated with steam turbines in co-generation mode

are ideal for the efficient utilisation of LNG as a fuel. This new design combines the exceptional volumetric efficiency of membrane containment technology with flexible electric propulsion to save even more cargo space compared with a conventional design,” says Arthur Barret, LNG bunkering programme director at GTT. “In addition to being a cleaner fuel, LNG is very abundant and could be made available for bunkering cost effectively for this kind of trade much sooner than commonly admitted today.” The two 10,960m3 LNG fuel tanks are located below the deck house, giving the vessel enough fuel capacity for an Asia/Europe round trip. With the gas and steam turbines integrated at deck level within the same deck house as the tanks, the space normally occupied by the conventional engine room can be used to increase cargo capacity significantly. The dissociation of electric power generation from electric propulsion allows the electric power plant to be moved away from the main propulsion system, giving a great deal of flexibility. “In fact, an engine room is not needed any more,” the companies claim. The three electric main motors, which are arranged on one common shaft, can be run fully independently of each other providing increased redundancy and reliability and a high level of safety.

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Marine biofuel consortium

Dredging company and marine consultant Boskalis, engine designer Wärtsilä and marine biofuel company GoodFuels Marine have formed a consortium to pioneer the development of sustainable “drop in” marine biofuels for the shipping industry. Netherlands-based GoodFuels Marine and its partners will spearhead a two-year pilot programme to accelerate the development of truly sustainable, scalable and affordable marine biofuels. They note that biofuels are not currently part of the marine fuel mix that operators and owners can choose from. They claim: “This means that shipping is missing an opportunity to utilise what should be a price competitive, environmentally friendly fuel option.” The programme’s focus will be on delivering and analysing a sustainable feedstock, securing industry certifica-

BV classes first ethane-powered ships

France-based classification society Bureau Veritas (BV) is classing the first ethane-powered ship. The JS Ineos Insight is the first of a series of eight 27,500m3 multi-gas Dragon-class vessels being built at Sinopacific, China, for Denmark’s Evergas. The vessel was named in July and is configured for transport of ethane, liquefied petroleum gas (LPG) or liquefied natural gas (LNG). It has options for ethane, LNG and conventional diesel power. BV’s business development manager, Martial Claudepierre, says: “The ability to burn ethane as well as LNG to power these unique vessels is a major step forward in the use of clean fuels. It means the vessels can use cargo gas during transits to provide a clean and clear commercial and environmental advantage. We have worked with Evergas and the Danish Maritime Authority to verify and ensure that the use of ethane is at least as safe as required by the IGC [International Code of the Construction and Equipment of

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tion, and preparing the building blocks for large-scale production. Additionally, the consortium will initiate a global scalability study involving leading shipowners, universities, non-government organisations, ports, biofuel companies and other industry stakeholders. The aim will be to identify tangible opportunities for scaling supply to the world’s commercial shipping fleet. The consortium will test several next-generation biofuels at the Wärtsilä laboratory in Vaasa, Finland, before sea trials are carried out on various vessels within Boskalis’ global fleet. With the objective of developing a fuel mix that is fully sustainable, the programme seeks to promote a lower carbon footprint for the maritime sector. The consortium believes that these biofuels will play a viable role in reducing emissions that no other fuel can currently achieve, without a capitalintensive fleet renewal or retrofitting.

Innovation

With gas turbine-driven power production that utilises a very clean fuel as well as electric propulsion, the ship’s machinery systems will be simplified and much more robust. This approach is also expected to lead to new maintenance strategies that are already common practice in the aviation industry. Such strategies would enable shipping companies to reduce the ship’s engine crew dramatically and save costs. The study also suggests that optimising the power plant through minimising the steam turbine size, reducing power capacities, using condenser cooling, plus using a two-stage pressure steam turbine and steam generator will increase the system’s efficiency still further. The next phase of the study aims to optimise the propulsion system and ship design to attain even greater efficiency and increased cargo capacity.

Ships Carrying Liquefied Gases in Bulk] and will not impair the engine compliance with MARPOL Annex VI.” The Dragon vessels were originally designed with dualfuel LNG/diesel power, utilising two 1,000m3 LNG tanks on deck powering two Wärtsilä 6L20 DF main engines with a total of 2,112kW of power and two shaft generators with a total 3,600kW of power. The ability to also burn ethane was added to allow use of the cargo gas, as the vessels are destined initially for transport of ethane from the US to the UK Ineos refineries. Claudepierre says: “Using ethane required extra engine room ventilation and additional gas detection, plus modifications to the main engines including a lower compression ratio, different turbocharger nozzles and de-rating of the engine to cope with the lower knocking resistance of ethane. But the gains in not carrying an additional fuel and in environmental performance from being able to burn clean fuel throughout the voyage are significant.”

Legal

Muddied waters? Sandra Speares looks at recent legal cases, including one that has caused a major stir in bunkering circles

egal fall-out from the collapse of OW Bunker continues, with a key recent legal judgment in the English courts, and differing approaches in different jurisdictions over the issue of outstanding bunker payments. The UK Court of Appeal’s judgment in the dispute between the owner of Res Cogitans and OW and ING Bank was handed down on 22 October 2015. The ruling held that although the contract as between the owner and OW had all the hallmarks of a sale contract, the Sale of Goods Act did not apply. Reaction to the ruling has been mixed, with some observers, or legal participants in the case, finding it provided clarity on the position, with others suggesting that this would muddy the waters still further. According to mutual insurance company the UK Defence Club, the court considered that: “It is a contract under which goods are to be delivered to the owners as bailees with a licence to consume them for the propulsion of the vessel, coupled with an agreement to sell any quantity remaining at the date of payment, in return for a money consideration which in commercial terms can properly be described as the price.” Responding to the judgment, Kieron Moore, senior director of claims for the club, said: “Under this reasoning, as the bunkers had been consumed, the member was obliged to pay for the bunkers as licensee, notwithstanding a retention of title clause in the underlying contract. As a consequence, an owner may be obliged to pay twice for the same bunkers. What the judgment fails to positively address is what occurs if some of the bunkers remain unconsumed: does the Sale of Goods Act apply in those circumstances? The Court of

Appeal judgment seems to suggest that it would in certain circumstances. What if the bunkers are found to be defective after some have been consumed? What we have here is a decision which, far from providing clarity, raises more questions than answers, and we believe the industry deserves better.” According to Gard P&I Club: “The key concern of owners remains the uncertainty that bunkers consumed are not clearly free from third party proprietary or lien rights. It is important to underline the case only deals with the English law position on whether the bunker contract was intended to transfer property and title in bunkers. The appeal court decided it was not – it was a supply agreement, granting owners the licence to consume the bunkers supplied. The court was unwilling to state whether such a licence automatically prevents third party claims, but doubted whether such term operates by implication.” It continued: “Owners and time charterers who contracted directly with the OW Bunker Group on similar terms now face the decision whether to pay ING or fight on. The key concern of owners remains the uncertainty that bunkers consumed are not clearly free from third party proprietary or lien rights. The owners’ argument – that ING, as a security assignee of OWBM’s right, cannot demand to be paid if it never acquired nor passed on ownership of bunkers – again failed.” Gard says: “The judgment fails to answer questions [as to] whether vessels may yet be arrested by physical suppliers, who, whilst they may lodge claims in the OW Bunker insolvency, have no realistic prospect of receiving any dividend payment out. A number of interpleader actions remain pending in the English

courts. It is noteworthy that, whilst a Singapore court has refused applications by owners and charterers to deposit funds in court to allow the court to determine priority interests directly between ING and the physical suppliers, a Canadian court has concluded [that] a physical supplier should be paid, with OW Bunker/ING entitled only to receive the margin on the financial transaction. Physical suppliers in the US (who have maritime liens) have also been criticised by the courts in New York for selling on credit terms to OW Bunker companies, but seeking to enforce against the vessel rather than lodge claims in the OW Bunker insolvency.” “Finally,” says Gard, “the mechanisms adopted by the US and Canadian courts has been to bring together the main players – owners, operators, physical suppliers, OW Bunker and ING – into the same forum to seek a measured response to the fallout from the OW Bunker collapse. This has shown far greater flexibility and ingenuity in attempting to find a resolution to the problem than so far demonstrated by the piecemeal approach of the English and Singapore courts.” According to law firm Clyde & Co, leave to appeal to the Supreme Court seems likely “given the importance of the issue and the requirement for certainty regarding the respective parties’ rights and obligations”. It says: “Ideally, the Supreme Court would go further than the Court of Appeal by providing some guidance on the wider effect of the full chain of contracts relating to the supply of bunkers in this case, although the procedural history of this aspect of the litigation may prevent this.” It adds: “In short, the central legal point arising out of the Court of Appeal’s decision seems to be that

World Bunkering Winter 2015

Pollution litigation in the US

The past several years have seen many prosecutions in the US resulting from ‘magic pipe’ cases and record book falsifications. A ship management company has pleaded guilty and was sentenced for deliberately concealing pollution discharges from the ship directly into the sea and for falsifying its oil record book. Chandris (Hellas) is headquartered in Greece and operated Sestrea - an 81,502 tonne cargoship that made calls in multiple ports in Texas. Chandris pleaded guilty to a violation of the Act to Prevent Pollution from Ships for failing to properly maintain an oil record book as required by federal and international law, as well as making a false entry in the ship’s oil record book. Shortly following the plea, US district judge Nelva Gonzales Ramos ordered the company to pay an $800,000 criminal fine along with a $200,000 community service payment to the National Marine Sanctuary Foundation established by Congress. The money will be designated for use in the Flower Garden Banks and Stetson Bank national

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marine sanctuaries, headquartered in Galveston, Texas, to support the protection and preservation of natural and cultural resources located in and adjacent to the sanctuary. Chandris was also sentenced to three years’ probation. As a condition of the probation, all ships that Chandris manages and that are involved in transporting crude oil will be forced to comply with an Environmental Compliance Plan. According to the joint factual statement, on or about 18 December 2014, the chief engineer onboard Sestrea, acting on behalf of Chandris, used a hose to pump fresh water through the oil content meter. Because of this, the meter was “tricked” into sensing that all of the oily bilge water being run through the oil water separator was within normal limits. As a result, the system discharged oily water in excess of 15 parts per million overboard into the sea. US federal and international law requires that all ships comply with pollution regulations, which include the proper disposal of oily water and sludge by passing the oily water through a separator aboard the vessel or burning the sludge in the ship’s incinerator. Federal law also requires ships to accurately record each disposal of oily water or sludge in an oil record book and to have the record book available for the US Coast Guard when the vessel is within US waters. Sestrea called on the port in Corpus Christi, Texas, on 3 January 2015. According to court documents, the chief engineer knowingly failed to make the required entries into the oil record book, including the fact that oily waste had been discharged directly into the sea. The chief engineer also made false entries in the oil record book to conceal the fact that the pollution control equipment had not been used. The crew members then attempted to conceal the discharge on 18 December 2014 during a Coast Guard boarding at the port in Corpus Christi by providing the falsified oil record book to the boarding crew. Low-sulphur fuel case

International Transport Intermediaries Club (ITIC) has reported a case in which the owners of a chemical tanker made an unsuccessful claim against a port agent for costs incurred in taking on additional low-sulphur fuel at a European port.

The port agent was appointed by the owners of the chemical tanker to attend the vessel in port. As the agent did not have an office at that particular port, it engaged its usual sub-agent to assist locally. Prior to the vessel’s arrival, the master sent an email to the agent asking whether there were any restrictions on the type of fuel that could be used while the vessel was both alongside and at the port’s outer roads, ITIC explained in a bulletin. The agent passed this request to its sub-agent, who in turn made inquiries of the local harbour-master, who was responsible for enforcing the EU directive relating to the use of low-sulphur fuel. “The harbour-master confirmed that the vessel was required to burn lowsulphur marine gas oil from the time of its arrival at the port’s outer roads. This advice was passed to the master, who duly followed these instructions. “As the vessel waited at anchorage it became clear to the master that he would not have sufficient low-sulphur fuel on board to complete operations and, as the vessel was unable to take on additional low-sulphur fuel at that port, the owners decided to divert to another port to replenish their supply. The vessel thereafter returned to its intended discharge port and operations proceeded without further disruption. “The agent subsequently received a claim from the owners of the vessel for approximately $150,000. The owners alleged that the information provided to them by their agent was incorrect, and that the local regulations required vessels to burn low-sulphur fuel only while alongside the berth, and not at anchorage. Because low-sulphur fuel was more expensive, the owners claimed for the additional costs incurred in burning this fuel when, they claimed, this was not necessary. They also claimed for the costs of diverting the vessel to take on the additional low-sulphur fuel. “It was established that the sub-agent had simply passed on the instructions received from the harbour-master, and that the agent had in turn passed this on, word for word, to the owners. “Lawyers mounted a vigorous defence to the claim, which was subsequently withdrawn.” ITIC covered the legal costs of defending the agent.

Legal

whether a contract (including a bunker supply contract) is a contract for the sale of goods depends in large part on whether the transfer of title to the goods is an essential or fundamental part of the contract.” Clyde & Co summarises: “The key commercial point, however, is that owners cannot rely on the Sale of Goods Act to avoid paying OW/ING sums due under the contract, but may in practice also have to pay the physical suppliers, thereby paying the price twice. Whether or not that is the case will likely depend on: a) what the Supreme Court decides if leave to appeal is given; b) the judicial weight given to that decision in the relevant jurisdictions across the world; and c) the terms of the relevant chain of contracts in question. Importantly, it remains unlikely that anything the English courts decide will prevent physical suppliers from claiming against shipowners and seeking to arrest.” What seems certain is that OW Bunker litigation looks set to continue and there have been key rulings on different points of the case in a number of jurisdictions, including recently in Australia.

Equipment & Services

“Massive fuel savings”

quipment manufacturer Alfa Laval says that, with Tier III nitrogen oxides (NOx) limits entering into force in North America and the US Caribbean in January 2016, the time has come for many shipowners to choose their method of compliance. It says exhaust gas recirculation (EGR) on MAN B&W engines has strong advantages by itself, but combined with its new pressurised EGR economiser it also offers the potential for massive fuel savings. “EGR provides Tier III NOx compliance with a very compact footprint, but compliance itself is only part of the full potential,” says John Pedersen, business manager, boilers, combustion and heaters, at Alfa Laval. “Working closely with MAN Diesel & Turbo to optimise the EGR technology, we saw additional opportunities through our expertise in marine boilers. The result is the Alfa Laval Aalborg EGR-HPE economiser, which paves the way for extraordinary energy and fuel savings.” Developed by Alfa Laval in close cooperation with MAN Diesel & Turbo, the Aalborg EGR-HPE is described as a revolutionary new economiser enclosed in a pressure casing. Placed inline ahead of the pre-scrubber sprayers in the EGR circuit, it has several advantages. If connected to a conventional waste heat recovery system, for example, waste

heat recovery becomes substantially more efficient – and is possible at significantly lower engine loads. “By moving the breakpoint for waste heat recovery from a medium engine load down to a low load, the Aalborg EGR-HPE enables even slower steaming,” says Pedersen. “That means fuel savings that quickly pay back the economiser, offset the EGR investment and lower carbon dioxide (CO2) emissions on top of the NOx reduction.” The source of all these benefits is the heat that would otherwise be lost during EGR. In the EGR process, around 30% of the exhaust gas is directed back into the engine, which reduces the combustion temperature and thereby the production of NOx. Since only the remaining 70% of the gas reaches the traditional exhaust gas boiler after the turbocharger, waste heat recovery is reduced by 30% as well. Alfa Laval says that, by installing the Aalborg EGR-HPE, this loss is turned into a gain. Placed inline before the EGR pre-scrubber spray jets that cool the exhaust gas, the economiser has access to much higher temperatures than traditional exhaust gas boilers. So while the installation is light, compact and self-cleaning owing to the high speed of gas flow, its application potential is enormous. This can

be seen in the way it increases the efficiency of a conventional waste heat recovery system. The Aalborg EGR-HPE is integrated with conventional waste heat recovery after the turbocharger by means of its steam drum, which is shared by the traditional exhaust gas boiler. With the output of the traditional economiser feeding into the shared drum, the Aalborg EGR-HPE produces extremely high-quality steam with a temperature of just above 400°C, bringing the waste heat recovery system to a much higher level of efficiency. “The difference in steam quality has a direct effect on the performance of the steam turbine,” says Pedersen. “Installation factors play a role, but a substantial increase in power generation can be expected.” He adds that the EGR economiser makes waste heat recovery beneficial at far lower engine loads, down to around 30%. He says this means that vessels can steam even more slowly, “with huge fuel savings as a result”. In a project supported by Denmark’s Energy Technology, Development and Demonstration Programme (EDDP) and developed in cooperation with Aalborg University, the EGR boiler has been rigorously tested aboard the Maersk Cardiff, a newbuild containership from AP Møller Mærsk.

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SulNOx, a fuel emulsion technology producer and supplier of SulNOx Fuel Fusions (SulNOx), says classification society Lloyd’s Register (LR) will provide verification, testing, technical support and consultancy services during the commercial deployment of its SulNOxEco Fuels. LR is to provide a stringent technical assessment of the new fuel, verifying its operational suitability for users of hydrocarbon fuels and providing recommendations on the most effective application of the technology to secure optimum fuel and environmental savings. To increase uptake of the technology, LR will also work with SulNOx to secure a third-party commercial vessel belonging to a significant shipping line on which sea trials of the SulNOx’s technology

will be undertaken. The company says: “The LR accredited results will aim to foster confidence in the proven safety, performance and anti-pollution benefits of SulNOxEco Fuels, particularly in the shipping industry, one of SulNOx’s key target markets.” The technology behind SulNOxEco Fuels permanently homogenises any standard fuel and water, which cuts exhaust emission pollutants and boosts fuel economy. It does this by increasing the efficiency and speed of the fuel burn, drastically cutting the production of particulate matter by up to 90%, which then helps to achieve up to an 8% improvement in fuel usage. Also, by lowering the maximum flame temperatures in combustion engines, it substantially inhibits the creation of nitrogen oxides (NOx) by up to 60%.

Boosting electrical power Calnetix Technologies LLC has published a white paper describing new processes for producing supplemental power for a ship’s electrical load. Entitled “NewTechnology Shipboard System Converts Heat from Engine Jacket Water into Electrical Power”, the white paper is available for free download at www. calnetix.com. Calnetix, working in close cooperation with Mitsubishi Heavy Industries Marine Machinery & Engine Co (MHI-MME), says it has developed a system called Hydrocurrent™, which uses an Organic Rankine Cycle (ORC) heat transfer process and a patented turbo-generator power system to convert thermal energy from heat in the engine’s jacket water into mechanical power to generate electricity. The white paper provides a detailed description of the system components and how they work, followed by a summary of test procedures and documented results. It is based on a technical paper presented by Calnetix to the American Society of Mechanical Engineers (ASME) in June 2015.

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“Waste heat from the engines is an underutilised source of power that can be harnessed to augment electricity produced by the ship’s generators,” said Calnetix chief executive Vatche Artinian. “While heat from the engine exhaust is already being used to generate steam on many ships, it has been difficult to harvest heat from lower-temperature sources, such as the engine coolant. Hydrocurrent™ technology aims to remove this barrier and tap into the low-grade jacket-water heat to generate additional electrical power without increasing fuel consumption.” “Test data reveals that Hydrocurrent™ can produce up to 125kW of electrical power from a temperature source as low as 80°C, saving up to 200 tonnes of bunker fuel and reducing carbon monoxide emissions by 18 tonnes per year by reducing the load on the ship’s bunker-burning diesel generators,” he added. The new system has been approved by ClassNK and Lloyd’s Register as meeting all applicable international standards and codes. Shipboard trials are expected to begin this year.

Caterpillar offers Tier III and Tier IV compliance Caterpillar Marine says that its C280 medium-speed diesel engines meet US Environmental Protection Agency (EPA) Tier IV and International Maritime Organization (IMO) Tier III standards. The EPA Tier IV standards apply to all new US-flagged vessels, starting in January 2014, and IMO Tier III standards will apply to all new vessels entering IMO NOx emission control areas (NECA), starting in January 2016. The C280 engines are available in eight-, 12 and 16-cylinder models spanning a power range from 2300kW to˗ 5060kW as main engines – conventional and diesel electric – and also as auxiliary generator sets. Caterpillar says the latest models offer significant benefits over earlier units. As well as reduced emissions, they consume less fuel and have lower through-life owning and operating costs.

Equipment & Services

Eco-fuel emulsion progress

Company news

Tranzit-DV Group Tranzit-DV Group is celebrating its 20th birthday with new achievements

he 20th anniversary of Tranzit-DV Group is a good chance to look back and recollect our past achievements. From its first days, the company developed rapidly, extending its geographic reach, setting ambitious goals for itself and achieving them. Since 18 July 1995, Tranzit-DV has grown from a small shipping company operating chartered vessels to a holding company comprising 10 companies and having its own fleet with a total deadweight of over 200,000 tonnes. As a matter of principle, it works only under the Russian flag, and has an oil terminal that has seen the volume of transshipment of petroleum products rise to 2.5 million tonnes per year and more. At present, Tranzit-DV Group is a holding company providing a wide range of services covering processing and supply of energy commodities, fleet bunkering and marine transportation. It is able to undertake any operations related to transshipment, storage and delivery of petroleum products and bulk

cargoes in any volume or direction through the use of its production facilities and highly skilled professionals. Also, the work of the JSC Vostokbunker oil terminal in Slavyanka (another member of the holding company) was internationally recognised when it was named International Congress Oil Terminal 2009 and 2013. The container terminal, also in Slavyanka port, enhances its capabilities with each new arrival of cargo. Today, Tranzit-DV is able to offer its customers the whole container port, plus specialist staff who will provide innovative logistics services for any transit containers: the containers are guaranteed to be delivered anywhere in the world “from door to door”, on time and with much care. Tranzit-DV is also celebrating new achievements on its 20th birthday: this year saw the launch of a road transshipment complex, offering a crane vessel with a deadweight of 1,700 tonnes, which is able to lift the containers up to 36 metres and 50 tonnes.

This resolves the problem of handling of handling road cargo and is the first stage in the creation of a multimodal transport and logistics complex. When implemented, this project will allow millions of tonnes of commercial cargo manufactured in SouthEast China to be shipped via Slavyanka to consignees all around the world. Igor Polchenko, president of Tranzit-DV Group, commented: “Russia is a maritime power with lots of ports and a long shoreline. It is also an oil-producing and oil-refining country. However, for a number of historical reasons, Russia was thrown into the background of international sea transportation traffic. “Today, Russia’s prospects in the sphere of development of shipping and bunkering are bright. Tranzit-DV Group is contributing to Russia’s integration into the world economy, and we are proudly sailing under the Russian flag to make our country an international maritime power.” ⏏

Vladivostok, Russia Tel: +742 3249 1199 E-mail: bunkers@tranzitdv.ru Singapore Tel: +65 6337 3341 +65 8518 6670 Seoul, Korea Tel: +82 2722 1123 +82 10 9690 6878 E-mail: lee@tranzitdv.ru E-mail: panchenko@tranzitdv.ru saenko@tranzitdv.ru Website: www.tranzitdv.com

World Bunkering Winter 2015

Your bunkering solution in TURKEY

ORS IKIZLER DENIZCILIK has been operating in the marine sector since its establishment in 1997. Through its bunker department, FORCE BUNKER, which was established in 1999, it has accumulated the experience, knowledge and qualifications to provide highquality bunkering services. It is the registered dealer and barge operator of the State Oil Company of Azerbaijan Republic (SOCAR) and is licensed by the Energy Market Regulatory Authority (EMRA) to operate in Turkey – mainly in Istanbul, Marmara and Iskenderun Bay – and as a trader worldwide. SOCAR is the only physical supplier in the region and now has bunkers-only status, allowing us to serve our customers more efficiently in Iskenderun Bay. Force Bunker can deliver MGO (DMA) max. 0.1% sulphur and a full range of high-sulphur fuel oil, as well as lubmarine lubricants. All fuels comply with Regulation 14 and 18 of Annex VI of MARPOL 73/78. Our highly qualified professionals apply a personal approach in dealing with clients, offering competitive rates and 24/7 service with Force Bunker’s unwavering aim of “best quality, lowest price”. With quality always a top priority, our company supplies products that comply with International Organization for Standardization (ISO) quality standards. Force Bunker is also a proud member of the International Bunker Industry Association (IBIA).

In the past two years, we have made a number of major investments at Force Bunker in order to grow our fleet. Our last acquisition in November 2014 took our fleet to four bunker barges, all of which operate under Force Bunker’s ownership: M/T FORCE 1 (1.326 DWT, IFO&MGO) M/T FORCE 2 (493 DWT, MGO) M/T FORCE 3 (1.723 DWT, IFO&MGO) M/T FORCE 4 (861 DWT, IFO&MGO) From our long experience of ship operations, Force Bunker is aware of the importance of supplying quality fuel on time. To ensure this, two larger bunker barges will be added to our fleet at the beginning of 2016. These sisterships will be the largest in our fleet. Force Bunker is fully aware of its responsibilities and is committed to complying with the highest social, health and safety standards, providing good working

conditions for employees and protecting the environment. In addition to our bunkering operations, FORS IKIZLER DENIZCILIK is very pleased to assist its customers with any other marine requirements they may have. These include: • Transit and port agency service in Turkey • Lubrication oil supply • Fresh water, provisions, paint and technical supplies – in the Istanbul anchorage area, for transit passages, and at all Turkish ports • Technical services for any kind of repair • Sludge/slop collection. • Diving support • Crew change • Motor boat and car service • Delivery services (cash to master, spares, mail and store items)

Company news

FORCE BUNKER

Force Bunker Salacak Mah. Bestekar Selahattin Pınar Sok. no: 112, 34668 USKUDAR- ISTANBUL /TURKEY Tel: +90 216 492 53 33 (pbx) Fax: +90 216 391 57 75 Email: forcebunker@ forceshipping.com Web: www.forcebunker.com : Force Bunker : Force Bunker : Force Bunker

World Bunkering Winter 2015

African Solutions to Developing Africa’s Marine Fuel Supply Sector

One of the key aspects of developing a thriving African ‘Blue Economy’ is to see the growth of effective African-owned marine fuel operations supplying high quality fuel products at competitive prices to seafarers in African waters.

This is the view of Jon Hughes, Managing Director of SABT, an African business operating in over 50 ports around the African coastline, and it reflects the objectives of the 2050 African Integrated Maritime (AIM) Strategy. Adopted by the African Union, the AIM Strategy highlights the importance of curbing illegal oil bunkering which creates losses of billions of dollars every year. The AIM Strategy also focuses on critical development of the continent’s maritime sector to increase international trade and maritime infrastructure, as well as competitiveness and job creation.

volume of global sea trade quadrupling over the last forty years, implementing the strategic plan to develop a sustainable ‘Blue Economy’ is now critical in order to channel the big business of the oceans into more African economies and hands. The AIM Strategy identifies that fiftytwo of Africa’s more than one hundred port facilities can handle containers and various forms of cargo. African-owned ships make up only 1.2% of world shipping by number. African ports currently handle approximately 6% of the world’s sea-faring cargo traffic and only about 3% of the global container traffic.

“SABT has an African solution to providing professional marine fuel services,” Hughes comments, “For years now we’ve proved that shipping around the African coastline can be safe, efficient, competitive and profitable.”

The opportunities for growth are clearly massive. Hughes says, “The growth of a legitimate, efficient African marine fuel supply sector is sorely needed to gain the confidence of the international shipping market and optimise on the obvious development opportunities in Africa. Shipping is an industry fraught with risk and high expenses. You are not going to venture to places where you don’t feel sure that you can secure the quality fuel products you need, on time.”

In its efforts to play a role in developing local marine sector industries, SABT works to provide a secure, competitive alternative for the African shipping market. “Unlike many offshore players who dabble occasionally in the fast opportunities that arise, SABT has focused on becoming an African specialist. We focus on establishing long-standing relationships with local operators, transferring skills and knowledge, and increasing financial gains for legitimate local businesses which are otherwise overwhelmed by lack of resources and the trade in poor quality black-market oil products.” With more than 90% of Africa’s exports and imports conducted by sea, and the

For the vision of creating sustainable wealth from African waters, to become a reality, reputable African marine fuel supply businesses need steady, multi-sectoral support from the African countries where they operate. The growth of professional local marine supply operations will enable them to take firmer hold in the African shipping market and marginalise the illegal operators who dominate in some of the vital economic areas around coast, especially the Gulf of Guinea.

Tel: 00 27 21 551 9588 Email: bunkers@sabunker.com Follow us on Twitter: @SABTMarineFuel www.sabunker.com

With its own storage and loading terminals and 13 bunkering barges, YugBunkerService is one of the leading fuel providers in southern Russia

ugBunkerService is a rapidly developing group of companies providing bunker services at the ports of the Black and Azov sea, and at the number of internal and river ports in Russia. The group supplies a full line of topgrade marine fuels (a wide range of IFO and MGO) and engine oils to sea-going and river vessels. YugBunkerService has been in bunkering for 17 years. Since launching our business in 1996, our priority has always been to meet and satisfy the requirements of our clients, providing superb service and high-quality fuel products at fair price. Years of hard work in the field have given us invaluable experience and the opportunity to establish a well-developed infrastructure for delivery, storage and bunkering of marine fuel. As a result, we have grown to become one of the leading fuel providers in southern Russia. Having our own marine storage and loading terminals, plus a fleet of 13 vessels with deadweight ranging from 200 to 5,700 MT, we are flexible and capable of coping with the demands of all our clients, from small independent carriers to large shipping lines. Being one of the biggest and most reputable bunker companies in the regional market, YugBunkerService has long-term and mutually beneficial relationships with large Russian, Turkish, Ukrainian and Greek shipping companies, as well as with a number of bunker traders operating at the Black and Azov sea.

World Bunkering Winter 2015

YugBunkerService is a member of the Russian Association of Marine and River Bunker Suppliers, and of the International Bunker Industry Association. Recently we expanded the number of ports that we service at and currently we are operating bunker deliveries at the ports of Rostov-on-Don, Azov, Taganrog, Yeisk, Kavkaz, Temryuk, Taman, Saratov, Syzran, Samara, Volgograd and Astrakhan.

Our team is pleased to offer you our experience and knowledge, best prices and an excellent service on a 24/7 basis. ⏏

Key information • Offices in Rostov-on-Don, Taganrog, •

• •

•

Yeisk and the port of Kavkaz Fleet of 13 own bunkering barges complying with loading and supply regulations Our own storage facilities, giving flexible bunker delivery options Our own terminal at the port Temryuk, providing safe fuel loading on tankers of up to 5000 DWTs Fuel deliveries compliant with MARPOL and SOLAS regulations.

Our competitive advantages

Company news

YugBunkerService

For more information, contact: Rostov-on-Don Tel: +7 (863) 242-44-86 +7 (863) 242-44-87 +7 (863) 242-44-88 E-mail: rostov@ybunker.com

• Wide range of top-grade marine fuels • • • •

from leading Russian oil refineries Well-developed and extensive supply network; Best prices for our clients Equal high-quality services at all our ports of delivery Widespread compliance of our barges and loading facilities with all legal and environmental requirements.

Yeisk Tel: +7 (86132) 2-60-64 E-mail: yeisk@ybunker.com Port Kavkaz Tel: + 7 (86148) 4-43-47 E-mail: kavkaz@ybunker.com Website: www.ybunker.com

Company news

The OILCHART GROUP Enjoy the right product in the right place at the right time, whether in port or offshore

stablished in 1982, OilChart ranks as one of the longest-standing independent physical suppliers in North-West Europe. The OilChart group offers its clients a solid counterparty with which to interact. By operating a diverse fleet of vessels, ranging from inland barges to dynamically positioned vessels and offshore tankers, a host of in-port and offshore locations are offered to customers. A core footprint of supplies is available within the Amsterdam, Rotterdam, Antwerp (ARA) region, utilising OilChart’s inland barge fleet to service the ports of Amsterdam, Rotterdam, Ghent, Antwerp and Flushing. The ports of Zeebrugge and Oostende are supplied by the more specialised estuarial barges, providing clients with round-the-clock supply. The barge fleet is a mixture of owned and chartered tonnage, allowing the right mix of flexibility and control over assets. OilChart prides itself on offering its customers the right product in the right place at the right time. It also places great value on being innovative and dynamic, and, with the independence of being privately owned, can take to market quickly the most demanding of supply models a client could require. Although a core focus of physical supplies is maintained in North-West Europe, physical supply solutions are also offered in the international arena. Supply licences have been acquired in the UK, France, Spain and offshore North Sea. More recently, physical supply licences have been

developed in Norway, so that OilChart can now offer supplies within Norwegian waters and ports, fully compliant with local legislative requirements. The group provides a full repertoire of products stocked on each of its barges and vessels. This includes: • Marine gas oils – standard and specific specifications • High-sulphur fuel oils, both RMG and RMK • Ultra-low-sulphur fuels oils – OilChart has access to all the products on the wholesale market produced by oil majors A fully managed supply chain is offered, providing clients with the confidence that a strong and effective due diligence protocol is followed. This ensures the integrity of the supply chain, stretching from the shore tanks that the product is loaded from, right through the barging chain, all the way to the end supply vessel from which supplies are provided. By having such control over the supply chain, OilChart is confident in taking to market a competitive yet reliable offer, providing that extra peace of mind. OilChart also offers a wide range of in-house experience – from qualified mariners with experience onboard vessels, to ship inspectors and surveyors knowing all the details and handling characteristics of the products supplied. In continuation of the group’s growth, Oilchart established in 2014 a London-based office, from which it controls and manages its offshore supply activity. ⏏

Oilchart International NV Plantinkaai 13 2000 Antwerp Belgium Tel: +32 3 2325234 E-mail: info@oilchart.com Website: www.oilchart.com

90 Long Acre, Covent Garden, London WC2E 9RZ Tel: +44 (0)20 8747 3611 E-mail: offshore@oilchart.com

World Bunkering Winter 2015

Traders

Lubricants

Our annual survey of the trading scene. It has been a tough year, with some high profile casualties. What does the future hold for traders, and are they are adapting to changing industry demands.

The complex requirements being placed on lubricants by slow steaming and fuel switching have given the impetus to a surge in new developments. We look what the manufacturers have been up to.

Fuel Quantity

I.T.

Fuel is not costing quite so much now but that does not mean any less pressure from owners for accurately measured stems. Meanwhile several administrations are taking a keen interest in this issue, most notably of course Singapore

As the development of “autonomous ships” grabs the headlines we assess the increasing impact of information technology on the bunker sector.

New Fuels Owners have, as expected, largely met the new Emission Control Area (ECA) requirement for a maximum 0.1% sulphur in fuel content by switching to distillate, such as MGO. However the oil companies have been busy developing new, or “hybrid”, fuels that comply with the new limits. We see how successful they have been in the market place.

Geographical Focus 1 Indian Subcontinent & Indian Ocean An in-depth feature on developments around the subcontinent and, for the first time, including a report on the increasingly important bunkering hub emerging in Mauritius.

Geographical Focus 2 Western Mediterranean We swing around the western shores of this major waterway and include Greece, Turkey, Cyprus and Port Said

Russian Update News, Views, Analysis

Regular Features Interview, Industry News, Environment, Testing, LNG, Risk Management, Innovation, Legal News, Equipment and Services, Diary Event Previews & Review

Company news

WORLD BUNKERING SPRING 2016 ISSUE

Mesos Ltd Bunker with confidence

ince its foundation in 2003, Mesos Ltd has accumulated the knowledge, experience, competence and skills required to provide quality bunkering and shipping services in the Russian far east. As an independent physical supplier, we aim to meet all our clients’ needs and conduct supply operations to the highest standards. We provide a service to our customer that requires sophisticated logistical operations designed to meet their strict fuel quality and delivery scheduling needs. In the Russian far east bunker market, we are well known for our reliability, strict but well balanced work standards and extended data base for strategic partnerships. Our team of highly experienced professionals applies a personal approach in dealing with clients, offering competitive rates and 24/7 service to satisfy customers’ requests. The quality of supplied fuel to our customers’ fleet is the highest priority to our company. That is why we strictly monitor the whole process of delivery at every stage, from the depot storage facility,

World Bunkering Winter 2015

through transhipment and transportation, and, finally, to the client’s vessel. We supply fuel at the following ports in the Russian far east: Vanino, Kozmino, Vladivostok, Korsakov, Vostochniy, Nakhodka, Zarubino , Posyet and Slavyanka. All supplied fuel is compliant with the Russian GOST standards and technical specifications and ISO8217:2012 in case of supply to a foreign vessel. We possess certificates of the highest quality from all the leading independent surveying companies.

General director Alexei Peredera

Mesos Ltd takes its civil liability very seriously and is committed to the highest social and health and safety standards, providing appropriate work conditions for its employees and environmental protection. We ensure a secure process when loading and unloading products and when undertaking other activities connected with ship maintenance and servicing. We also focus on environmental safety issues and prevention of oil spills. The ompany joined IBIA in 2015 ⏏

MESOS Ltd Admiral Fokin Street 8/1B, Vladivostok, Primorskiy region, Russia 690091 Tel: +7 (423) 240-64-91 Fax: +7 (423) 240-66-98 E-mail: office@mesos.su Website: www.mesos.su

Diary

18-19 January 2016

PLATTS 9TH ANNUAL EUROPEAN OIL STORAGE CONFERENCE, AMSTERDAM, NETHERLANDS This conference will once again provide an unrivalled opportunity to network with the world's leading owners and operators of storage, port authorities, oil traders, technology solution providers, financiers and market analysts as they discuss and debate the future of the industry, latest business strategies and opportunities for the market. For 2016, special attention will be given to the impact of a volatile oil market, what the market is doing to find new business opportunities and best operational strategies for terminal operators globally.

www.platts.com

14-17 March 2016

BREAKBULK CHINA 2016 Breakbulk China’s targeted programming will ensure that you develop skills and strategy to help you do your job more effectively. Breakbulk China workshops are commensurate with your experience level from entry-level Breakbulk Education Day for students & industry freshmen to advanced-level Heavy Lift Technical Workshops.

www.breakbulk.com

16-18 March 2016

ASIA PACIFIC MARITIME, SINGAPORE Meet 15,000 decision makers, shipowners, shipbuilders and other key players from the maritime and offshore community in 3 days.

26-27 January 2016

www.apmaritime.com

MIDDLE DISTILLATES CONFERENCE, 6TH ANNUAL OIL, ANTWERP, BELGIUM Platts 6th yearly Middle Distillates Conference is returning to the picturesque surroundings of Antwerp, Belgium next January for the region’s leading refiners, traders, financial players, end users and other key industry stakeholders.

www.platts.com

23-24 March 2016

8TH ARCTIC SHIPPING SUMMIT, CANADA ACI’s 8th edition of our Arctic Shipping Summit will take place in Montreal, Canada this coming Spring on the 23rd-24th of March 2016. We will be deeply exploring new developments and regulations that will come into action for the Arctic Shipping indusrty. Combining expert views, govermental officals and industry service providers to expand and increase effiency & knowledge for new generation shipping and operations.

8 February 2016

IBIA ANNUAL DINNER 2016 LONDON, UK

www.wplgroup.com/aci/event/arctic-shipping-summit

2016 will see the event go “Back to the future” with a return to the Grosvenor House Hotel, Park Lane, London. Peter Hall, CEO of IBIA said ” It is great to be taking our dinner back to the Grosvenor House Hotel, it is like taking the event home! Although we are going back to the Grovesnor House we will not stop the progression of this great event. It really will be like going Back to the future!.

www.ibia.net

9-11 February 2016

INTERNATIONAL PETROLEUM WEEK 2016, LONDON UK International Petroleum (IP) Week, hosted by the Energy Institute is widely recognised as one of the major annual international oil and gas events, where decision makers gather to debate, learn and help shape the future direction of the industry. IP Week attracts delegates from over 50 countries every year.

www.energyinst.org

24-25 February 2016 SMM ISTANBUL 2016

Turkey’s economy continues to grow and the achievement of its goal to become one of Europe’s top shipbuilding exporters is on course. SMM Istanbul (a foreign subsidiary of SMM Hamburg, the world’s leading international maritime trade fair) provides an opportunity to meet with the key stakeholders involved in the development of this important regional maritime industry hub.

www.smm-istanbul.com

27-29 April 2016

THE INTERNATIONAL BUNKER CONFERENCE The International Bunker Conference (IBC) has become a world renowned forum for the international bunker industry. The previous IBC’s have focused on the industry milestones and challenges presented by MARPOL Annex VI. The upcoming conference will expand on this very important topic, its impact on shipping and current solutions. Don't miss the chance to obtain an update on what’s happening in the bunker industry as well as to meet old and new friends at this great networking arena.

www.bunkerconference.com

23-27 May 2016

MARITIME WEEK AMERICAS 2016, FORT LAUDERDALE Returning to North America, Maritime Week Americas comprises a full week of key maritime events, including the MWA Conference – the largest and most popular bunkering conference in the Americas. Top-level training, including the IBIA Basic Bunker Course, An Introduction to Shipping and An Introduction to Bunker Disputes is on offer, as is an exhibition and some exciting pool-side social events overlooking the Atlantic Ocean. MWA 2016 also includes a guided tour of Port Everglades, one of the biggest and most important cruise, petroleum and container ports in the Americas.

www.petrospot.com/events

July 2016

MARITIME WEEK AFRICA 2016, GHANA

6-10 March 2016

MIDDLE EAST BUNKERING CONVENTION 2016, DUBAI The first annual Middle East Bunker Convention is designed to highlight the exceptional growth taking place in the marine fuels sector in Dubai but to examine the markets and players active in Fujairah, Sharjah and elsewhere in the United Arab Emirates, as well as in Oman, Kuwait and the other key supply and delivery centres in the Mideast Gulf region. This exciting Convention consists of a range of highly-focused one-day training courses on bunkering, risk management, shipping and marine surveying and a high-level twoday conference.

www.petrospot.com/events

Maritime Week Africa returns to West Africa with the Oil & Shipping Africa marine fuels conference and a range of high quality bunker and shipping training courses. West Africa remains a dynamic, exciting region for shipping and bunkering but it can also be challenging for those who do not take the time to understand how it works. This event will bring together many of the leading companies involved in the West African shipping and bunkering sector to meet each other, build new contacts and share ideas. For those looking to learn about the practical aspects of bunkering, the training courses are a must. To learn about West Africa and how it interacts with bunker markets elsewhere in the world, the Oil & Shipping Africa conference is essential.

www.petrospot.com/events

World Bunkering Winter 2015