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2014

2014

Special Convention Edition

World BUNKERING SpECial ConvEntion Edition

Welcome to

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Editor’s letter

A packed week ahead

I

t would be difficult to arrange an IBIA Convention at a more significant point in the development of the bunker industry. Nobody in the industry can be unaware of the impending 0.10% sulphur in emissions rule that will be in force in less than two months in North American and northern European waters.

That looming reality will no doubt concentrate minds in Hamburg and features prominently on the agenda, which you can find in IBIA programme included with this special issue of World Bunkering.

The other day I tried counting how many IBIA Conventions I’ve been to. The first was Monaco, which was memorable in many ways and, if memory serves, was dominated by the perpetual topics of quantity and quality. In 2007, IBIA was at Montreal, just as the International Maritime Organization (IMO) was considering amendments to Marpol Annexe VI. I remember clearly the consensus being that the idea of the shipping industry switching to distillates was not feasible. There was a very convincing report based on in-depth research that pretty much proved that case.

That seems more than just seven years ago. How the world has changed. Not only are many ships having to switch to distillates, our industry and others that depend on distillate fuel are about to learn to live with a whole new demand structure.

The unthinkable has become the must-do!

Seven years ago, liquefied natural gas (LNG) fuelled LNG carriers. Now it is being seen as realistic alternative, in the medium to long term, to heavy fuel oil (HFO).

Hardly a day goes past without

news of some development on the LNG front, dual-fuel engines being certified, LNG-powered ferries entering service and upbeat assessments of demand and prices. A few weeks ago, the Society for Gas as a Marine Fuel (SGMF) was officially launched as a new non-governmental organisation established to promote safety and industry best practices in the use of gas as a marine fuel.

This issue of World Bunkering features a concept developed by two Russian naval architects to meet the needs of LNG-fuelled ships in the transitional period while LNG bunkering infrastructure is still being developed.

Before we get too excited about LNG, some breaking news as this magazine was being put together could serve as something of a reality check. French ferry company Brittany Ferries has abandoned plans to switch six of its ships to LNG fuel and cancelled its order with STX France for a new LNG-powered ferry.

The company had planned to spend about US$510m on the LNG refit programme but has had a rethink, saying that it would cost too much. It appears that the company will now comply with the 0.10% sulphur limit coming into force on 1 January within the North Sea and Baltic emission control areas by initially using compliant fuel and then, in the longer term, by fitting scrubbers (see the news story on http://www.worldbunkering.com).

Scrubbers have taken sometime to develop and have not been exactly welcomed with open arms by environmentalists. There are still uncertainties surrounding the legal framework in which scrubbers will operate, and there is more on that on page 19 of this special issue.

Nevertheless, scrubber technology does now appear to have reached the stage where it is a viable alternative to distillates and LNG. That means HFO is likely to be with us for some time yet – which in a sense is just as well, given the time and energy put into the development of flow meters. That is another technology that is just achieving acceptance and we will be hearing a lot more on this subject during the week.

The World Bunkering team will be present at the convention. I will be making a point of meeting as many delegates as possible, but I will also be contactable via the IBIA stand, as will our project director, Dawn Allison.

I look forward to meeting you during what should be an interesting and constructive event.

David Hughes David Hughes Editor

World Bunkering Special Edition 2014 2014

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Contact: Shazmeer Jiwan alba Petroleum ltd Po box 97155 Mombasa, kenya Tel: + 254 734 539777 + 254 720 630000 Fax: + 254 20 2689549 Mobile: + 254 734 575744 E-mail: sales@albapetroleum.com

2014

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Publisher: W H Robinson

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Editor: David Hughes editor@mar-media.com

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

Project Director: Dawn (Barley) Allison dawn.barley@mar-media.com

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

Designer: Justin Ives justindesign@live.co.uk

Published by: Maritime Media Ltd Suite 19, Hurlingham Studios, Ranelagh Gardens, London SW6 3PA, UK Tel: +44 (0) 20 7386 6100 Fax: +44 (0) 20 7381 8890 E-mail: inbox@mar-media.com Website: www.worldbunkering.com On behalf of: IBIA Ltd Latimer House 5-7 Cumberland Place Southampton SO15 2BH, UK Tel: +44 (0) 20 3397 3850 Fax: +44 (0) 20 3397 3865 E-mail: ibia@ibia.net Website: www.ibia.net

ISSN 1367-5018

IBIA REPORtS Editor’s letter 1 Chairman’s introduction 5 Chief Executive’s report 7 Welcome to Hamburg 9 IBIA news 11 SPECIAl fEAtuRES Setting the scene 14 Talking points 15 Special focus on North European ECA 21 Legal news 23 German market 24 Russian perspective 27 Innovation 32 Diary

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© The International Bunker Industry Association Ltd This publication is printed on PEFC certified paper.

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I

t is an honour to welcome you to the IBIA Annual Convention, and this year I am delighted to introduce our host city, Hamburg.

This is the first time the convention has been held here. It is only a short drive from my home in Lübeck and so I have got to know Hamburg well.

I hope you will also have chance to get to know the city. I am sure you are going to like it, with its maritime heritage and close links to Europe’s other great shipping centres and with the Elbe running through its centre from the heart of Europe.

IBIA has over 250 members in Europe, making it by far the biggest centre for bunkering expertise in the world, and so it is a natural choice as a venue. For this year’s annual convention, we have been working closely with the German Shipowners’ Association (VDR) and the organisers of the Eisbeinessen festival. Our convention finishes on Thursday, with the opportunity to look around this great port, while Eisbeinessen starts on Friday and is expected to attract some 8,000 shipping professionals to Hamburg. I am sure many of you will stay on to enjoy this unique event.

Quality and compliance

The title of the convention is Quality and Compliance, a theme that IBIA has been addressing throughout the year. During the past three months, the environmental, safety and alternative fuels working group has been engaging with the bunkering community to develop a paper for the 67th session of the International Maritime Organization’s Marine Environment Protection Committee (MEPC 67), addressing some of the key issues associated with the challenges operators are facing. By the time you read this, the debate will have taken place and I hope we will have some great news to share at the convention.

especially the Singapore Shipping Association and the Maritime and Port Authority of Singapore. I believe we have a pragmatic solution that is a major step forward and one that will, I hope, be universally adopted.

Convention follow-on

Returning to the convention, there is much to discuss, most notably the emergence of the ‘new variants’ of low-sulphur fuel. No doubt, IBIA members are keen to hear more. How widely will they be available? Will the developers share the intellectual property with all refiners, making the fuel available across the world?

What will the marketing strategies be? Where are they likely to be featured in the market place?

Perhaps most important, how much cheaper than distillate will they be? If you can’t make the convention, we will feature the answers to these questions in the next edition of World Bunkering.

I do hope to meet as many of you as possible in Hamburg.

Best regards, Best regards, Jens Maul Jørgensen, Jens Maul Jørgensen, Jør chairman, IBIA chairman, IBIA

Bimco contract

Another area of work related to quality and compliance is the change to the terms and conditions of the Baltic and International Maritime Council (Bimco) contract. IBIA’s legal working group and I, with my Oldendorff Carriers hat on, have been working hard to incorporate practical and relevant changes and to promote the adoption of these changes (more information on these can be found on the IBIA website) I have to say, this has been a long process, involving many of the key shipping associations around the world,

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Chairman’s introduction

Hamburg – connected to Europe and to the world

Hamburg

A convention is a long time in the making, and I do hope you will enjoy your time in Hamburg. This is the first time the International Bunker Industry Association (IBIA) has been to Germany’s largest seaport – Hamburg, where the maritime spirit is infused everywhere you go. This week is extra special, with the famous Eisbeinessen event taking place alongside IBIA’s international convention.

There is much to see and hear about at the conference. I also hope that there is going to be some lively debate and opportunities for you to shape the direction of the industry and the Association.

We are on the cusp of significant change as, from 1 January, emission control areas make 0.1% sulphur fuel mandatory. Our focus is not only on preparation for this but also looks at the future. ‘2015 and Beyond’ is the title of the training day that kickstarts the conference. Then we have a special session from the Singapore team on the timetable for implementation of mass flow meters. The conference starts in earnest with a world shipping overview before plunging straight into ‘New fuels’ then addressing the implications these may have. Enforcement and compliance is a hot topic, as is integrity. Last but not least, we need your views on all these issues.

IBIA Convention app

Last year, we used electronic voting and captured views electronically. This year, we are going a step further, with the IBIA Convention app, sponsored by OW Bunker.

The technology will enable us to capture views on everything as we go. You can use the app to set up meetings with other delegates, give your views on speakers, take part in the convention quiz or find your way around the hotel and city. I do hope you will enjoy all the opportunities that Hamburg has to offer.

The present

The past few months have been both challenging and rewarding, with a key focus being for IBIA to communicate the challenges and opportunities that the industry faces. This has happened across a number of forums. In August, the focus was on developing a paper for submission to the International Maritime Organization for the 67th session of the Marine Environment Protection Committee on delivering greater transparency on fuel quality. The paper can be found on the IBIA website www.ibia.net During the early part of September, IBIA was prominent in the African Ports Evolution conference in Durban. The bunkering semi-

World Bunkering Special Edition 2014

nar was attended by 280 delegates from over 20 countries, engaging in the opportunities and challenges that face the region. There will be more on this aspect in the winter edition, which will feature a specific section on the bunker industry in Africa.

IBIA has also featured prominently at the Singapore International Bunkering Conference (SIBCON), addressing some significant topics and engaging in the debates. In keeping with IBIA’s ethos, it was not all business as the conference concluded with the IBIA Golf Tournament at the Jurong Country Club, which culminated with the annual bursary awards to aspiring marine students.

The future

The debate concerning future conventions is already well under way; first, let me explain how a convention location is chosen.

IBIA is currently split into five regions: Americas; Europe; Africa; Middle East, India and Pakistan; and, the fifth, Asia and Australasia. The idea is to rotate across each region, so that every fifth year a conference is held relatively close to you – at least, that’s the objective!

Each destination city is chosen 18-24 months in advance, in order to plan hotels and venues. The choice for the 2015 venue is Cancun, Mexico. Given the location, it is planned that in addition to the business issues, a parallel partners and family programme is developed.

Mexico offers really good value at all-inclusive rates. This will be a first, whereby not only do you get a conference but you also benefit from numerous leisure opportunities.

Looking forward to 2015, we have our annual dinner in February followed by a regional forum in Gibraltar and, in March, IBIA takes part at FUJCON, the Fujairah Bunkering and Fuel Oil Forum. In April, IBIA Asia has its gala awards dinner. We will be issuing an events card with the winter edition, detailing the full 2015 calendar.

Have a wonderful conference and I look forward to seeing everyone in Hamburg.

Captain Peter Hall Captain Peter Hall IBIA chief executive IBIA chief ex executive ecutive

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Chief executive’s report

Welcome to Hamburg and the 2014 IBIA Annual Convention

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Hamburg

Welcome to Hamburg

A city with a rich maritime tradition

I

BIA’s 2014 Convention is being held at the impressive and centrally located Grand Elysée Hotel Hamburg.

While this year’s convention is set to address crucial issues for the bunker industry, delegates will be missing out if they don’t spend at least some time exploring one of Europe’s most fascinating cities.

Located a few minutes by foot from the Dammtor ICE and S-Bahn rail station and near the business district, the area surrounding the hotel offers plenty to see, including the stunning Alster Lake and the Moorweide Park.

Also worth a visit is the docklands (HafenCity) area, which is currently being redeveloped, along with the historic warehouse district (Speicherstadt). There are also theatres, museums, exhibitions and many shopping opportunities in the centre of Hamburg Hamburg, officially the Free and Hanseatic City of Hamburg, is Germany’s second largest city and the eighth largest in the EU, with a population of about 1.8 million people.

At the latest count, there were more than 120,000 businesses located in this thriving commercial centre. Included at the top end are Blohm + Voss, Aurubis, broadcaster Norddeutscher Rundfunk and publisher Gruner + Jahr and SPIEGEL-Verlag.

Then there are many small and medium-sized businesses.

Not surprisingly, Hamburg is also an important financial centre and is home to the world’s second oldest bank, Berenberg.

The port of Hamburg, on the river Elbe, is Europe’s second busiest port after Rotterdam and its maritime heritage can be seen everywhere. Indeed, the city grew on the

World Bunkering Special Edition 2014

basis of the trade generated by its port. But this is most evident along the banks of the Norderelbe, down the hill from the world famous St Pauli district and the landmark tower of St Michael’s church.

Two historic vessels, now museum ships, are berthed along this stretch of the river. The sailing ship Rickmer Rickmers was built in 1896 by the Rickmers shipyard in Bremerhaven and initially sailed the Hong Kong route carrying rice and bamboo. For many years, she was the Portuguese Navy’s sail training ship before being bought in 1983 by the Windjammer für Hamburg organisation and turned into a floating museum.

Meanwhile, the 1961 fast general cargo ship Cap San Diego is a reminder of the more recent past – the liner trades just before the container revolution. Destined for scrapping, she was bought in 1986 by the city of Hamburg.

Of course, if you can join the harbour tour on Thursday you will find out much more about Hamburg’s port and rich maritime heritage.

A unique part of that heritage is the Eisbeinessen festival, which takes place immediately after IBIA finishes and attracts thousands from the German shipping community. For those not familiar with this delicacy, Eisbein is salt-cured pig’s knuckle, which is simmered for several hours in broth and served with sauerkraut and puréed peas.

So, combined with a packed programme, this year’s convention in Hamburg should be one to remember for a long time.

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IBIA news

Event manager’s report After only a few months in post, Stephen Hoare reports on the busy scene at IBIA as several events loom up

A

s we fast approach November and my first IBIA convention, plans are well advanced and I am really looking forward to producing an outstanding event for you all. I am currently ordering and receiving items for delegate bags, tying up last-minute deals, collating speeches and sorting out logistics, while all the time keeping an eye on the delegate sales!

We have some great speakers, with thought-provoking and informative presentations covering: new and emerging fuels, quality and quantity of bunkers, regulation, compliance and enforcement and, of course, an update on IBIA’s groundbreaking work with the International Maritime Organization and the Maritime and Port Authority of Singapore.

We also have a excellent selection of networking events – right from the welcome reception, with some surprising entertainment! Sponsored by Gibraltar Port Authority, our convention dinner, to be staged at the Hofbräu Bierkeller near the hotel, will be something a little different – IBIA’s own version of Oktoberfest... yes, you guessed it, IBIAFEST! On Thursday, we have a guided boat tour round Hamburg harbour that is nearly sold out.

Planning is also now well under way for our two events in February. First of all, we have the IBIA dinner on 9 February 2015 at the Park Plaza Hotel, Westminster Bridge – a change of venue for us this year as, unfortunately, Grosvenor House was already booked. But a new venue will bring a fresh outlook on the dinner, so watch this space for announcements and, of course, those all-important sponsorship deals! I look forward to seeing you all there.

The second event in February is the inaugural Gibraltar Conference on 25-26 February in association with Gibraltar Port Authority and Gibraltar Maritime Administration.

This will certainly be a conference with a difference. Final details are just being confirmed, but it will be a fantastic event that will make you want to be there.

Plans are also at an advanced stage for the IBIA Convention 2015. Watch the IBIA presentation on Wednesday for details of the all-new IBIA Convention 2015.

I look forward to seeing everyone at an IBIA event in the next 12 months.

World Bunkering Special Edition 2014

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IBIA news

IBIA Africa update Continued progress in Southern Africa as IBIA becomes involved in more events

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s IBIA Southern Africa branch gradually builds up momentum, we have made great inroads into the sector by raising our profile and giving a voice to the needs of the bunkering industry in Southern Africa.

We recently attended and were an active part of the African Ports Evolution. This is a conference held in Durban, South Africa, where the forum was a great opportunity to discuss Africa’s enhanced trade and investment and how this is leading to massive development of port infrastructure across the continent. The panel comprised Professor Trevor Jones and IBIA chief executive Peter Hall, chaired by our legal expert, Patrick Holloway of Webber Wentzel. The topics of discussion covered a broad spectrum of the issues that are being faced within the bunkering industry both here in Southern Africa and internationally. Namely, the search for alternative fuels that are economically viable as well as sustainable and which could offer national authorities, ports, shipowners and operators environmental and cost-efficient solutions.

The forum also discussed the financial and social implications of a buoyant bunker industry for South African ports and port-ancillary clusters, including job and wealth creation opportunities for local communities.

On a social front, IBIA Southern Africa hosted its first member’s luncheon at the Royal Cape Yacht Club in Cape Town.

Peter Hall was on hand and in an informal discussion covered many of the topics discussed in Durban during the African Ports Evolution conference. Our members enjoyed a relaxed atmosphere and the chance to engage with one another over many of the shared interests in growing the Southern African market and creating job opportunities for the future. We look forward to hosting another lunch in the next quarter.

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Setting the scene

Regulations ‘avalanche’

It may seem that the agenda at Hamburg is full of urgent regulatory issues, but for shipowners that is only part of the story

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he attention of those involved in bunkering, either as suppliers or buyers, is understandably focused on the implications of the 0.10% sulphur limit in emission control areas (ECAs), which will be upon us in the New Year.

The sulphur regulations are, however, just one aspect of a raft of rules gradually coming in on emissions. These are more than enough to keep shipowners fully engaged trying to comply.

Actually, though, there are other new rules to worry about. And the water ballast regulations would surely top the ‘worry list’ right now.

So, can shipping struggle through these problems, eventually working out acceptable solutions, and then sail serenely into a settled future. No chance.

There are many other issues waiting out there. In particular, the pressure for shipping to reduce its ‘carbon footprint’ can only increase.

In advance of the 67th session of the International Maritime Organization’s (IMO’s) Marine Environment Protection Committee (MEPC 67), the International Chamber of Shipping (ICS) called on IMO member states to “give careful consideration to shipowners’ concerns about the implementation of an avalanche of new environmental regulations, which are about to impact on ship operations at more or less the same time”.

ICS chairman Masamichi Morooka explained: “The shipping industry is not in any way questioning the need for these important new IMO rules and is fully committed to implementation. But governments need to address some very important issues if they wish to avoid confusion and market distortion.”

The water ballast issue is not directly related to marine fuel, but ICS’s analysis of what has happened will have resonance for those companies grappling with decisions over distillate, scrubbers and liquefied natural gas (LNG).

ICS says that the IMO ballast regime, expected to come into force during 2016, contains a number of deep flaws, having been adopted 10 years ago when the technology required to comply had not been widely tested or proven commercially. The problems still to be solved include the lack of robustness of the current typeapproval process for the very expensive new treatment systems that will be required, and the need to provide confidence to shipowners who have already installed the new equipment, or who are about to do so, that they will be regarded by the authorities as compliant.

ICS is particularly concerned that port state sanctions could unfairly affect shipowners who, in good faith, have fitted type-approved

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equipment in accordance with IMO guidelines, only to be told subsequently that it falls short of the required standard. You could substitute the word “scrubber” for “treatment systems” and the story would be very similar.

Turning to the actual 0.1% sulphur in fuel requirements, ICS notes that there is still much uncertainty as to how they will be implemented by governments. It has asked the Paris Memorandum of Understanding on Port State Control to ensure that there is a harmonised approach to implementation and thus avoid market distortion. In particular, ICS bunker delivery notes, rather than fuel sampling, to be used as prima facie evidence of compliance, unless there are clear grounds for suspecting otherwise. It has also urged states to take a “sensible approach” towards minor technical violations as opposed to the deliberate use of the wrong grade of fuel.

Morooka remarked: “With respect to the issue of fuel availability and the impact on price, there is perhaps even greater concern about the 0.5% global cap in 2020. The increased demand for diesel grade fuel from shipping may have an impact on land-based industry too.”

In that regard, ICS has expressed disappointment that IMO now looks unlikely to bring forward the IMO fuel availability study from 2018 (as required by MARPOL), by which time it will be far too late to encourage any action needed from governments to help ensure that refiners produce sufficient quantities of fuel, so that ship operators are able to comply.

ICS chairman Masamichi Morooka

World Bunkering Special Edition W Edition 2014 2014

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he issue of fuel quality will be a recurrequires that the supplier must obtain a test result ring theme during the discussions at no higher than the required specification limit value.

Hamburg. IBIA officials will be able By contrast, the recipient cannot consider a product to report on the reaction to its recent out of specification unless the recipient’s test result submission to the 67th session of the exceeds the specification limit value by more than the International Maritime Organization’s (IMO’s)Marine 95% confidence limit which, for a single test result, Environment Protection Committee (MEPC 67), but, is given by the reproducibility of the test method whatever the IMO reaction, quality will stay a hot topic. multiplied by 0.59. This statistically based process IBIA chairman Jens Maul Jørgensen has made fuel defines how results shall be interpreted allowing for quality, or the lack of it, as perhaps the defining issue these inherent test variations. of his tenure at the helm. He is very concerned that a However, within the Annex, the assessment of sulmajority of the global fuel suppliers fail to comply with phur compliance is undertaken by testing the mandatory the standards adopted in 2010 (ISO8217:2010) and are MARPOL sample, using the given verification procedure, still using outdated standards. to determine a value which is then compared to the He says: “I do believe it shows a lack of respect relevant limit. This verification procedure does not take that people refuse to comply with this. We have an into consideration inherent variations in results obtained International Organization for Standardization (ISO) in one laboratory and normal bias between laboratories. standard in the world, and we need to comply with Furthermore, this can result in a fuel oil being it. But the biggest problem is that when an ISO established as non-compliant, in accordance with the standard is introduced for bunker trade, it’s not Annex, despite both the supplier’s and recipient’s test a regulation but a voluntary agreement. It goes results meeting the recipient’s specification limit, without saying that we need to speed up the where that limit is the regulation 14 value. initiatives introduced in the bunker industry. We To date, the members of the CIMAC Fuels need to introduce new rules that suppliers and Working Group, which spans oil suppliers, fuel buyers must comply with.” testing services, shipowners and others, are aware IBIA has asked IMO for clear global rules that that the Annex verification procedure is not being include a licence system with specific criteria and widely applied in practice. From discussions with requirements with which suppliers must comply some authorities, this is, at least in part, due to the and which can be taken away from suppliers who fail conflict with the standard commercial practice. to do so.

Furthermore, the Annexe’s verification procedure lacks the Until now, quality has been about whether damaging cat fines necessary robustness and certainty required for an authority to take or other unwelcome elements found their way into the fuel. As of action, as specified under regulation 18, against the supplier, in the 1 January, the big quality question will be “How much, or rather how case of the supply of non-compliant fuel oil. little, sulphur is there?”.

CIMAC’s review concludes that “IMO should be invited to reThe easiest way owners and anybody else can answer that quesconsider the Annex verification procedure, taking into account the tion is by looking at the bunker delivery note (BDN). technical facts and the established commercial practice. If there is However, the International Council on Combustion Engines to be a robust and reliable enforcement of the sulphur limits, there (CIMAC) says that IMO’s BDN requirements contain an “inherent needs to be a single, universal, unambiguous approach.” problem”.

According to CIMAC, the international standard for marine fuels In its 2014 guideline, The Interpretation of Marine Fuel Oil Analysis (ISO8217) applies the well established, statistically based ISO4259 Test Results with Particular Reference to Sulphur Content, CIMAC says: for the interpretation of test results and it recommended that IMO “With the introduction of MARPOL Annex VI, the sulphur content should adopt the same approach for the enforcement of the Annex of a particular fuel oil is now often the primary factor in assessing sulphur limits, since this would then provide uniformity and an unamwhether or not that fuel oil is acceptable for intended use. However, biguous approach across the marine industry. It says: “Adoption by at present, this issue is complicated by the fact that the Annexe’s IMO would also align the marine industry with automotive and land approach to assessing compliance differs fundamentally from the based industries which are legislated to use the ISO4259 approach.” commercial process under which the fuel oil is ordered and supplied.”

CIMAC goes on to explain that, since all fuel oil Questions for Hamburg testing is subject to inherent variations, the commercial Will port state inspectors accept bunker delivery notes? assessment of fuel oils as supplied is governed by the What happens if a sample is taken and is just over the 0.10% limit? provisions of ISO4259. This

World Bunkering Special Edition 2014

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Talking points

Quality

Talking points

Quantity

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ingapore is leading the way with the deployment of flowmeters and so there is likely to be great interest in a presentation during the IBIA Convention by officials from the country’s Maritime and Port Authority (MPA) on the new developments taking place there. refuelling process for vessel operators. It says: “Mass flow metering ExxonMobil Fuels is one of the companies at the forefront of the is a proven technology that considerably enhances quantity transparmove to flowmeters. It has delivered more than 1 million tonnes of ency.” fuel in Singapore since June 2012 using an MPA-approved mass flow Molina Albright, ExxonMobil’s general manager for marine fuels, metering system.

Asia Pacific, says: “Fuel quantity shortages continue to be an ongoing The company says that mass flow metering saves an estimated issue facing customers. But, with mass flow metered deliveries, three hours and up to US$7,000 per delivery. It adds in a statement customers no longer gamble on quantity.” that the majority of ExxonMobil marine fuel in Singapore is now She adds: “This milestone underlines the increasingly important delivered via a mass flow metering system role that ExxonMobil is playing within the industry to address this The oil major says it has reached this milestone as demand for important issue. The majority of fuel supplied by ExxonMobil’s the “market-leading process” continues to grow, following an MPA chartered vessels in Singapore is now delivered using the mass flow mandate on the use of mass flow metering systems for fuel deliveries metering system, helping customers to benefit from the valuable in Singapore from 1 January 2017. time and cost savings.”

In June 2012, ExxonMobil became the first fuel supplier to make bunker deliveries using a mass flow metering system approved by a port authority – the MPA. Today, ExxonMobil Questions for Hamburg charters a full fleet in Singapore that can supply bunkers using the MPA-mandated mass flow metering procedure.

Will other ports follow Singapore’s example?

According to ExxonMobil, the onboard mass flow meterWhat happens if there is an onboard flowmeter? ing system delivers a more efficient, simplified and accurate

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16

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World Bunkering Special Edition 2014

U

ntil recently, the shipping industry has been working on the assumption that there are essentially three ways of complying with the 0.10% sulphur limit in emission control areas. These were: using LNG, fitting scrubbers or switching to distillate fuel. It was also assumed that, initially at least, the majority of vessels would use distillate and, specifically, marine gas oil (MGO).

As the January 2015 deadline has come closer, however, a number of alternatives to straight MGO have started to emerge.

Russian-based Gazprom Neft Marine Bunker is reportedly developing a cheaper alternative to MGO. “The company is developing a new fuel, based on distillates with a sulphur content that is permitted in ECA areas, but which is cheaper than diesel,” the company’s chief executive, Andrei Vasiliev, told U2C Communications.

Major global supplier OW Bunker announced earlier this year that it had signed a memorandum of understanding with global engineering technology development company Genoil to build a facility that can produce 0.1% low-sulphur fuel oil, and provide shipowners and operators with the opportunity to buy a cheaper product than distillates that still meets ECA compliance regulations.

As part of the agreement, Genoil will finance the building of a hydroconversion upgrading system within Europe. The facility is primarily designed for hydro cracking and the desulphurisation of fuel oils. OW Bunker will provide the initial feed oil for the system and, following the desulphurisation process, will agree to buy 1 million tonnes of 0.1% low-sulphur fuel oil at an agreed price each year.

Steffen Kortegaard, technical director at OW Bunker, said: “Many shipowners and operators are concerned about the impact that ECA regulations will have on their bottom lines. As a leading global fuel distributor, we believe we have a responsibility to our customers to look at all options and innovations for compliance beyond expensive distillates to help them maximise control over their operational costs. While we are still in the early stages of this initiative, we are pleased to be partnering with Genoil, and look forward to working together to bring it to fruition.”

Meanwhile, ExxonMobil has launched a “new category of marine fuel” formulated to meet the 0.10% sulphur limit, which it says is available in Amsterdam, Rotterdam and Antwerp (ARA) now.

ExxonMobil says that its Premium HDME 50 helps engineers to safely and efficiently operate their main and auxiliary engines and boilers. It has the performance benefits associated with both marine MGO and heavy fuel oil (HFO). The fuel is claimed to have the low sulphur content associated with MGO and the higher flashpoint and lower volatility properties typically found in HFO. Its properties, according to ExxonMobil, allow marine operators to simultaneously: comply with the upcoming ECA sulphur cap; reduce the risk of engine and boiler damage; and maintain safety and reliability.

The fuel’s higher viscosity makes storing and handling the fuel onboard similar to HFO while it also reduces the risk of thermal shock during fuel switch-over. The fuel is already in use by a range of vessel operators and ExxonMobil has received a letter of no objection from MAN Diesel & Turbo.

Spanish oil company Cepsa has also announced an alternative to MGO. Its DMB 0.1% product is expected to be available at its main supply ports from December 2014.

It seems likely that the other oil companies will offer similar products. Other alternatives are also making an appearance. A UK-based company is looking at shipping as a major market for its new emulsion.

SulNOxEco Fuels says it is targeting the marine sector after a test using the fuel on an old London bus at the London Bus Museum. The company says the test resulted in particulate matter being reduced by 91% and nitrogen oxide gases by 60% when compared with the use of normal diesel on the same engine.

The company says it has developed a new mixing process that smashes the fuel together repeatedly at great speed and under high pressure to alter the mixture at a nano, or quantum level. An addiQuestions for Hamburg tive is then injected into the mix, which helps to further stabilise the Will there be a range of alternative fuels available early next year? emulsion. It can then be burnt just like regular fuel in any engine that What will the new fuels cost? burns hydrocarbon-based fuel.

SulNOxEco Fuels has identified shipping as an initial target market.

World Bunkering Special Edition 2014

17

Talking points

Future fuels

Talking points

Liquefied natural gas

L

iquefied natural gas (LNG) projects, almost entirely for a draft international code of safety for ships using gases or other low newbuildings, are coming in thick and fast, and the regulaflashpoint fuels (IGF code) and has also proposed amendments to tors, the International Maritime Organization (IMO) and make the code mandatory under the International Convention for the classification societies have all been rushing to keep up. the Safety of Life at Sea (SOLAS).

For example, France-based international classification society According to an IMO statement, the basic philosophy of the IGF Bureau Veritas (BV) has published a comprehensive set of guidelines code is to provide mandatory provisions for the arrangement, instalon LNG bunkering, with, it says, “the aim of speeding adoption of lation, control and monitoring of machinery, equipment and systems LNG as a ship’s fuel by kickstarting the LNG bunker chain”. using low-flashpoint fuels, such as liquefied natural gas (LNG), to Jean-Francois Segretain, technical director of the marine and minimise the risk to the ship, its crew and the environment, having offshore division at BV, said recently: “We really believe that LNG has regard to the nature of the fuels involved. great potential as a clean fuel for shipping. But fears over its availThe code addresses all areas that need special consideration for ability in the bunker chain are holding back owners from adopting it. the usage of low flashpoint fuels, based on a goal-based approach, Part of the issue is that ports and terminals wishing to provide LNG as with goals and functional requirements specified for each section bunkers and shipowners wishing to have LNG-powered ships do not forming the basis for the design, construction and operation of have agreed international standard bunker procedures to work to. shipsusing this type of fuel.

BV has very wide experience with LNG in the marine context While not all LNG projects may come to fruition LNG clearly is and we hope that these guidelines will give ports, terminals, LNG going to be part the overall mix in the coming decades. Reflecting suppliers and shipowners confidence to proceed.” this a new non-governmental organisation has been established BV’s Guidance on LNG Bunkering provides recommendations on to promote safety and industry best practices in the use of gas as LNG bunkering, focusing on the framework to be established with a marine fuel. The Society for Gas as a Marine Fuel (SGMF) plans the port authorities and the bunkering organisations before any comto publish studies and produce information papers and works of mercial operation, conditions to be observed before, during and after reference. each bunkering operation, management of emergency situations and SGMF’s Brand, Marketing and Membership Manager, John the training of staff involved in bunkering operations.

Saunders, says: “It’s an exciting time for us. We were established in BV has carried out a lot of work on risk analysis for LNG bunkerSeptember 2013 and already we are pleased to have 70 members on ing, helping owners such as Brittany Ferries make the decision to board. We are looking to speak with more members who work in this switch to LNG as a fuel. In the vent however that particular project exciting industry to join us and get involved in the valuable work that fell foul of economic pressures, with the French ferry operator decidwe are doing for this industry.” ing in October to opt for compliant fuel in the short term and to fit scrubbers in the longer term. The company’s order for an Questions for Hamburg advanced LNG-fuelled ferry newbuilding (pictured) has been cancelled.

How quickly will LNG be widely available?

Meanwhile, the inaugural session of IMO’s Sub-Committee on Carriage of Is it a better option than scrubbers?

Cargoes and Containers (CCC 1) has agreed

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World Bunkering Special Edition 2014

T

he shipping industry has been stung by criticism that it has not acted in timely fashion to be ready for the 1 January 2015 0.10% sulphur limit in emission control areas (ECAs). In particular, there have claims that the take-up of abatement technology, or scrubbers, has been slow. In fact, this technology has only very recently become fairly readily available and in many ways is still in early development.

There are two main types of scrubbers available, open-loop and closed-loop. Open-loop scrubbers produce washwater, and European shipowners have asked EU member states to adopt a clear, long-term “and above all” harmonised position on the issue of the discharges of washwater.

The European Communities Shipowners’ Associations (ECSA) says that the EU Water Framework Directive (WFD) is a source of concern for European shipowners as it sets limits for the content of pollutants in ports, estuaries and coastal areas. This in turn means that the discharges of washwater will in some areas be well under the limits set by the WFD, while in other areas with poorer water quality, washwater discharges might be prohibited by member state legislation. The resulting lack of harmonisation and clarity will without a doubt hamper the uptake of scrubber technology.

What is more, according to ECSA, the WFD foresees a progressive reduction of some substances and a complete phasing out of others. However, due to a lack of information on the actual composition of washwater discharges, it is currently not possible to ascertain whether scrubber discharges fall within the two aforementioned categories. Hence, more scientific research on the actual ecological effects of scrubber discharge is necessary.

ECSA secretary-general Patrick Verhoeven warned : “The current uncertainty jeopardises investments already made by shipowners eager to meet the compliance criteria before the fast-approaching deadline of 1 January 2015, but, more importantly, it hinders the commissioning of future scrubber installations. Any restriction of the use of scrubber technology should, in our view, be preceded by a scientific assessment, with any changes in the approval procedure of such systems reflected under IMO rules. Also, shipowners that have already committed to a scrubbing system should not be disproportionately penalised.”

Questions for Hamburg Will open-loop scrubbers be acceptable in EU waters?

With new fuels being developed, will fitting scrubbers be the cheapest option?

© Wartsila

World Bunkering Special Edition 2014

19

Talking points

Scrubbers

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International

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Ferry routes have closed and a modal shift from sea to road could be on the cards

U

K Chamber of Shipping chief executive Guy Platten recently described the implementation of the 0.10% sulphur limit in the North Sea and Baltic as “cack-handed”.

The UK shipowners’ body had tried, in June, to persuade the British government to take a lead in urging the EU to introduce some flexibility into the implementation of the new regulations. For its trouble it received a severe telling-off from the then UK shipping minister, who said the industry had had plenty of time to prepare and should just get on with it.

In a statement, the UK Chamber had laid out its case saying that it supported the move to reduce sulphur emissions and the introduction of the new limits. It said: “There are two ways of doing this: by using either low-sulphur fuels or fitting specialist technology to ships.

A sharp increase in demand for low-sulphur fuel will see a massive spike in costs both for shipowners and potentially for ordinary diesel car users – so we need to use the new technology instead. But that technology is only now beginning to work, and could take up to two years to fit properly to all of our ships.”

The UK Chamber’s arguments were based on a 2013 study it commissioned from consultants AMEC Environment & Infrastructure. It identified modal shift and threats to the viability of routes, with consequent effects for jobs in the port and ferry industry.

The study reviewed three possible means of achieving the required standards: retrofit scrubbing systems, retrofit conversion to liquefied natural gas (LNG) and use of lower-sulphur fuel in place of heavy fuel oil (HFO). Retrofitting LNG was found, in practice, to be unsuitable for much of the UK fleet, given the age and configuration of the existing ships. Scrubbing had the potential to be a viable technology in the future, but at that point the state of development – and operators’ direct experience of trialling systems – did not provide sufficient confidence that the investment required would result in the emission reductions required to ensure compliance.

It concluded that, given the technical and practical unavailability of LNG and scrubbers in the immediate future, the only viable means of meeting the 0.10% limit would be through switching to lower-sulphur fuel.

World Bunkering Special Edition 2014

The study found that a consequence of using lower-sulphur fuel within the emission control area (ECA) from 2015 would be significant increases in costs associated with fuel purchases, amounting to between an additional $275 and $350 per tonne of fuel used.

It predicted: “The direct impacts of increased costs on the shipping industry in the UK could be considerable, leading to increases in fuel costs faced by operators in the Western Channel and North Sea of more than £300 million.”

By June this year, the development of scrubber technology had moved on considerably and orders were being placed and equipment being fitted. But the general argument that fitting scrubbers would take time remained valid.

The UK Chamber summed up the AMEC report as warning that “if we implement new regulations before the technology is ready, then 2,000 UK jobs could be lost, thousands more lorries will clog up our roads and 12 million tonnes of additional CO2 will be emitted into our atmosphere unnecessarily”.

“All we’re asking for is the EU to understand the practical realities we face and give us the time we need to comply,” the UK Chamber pleaded. That call fell on deaf ears.

Danish-based ferry company, which operates a wide network throughout European waters, issued a similar assessment early this year. It noted that it had been estimated that ships trading within the ECA consume around 13 million tons of HFO per year. Switching this to 0.1% marine gas oil would mean an extra cost of about s3 billion a year.

DFDS also noted predictions of modal shift, with a portion of sea freight moving to the already busy roads in Europe. “As a consequence, society may see further congestion on roads, environmental side-effects, potential closure of shipping routes and a loss of jobs,” it warned. Shortly afterwards DFDS announced the closure of its Harwich to Esbjerg service. The route had been struggling for a long time with high costs, loss of passengers and freight being switched to road transport. DFDS said it was unable to bear the “substantial additional costs” of meeting the 0.10% sulphur limit. The service closed at the end of September.

21

Special focus on North European ECA

Unintended consequences

Special focus on North European ECA

A level playing field?

The big players in the ferry and liner shipping trades around the North Sea and Baltic know they must comply with the new 0.10% sulphur limit, but they fear others may cheat

W

hile the shipping industry made a last ditch, and unsuccessful, attempt to buy extra time to allow for the fitting of scrubbers, many large shipowners have accepted that there will be no delay to the 1 January deadline. They also accept that increased costs will have to be passed onto customers.

Given that reality, there is an increasing desire for strict enforcement of the new rules, rather than a period of tolerance.

German-based shipowner Rickmers-Linie’s view is typical. It has declared its support for the introduction of stricter sulphur regulations and expects that they will inevitably lead to an increase in the cost of marine fuels.

Chief executive Ulrich Ulrichs says: “Rickmers-Linie fully supports the introduction of the new regulations. Using these fuels during navigation in the emission control areas (ECAs), the content of sulphur and hazardous sulphur dioxides in the exhausts of our vessels will be reduced considerably.”

“However, the new regulations will inevitably mean an increase in bunker costs. So we are in the process of implementing a lowsulphur fuel surcharge for quotations valid for shipments arriving to or departing from an ECA on or after 1 January 2015.”

Ulrichs stresses that the effectiveness of the new regulations is tied to powerful enforcement to ensure an industry level playing field and to prevent a weakening of the positive effect on the environment. “We firmly encourage industry players and associations to comply with, and authorities to ensure enforcement of, the new regulations.”

Other major companies have come together in the Trident Alliance, which was formed in July to campaign for “fair competition through robust enforcement of maritime sulphur regulations”.

22

By October the group had grown to 17 companies and it argued its case at a number of industry conferences, working groups and media interviews. It has been trying to raise awareness of what it sees as a lack of enforcement of sulphur regulations and consequent risk to human health and the environment and the damage to fair competition.

At a recent meeting, Trident Alliance members presented research and discussed solutions including: • Handheld sulphur content instruments for fast and accurate measurement of sulphur levels in ships’ fuel.

• Satellite-controlled drones for carrying compliance measuring sensors.

• Automated reporting of fuel-line temperature as an indicator of whether a vessel is running on HFO or MGO. The group’s chairman, Roger Strevens, says: “The Trident Alliance has been contacted by several organisations and entrepreneurs, and members have taken initiatives to explore a range of different paths for facilitating measurement of sulphur emissions.

It’s early days, and the outcomes are not certain, but these are important steps to support technology development.”

These tactics do not fit easily with the International Chamber of Shipping’s pleas to rely on what the bunker delivery note says and to take a “sensible approach” towards minor technical violations as opposed to the deliberate use of the wrong grade of fuel.

It does look as though the Danish government, at least, has taken on board the Trident Alliance approach. It has allocated DKK7 million (US$1.2 million) to boost checks on ships in its waters.

It appears that inspectors will be issued with handheld sulphur measurement devices. There will also be airborne surveillance of sulphur emissions. The country has already spoken about plans for using unmanned air drones equipped with sniffer technology.

World Bunkering Special Edition 2014

Legal

Detained engineer released US court lets Croatian seafarer return home after plea bargain in illegal oil discharge case

U

S-based law firm Arent Fox LLP says it has secured the freedom of a Croatian citizen and cargo ship chief engineer who was indefinitely held by US officials for almost a year pending an investigation into environmental violations.

Complex litigation partner Michael Zweiback, a former assistant US attorney, led a team from Arent Fox that included associates Rachel Fiset and Erin Perez.

In October 2013, Dejan Vodopic was accused of discharging oil into the Pacific Ocean in violation of international maritime law.

As a result, Vodopic and 11 other crew members were held in the US pursuant to a security agreement between the operator of The Bellavia and the US government. The agreement provided for the release of the vessel in exchange for the indefinite detention of the crew members. Vodopic and the other crew members were never consulted or shown the agreement, but were still held thousands of miles away from their homes and families for nearly a year. During this time, they were unable to exercise their procedural rights.

“Dejan and the rest of the crew were held without due process rights,” said Zweiback. “A contract between their company and the United States Coast Guard allowed the United States Attorney’s Office to indefinitely detain the crew and prevent them from departing the country.

As a result, they had no rights under the material witness statutes defined under the United States criminal code because, unlike in almost every other criminal case, the government does not designate these individuals as material witnesses in ship-based environmental cases.”

According to Arent Fox, the US government had been seeking a prison sentence for Vodopic after accusing him of pumping fuel out of a tank that had been compromised during a shipping accident in the Panama Canal. The government initially sought two counts against Vodopic for failing to maintain an accurate record book and making false statements. But Arent Fox negotiated a plea deal that includes a probationary Los Angeles city

World Bunkering Special Edition 2014

sentence and a fine of $15,000 on one count of a conspiracy for failure to report a hazardous condition, a charge that is not premised on false statements or an oil discharge. The US District Court for the Central District of California accepted the plea agreement, imposed a probationary sentence, and, in an unusual step, released Vodopic immediately so that he could depart for his home country of Slovenia.

Earlier this year, the operator of The Bellavia paid a $1.25 million fine for the alleged violations of failure to report a hazardous condition and failure to maintain an accurate oil record book, $500,000 of which was paid to four whistleblowers. Captain Mitar Miseljic pleaded guilty to a conspiracy to defraud the United States and is awaiting sentencing.

Vodopic is now home in Slovenia with his wife and three young daughters, according to the law firm.

23

German bunkering market

German owners braced for ECA

John Rickards reports support in principle for the 0.1% cap, but many doubts about the practicalities

W

ith the 0.1% sulphur cap just weeks away and the country’s ports squarely in the heart of the northern European emission control area (ECA), German owners are bracing themselves for the impact the new regulations will have. Suppliers are already planning ahead for a much-reduced fuel oil market, with most majors looking at either lowering production or else upgrading refineries to produce more distillates. Some, like Lukoil, ExxonMobil and CEPSA, have begun to introduce blended fuel oil/distillate fuels with 0.1% sulphur, but these products are very new and only available in limited quantities at present.

While scrubber technology is rapidly maturing, doubts remain over its regulation and, while some are looking to refit liquefied natural gas (LNG) engines, most owners are consequently readying for a switch to distillates and the higher costs involved. That’s

not to say they don’t support the aims of the regulations, though.

Rickmers-Linie chief executive Ulrich Ulrichs, for example, said this autumn: “While shipping is already the most environmentally friendly mode of transport, the new regulations help to further reduce the impact on the environment and our health. But low-sulphur fuels are more expensive and growing demand is widely expected to further increase the costs of these fuels.”

The company is, like many others, introducing a low-sulphur fuel surcharge on cargo passing through the ECA from the start of the year.

What, though, of the broader picture? With the country on the brink of the biggest change to ship bunkering for more than a generation, and question marks remaining over the future viability of short sea shipping in particular, World Bunkering spoke to the CEO of the German Shipowners’ Association (VDR), Ralf Nagel.

World Bunkering: Germany is at the heart of the Northern European ECA, and its short sea operators are obviously going to be most affected by the sulphur cap. How prepared are the VDR’s owners now? Are your members confident of dealing with the rules change in what is still quite a challenging market?

Suppliers are planning ahead for a much reduced fuel oil market

24

Ralf Nagel: Our companies are working at high pressure on the preparation for the new caps. As of 1 January 2015, the shipowners will exclusively bunker fuels with the lower sulphur content of a maximum of 0.1%, or will scrub ship exhaust gases accordingly. The technical and operational steps are currently being taken on board and at the shipping companies.

For the bordering states and the EU Commission, things are now, however, getting very tight in order to respond to the unresolved legal ambiguities – for example, relating to wash water discharge and the operation of scrubbers – by the turn of the year.

World Bunkering Special Edition 2014

WB: In the past there were worries about the availability of supply of marine diesel oil (MDO)/marine gas oil (MGO), as most owners seemed likely to simply switch to distillate fuel. How confident are you of suppliers in German ports being able to meet demand?

RN: We anticipate additional annual demand for MGO of 14-17 million tonnes per year within the North and Baltic Sea ECA as a whole.

This is about 5% to 10% higher than currently.

According to our information, petroleum enterprises are able to make these quantities available, but this will presumably lead to a price increase in diesel distillates.

WB: Will the development and introduction in recent months of hybrid fuel oil/distillate fuels with 0.1% or lower sulphur content alleviate some pressure on supply and offer German owners a genuine alternative, or are they not yet widespread enough to have an impact?

RN: Individual petroleum enterprises are working on fuels based on heavy crude oil that meet the new caps. What is important is that engine manufacturers give the green light for using these fuels.

Otherwise, there is a danger that the main engine of a ship may fail.

Besides the financial consequences for the shipowner, this could severely threaten ship safety.

WB: Do you know the approximate proportion of VDR members who have looked at or are installing technological solutions to sulphur emissions rather than switching to more expensive fuel?

RN: In terms of new construction and reconstruction projects, cruise liner enterprises and ferries in particular are backing dualfuel engines. A North Sea ferry is currently being converted to LNG propulsion.

World Bunkering Special Edition 2014

Some member companies have installed scrubbers onboard their ships. The EU, in conjunction with the member states, is in the process of setting up scrubber utilisation rules and regulations. We need uniform regulations throughout the entire ECA. This involves investments in the millions.

Retrofitting of existing ships often fails due to technical imponderables and the strong reluctance of banks. We are still waiting in vain for the sponsorship of green shipping technology, particularly when it come to the topic of LNG, the assurance for which was provided by the federal government in the coalition agreement.

WB: What effect, if any, are you expecting to see from the switchover as your members’ costs rise and/or operating profiles have to change, and how do you expect the ECA rules to affect the German shipping industry as a whole?

RN: The additional costs that arise through the implementation of more stringent sulphur caps cannot be absorbed by shipping companies and, as a rule, need to be passed on to their customers – something that will not always be possible given the fierce competition in terms of short sea traffic, including sea versus road.

In particular, when it comes to the Baltic Sea, we anticipate a shift in traffic from ferries to the road, resulting in people along these roads being exposed to additional emissions and noise.

Cost increases will also affect employees of the relevant shipping companies. Individual enterprises have already announced layoffs and the discontinuation of ferry connections.

So while the VDR expects cost impacts from the new regime to inevitably hit short sea carriers and ferry operators the hardest, the organisation is at the very least reasonably confident that the other question marks left hanging by the rules change should be resolved. Small comfort for some, but the situation is not as gloomy as some feared in the past.

25

German bunkering market

Cruise liners and ferries in particular are backing dual-fuel engines

Offices in Rostov-on-Don, Taganrog, Yeisk and the Port of Kavkaz Fleet of 13 own bunkering barges complying with loading and supplying regulations Own storage facilities giving flexible bunker delivery options Own terminal at the Port of Temryuk, providing safe fuel loading on tankers of up to 5,000 DWT Fuel deliveries compliant with MARPOL and SOLAS regulations

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

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 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

www.ybunker.com

Anton Lutskevich and Andrey Krestyantsev, from Russia’s Krylov State

Research Center, explain their proposal for supplying LNG to gas-powered vessels during the transition period from fuel oil without massive capital investment

T

he number of vessels fuelled by liquefied natural gas (LNG) is growing all the time and this has clearly become a major trend as the shipping industry moves towards a greener future. However, there is currently no clear framework for the expansion of LNG infrastructure. This restricts the development of the industry.

Technical problems with LNG fuel handling have been widely discussed and we won’t repeat that discussion here. As well as the dangers connected with LNG fuel itself, however, there are also regulations that are contradictory, poorly developed, insufficient and, in some aspects, outdated.

In particular, it is difficult to build a coastal LNG terminal at the majority of existing ports because it is necessary to allocate exclusion areas, which do not fit into the existing port infrastructure.

However, we can use an LNG bunkering vessel. In this case, the surrounding anchorage will serve as an exclusion area. The bunkering vessel should not necessarily be a self-propelled tanker. It may be towed around the anchorage or, in some cases, stay in one place ready to supply the calling vessels.

Currently, development of LNG bunkering infrastructure is governed by environmental and economic requirements plus administrative pressure. The latter is particularly relevant to northern European ports.

Supplying LNG fuel to liner shipping is not too complicated because the time, place of bunkering operations and amount of fuel necessary are known in advance. The typical LNG bunker tanker suitable for this task is equipped with a large LNG tank of a capacity determined by clients’ requirements. The bunker tanker takes on fuel at a special LNG terminal or from a gas-carrier.

This very simple flat-top barge and pusher tug arrangement allows road trailer mounted LNG tanks to be used to refuel vessels.

Both tug and barge can be used for other purposes when not required for bunkering.

World Bunkering Special Edition 2014

27

Russian perspective

LNG bunker barges for the transition

SCADAR was established in Murmansk in 1998. We are physical suppliers at the port of Murmansk and carry out offshore delivery in the Barents sea We are pleased to offer all bunker buyers top quality service and the following range of products, which are well within the ISO8217 quality standards, with full respect for correct sampling procedures.

We operate two double hull barges with segregated tanks for carrying multiple fuel grades.

We can deliver the products outside port limits for passing vessels with no calling costs, and there are no extra charges for weekends or holidays. Our aim is to benefit our clients with good prices and a reliable service.

Scadar Ltd Tel: +7 8152 596 170 Fax: +7 8152 596179 E-mail: scadar@scadar.com Website: www.scadar.com

NIZHEGOROD BUNKER LTD Your reliable bunker supplier in the Volga basin and neighbouring waters offering high-quality fuel at flexible prices.

IN PARTNERSHIP WITH ROSNEFT

THE ONLY OFFICIAL MAGAZINE OF

Nizhegorod-Bunker Ltd. Per. Boynovskiy, d. 22, Nizhniy Novgorod 603024, Russia tel/fax: +7 831 432 58 22 tel/fax: +7 831 432 26 77 tel/fax: +7 831 432 57 89 e-mail: nbunker@mail.ru www.nbunker.ru

Andrey Krestyantsev

World Bunkering Special Edition 2014

Between bunkering operations, this vessel may be used for alternative purposes or be laid up. If laid up there would be no LNG onboard and the cost of the ship being idle would be relatively low.

Also, with no liquid gas or vapour onboard, the vessel could be safely kept at an ordinary berth. An example of such a mini bunkering vessel is shown in Figure 2.

The vessel is intended for use as a mini combined bunkering tanker. It performs bunkering services for non-LNG fuelled ships and can supply three grades of marine fuel. It has a total capacity of about 3,000m3 and doesn’t carry LNG tanks on board.

If necessary, bunkering of a gas-powered small or medium-size ship could be carried out as described above.

Costs may be further reduced by not installing a propulsion system onboard. It is known that the operational expenses of a nonself-propelled vessel are significantly lower that of a self-propelled one in respect of maintenance, the service crew and meeting regulatory requirements.

A non-self-propelled barge would need only a minimum of equipment to handle the LNG from the barge to the receiving ship. A tug could both move the barge and provide the power supply for the LNG handling equipment. An example of such a non-self-propelled barge is shown in Figure 3.

This non-self-propelled crewless barge has very basic equipment for rolling gas-carrier trucks on board and performing LNG bunkering operations. There are no LNG tanks fitted on board. This barge could supply LNG to small or medium-sized gas-powered ships in protected water areas with no ice.

However, such a barge would have limitations. It could not operate in bad weather or in ice. A rigid connection between a tug and the barge would be preferable for operations in open anchorages.

This would obviously increase costs, but would provide better seagoing performance and manoeuvring ability. When not required for LNG bunkering, the tug could still be unhooked and used for general port duties.

To conclude, we must emphasise that our proposed approach provides the opportunity to organise LNG bunkering supplies where there is low or irregular demand at low risk and cost. In the near future, such projects may be required in various regions, including northern European ports. This is particularly the case in relatively small ports on the Baltic Sea and Northern Sea, where LNG bunkering services should be in place by 2025.

Anton Lutskevich

29

Russian perspective

So far, just a single bunkering tanker of this type has been put in operation. There are, however, many other projects proposed.

Several such vessels are under construction and the issues relevant to their performance have been discussed widely. Figure 1 shows an example of such a vessel.

However, the nature of tramp shipping does not fit well with LNG’s physical properties and this needs be taken into account in the design of a bunkering tanker supplying to non-liner shipping.

The number of gas-powered vessels is still low. That means there can be too long a wait before the next bunkering operation. Long storage of LNG on the bunkering tanker causes significant losses due to evaporation, even if the vapours are recycled. The alternative is installation of expensive plants for condensation of vapours, but this isn’t economically feasible. LNG reloading operations also bring gas losses so these should be minimised.

We also proposed the concept of mini bunker tankers. The concept includes several types of barges, including self-propelled crewless vessels, suitable for operations during the transitional period.

The concept is based on the LNG bunker vessel taking onboard road LNG tanker trailers. The bunker vessel is equipped to pump the LNG from the trailer to the receiving vessel. Empty trailers are returned to the shore and the LNG bunker fuel stays on board only during preparation and performance of the bunkering operation.

The equipment for LNG storage and handling is minimal.

The ship may be used for alternative purposes and so its standingby costs can be kept to a minimum.

A bunkering operation would start with the LNG being delivered onboard the bunkering vessel at the customer’s request in tanks on trailers with a capacity of between 36m3 and 50m3. The tank is then hooked up to the tanker’s loading system and LNG is then pumped onboard the gas-powered vessel. When the operation is complete, the cisterns are unhooked from the vessel’s loading system, the trailer returns ashore for other uses.

The costs of such a bunkering operation would include the cost of storing the LNG tank, and probably the trailer, onboard the bunkering vessel. However, this would be economically feasible compared with the high costs of LNG storage onboard a vessel fitted with an internal LNG tank. Costs would also be reduced as less LNG would be lost. In addition, the design of the bunkering vessel itself would be much simpler and so cheaper. The costs of loading a trailer would be significantly less than taking on LNG by pipe from a terminal.

Company news 30

Valery Morozov’s tactical moves This year, Valery Morozov took office as executive president of the Tranzit-DV Group.

No ordinary appointment, this position was created especially for him.

Meanwhile, the company is progressing with projects in line with the federal programme for the development of the Russian far east

What are the specific characteristics and advantages of these projects?

Having a multimodal transport and logistics complex will provide the infrastructure necessary to offer the widest possible range of services to vessels calling at the port, ranging from bunkering and cargo handling to rest amenities for crew.

It also includes road and rail links, a container terminal and direct handling facilities that will enable cargo operations without vessels needing to moor at a pier.

Local small businesses Valery Morozov will provide services and facilities for off-duty crew (a seaman today can easily spend a few HIS OWN VISION hundred or even more than a thousand Valery, the Tranzit-DV initiatives are well dollars on relaxation). They will also supply food, water and spare parts for marine known to and supported by the regional equipment. government, the presidential embassy The cost of the first stage of the project and the Ministry for the Development is RUB1 billion, which we are funding of the Russian Far East. Is there a feeling ourselves with the support of VTB Bank. At of qualitative change in the company? present, we are testing the road-handling The business is making inroads into the facility, implementing new container transit development of the Russian far east, technology that is a first for Russia. We plan shoulder to shoulder with the state. to go live with this facility this autumn.

It would be difficult to work without Another of our major projects is largeunderstanding, support and ongoing scale fuel cabotage. The company has dialogue with the government. acquired two 45,000 tonne tankers, which Generally, Tranzit-DV is implementing have been operating on the Northern Sea unique projects that will boost the flow of Route since July, when weather conditions international traffic, change the principles of permit navigation in the Arctic Ocean. One bunkering and attract big-tonnage fleets to tanker goes via the east and the other via the ports of the Khasan district. Key to this is the creation of a multimodal production and logistics complex in the port of Slavyanka.

This is being carried out by Vostokbunker Company, which is part of the Tranzit-DV Group. At the same time, we are increasing the flow of goods via the Northern Sea Route.

the west, and we plan to introduce seven schedules. This is not only additional cargo traffic for the Northern Sea Route but also a new means of fuel delivery. Rosatom State Nuclear Energy Corporation, which controls the icebreaker fleet, has agreed to extend its support to us. Development of the Northern Sea Route is in collaboration with the People’s Republic of China.

What are the company’s objectives for strategic development?

In business, as in chess, there are final positions that can be achieved through certain configurations. In general, the aim is to see the big picture, encompassing not only our company but also the entire Russian far east and Asia Pacific. Our goal is to transform ports in the Russian far east into hubs of global significance that can be incorporated into international transport corridors between Europe, the US and Asia-Pacific.

What challenges do you face?

Given the scale of these projects, communication with the authorities becomes vital. There have also been a number of changes to federal laws, which have aided our initiatives. For example, in Slavyanka Bay, Vostokbunker has developed a reloading solution with DNIIMF. The idea of the project is that cargo operations can take place not only at the piers but also in the shipping lanes, which will increase the port’s capacity and attract investment.

To do this, it was necessary to expand the boundaries of the port basin. A subsequent resolution of the Russian Federation government changed the boundaries of Posiet seaport, which includes Slavyanka and Zarubino.

World Bunkering Special Edition 2014

NATuRAL HARBOuR

Has your extensive experience of working with foreign partners given you an insight into why it has been hard for Primorsky Krai to attract foreign investors?

Are you here to stay?

Unfortunately, we are still relatively unknown, and lack of knowledge creates fear.

I’ll give you an example: one foreign vessel refused to call at Zarubino port, because it was a “white spot” for them. The ports of Nakhodka Vostochny are somehow known, while Zarubino is not. Yet, if a company were to consider transferring production from the northern provinces of China to the Khasan district of Primorsky Krai, it would be faster to export finished products from us. We hope that this will be one of the effects of having a multimodal production and logistics complex in Slavyanka.

Was it difficult to build your contacts with foreign partners?

It took a long time to build up relationships.

But the result is obvious: we are working on long-term contracts with major foreign partners. Right now, we are working jointly with the Korea Maritime Institute on the development of a container business system.

A number of agreements were reached at the recent Russian-Korean Economic Forum in Vladivostok. Talking about our relationship with foreign partners, it should be noted that we have borrowed a lot from best practice in Singapore, Hong Kong and South Korea.

We can learn a lot from them, and their experience should be held in respect.

In turn, Korean and Chinese businesses are interested in our projects, and Korea is ready to invest funds in the infrastructure development for the multimodal complex, including reloading and delivery of containers handling petroleum gas. The Chinese are also interested in investing in the transshipment of containers from the Northern provinces.

World Bunkering Special Edition 2014

I hope so. My goal in Tranzit-DV is to implement a strategy that will help us find the most effective tactical moves. At the same time, we are developing rapidly, especially in the past year. Actually, I’ve been working at Tranzit-DV for 10 years and feel like I have found my natural harbour. We have a very special team and management and a unique attitude to people and business.

Great attention is given not only to learning but also to spiritual development – I have not seen this anywhere else.

Is it fair to say that the company's policy does not fit into the usual mode of doing business in the region?

Yes, some people in business believe that we are a little bit... …non-standard?

Yes, you could say that! We have some big personalities within the company, and there are occasions when more traditional thinkers struggle to understand the culture. A lack of knowledge, as I said, creates fear or rejection.

We are different in many ways, even in office life. For example, every day at 3pm many of the company’s employees head out for a flash mob: you can often see our girls dancing to the music on the street outside the office in the centre of Vladivostok. Things like this are strictly voluntary, of course, but we find that people are charged with a creative energy that is felt in the working atmosphere for a long time afterwards.

Colleagues (or competitors) in business do not immediately understand our major strategic decisions. But, later, after six months or a year, they often copy us. For instance, when we began using 17,000 tonne tankers in the bunkering business, everyone

said that made no sense and would be economically inefficient. Now the whole business works this way. Two years ago, we began to carry oil from the western part of the country to the Russian far east by sea in tankers – everyone thought we were mad, but now we have completely reversed their opinions. Although non-standard solutions may not always be economically efficient or yield swift profits initially, there is often a payback later on. To understand and feel this, one must have experience in the business, as well as intuition and a certain spiritual development.

Tranzit-DV gives generously to charitable programmes, especially the Young Captains scheme.

Yes, charity is important to us, hence the structure of Tranzit-DV includes two charity funds. But Young Captains is not specifically a charity project but rather a programme to create a reserve of personnel.

At the moment, most of the best Russian navigators are working abroad. But if we want a trouble-free, high-quality fleet, we need skilled professionals, especially for the Northern Sea Route. Therefore, we make contracts with the Naval School: we teach, give the cadets practical skills, guaranteed jobs, wages and social guarantees. Creating a talent pool is a problem that the whole of Russian is facing, but we are ready and can make our contribution.

Company news

IgNORANCE CREATES FEAR

Can you outline your business philosophy?

I have one philosophy for both general life and business: to do good, to give more and to not wait for an award. A good attitude towards family, partners and colleagues is key. The more openly, honestly and decently you work, the more you receive in return.

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Innovation

Look, no CREW! New concept for a slow, battery-powered, unmanned and fully autonomous cargo ship

T

he increasing stress placed on land-based logistic networks is driving the search for alternatives, according to classification society DNV GL. It says that one of the most promising is short sea shipping, and its researchers have developed a vessel that is claimed to be greener, smarter and safer than conventionally fuelled and operated vessels.

“Autonomous, fully battery powered and highly efficient,” DNV GL says, “ReVolt is a new shipping concept that offers a possible solution to the growing need for transport capacity.”

Instead of using diesel fuel, ReVolt is powered by a 3,000 kWh battery. This reduces operating costs by minimising the number of high-maintenance parts, such as rotational components. The vessel has a range of 100 nautical miles before the battery needs to be charged. If the energy required for that were harnessed from renewable sources, this would eliminate carbon dioxide emissions.

ReVolt does not require a crew and therefore, DNV GL claims, “goes a long way in tackling one of the shipping industries’ weakest links: the safety record”. It says that with an average of 900 fatalities per year, the mortality rate in shipping is 90% higher than in compa-

rable land-based industries. Studies have shown that the majority of these accidents are caused by human error. Unmanned vessels take this factor out of the equation and make the operation of these ships more cost-efficient.”

The vessel has an average speed of 6 knots and faces less water resistance than other ships, which usually travel at about 8.7 knots.

The slight loss of speed allowed the engineers to fit a straight vertical bow, further reducing water resistance along the ship’s entire profile and ultimately saving energy.

With no crew, there is no need for crew facilities such as the superstructure on board this vessel. The resulting increase in loading capacity, as well as low operating and maintenance costs, mean that compared with a diesel-run ship ReVolt could save up to US$34 million during its estimated 30-year lifetime.

The concept ship is currently still being tested. “Building and operating this vessel would be possible with today’s technology. ReVolt is intended to serve as inspiration for equipment makers, shipyards and shipowners to develop new solutions on the path to a safe and sustainable future,” says Hans Anton Tvete, senior researcher at DNV GL.

bunkering in Sea of ohotsk and bering Sea. Transportation wholesale and retail of oil products in the russian Far East ports

Morskoy Trust LLC

9/6 Torpokov Street, Building 1 Petropavlovsk-Kamcharskiy, Kamchatka Region Russia 683031 Phone/Fax: +7 4152 230763 Phone/Fax: +7 4152 232904 E-mail: tanker-41@mail.ru

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World Bunkering Special Edition 2014

Innovation

Ethane-fuelled ship by 2016

A new report on the technology required for very large ethane carriers (VLECs) reveals that plans for an ethane carrier using boil-off gas as fuel are at an advanced stage

C

lassification society Lloyd’s Register (LR) says that a new trade in ethane is emerging as a result of increased US gas production. Its report, Seaborne Ethane: A Report Into The Commercial Need And Technical Requirements For Very Large Ethane Carriers, looks at the risks and challenges in developing a safe and efficient trade in ethane, using larger ships and requiring ethane-specific technical solutions.

A benefit of ethane, LR notes, is that, as with liquefied natural gas (LNG), the cargo can be used to power an ethane carrier’s engine. But this requires specific risks to be addressed. LR and MAN Diesel have together worked on an ethane engine project and LR has already issued an approval in principle (AiP) for a MAN ME-GI engine to combust ethane. MAN Diesel has agreed to make the necessary design modifications to the methane version of the ME-GI and to supply the engines for Q4 2015, for an anticipated ship delivery in June 2016, and has submitted the required documentation.

Some of the changes required to accommodate the higher pressure required for ethane include redesigned fuel valves, control block and piping, along with some material changes. However, while these are not insignificant, the conceptual engine design and the risk management philosophy will have a very high degree of commonality with the LPG-fuelled ME-LGI engine, which is already approved by LR. As ethane is not included within the International Gas Code, LR is also seeking the agreement of flag administrations for the use of ethane as a fuel.

LR says that US ethane production capability, as a by-product of total increased US gas production, is under-utilised. It concludes that the potential exists for annual exports of 1 million tonnes of ethane to provide employment for 0.18 million cubic metres (m3) of shipping capacity if shipped to North Europe, a further 0.32m3 if shipped to South Asia and a similar amount to China through the Panama Canal. Projects are now under way to produce and move this ethane.

“The window of opportunity to tie up ethane exports and secure tonnage to serve this trade is now open to feed potential markets in Europe and Asia,” says Tim Protheroe, president, Lloyd’s Register North America Inc. “Lloyd’s Register has identified the technical risks and best technical pathways to help ensure that nearterm demand for large VLECs can be met by shipyards and gas containment system suppliers. Our job is to help anyone looking at trading ethane to make the best

World Bunkering Special Edition 2014

commercial decisions based on the best technical insight as well as working with regulatory bodies such as the US Coast Guard and flag administrations to ensure that the risks are understood.”

LR’s global gas technology manager, Leonidas Karistios, said: “We have been studying the potential for ethane for over a year and we asked the question ‘What would a safe and efficient 80,000m3 ethane carrier look like?’. The answer is that to transport larger quantities in a single hull will almost certainly require the adoption of alternatives to type C gas containment systems.”

Historically, ethane has been transported in small liquefied ethane/ethylene carriers (LECs), designed and constructed to carry ethylene (boiling point -104°C) as well as ethane and other ‘normal’ LPG cargoes. All these vessels have type C containment systems and it is estimated that the maximum feasible size of a ships with type C cargo tanks is around 40,000m3. “It’s not impossible that type C tanks could work, and it is important to keep reviewing the technology being developed,” says Karistios.

The study evaluates all tank technology options and identifies that, for ethane carriers of 80,000m3 and over, the adoption of either prismatic type B tanks or membrane systems would probably provide the best technical design pathways – based on a ship with three to four tanks.

33

Company news

galp Energia group Portugal's premier supplier of fuel services

B

ased at Lisbon, Galp Energia Group, is able to offer fuel supply services to all ships visiting this warm and pleasant country.

Galp Energia's professional bunkering team provides customers with high-quality fuels and services, as well as the highest safety standards in all its bunker activity. The company’s bunkering products fulfil the ISO 8217: 2010 specification in all grades. To help customers’ achieve environmental targets, the company can also supply low-sulphur fuels at several ports, with the port of Lisbon being the main port for low-sulphur fuel.

By optimising its logistics resources and storage capabilities, Galp Energia is able to provide high-quality services and products, including a wide variety of marine distillates.

It is Portugal's main bunker supplier and provides bunker services using its two barges, with capacities of 5,800 tonnes and 3,000 tonnes each.

The 5,800 dwt double-hull barge, Bahia Tres, began operations in 2010 to support the company’s business in the ports of Sines and

Setúbal, meeting all the important aspects for safety and protecting the environment.

It is equipped with anti-pollution measurers and is covered by European Maritime Safety Agency regulations in the Atlantic Ocean and Mediterranean Sea. Always aware that its customers’ main concern is product cost, the company offers competitive prices without compromising product or service quality.

Visiting Portugal and being supplied by Galp Energia will always be a good decision for regular customers, used to working with a professional team.

We are the only refinery in Portugal and operate refineries at Sines and Matosinhos. We have an extensive product range that includes gasoline, diesel fuel, jet fuel, fuel oil, LPG, bitumen and several aromatic products. Our refining business is responsible for the supply of oil products to our retail, wholesale and LPG marketing divisions, competitors and foreign customers, as well as for the operation of our refining and logistics assets.

We hold a significant position in the Portuguese crude oil products storage market. Our two refineries in Portugal together represent 20% of the Iberian refining capacity and collectively account for the majority of Portugal’s annual domestic petroleum product requirements.

We are investing approximately €1.4bn to upgrade and improve the efficiency of our refineries, representing €1bn for Sines and €0.4bn for Matosinhos. ⏏

For more information, contact: galp Energia SA Tel: +3512 1724 0637/654 Fax: +3512 1724 2957 E-mail: bunkers@galpenergia.com Web: www.galpenergia.com

Morskoy Trust LLC A fuelling company that is going from strength to strength

E

stablished in 2007, Morskoy Trust LLC fuel supply company is based in the city of PetropavlovskKamchatskiy in Russia. Its main activities are fuelling of fishing vessels operating in the Sea of Okhotsk and the Bering Sea, wholesale and retail sale of oil products in the Far Eastern sea ports, and oil transportation.

The company operates 11 vessels, comprising eight oil carriers and three fuel vessels, with a total deadweight of 47,550 tons. All the company’s vessels are ice-class ships capable of operating in any navigation area throughout the year. They meet all the requirements of the Russian Register of Shipping and the latest requirements of MARPOL 73/78 – International Convention on Marine Pollution.

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All vessels are equipped with heating cargo systems, which makes it possible to transport any oil products and they can carry several types of various oil products at one time.

During in the 2013 navigation our tanker Svatoy Petr sailing via Northern Sea Route.

Morskoy Trust holds membership with the

Russian Association of Marine and River fuelling companies. It has undergone strong growth in recent years, due to its constantly increasing number of customers, highly qualified staff and reliable business partners. ⏏

Morskoy Trust LLC 9/6 Torpokov Street, Building 1 Petropavlovsk-Kamcharskiy, Kamchatka Region Russia 683031 Phone/fax: 8(415-2) 23-07-63, 23-29-04 E-mail: tanker-41@mail.ru

World Bunkering Special Edition 2014

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

Y

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 top-grade 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 Special Edition 2014

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 • 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.

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 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

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Diary

23-25 March 2015 The 9th International FUJCON 2015 Fujairah, United Arab Emirates

25-26 November 2014 Saudi Maritime Forum The two day conference-led event, which will take place at the Sheraton Dammam Hotel & Towers from the 25-26 November 2014, will attract up to 200 delegates. Amongst the participants offering first-hand business intelligence are some of the Kingdom’s foremost stakeholders, decision makers, investors, trade specialists and economists.

www.saudimaritimecongress.com

1-2 December Mediterranean Bunker Fuel Conference Barcelona, Spain These are uncertain times for the bunker fuel industry; fuel prices are rising, demand patterns and emission control deadlines are looming. By the time of this conference, we will be just one month away from the imposed emission regulations on sulphur content, the industry is about to face its biggest change in years.

www.platts.com/ conferencedetail/2014/pc451/index

FUJCON enjoys international recognition and attendance from 46 countries covering diversified sectors of the bunkering industry. Recognised as an international service anchorage, Fujairah is among the world’s top three bunkering locations & a global hub for both oil storage and oil product supply. It is an opportunity to meet with leading fuel oil/bunker producers, traders, shipowners & managers, terminal operators, refiners, classification societies, maritime lawyers, consultants and bankers.

www.cconnection.org/event/ FUJCON/2013/resources/CC14276_ FUJCON2015_Postcard_FA_WB.pdf

2-5 June 2015 Nor Shipping Nor-Shipping is the leading maritime event week. Its top-quality exhibition, high-level conferences and prime networking opportunities attract the cream of the international maritime industry to Oslo every other year.

www.messe.no/nor-shipping

21-23 April 2015 Sea AsiA Since its launch in 2007, Sea Asia has firmly established its place in the marketplace as the platform for industry to do business, network and unveil new products and services in the Asia Pacific region.

A record number of attendees in 2013 further reinforced the exhibition and conference as the region’s leading shipping and maritime event, paving the way for another edition in 2015.

www.sea-asia.com

27-30 October 2015 Gastech Singapore One of the world’s largest and most prestigious LNG and natural gas conferences and exhibitions, Gastech, is coming to Singapore in 2015, reflecting the country’s growing strategic importance as a regional hub for the Asian gas market.

www.gastechsingapore.com

3-6 November 2015 25-26 February 2015 Gibraltar Conference

9 Feb 2015

Organised by IBIA, with a training course on Tuesday 24 February

www.ibia.net

The IBIA Annual Dinner 2014 Drumroll please – we have a new venue for the 2015 Annual Dinner. We will be at the Park Plaza Westminster, a stunning venue on the banks of the River Thames. Right in the heart of London, it is close to all the IP Week activities, and as a purpose-built venue, it has great flexibility for the dinner. So expect new innovations to go with it!

www.ibia.net/event/ annual-dinner-2015/

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22-24 April 2015 IBC 2015 The 36th International Bunker Conference (IBC) will meet in Oslo 22-24 April 2015. BI Norwegian Business School is proud to confirm that IBC 2015 is supported by the industry and has remained a proactive forum since its introduction in 1979

www.bi.edu/IBC

Europort, Rotterdam The 37th edition of Europort will take place from 3-6 November 2015 in Rotterdam. Established as one of the world's leading maritime exhibitions, attracting visitor numbers of about 30,000 maritime professionals from 84 countries, Europort is a must attend for anyone who wants to stay ahead in the international maritime market. No other event has the scope of coverage Europort manages. Bringing together all sectors of the maritime chain under one roof, Europort is unrivalled as a platform to showcase innovation and connect to the wider maritime community. For the 2015 edition a number of 1,100 exhibitors and 16 country pavilions are expected.

www.europort.nl

World Bunkering Special Edition 2014

ADVERTISEMENT

Introducing ExxonMobil Premium HDME 50 A Q&A with Iain White

Q: What options do marine operators have available to them

ExxonMobil Premium HDME 50 also has enhanced ignition

to comply with the new sulphur cap?

characteristics compared to typical HFO.

From 1st January 2015, sulphur levels in marine fuels will

This helps to optimise combustion, reduce deposits and

be limited to a maximum of 0.10% in the existing Northwest

minimise wear on the fuel system components.

Europe and North America ECAs. In practice, this means that vessels will have to use a distillate, an alternate fuel, or install exhaust gas cleaning systems (also known as scrubbers) that remove sulphur from the exhaust after combustion.

Q: What is Premium HDME 50?

A: Premium HDME 50 is a new category of marine fuel formulated to meet the 2015 Emission Control Areas (ECA) sulphur limit. It has been specially designed to help marine operators comply with the 0.10% sulphur cap to be introduced in the ECA from 1st January 2015.

Q: What performance and safety benefits does Premium HDME 50 offer?

Premium HDME 50 offers potential performance and safety benefits versus distillate marine gas oil (MGO) and heavy fuel oil (HFO). It has the performance benefits associated with both MGO and HFO, including: • A low sulphur content associated with MGO • The higher flashpoint and lower volatility properties typically found in HFO

Q: How can Premium HDME 50 help to maintain safety and reliability on-board?

With vessels using MGO, some operators chose to install chillers in their systems to increase the viscosity of their fuel. This costly process is avoided with the use of ExxonMobil Premium HDME 50.

The higher viscosity of ExxonMobil Premium HDME 50 makes storing and handling the fuel on-board similar to HFO. A benefit of having to heat the fuel is a reduction in the risk of thermal shock during fuel switchover when entering and leaving an ECA. This issue can result in pump seizures and engine shutdowns.

Q: What ISO standard(s) does ExxonMobil Premium HDME 50 comply with?

With ExxonMobil Premium HDME being a new category of fuel, there is not an appropriate ISO standard to which it can be held.

However, prior to its introduction, ExxonMobil Premium HDME 50 was tested with Wallenius Wilhelmsen Logistics, one of the world’s leading shipping and logistics groups, and is suitable for use in main and auxiliary engines and marine type boilers.

Q: Is this product approved for use in marine engines?

The properties of ExxonMobil Premium HDME 50 allow

The new fuel has received no objection letters from MAN

marine operators to simultaneously:

Diesel & Turbo (MDT) for use in MAN B&W two-stroke and

• Comply with the upcoming ECA sulphur cap • Reduce the risk of engine and boiler damage In addition, ExxonMobil Premium HDME 50 avoids a number of issues that can be associated with HFO. For example, it does not typically contain catalytic fines (aluminium and silicon within marine fuel) or lead to issues with deposits.

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MAN B&W Holeby genset designs, provided MDT’s specific engine type guidelines are followed.

Q: Where is Premium HDME 50 available?

It is available for vessels operating in the Amsterdam, Rotterdam and Antwerp region. ExxonMobil also offers MGO at more than 40 ports worldwide.