World
AUTUMN 2010
AUTUMN 2010
Bunkering
World BUNKERING
Singapore bounces back l IBIA tackles the training gap l LNG: a fuel for the future l Bringing ISO8217 up to standard
THE ONLY OFFICIAL MAGAZINE OF
World
AUTUMN 2010
AUTUMN 2010
Bunkering
WOrLd Bunkering
Singapore bounces back l IBIA tackles the training gap
THE ONLY OFFICIAL MAGAZINE OF
l LNG: a fuel for the future l Bringing ISO8217 up to standard Front Cover AUTUMN 10.indd 1
03/08/2010 12:10
Editor’s Letter
T
his issue of World Bunkering will arrive on desks in the middle of the holiday season. Now, of course, I realise that the shipping and bunker industries don’t just stop for the summer; ships still sail, still take on fuel at all hours of day and night. Ashore, however, we are entering a spell where empty desks in company offices are commonplace and the pace of work at national shipping administrations and IMO tends to drop to tick-over. That will all change in September when diaries suddenly become full with shipping events – not least of course the IBIA Convention in Connecticut which is previewed in these pages. But while all is relatively quiet, this magazine provides an insight into a number of issues that will come into prominence as the northern summer slides away. Recently, there have been many warm words about the future of LNG as the next marine fuel. We report how, in particular, several of the big classification societies have become LNG enthusiasts and we also note some voices of caution. Being cautious is something that should be second nature to the bunker industry and the feature on Risk Management looks at how the financial risks involved in bunker supply can be minimised, even in turbulent economic times. The downturn seems to have done little to dampen the enthusiasm of a number of independents to hit the expansion trail. Again, as our report makes clear, we can expect more developments later in the year. The eagerly anticipated revisions to ISO8217 came out in early July. In this issue we look at what the new standards mean for the industry. Singapore features strongly this time. Our review pages look forward to Sibcon, to be held in October, while our interview with Hong Lam’s chief executive Lim Teck Cheng gives an insight into how he developed a small family business into one of the country’s larger suppliers and barge operators. The world’s largest bunkering hub has weathered the economic storm remarkably well but, as we discover, there are significant challenges to be faced. Not the least of these is intense pressure on margins, something which is also very familiar to Middle Eastern bunker companies. There, unlike Singapore, vanishing profits have also led to some players disappearing from the the market. I hope you find this issue a useful source of information. Please remember that you can find current news and bunker prices, and also add your own views, on our free access website www.worldbunkering.com which is updated daily. David Hughes
World Bunkering Autumn 2010
1
World
AUTUMN 2010
Bunkering Publisher: W H Robinson Editor: David Hughes (editor@mar-media.com) Deputy Editor: Lucy Budd (lucy.budd@mar-media.com) Sales Manager: Taj Oberai (taj.oberai@mar-media.com) Project Manager: Dawn Barley (dawn.barley@mar-media.com) Project Consultant: Alex Corboude (alex.corboude@mar-media.com)
The views expressed in World Bunkering are not necessarily those of IBIA, or the publishers unless expressly stated to be such. IBIA disclaims any responsibility for advertisements contained in this magazine and has no legal responsibility to deal with them. The responsibility for advertisements rests solely with the publisher. World Bunkering is published by Maritime Media (a division of Roxby Media Ltd) on behalf of IBIA and is supplied to members as part of their annual membership package.
World
AUTUMN 2010
AUTUMN 2010
Bunkering
WOrLd Bunkering
Maritime Media (a division of Roxby Media Ltd) The Diary House Rickett Street London SW6 1RU 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:
Singapore bounces back l IBIA tackles the training gap
THE ONLY OFFICIAL MAGAZINE OF
l LNG: a fuel for the future l Bringing ISO8217 up to standard Front Cover AUTUMN 10.indd 1
THE ONLY OFFICIAL MAGAZINE OF
Published by:
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ISSN 1367-5018
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AUTUMN 2010
Bunkering
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IBIA Reports
Editor’s letter Chairman’s introduction Industry news Chief Executive’s report
1 7 9 13
Noticeboard Election notice New members Membership application Interview Environment
14 18 20 22 25 29
Special features 33 37 45
Independents Risk Management ISO8217
Geographical focus
South East Asia Middle East
49 57
Russian update
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Port focus
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Preview Sibcon Preview IBIA Convention Book Review Equipment and services Company news Diary
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REPORTS
Chairman’s Introduction
F
ormer US vice-president Dan Quayle once said, “I do have a political agenda. It is to have as few regulations as possible”. While that is a nice thought, it goes against what is happening in the world – and indeed in shipping – today. Increased regulation in shipping is closely related to a greater awareness of safety, environmental and health issues, which of course is no bad thing. The modern bunker industry has to concern itself with the likes of sulphur emissions and air quality, in addition to the traditional considerations of safety and engine performance which have always been with us. Shipping, generally, has a good environmental footprint, and it is only going to get better. Increasing regulation is something that the shipping industry has had to learn to live with in recent years, and we have seen two very recent examples of that, which will have a significant impact on the bunker industry. In June, the fourth edition of ISO8217, which governs the specification and classification of marine fuels, was published. We have all been working with ISO8217 for a number of years, but of course each revision presents new challenges. This one will be no exception. In July, a new fuel sulphur limit of 1% came into effect for ships operating in the Emissions Control Areas covering the Baltic, the North Sea and the English Channel. This represents a drop from the previous limit of 1.5%, and follows closely on from the requirement under EU law for all ships at berth or anchorage in EU ports to use fuels with a sulphur content of less than 0.1%. In addition, of course, we will have the US and Canadian ECAs to contend with from mid-to-late-2012. These regulations all represent significant
World Bunkering Autumn 2010
challenges for the bunker industry, which must achieve compliance with the rules while maintaining the high standards of quality, service and safety, at competitive prices, which today’s quality shipowners demand. No small task, but one that I am confident we can accomplish as an industry. IBIA, of course, represents the industry at the forums where these issues are debated. So we rely on our members to provide us with the sort of feedback which we need to inform – and hopefully to influence – the debate. As you are all aware, we have restructured IBIA so that it is more efficient, more user-friendly and ultimately more effective on behalf of the membership. In order to be your eyes and ears, we have to hear your voice, so please provide us with the feedback which we need to help us fulfil our remit on your behalf. In order to make the right decisions, the regulators need to understand what shipowners and fuel suppliers need and why they need it. Otherwise we run the risk of having to comply with regulations which are simply unworkable. IBIA places the highest store by professionalism, and so it was rewarding to see that Certificates of Competency were recently awarded to the first graduates to complete our Training Programme for Bunker Cargo Officers, which aims to raise professionalism through recognised industry qualifications. With this training programme, IBIA has taken the first steps towards enhancing employability and the advancement of graduate careers. Other developments since we last spoke include the appointment of Bob Lintott as IBIA’s vice-chairman. Bob is an industry man who has bought, sold and marketed bunkers, and that is important for an organisation such as IBIA, which represents every part of the bunker world. Bob’s experience
Mike Ball
will be invaluable to IBIA at a time when we face increasing regulation of the production and use of fuel. He will take over as chairman next year. We will all be in safe hands. Finally, I would like to welcome Charlotte Egan to the IBIA family. Charlotte has recently joined us as our new events manager, which title embraces a wide range of responsibilities, not least the priority of strengthening our presence on social networks and e-platforms, and building on the success of IBIA’s two flagship events – the Annual Convention and the Annual Dinner. Technology has changed our industry a great deal in a short space of time, and increased the opportunities to exchange information and to keep in touch in a way that wouldn’t have been possible just a few short years ago. Charlotte will use her skills and experience to, among other things, harness the power of social networks and the internet to better effect. We have some grey hair at IBIA, as does every organisation of our kind, because there is no substitute for experience. But we are also a modern, dynamic organisation, which is committed to moving with the times, and we recognise that we need to put in place the tools which will help members to interact more easily, and IBIA to interact more readily with other shipping industry and political interests. It will be part of Charlotte’s role to ensure that we do not lose the ability to socialise whilst making full use of the power of the internet. We believe that Charlotte can help us bring people together, both in the traditional way and online. Exploiting the power of the internet can only help us to expand both the membership and its sphere of influence. Mike Ball
7
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Industry news
Global round-up AMERICAS ISO8217 compliant fuel in Colombia
Bunkers International Corp says it is now delivering marine bunker fuels meeting the revised ISO8217 standard at Cartagena and Barranquilla on request, in collaboration with its Colombian joint venture partner, Vanoil. The company says the new products have very low metals content and all other parameters within the 2010 specifications. They can be blended to meet either 1.50% or 1.00% maximum sulphur levels. Bunkers International president John Canal says: “This product will be of great interest to our customers with charterparty agreements that mandate the newest ISO specifications. Charterers can meet their contractual obligations while receiving the same high-quality service we have become known for. In fact, Bunkers International also offer a full service and fees inclusive “bunkers-only” call to the Cartagena anchorage, which should appeal to vessels in transition to areas requiring the ISO2010 specification or 1% max sulphur product, which Bunkers International can also provide.”
Each tanker is to be powered by two 6-cylinder in-line Wärtsilä 20 medium-speed engines, with delivery of the first 10 engines scheduled to take place between December 2010 and June 2011. The bunkering tankers will be of two sizes, 4,100 dwt and 7,000 dwt, and both designs have the same power configuration, utilising a twin-screw propulsion solution. Some of the vessels will operate in Chinese waters and will be CCS classified. The remainder will trade in international waters and be classified by Bureau Veritas (BV). BPG will operate the vessels itself. Wärtsilä has also signed an eight-year spare parts and technical services agreement with BPG for all 80 engines. Sinopec launches bunker arm
ASIA
Chinese state-owned oil company, Sinopec, which is Asia’s biggest refiner, has formally launched a dedicated fuel oil and bunker sales and marketing arm. Sinopec-affiliated refineries have been selling bunkers but they will now have to sell fuel oil to newly established Sinopec Fuel Oil Corp. Observers see the move as an indication of both the rapid growth of the Chinese bunker market and also its increasingly competitive nature. The country’s bunker sales were estimated to be about 6.3 million tonnes in 2008, representing a doubling in the previous five years.
Brightoil orders 40 tankers
New contract for Andatee
Brightoil Petroleum Group (BPG) plans to build 40 bunker tankers at Chinese yards. The newbuilding programme became public in July, but has apparently been in place for some time. It would appear to be part of BPG’s determined expansion drive in both the Chinese and international markets. In particular, BPG has been expanding its presence in Singapore rapidly in the past few months. Finnish engine maker Wärtsilä Ship Power has announced it will supply 80 main engines for BPG’s newbuildings in a deal worth over €23 million, representing one of Wärtsilä’s largest ever orders in number terms. A Wärtsilä statement says that BPG has recently signed the contract for the 10 first bunkering tankers with a shipyard in Zhejiang, China. These vessels will be launched in June 2012.
Chinese blended marine fuel oil supplier, Andatee China Marine Fuel Services Corp, has secured two separate agreements to supply marine fuel, on an exclusive basis, for a period of 10 years. The long-term deals are with Haiyu Fishery Limited Corp and Jinghai Group, both located in Shandong Rongcheng City. Under the terms of the agreement with Jinghai, Andatee will supply up to 18,000 tonnes of marine fuel per year. In addition, Andatee will receive the exclusive rights to operate in the Jinghai port area for a period of 10 years for an annual payment of CNY1 million ($146,360) for the first three years. At the same time, Andatee will supply up to 12,000 tonnes of marine fuel per year to Haiyu and will receive the exclusive rights to operate in the Haiyu port area for a period of 10 years.
World Bunkering Autumn 2010
9
Benelux B.V.
Reliable, efficient service in ARA and beyond. quick and timely delivery of a wide range of grades. We look forward to your enquiries both in and outside the Netherlands. Office address: De Linie 1, Capelle aan den Ijssel, NL-2905 AX , the Netherlands Post address: PO Box 377, Capelle aan den IJssel, NL-2900 AJ, the Netherlands Tel: 24/7: +31 10 264 27 00 E-mail: Bunkers@lukoil.nl
EUROPE New barge for Le Havre
Total Marine Fuels has increased its bunkering capacity at the port of Le Havre and at the Port 2000 container facilities, with the delivery of its new bunkering barge, Cimil. The 4,500 tonne capacity bunker tanker is highly manoeuvrable and can deliver blends and different grades at 500 tph.
Christophe Girardot, general manager Total Marine Fuels (above), says: “Cimil is a modern and flexible barge which will complement the bunker delivery capacity we have in Le Havre with our current barge ST Sara. It will improve service to our contract clients, mostly liner and cruise operators, while allowing us to offer a replacement to the Antifer pipeline service for tankers, which is out of service this year. Delivering our full product range at high speed it gives owners calling at Le Havre a new opportunity, especially for 380 cSt fuel. Cimil will also increase our ability to serve spot customers.” Built in Turkey in 2010 for Swiss company ABC Maritime, Cimil is chartered to Total for three years. It can carry IFO 380, IFO 500, IFO 700 and DML in 10 tanks. Aegean in Las Palmas
Aegean Marine Petroleum began bunkering operations at Las Palmas, Canary Islands at the beginning of June. The company says it sees the move as strengthening its position as a leading supplier of marine fuels in the western Atlantic and entrance to the Mediterranean, where it already has bunkering stations in Gibraltar, Tangiers and West Africa. Aegean plans to offer all grades of marine fuel oil, including MGO 0.1 LSFO. It says ISO8217/2005 specifications are guaranteed. Initially, deliveries will be made by the double-hull vessel Mykonos. Ex-pipe deliveries can be arranged, as well. Another double-hull barge is planned to arrive shortly. The move into the Las Palmas market follows Aegean’s acquisition of the Shell Las Palmas terminal, which should be finalised by the end of July. Shell Espana is exiting the Las Palmas marine fuel business and all employees of the terminal will be retained by Aegean. “With our agreement to acquire the Shell Las Palmas terminal, Aegean Marine continues to actively consolidate the fragmented marine fuel industry in a disciplined manner that meets a strict set of return criteria,” said Aegean president E. Nikolas Tavlarios.
World Bunkering Autumn 2010
Tavlarios added: “We also plan to take advantage of the increasing demand for low-sulphur fuel in this sizeable market and utilise the port’s considerable storage facilities to procure large quantities of supply to be on hand in order to serve our customers.” OW starts North Norway supply
OW Icebunker has established new operations within North Norway, offering customers access to products either in port, at the roads or at sea. The company now has one tanker operating in the Barents Sea and off the coast of Norway. It can also provide fuel in port at Narvik, Hammersfest, Honnigsvåg and Kirkennes, and has access to OW Bunker’s logistics network of over 30 vessels if necessary. The company can provide customers with all grades of fuel oil up to 380 cSt as well as marine gas oil, and low-sulphur products. Bunkers will be delivered either with the barge alongside the customer’s vessel or by a stern-line in rougher weather. The company also has a permit to provide customers with products during cargo operations, which it says reduces vessel downtime and increases efficiencies even further. OW Icebunker’s managing director Per Funch-Nielsen said: “Our aim is to work in partnership with our customers and provide them with the best fuel procurement solution that meets the demands of their business and improves operational efficiencies as well as profitability. Suppliers must have the ability to develop and adapt strategies directly with customers’ needs, based on a fundamental understanding of the challenges that they face. High seas bunkering is a great example of this and saves customers days of time that would otherwise be spent in port, where they would also incur additional costs.”
INDIAN SUBCONTINENT Matrix Bharat to supply in Kochi
Singapore-based joint-venture firm Matrix Bharat Marine Fuels (MXB), which opened for business in Mumbai in December last year, is to offer supplies in Kochi in a move that could push its monthly deliveries up to the 15,000 tonnes mark. The company says that it is looking to supply a minimum of 3,000 to 4,000 tonnes a month by the end of this year at Cochin Oil Terminal and Wellington Island in Kochi (formerly Cochin) in Kerala state. Last year, Kerala state reduced value added tax on bunker products to 0.5%, down from 12.5%. At the time it was hoped that this would bolster sales at Kochi. Cochin Port Trust is developing a multi-user liquid terminal in the Puthuvypeen area to handle bunkers, LPG and crude oil with a planned 2011 project completion date. Matrix Bharat Marine Fuels (MXB) is a 50/50 joint-venture between Matrix Marine Fuels (MMF), the trading division of German independent oil company Marquard & Bahls, and Indian-based Bharat Petroleum Corporation Limited (BPCL). MMF was set up about 15 years ago and has its headquarters in Houston, Texas. In Singapore, MXB has a long-term agreement to use customised tanks and infrastructure at the Oiltanking Odfjell Terminal and delivers bunkers both alongside and by barge. Government-owned Bharat Petroleum Corporation is India’s second largest oil company, with activities covering refining, storing, marketing and distribution of petroleum products, as well as bunkering. One of the factors prompting MXB to supply bunkers at Kochi is that Bharat Petroleum has a refinery there. In addition, the joint venture says that Kochi is well situated on the main shipping lanes. The MXB initiative is one of a number of new projects that are underway or in the pipeline. Among these is Chemoil Adani’s operation out of, initially, India’s largest private port, Mundra.
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REPORTS
Chief Executive’s Report Annual Convention
A
s you will be aware, this year the IBIA Annual Convention is being held in Stamford, Connecticut, USA, from 20-24 September. The theme for 2010 is ‘Everything you wanted to know about bunkers (but were afraid to ask?)…’. A wide ranging and varied topic, resulting in an excellent conference programme, which draws on the experience gained from last year as well as the valued input of Members and the IBIA Board. There is also one other important element running through the two days of the Conference. The International Maritime Organization is currently grappling with the issues of greenhouse gas (GHG) emissions from ships. There are elements of the debate which may have a significant effect on the bunker industry. IBIA’s shipowner members will certainly be impacted, but so too will the supplier side. We intend to establish an IBIA position to take to IMO as a direct result of the discussions at the Conference, which will conclude in a vote. The IBIA Convention is the only event at which attendees can pass a resolution that will actually be acted upon. This is why I would encourage all IBIA members to attend and have their say. I believe you joined IBIA to make a difference; here is the opportunity! In addition to the serious business of debate and discussion there will also be a lot of networking opportunities, both formal
World Bunkering Autumn 2010
and informal. Last year we had a huge turnout for our first event managed in-house. I look forward to seeing even more of you in Stamford. MARPOL Annex VI
Thursday 1 July saw the first changes to MARPOL Annex VI, following the revision completed in October 2008. The revised MARPOL Annex VI is now in force and the first consequences of this is that the Sulphur Emissions Control Areas (SECAs) are now renamed Emission Control Areas (ECAs) and the sulphur limit within these ECAs is now 1.0% m/m (from 1.5% m/m). Bunker Cargo Officer Certificates /IBIA (Asia) Seminars
I have recently returned from a trip to the Far East, during which I was delighted to present certificates to the first three recipients of the IBIA Bunker Cargo Officers Certificate. Chen Chao, Mohamed Riszuan and Shahrizal Mohamad successfully completed the three-month Bunker Cargo Officer Course, which has been approved by the Maritime and Port Authority of Singapore (MPA). The course, which was jointly developed by IBIA’s Asia Branch, Wavelink Maritime International (WMI) and bunker industry stakeholders in consultation with the MPA, aims to raise professionalism through recognised industry qualifications. The certificates were presented during the second of three IBIA seminars which were held in Kuala Lumpur, Singapore and
Ian Adams Tel: +44(0) 23 8022 6555 Fax: +44(0) 23 8022 1777
Hong Kong. These seminars were kindly sponsored by Lloyds Register FOBAS and focused on two current issues for the bunker industry. Douglas Raitt, LR FOBAS, gave a presentation entitled ‘Quality of Marine Fuels ISO8217: the Revisions’, whilst I gave a presentation entitled ‘International Environmental Regulations: problems and potential solutions’. The seminars attracted about 140 people in total and seemed to be well received. We are investigating the possibility of running similar events in other parts of the world. Board Elections
It is hard to believe but we are yet again at the time of year where we are seeking nominations for the IBIA Board. Once again this year there will be three vacancies. Please see further details on page 18. This is your chance to get involved with the strategic ambitions of IBIA. If you have ever considered doing so, now could be the time.
13
REPORTS
IBIA Noticeboard Benefits to members as at 1 August 2010
THE IBIA COURSES
IBIA Guide to Bunker Samplers
Sale price to non-members £50. One-Day Basic Bunkering Course
The charge for the Basic Bunkering Course is £200 per head for members and £300 for non-members. Advanced Courses
These courses are intended for those who already have at least one year’s experience in the bunker industry. £425 per head for members and £625 for non-members.
IBIA Guide to Arbitration
A loose-leaf book giving arbitration procedures in 13 countries, written by lawyers. This is now available free to IBIA members. Non-members may purchase at a price of £50 + postage. Vanadium and Sulphur in Marine Fuels
What everyone should know about these two important elements in marine fuel bunkers. For sale to non-members at £35.
IBIA PUBLICATIONS Evaluate the Merits of a Bunker Claim IBIA World Bunkering magazine – Free copies for members of IBIA
Please note non-members are requested to subscribe to the magazine at a cost of Pounds Sterling £45, £60 or £80 depending on location. Up to 20 additional free copies of the magazine are offered to buyer members of IBIA for forwarding to their vessels. IBIA World Bunkering magazine – Discounts on Advertising
Discounted advertising rates are available for IBIA members. Please contact the Advertising Sales Team on + 44 (0) 20 7386 6262 (London office) or +30 210 338 9898 (Athens office).
copy. The report is available free of charge to members and non-members. Please ask IBIA administration for a copy.
Interpretation of specifications for bunker fuels and a guide to the question of repeatability. For sale to non-members at £35. IBIA Glossary of Bunker and Lubricating Oil Terminology
A comprehensive guide to all those complicated terms which are in daily use in the bunkering industry. For sale to nonmembers at £45.
BOOK OFFERS
Informa Group is offering IBIA members a discount of 10% on the following publication. Please order, adding your IBIA Membership number, from Customer Services at Informa Group, Tel +44 (0)1206 772 223, Fax +44 (0)1206 772 771, E-mail: professional.enquiries@informa.com The BunkerNews Directory of International Bunker Suppliers, Traders and Brokers Recommended Retail Price £85
The publishers say: “Firmly established as the main source of bunker industry contact information, containing more than 800 companies, 2,000 personnel in 75 countries, all cross-referenced by two indices. First published in May 1993, the ‘Little Black Book’ is published every May and November.’’
IBIA Guide to Good Commercial Practice
On sale to non-members at £50 per copy.
IBIA Logo
IBIA Fuel and Lube Oil Training CD
Free bromide supplied for use by Corporate Members only.
This CD is available on request. Members – please contact administration for your free copy/copies.
IBIA List of Members
If your details are not correct then please let the IBIA Administration know. This publication is only available to members. IBIA Guide to Avoiding and Resolving Bunker Disputes
IBIA members receive their personal copy free, but the report is offered for sale to non-members at £50.
14
IBIA Safety Cards for Vessel’s crews
IBIA buyer members receive copies of the IBIA Safety Cards for distribution to their ships, giving basic, plain English advice about safe handling of bunker fuels. IBIA Annual Report
The 2008/2009 report is now available. All members will have already received their
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REPORTS
Elections to the IBIA board of directors
A
t the Annual General Meeting (AGM) on Monday, 14 February 2011 there will be three members of the Board whose term of office has expired and who will therefore stand down with effect from 1 April 2011. These elections are an opportunity for new people with new ideas to join the Board and take part in the running of the Association. In the same way as the officers of the Association change, so should the Board Members. By order of the Board, the Administration is therefore requesting the Members of IBIA to put forward names of candidates who are willing to stand for election to the Board and who they think will make a contribution to the running of the Association. Prospective Board Members should be aware that being a Board Member is not just a titular position. They will be expected to take an active part in the direction of the Association. A copy of Guidelines for Board Members is available on request and on the website www.ibia.net Candidates for election to the Board must: • Consent to stand for election • Be paid up Members of the Association
• Be proposed and seconded by paid up Members of the Association • Complete and return the Nomination Form
FORMS MUST BE RETURNED BY 15 OCTOBER 2010 Yours sincerely, IBIA ADMINISTRATION
MARINE FUELS IN UAE
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World Bunkering Autumn 2010
REPORTS
BCO graduate certificate presentation 2 July 2010
Mohd Riszuan bin Jumain
Shahrizal bin Mohamad
Captain Ye on behalf of Chen Chao
LUKOIL-BUNKER New bunker supplier in the Mediterranean region Lukoil-Bunker is now providing bunker services out of Port Augusta in Italy IFO 380 HS and MGO 0.1% to be supplied At your service, 24 hours a day, 7 days a week
LUKOIL-BUNKER OOO Ul. Fokina, 5 St. Petersburg 194044, Russia Tel: + 7 812 346 8130 Fax: + 7 812 346 8132 E-mail: bunker@lukoil-bunker.com Website: www.lukoil-bunker.com
LUKOIL-BUNKER ITALY S.R.L. Gelone str., 36 96100 Siracusa Italy Tel: +39 0931 207620 Fax: +39 0931 207621 E-mail: office@lukoil-bunker.it
This subsidiary is already operating in Sicily and is fully-owned by LUKOIL-BUNKER OOO, St. Petersburg
World Bunkering Autumn 2010
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REPORTS
New members Corporate
TALEN’S MARINE & FUEL Dale Doucet BUNKER SUPPLIER 225 Pleasant Street Lake Arthur 70549 USA Tel: +133 7774 5480 E-mail: dale@talensmarine.com ELIT BUNKER AB Yury Rodichev BUNKER SUPPLIER Ostergatan 9B Malmo 211 25 Sweden
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Tel: +371 2848 6970 Fax: +464 0660 5808 E-mail: bunker@elitrail.se
INTERNATIONAL BUNKERING MIDDLE EAST DMCC Carsten Ladekjaer BUNKER TRADER Liwa Heights Jumeirah Lakes Towers PO Box 283 933 Dubai UAE Tel: +971 4437 1700 E-mail: ckl@ibmeast.com
Corporate ADDITIONAL
OMANOIL MATRIX MARINE SERVICES LLC Avik Ghosh BUNKER SUPPLIER PO Box 92 Mina Al Fahal Muscat 116 Oman UAE Tel: +968 2457 4116 Fax: +968 2456 1628 E-mail: sohar@matrixmarine.com
World Bunkering Autumn 2010
Protection guaranteed Pushing safety further
OW BUNKER CHINA LTD – HONG KONG Morten Kalle BUNKER TRADER Rm 1710-11 Shui On Centre 6–8 Harbour Road Wanchai Hong Kong Tel: +852 2866 6588 Fax: +852 2866 9590 E-mail: moka@owbunker.com.hk
individual
Antonios Koukas BUNKER BROKER ARABIAN DYNAMIC OIL SA 6 Agias Varvaras Street Rafina Athens 19009 GREECE Tel: +0030 2294 0322 Fax: +0030 2294 0781 E-mail: aradyn@otenet.gr Nilufer Kutur BUNKER TRADER JUPITER SHIPPING AND TRADING LTD Kalams Fener Cad. Kordonyolu Sok. Kordon Apt. A Blok: no: 48 Kalamstanbul Kadköy 34726 TURKEY Tel: +9054 2324 4462 E-mail: jupiter@jupitershipping.com; nilufer_eroglu@hotmail.com
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World Bunkering Autumn 2010
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REPORTS
The International Bunker Industry Association Ltd panies and associations with an interest in bunkering, whether they are involved in the day-to-day business of bunkering ships or have an interest in the industry. Each member has one vote in association business, but corporate membership has the advantage of allowing companies to delegate different members of their company to participate in different working groups. • Corporate sponsor: this is the newest category and allows a company to contribute any sum they see fit to the association. In return they receive the same benefits as a corporate member but in addition have their logo printed on all IBIA publications and are offered further sponsorship opportunities ahead of other members.
• Implement the running of IBIA’s two-day
In the beginning
The board
Environmental
Eight members of the industry conceived the International Bunker Industry in October 1992, and the association was formally registered on 29 January 1993. Since then it has expanded steadily with a worldwide membership comprising shipowners, charterers, bunker suppliers, traders, brokers, barging companies, storage companies, surveyors, port authorities, credit reporting companies, lawyers, P&I Clubs, equipment manufacturers, shipping journalists and marine consultants. In 2008, our membership stands at over 500 and is spread over 67 countries. There are three categories of membership, namely: • Individual membership: open to all people with an interest in bunkering, whether they are involved in the day-today business of bunkering ships or have an interest in the industry. Each member has one vote in association business, but this category does not allow delegation. • Corporate membership: open to com-
The board is constrained to have a balance of members from each sector of the industry in order to preserve the industry-wide representation and approach of the association. The board regulates the association and is elected by the membership to perform that role.
• Discuss IBIA approach to EC initiatives; • Develop environmental policy.
The Aims of the Association • To provide an international forum to
• •
•
•
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address the concerns of all sectors of the bunker industry; To improve and clarify industry practices and documentation; To represent the industry in discussion with relevant governmental and nongovernmental bodies and to make the concerns of the industry known to such bodies; To assist members in the event of disputes by identifying the options and exploring the alternatives open to them and eventually to provide a panel of experienced mediators and arbitrators; To increase the professional understanding and competence of those working in the industry.
The working groups
Because IBIA is an association dedicated to its membership, it must reflect members’ wishes and react to their needs. In the past this has been achieved by the formation of Working Groups. These groups reported back via IBIA’s official magazine, World Bunkering, or through special circulars where appropriate. There were six Working Groups, as listed below, with the issues that they each addressed. Education • Run further IBIA Basic Bunkering courses
Intermediate Bunkering courses; • Run further IBIA half day Ships Agents
courses. Safety • Investigate the issue of Safe Access; • Produce a best practice for pre-delivery
checklists. Operational Standards and Procedures • Looking at turning ISO(TR)13739 into a
bunkering procedure. Technical • Continue to provide answers to technical
enquiries from members; • Report on the latest technical issues to
the members.
Commercial Working Group • Has been responsible for the production
of the IBIA Guide to Good Commercial Practice; • Cooperated with BIMCO on the Standard Bunker Contract. Task Forces
IBIA now operates a Task Force system. When an issue is identified as requiring attention a Task Force is formed, the issue investigated, and upon completion the Task Force is disbanded. Issues that have been tackled by Task Forces to date are: • Sales Tax • SIBCON/IBIA Golf Tournament • IBIA Convention • IBIA Seminar – Cruise & Ferry 2007
worldwide;
World Bunkering Autumn 2010
Membership application
PLEASE PRINT VERY CLEARLY Applicants must fill out all appropriate sections including method of payment. Corporate members must give the name of the individual contact.
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World Bunkering Autumn 2010
23
INTERVIEW
Passion for the business Lim Teck Cheng, chief executive of Singapore-based supplier Hong Lam Marine, talks to David Hughes
W
ith some 33 years’ experience in the bunker business, Lim Teck Cheng knows a lot about the industry and, in particular, how to run a successful company. He recalls: “I joined my father’s company in 1976, a sole proprietorship called Hong Lam Marine Services Co. This company operated two wooden barges for Esso. Later, in 1981, together with my father, we founded Hong Lam Marine Pte Ltd, which had two steel tankers and these were timechartered to Esso. “We have come a long way since then. I have been involved in all aspects of the business, growing and running the company. It has been a challenging and exciting journey to date. ” He adds: “I set the overall vision for our company, and oversee its entry into new businesses and the building of new tankers. I have been and am personally involved in the inspection and purchase of all second-hand tankers and all newbuildings.” That is quite some task, as Hong Lam has commissioned and delivered 35 newbuilds from Japan and China since August 2001 and has several more for delivery next year. He is also active in the industry: “I am a member of the Technical Committee of the Classification Society Bureau Veritas and Singapore Technical Committee of Nippon Kaiji Kyokai. I am also a member of the Services Committee and the Bunkering Sub-Committee of Singapore Shipping Association and a member of the SPRING working group on mass flow meters on bunker tankers.” Developing a successful business
So how do you stay profitable and still grow your business? He answers: “First and foremost, passion for the business that you are in. With passion comes the desire to learn and acquire new knowledge and to improve the processes of the company. Equally as important is business integrity. Your customers must be able to trust you and trust the way you conduct your business. “Even if you have these two qualities, you still need to cascade
World Bunkering Autumn 2010
Lim Teck Cheng
25
them down to your senior management and then to middle management and then to rank and file, in order for the company to do well. This is sometimes a challenge especially in these times where turnover of staff is high. We are continuously working on this.” Singapore – opportunities ...
What about Singapore? Why has the bunker industry here prospered in the way it has? He replies: “Singapore’s bunker industry is entrenched and mature. We are way ahead of other ports in terms of our transparency, our systems and processes. We are already successful – we need to build on this platform of success – how do we do it? By constantly seeking to improve our processes, efficiency , and the capability and quality of the manpower in the industry. There is no point having the best hardware if the software is lagging behind. In Singapore, the Maritime and Port Authority (MPA) not only leads but also provides significant support to the industry. MPA’s vision and willingness to work with the industry has been a significant factor in the advancement and success of the industry. ... and challenges
But there must be challenges facing the Singapore bunker industry? Mr Lim agrees and points first to increasing costs. He says: “Increased operating expenses especially in areas of wages and repair and maintenance at a time of stagnating or decreasing charter rates present a serious challenge to the profitability and growth of the industry. Wage costs are increasing significantly, primarily due to shortage of qualified officers on board vessels and qualified shore superintendents. In addition there is a shortage of repair yards and facilities.” Another problem facing Singapore bunker tanker owners and operators is a lack of finance for new vessels. “We need more financial institutions who are able and willing to provide financing for the purchase of such tankers for operations in Singapore harbour. Currently, there are less than a handful of banks willing to support this industry.” He also points to a lack of technical knowledge, in insurance for example. He says: “For insurance, we need to learn from the experts who have set up shop here, assuming that there is a corresponding willingness to transfer such knowhow.”
Time for change?
Looking ahead, how ready is the bunkering industry for change? Some classification societies, including BV, DNV and GL, are now pushing LNG as a viable, realistic response to very low sulphur limits rather than distillates. Does Mr Lim see Hong Lam operating LNG barges in five years time? Probably not, it seems. He comments: “Change will be gradual. This is an industry that requires intensive capital expenditure in terms of the infrastructure for the supply of LNG, bunker tankers that are built to carry LNG for bunkering, and vessels that are designed and built to use LNG as bunkers in lieu of fuel oil. A critical mass of ships that is built to consume LNG will drive the investment in building of LNG bunker tankers. LNG appears to be the future in view of the environment. Will it happen on a big scale in five years? I am sceptical. It is not only a question of the capital commitment involved but also of training the officers and crew to operate the dangerously explosive and flammable LNG tankers. I believe it will take more than five years to train the large pool of officers and crew required to operate such vessels in our congested harbour safely and efficiently. At this point in time there is no such training capability.” He adds that Hong Lam Marine has been keen to keep up with new trends and innovations – building the largest double-hull bunker tanker in South East Asia in 2005 and the largest purpose-built bunker tanker in the world in 2009, and being one of the first in the region to equip bunker tankers to carry 500 cSt and then 700cSt fuel oil. “Moreover,” he says, “we now have three tankers equipped with the mass flow metering system to enhance the integrity of the delivery of fuels. In this I believe we are also one of the first. By the third quarter of 2011, we also believe we will be the first to take delivery of environmentally-friendly diesel electric propulsion bunker tankers. We try very hard to keep abreast of industry trends and requirements through constant dialogue with industry members and customers. A core part of Hong Lam Marine business is the provision of quality bunker tankers to our customers (we do not have any fuel oil trading activities). Therefore, if there is demand for LNG bunker tankers, we will not hesitate to build and operate them, and we believe we will be one of the first to operate LNG bunker tankers if so required.”
Singapore is the world’s busiest bunker port
World Bunkering Autumn 2010
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OILTRADE MARINE LTD. Effective• Dynamic• Independent The team has over 15 year experience of physical bunker supplying Istanbul, Gulf of Izmit and other Turkish ports Has a proven track record of trouble-free gasoil and lubricant deliveries In Turkey please contact: Tel: + 90 212 352 24 40 Fax: + 90 212 352 24 50 E-mail: bunker@oiltrade.net
World Bunkering 124 x 178_Layout 1 28/07/2010 14:28 Page 1
right place, right price Take the shorter route and secure a competitive price with the closest bunkers-only operation to the English Channel’s shipping lanes. Cockett Marine Oil’s new bunkers-only facility avoids time consuming and costly diversions. Open to deep draft vessels of all types from September 2010, it will offer low and high sulphur fuel variants, as well as gasoil, at three anchorages. The anchorages are in a sheltered location with good protection from prevailing south westerly weather.
Source: NASA
Benefit from the commercial strength of Cockett Marine Oil, Unicorn Shipping and Rotterdam based Associated Bunker Oil Contractors – all part of the Grindrod Group.
t: 01689 883430 • f: 01689 877666 e: thames@cockett.com
www.cockettgroup.com
environment
Going green
David Hughes provides a round-up of the latest news and issues from the green shipping sector
ECA realities start to hit home
T
he shipping and bunkering industries are now coming to terms with the reality of a 1% sulphur limit in the North Sea and Baltic Emission Control Areas (ECAs), and also with the inevitability of a similar, strictly enforced regime around North America in two years time. The latest reduction in the sulphur limits allowed by the revised Annex VI (Regulations for the Prevention of Air Pollution from Ships) of the International Convention for the Prevention of Pollution from Ships (MARPOL convention) entered into force on 1 July 2010. The 1% cap is part of a progressive reduction of SOx emissions which will also see the global sulphur cap outside the ECAs reduced initially to 3.5%, from the current 4.5%, on 1 January 2012 and then in phases to 0.5 % from 1 January 2020. The 0.5% limit is subject to a feasibility review to be completed no later than 2018. Within the ECAs the cap will be reduced to 0.10% from 1 January 2015. The 1% cap does not appear to have caused too many problems so far, and sufficient supplies appear to be available. The scheduled 2012 introduction of the North American ECA has, however, prompted cruiseship company Fred. Olsen Cruise Lines to look very carefully at whether to include calls in North America once the North American Emission Control Area (ECA) comes into force in August 2012. The company says reports that it plans to “drop its Canada/New England itinerary after August 2012” are premature and that nothing definite has yet been decided about schedules after April 2012. However, it reportedly estimates that using distillates to meet the 1.5% cap would cost it an extra $16,340 a day. One major cruise operator has opted to test out a system that promises to both meet current sulphur oxides (SOx) and nitrogen oxides (NOx) limits and also dramatically cut emissions of the greenhouse gas carbon dioxide. Royal Caribbean Cruises is to install a pilot test plant of Singapore-
World Bunkering Autumn 2010
based Ecospec’s CSNOx system on Royal Caribbean International’s Independence of the Seas. “Every day, we are actively researching methodologies and technologies that will reduce our emissions of not only SO and NOx, but also CO² as part of our comprehensive strategy to reduce our environmental impact,” said Jamie Sweeting, global chief environmental officer and vice president of environmental stewardship for Royal Caribbean Cruises. He added: “We are optimistic that the CSNOx system will help us to meet our goal.” The CSNOx technology was installed and tested on the White Sea, a Tanker Pacific panamax vessel, in 2009. The results of this test, published by Ecospec in February 2010, revealed a 99% reduction in SOx emissions, a 66% drop in NOx, and a 77% drop in CO². Additionally, Ecospec says, wash water test results surpassed the IMO’s exhaust gas cleaning discharge criteria. The Royal Caribbean pilot test is expected to be complete by spring next year. Another North American-based shipoperator, Canada Steamship Lines (CSL), has signed a letter of intent with Ecospec for both parties to work together to develop and install CSNOx technology within the CSL fleet. While there has been a large degree of industry scepticism about the CSNOx system, it is expected to shortly be type approved by ABS as an SOx and NOx scrubber. The US classification society has also verified tests showing significant removal rates of CO². The willingness of two major North American operators to test the system will be widely seen as a vote of confidence for Ecospec. Warm words for LNG
The past few months have seen increasingly strong support from several classification societies for the idea of a major switch to LNG as a major, possibly even principal, fuel for the world’s commercial fleet. Bureau Veritas, Det Norske Veritas and GL have all issued statements flagging up LNG as the possible fuel of the future. In June last year, IMO’s Maritime Safety Committee (MSC)
29
lifted the ban on natural gas as a ship fuel by adopting Resolution MSC 285(86), ‘Interim Guidelines on Safety for Natural Gas-Fuelled Engine Installations in Ships’. The Interim Guidelines are the first step towards the envisioned general code for gas as a ship fuel, the so-called IGF Code, which is currently under development by IMO and is expected to enter into force concurrently with the revision of SOLAS 2014. Hamburg-based Germanischer Lloyd (GL), which was involved in developing the IMO policy, has now issued guidelines for using gas as a marine fuel. GL says the guidelines are intended to help shipowners and yards prepare for the introduction of gas as a ship fuel in the near future. GL’s head, Hermann Klein, commented: “With new emission control regulations taking effect, gas as a ship fuel, once banned, is now re-emerging as an environmentally and economically attractive option.” Dr Klein has been vocal for some time in his view that the use of residual fuel should be phased out in the world fleet. He initially strongly supported Intertanko’s approach of switching to distillate fuel. Now, however, he appears to see LNG as a more attractive alternative to residual fuel. GL says that, compared to oil, natural gas has two key advantages: high efficiency and a lower environmental impact. It says that engine problems and damage caused by low-quality heavy fuel oils will be a thing of the past for owners switching to gas as a ship fuel. Risks associated with conventional ship fuels include bunker quality issues, poor ignition and combustion, and uneven heat and pressure distribution on pistons, piston rings and cylinder liners. “GL believes LNG as a ship fuel may be just the solution the shipping industry has been looking for to cope with the emissions challenges of our time,” added Dr Klein. In a similar vein, DNV’s executive vice president Remi Eriksen said: “Many believe that gas is tomorrow’s fuel. We at DNV think it is already here. LNG as a fuel offers obvious environmental benefits. These benefits include nearly 100% reduction in SOx and particle emissions, 85-90% reduction in NOx emissions and 15-20% reduction in CO² emissions.” He added: “For a switch to LNG to happen, certain elements need to be in place. The technology is there, as many manufactures are offering LNG fuelled engines already. A challenge is the loss of cargo space due to cylindrical LNG storage tanks. For newbuildings it is fairly simple to find space for the larger fuel tanks, while this may be more difficult for retrofitting on existing ships.” Taking a similar tack, French-based classification society Bureau Veritas (BV) told BV’s Nordic Committee meeting in Klaipeda, Lithuania that natural gas (NG)-powered propulsion will be one of
World Bunkering Autumn 2010
the major contributors to greener shipping. BV is about to publish a new edition of the BV Rules Note on Safety Rules for gas-fuelled engine installation on ships, and update BV Rule Note NR 529 to address the use of containerised storage tanks and connection with ships’ gas fuel piping systems and the location of gas fuel tanks. Bernard Anne, BV’s marine managing director said: “Using natural gas to power ships offers substantial advantages in reducing emissions. It is also abundant in supply and will be price-competitive with low-sulphur fuel. We are already working with shipowners and yards on a number of projects involving gas or dual gas/fuel projects involving a range of containerships, cruise vessels, ferries, ro-pax and ro-ros, as well as inland and coastal navigation ships. We are also engaged in projects to assess the viability of refitting existing ships.” The classification societies may be enthusiastic about switching to LNG, but implementing such a policy would be a massive undertaking and is unlikely to be without critics. At the International Bunker Conference in Stockholm earlier this year, several speakers touched on the potential of LNG as a marine fuel. Per Croner, president of Wallenius Marine, said that in Sweden, regulation was pushing shipping into LNG, and that use of the fuel had ‘exploded’ in the last year and a half. However, the problem was that the energy content of LNG was only 50% of HFO by volume. This would mean that vessels would either need fuel tanks of much greater volume, or would need to bunker more often, he said. This concern was echoed by Dorthe Jacobsen, from the marine low speed research and development team at MAN Diesel. Designs showing the fuel tank space needed in containerships showed LNG tanks would need to be 2 to 2.5 times larger than HFO tanks, she said. Nevertheless, “The savings in SOx and NOx are something to consider.” In response to a question from World Bunkering for this article, OW Bunker’s vice president, Götz Lehsten, also sounded a note of caution. He said: “Whatever decision is taken when it comes to the future of shipping from an environmental perspective, it has to be well thought through, based on practical and measured debate. Clearly LNG has a future role to play, but it is perhaps too early to advocate a total switch, when there are still many questions to answer regarding the potential of supply and associated costs, as well as the storage of LNG in relation to bunkering ports and global oil hubs; there is much that needs to be considered in relation to the whole LNG supply chain and its infrastructure. Naturally, we will continue to remain abreast of the issue, and any decision or viewpoint that is taken will be done with our customers at the front of our minds.”
Below: LNG takes up a lot of storage space
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INDEPENDENTS
Independents in expansion mode
As David Hughes reports, the global economy may be going through a downturn but some of the larger independents are in optimistic mood
I
ndependent bunker suppliers continue to play a major role in the global industry, and the signs are that several of the most dynamic of these companies are set for significant expansion. That the independents are certainly not insulated from the troubles of the world economy is demonstrated by the first quarter loss of $13.5 million reported by Singapore-listed Chemoil. Gross contribution per metric ton (GCMT), the company’s key margin indicator, fell to $1.74 compared to $8.74 for the same period in 2009. Sales volume was down 2% to 3.7 million tonnes, “attributable to lower wholesale volumes in Europe, the Americas and Asia, but compensated by higher retail sales”. Even so, Chemoil’s chairman and ceo, Mr Mike Bandy, commented: “Despite the continued weakness in the global shipping industry, Chemoil has consolidated its market position in the retail bunker segment as reflected by our improved delivery volumes with 2.5 million tonnes for the first quarter of 2010. This represents an increase of 14% from the corresponding period last year, and accounted for about two-thirds of all our volumes. However, we face a continued narrowing of wholesale-retail spreads reaching among the lowest levels in recent years due to weak demand and the lack of cheaper fuel sources.” Referring to the company’s recent takeover by Glencore, Mr Bandy concluded: “Now that the uncertainty over our ownership and listing status has been resolved, our focus can be directed towards realising the potential synergies of having two major international trading houses as our shareholders and who will be our partners in delivering value for our customers and shareholders.”
World Bunkering Autumn 2010
Expanding the network
Chemoil had already hit the expansion trail before the merger but is by no means alone. Peninsula Petroleum is also extending its network rapidly and has just opened a new Tokyo branch to boost sales in the Japanese and South Korean markets. The company is targeting annual sales of 1 million tonnes, according to Bloomberg calculations. Peninsula’s Tokyo office is its 11th, with others including branches in Geneva, Dubai, Athens and Montevideo. A company spokesman said Peninsula was also eyeing the North American market. OW reviews structure
Rapid expansion has prompted another large independent, OW Bunker, to review its structure. The company’s vice president, Götz Lehsten, said: “OW Bunker has shown exponential growth over the past few years, and has put a new strategy in place to ensure that the group can sustain this level of growth and meet its ambitious corporate objectives and expansion plans, as a global, full service bunker supplier.” He explained that the global business and sales strategy will be devolved from a central function, and delivered and managed across the five key regions where the group has a significant presence: Asia, Northern Europe, Central Europe, the Mediterranean and the Middle East, and South America. He added: “Ultimately, success in this market is being able to anticipate and appreciate the changes that have occurred over the past two years, particularly in relation to the economic downturn.
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Some independents are pursuing a global expansion strategy
OW Bunker has done this successfully, especially with regards to identifying the new and increased areas of risk that need to be managed. For example, the Group established a new internal credit management department to work very closely and transparently with customers to effectively manage credit lines. As well as providing appropriate protection, this has also acted as a catalyst to developing positive and closer working relationships with customers based on a fundamental understanding of their business operations and associated challenges in line with the current economic climate. This has served to ensure a very strong customer retention rate, as well as acting as a catalyst for securing new business.” What does the future hold for the independents, World Bunkering asked? Mr Lehsten replied: “In the fuel supply market, it is the large independent, global organisations, like OW Bunker that are driving progression. Independents have the flexibility within their business models to innovate, and to provide customers with a premium level service. Those with a significant physical presence and global scale also have the ability to act as market makers, again providing customers with flexibility in pricing, based on effectively utilising the paper structure, and leveraging accordingly where there is volume. This enables us to give customers the best possible price, as well as service.” “And,” he continued, “because independents operate right at the coal face of the industry, based on their in-depth knowledge and understanding of the market, they have the ability to spot and anticipate trends, which enables them to add further value to the customer, and build closer, stronger and partnership-based relationships.” He said there had undoubtedly been consolidation within the market as a result of the economic downturn. It has been particularly tough for the smaller operators, who do not have the liquidity or resources to manage the increased financial risks of buying and selling fuel oil. However, he noted, for the larger global operators that do have the financial strength and infrastructure, the downturn has also
34
represented an opportunity to expand both organically and through acquisition. “I believe that we will continue to see further consolidation. Not just as a result of the continuing effects of the global financial situation, but as customers continue to see the benefits and want to work with the larger independents that can provide a global fuel procurement solution, as well as advanced risk management services; solutions that are wholly focused on increasing efficiencies, and maximising profitability,” he said. Challenges ahead
Mr Lehsten accepts that the industry has been and continues to be faced with significant financial and legislative challenges. The economic downturn has created more financial risk within the market, and environmental legislation, specifically related to levels of sulphur, provides challenges for shipoperators in terms of supply, as well as technical issues when switching from high to low-sulphur fuel oils and below. However: “This presents opportunities for fuel suppliers to add value to their customer relationships, by providing solutions to these challenges; having sufficient financial transparency, and helping them to implement effective risk management strategies; ensuring there is sufficient availability of supply to meet their demands for low-sulphur fuel oil; as well as guiding them through the in-depth technical process of switching fuels so they avoid any potential hazards,” he said. While some independents are set on expanding their global reach, others are more focused on particular regions. Austrian-based OMV has specifically developed its marine product portfolio to respond to the needs of transportation on inland and coastal waterways in and around Central Europe. In doing so it now covers the whole the Danube as well as Constanta in the Black Sea and Koper in the Adriatic. In Turkey, OMV has a strategic alliance with Petrol Ofisi Marine.
World Bunkering Autumn 2010
Cockett launches Channel service
Grindrod subsidiary Cockett Marine has recently given a classic example of how the independents can identify and target very specific gaps in the market. It is set to launch a bunkering service at an anchorage in Queen’s Channel Thames estuary in September 2010. “We decided the main route to growth for traders was through acquisition, but there was not much that we wanted to acquire, so we looked to physical supply operations instead,” said group managing director Karl Beeson. Cockett first entered the physical supply area with a barge operating on the Thames last year, followed by the purchase of Dutch company ABC by Cockett’s parent company Grindrod earlier this year (see page 75 for details). The company is looking to develop its physical capability worldwide, Beeson said. Robert Thompson, general manager supply and business development, is in charge of setting up the operations. He was previously involved in establishing physical operations in both Falmouth and Portland. However, these were on a completely different scale to the operation Cockett is establishing in London, Thompson says. “I’d been looking for something with international scope, and I’d always wondered why the English Channel doesn’t have a major bunker location. This is not going to be Falmouth or a Portland. We’re aiming for the premier league – a Gibraltar or a Skaw.” The initial objective is to achieve a volume of 1 million tonnes per annum, equivalent to 1% of passing vessels taking an average stem of 700 tonnes. Successful bunkers-only ports typically achieve a bunkering rate of 8% of passing vessels, so the target should be well within reach. “Usually by two–three months in you can reach 80-90% of a location’s full potential, so we should be able to reach our target within a year,” Thompson says.
World Bunkering Autumn 2010
Cockett is very clear about the market that it is aiming for. “A ship going to ARA is not going to us – you can’t compete with Rotterdam on price,” Thompson says. However, about half the ships going through the Channel separation scheme are not going to Rotterdam – and Cockett hopes that they will come to Queen’s Channel instead. The anchorage requires only minimal deviation from the major shipping routes – an important requirement for a bunkers-only location, particularly when freight rates rise. By way of comparison with other bunkering hubs, Queen’s Channel requires slightly less of a deviation from the main steaming route than Gibraltar, Thompson says. “There may also be a possibility to pick up contingency bunkering if there are heavy delays in Rotterdam, but that is very much a side benefit. The opening of the Thames Gateway port in 2014 could also lead to a considerable increase in demand.” Consolidation to come?
Dan Bunkering’s international sales manager Søren Høll, shares the upbeat view that seems prevalent among the independents. He says: “The prospects look promising for those traders who can deliver true added value to the clients and a high degree of financial stability and safety. Partnership between traders and shipowners is the keyword today.” He, too, sees more consolidation in prospect. “There will be consolidation, for some based on need and for some it will be part of their strategy.” Asked about the challenges facing the industry, Mr Høll is emphatic. “The main challenge is third party risk. Can your counterparty still perform, despite its own counterparty failing to meet its obligations?”
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RISK management
Oil price risk management in the ‘green’ world The players in today’s bunker market could be forgiven for thinking “when it rains, it pours”, says Caner Seren Varol of Global Risk Management
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s well as having to respond financially and operationally to the current economic crisis, shipowners, charterers, refineries and physical suppliers now have to deal with the consequences of new environmental standards imposed by Marpol Annex VI. Vessels sailing in the Baltic and the North Sea Emission Control Areas (ECAs), have been obliged to burn maximum 1% sulphur content bunkers from 1 July 2010. This abrupt change is expected to introduce many disruptions and volatility to the market in the short term.
Demand potential
For example, one expert in this field, Robin Meech of Marine and Energy Consulting, has recently been quoted as estimating that global demand for 1% LSFO will initially be around 11 million tonnes per annum in 2010, doubling to around 20 million tonnes in 2011, and more than quadrupling to around 48 million tonnes by 2014. We believe this to be a realistic assessment. Refiners and suppliers can employ a number of different operational tactics, including using lower sulphur content crude, desulphurising the HSFO further, or blending HSFO with gas oil, to meet the initial LSFO demand. At Global Risk Management we believe higher costs, procedural complications and product quality issues associated with these strategies will increase price and availability uncertainty in the physical markets.
In late June the premium for LSFO over HSFO was around $30 to $35 per tonne depending on the port, and the forward curves were predicting this premium to reach about $40-$45 per tonne towards the end of the year. Future supply-demand imbalances in the ECA areas, increased cost of sulphur reductions, and the volatility of oil prices pose a great threat to budget, cost and operational stability of vessel operators. Fuel price risk management strategies have become more important, even vital, for bottom line profit margin protection during such turbulent times. Many vessel operators utilise financial contracts such as swaps and options to minimise price related risks, enabling them to secure profit margins. Unfortunately, these tools fail to protect the companies against another operational risk factor, namely the availability of the right bunker grade. The role of price agreements
Availability concerns persist
This is where, Global Risk Management believes, physical hedging tools can come into their own, complementing financial ones. Such tools can include Fixed or Maximum Price Agreements (FPAs/MPAs) with guaranteed physical supply in the ports of choice. The advantage to vessel operators is that entering such contracts will give them bunkering priority at times of supply squeezes, which are expected to occur in the Baltic and North Sea ports after the implementation of the 1% sulphur regulation. This strategy can result in 100% hedging efficiency, achieving cost and operational stability at the same time during volatile times that lie ahead.
A recent media survey indicated that 47% of the participants were worried about LSFO availability and supply problems, even though major suppliers, including Chemoil and CEPSA, reported sufficient product inventories.
Global Risk Management is part of one of Denmark’s largest companies, United Shipping and Trading Company (USTC), and is a leading provider of customised hedging solutions for the management of bunker fuel price risk.
World Bunkering Autumn 2010
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RISK MANAGEMENT
Manage Your Bunker Price Risk Effectively SGX Fuel Oil 380 cSt Futures
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trategically located in Asia, Singapore has prided itself as an international maritime centre. Its busy seaport, together with its comprehensive range of maritime-related services such as cargo handling, logistics and distribution management and ship repairing services, have given the country a clear advantage to supply bunkers to ships that make their call in Asia. This has paved the way for Singapore to be developed into the world’s largest bunkering port with 36.39 million metric tonnes of physical bunker fuel sold in 2009, a 4.15% rise over the previous year. Singapore Exchange (SGX) launched SGX Fuel Oil 380 cSt Futures in February this year. The launch complements Singapore’s active physical trading with a better risk management infrastructure, thereby bolstering Singapore’s role as a key energy trading centre and world’s largest bunkering port. The SGX Fuel Oil 380 cSt Futures is based on Marine Fuel Oil (MFO) 380 cSt grade, or bunker fuel, and is physically settled upon contract expiry. Designed with the international oil trading and bunker market participants in mind, the SGX Fuel Oil 380 cSt Futures trades in minimum lot sizes of 100mt and is quoted in US Dollar per metric ton. To meet the risk management need of participants during Asian, European and US hours, the SGX Fuel Oil 380 cSt Futures market is open 15 hours a day from 9.00am to 6.30pm and 7.30pm to 1.00am the next day (Singapore time), giving market participants increased trading opportunities from Asian opening to US mid-day. SGX Fuel Oil 380 cSt Futures has successfully completed physical deliveries for the first five contract months from April to August 2010 during which a total of 102,200mt of fuel oil has been successfully loaded.
SGX Fuel Oil 380 cSt Futures offers market participants the following key benefits: Additional Trading and Hedging Tool
This contract offers fuel oil market participants a wider range of derivative contracts in addition to the OTC energy derivatives, thereby introducing new trading opportunities such as arbitraging and spreading from Asian opening to US-mid day time zone. Better Price Discovery and Transparency
Electronically traded on SGX, this contract offers the MFO 380 cSt bunker market a more efficient and transparent price discovery mechanism as best bids and offers and last traded prices on SGX are continuously disseminated on a real-time basis through price vendors for the benefit of all market users. SGX also provides the daily settlement price at 7.30pm (Singapore time). Alternative Means for Bunker Sales and Purchase
Physical settlement provides market participants with the flexibility to use the futures contract as an alternative means for bunker sales and purchase based on a fixed price basis.
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Enhanced Trading Facilities
In addition to on-exchange trading, this contract also provides oil market participants with enhanced trading facilities such as Exchange of Futures for Physicals (EFP), Exchange Future for Futures for Swaps (EFS) and Negotiated Large Trade (NLT). Such transactions are privately negotiated so that the parties to the transactions are not confined to the exchange delivery terms, executed off-exchange and registered with the Exchange for clearing. These facilities allow market participants to better manage their physical, swaps and futures positions. Global Access via Electronic Trading
The SGX electronic market can be easily accessed via the internet using SGX Clearing Members’ in-house trading systems or systems provided by 10 Independent Software Vendors (ISVs). Financially Strong and Proven Clearing House
SGX’s derivatives market has over 20 years of experience in the trading and clearing of derivatives products. It has a tested and proven system of financial safeguards that has weathered diverse market cycles and crises over the years. Under its system, SGX clearing house is able to mobilise additional resources should a derivatives clearing member fail to meet its obligations to the clearing house. These additional resources include the Exchange’s clearing funds, default insurance and funds of other non-defaulting Clearing Members under the common bond system. However, there has never been a need to tap into these additional resources in our clearing history. For more information on trading the SGX Fuel Oil 380 cSt Futures, please contact: Brenna Koh Assistant Vice President Singapore Exchange Limited Tel: (65) 6236 8827 E-mail: brenna.koh@sgx.com Website: www.sgx.com/fueloil
This advertisement is not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject SGX to any registration or licensing requirement. This advertisement has been published for general circulation only. It is not an offer or solicitation to buy or sell, nor financial advice or recommendation in relation to, any investment product. Advice should be sought from a financial adviser regarding the suitability of any investment product before investing or adopting any investment strategies. Further information on this investment product may be obtained from www.sgx.com
World Bunkering Autumn 2010
RISK management
Moving the market forward
The range of possibilities for online fuel trading continues to expand – but will they catch on?
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espite a slow start to its fuel oil swap agenda, the Singapore Exchange is continuing to push the product. The swaps can be used as a means of locking in future supply at fixed prices. In May, the exchange announced the successful completion of the loading for all physical deliverable positions for its first SGX Fuel Oil 380cst (“SGX FO380”) futures contract. The SGX FO380 futures contract, launched on 22 February 2010, aimed to provide an alternative hedging and trading tool for the Singapore fuel oil industry. The first contract month of April 2010 expired on 25 March 2010 with 131 thousand-tonne lots of fuel oil for delivery. All deliverable parcels matched by the Exchange were successfully loaded by end of April 2010. The counterparties who participated in the April 2010 delivery include Hin Leong, ENOC Singapore and Glencore Singapore. Ms Elena Sng, senior vice president, Clearing and Commodities Business at SGX said: “The deliveries in this first contract month bear testament to interest in the physical delivery aspect of the contract. We will continue to work closely with our market participants to meet the needs of the evolving market.” Mr Tayyeb Al Mulla, ceo, ENOC said: “The successful delivery for the first contract month is a confirmation of SGX’s delivery mechanism. We are satisfied and hope that this will encourage greater participation in the contract.” The successful completion of this contract follows reports in the shipping press that SGX’s 380cst fuel oil contract was “not working out”. At the time of writing, the annual report showing up to date figures for the trading of SGX fuel oil contracts has yet to be issued. However, an SGX spokesman told World Bunkering: “We are seeing
World Bunkering Autumn 2010
trades from a variety of participants ranging from oil majors, oil trading companies, bunker suppliers and individual trading members.” He added: “To facilitate trading during the initial period, there are market makers providing prices during active trading hours.” SGX is targeting trading volumes of 3 million tonnes per month by the end of this year. However, the exchange says it expects relatively low volumes in the the early months of trading. Navitas launches NR-X platform
Singapore was also the location for the launch of another product aimed at making it easier for buyers to trade fuel oil parcels online. In May, Singapore-based Navitas Resources officially launched its NR-X platform, an online trading platform intended to trade spot contracts for bunker and marine fuels. Trading between a limited number of participants has been taking place since November, with a ‘major shipowner’ joining the platform in March. “Players are looking for better ways to hedge bunker and marine fuel more efficiently and we are trying to encourage transparency and get a forward physical market one or two months out,” says Tom James, chief adviser to Navitas Resources. “We are discussing future developments with regulated exchanges and clearing houses regarding a derivatives market for these contracts.” Shipping companies currently use the wholesale cargo swaps market for fuel to hedge their risk and there is basis risk between pricing the cargo market and the price charged in the port, says James. “Our focus is the delivered market for physical bunker and marine fuels to the ships from suppliers and there is interest from the industry to do this,” he says. “The bunker and marine fuel market is large and so far it has not
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Vooolatile oil prices can be controlled Is your business sensitive to the ups and downs of oil prices? Ask us to minimise the impact of price volatility. We offer customised hedging of your fuel price risk. Kick start your fuel risk strategy at global-riskmanagement.com A/S Global Risk Management Ltd. 路 Strandvejen 5, 5500 Middelfart, Denmark 路 Phone: +45 88 38 00 00 路 Fax: +45 88 38 00 09 路 hedging@global-riskmanagement.com
been given any real development on the exchanges so there is great potential,” says James. “We expect to see steady development on the NR-X platform.” Unusually, contracts on the platform are available priced not only in dollars, but in World Currency Units (wocus). Bunkers are the first physical commodity in the world to be priced in wocus. A statement from the company behind the wocu, UK-based WDX Organisation says: “As bunker oil drives the majority of sea-going trade, it is a commodity of primary importance. Trading bunker oil in wocus rather than dollars is anticipated to allow companies to achieve maximum benefit from the wocu’s particular advantages, namely reduced exchange rate volatility and an effective partial hedging mechanism, reducing spot and forward inconsistencies in bunker oil pricing.” Tom James commented: “We are very excited to have finalised the terms of the agreement with WDX regarding the wocu and look forward to launching wocu pricing for a range of physical commodities on our NR-X platform. We have no doubt this will give our platform a leading edge over those who do not offer the advantages of pricing in the wocu, especially given the large US$ currency concentration risk most companies in the commodity and energy sectors currently have to manage.” According to the WDX website: “Conceived in 1996, formulated and calculated since 1 January 2000, the wocu was officially launched on 1 January 2010. The wocu is based on a basket of currencies that are qualified by the success of their economies – and not on politics, history or geography; its major claim, that it exhibits lower volatility than its components, has already been proven. Michael King, ceo of WDX Organisation, said: “We believe this
World Bunkering Autumn 2010
early adoption of the wocu basket is a key signal from the markets. The agreement reflects the requirement of market participants for currency neutrality in some, or all, of their activities. Utilising the wocu in commodity trading will create certainty in forward transactions, which in turn will drive down costs. A single currency arrangement would be hard pressed to reduce volatility in this manner.” Aspect solution takes off
A perhaps somewhat more conventional solution to bunker management was released by one of Navitas’ partners, Aspect Enterprise Solutions in March. AspectETRM for Bunkering is a specialised version of its software as a service (SaaS) trade and risk management solution. According to the company, the programme is both comprehensive, combining all the core functionality required for bunkering, and very fast to implement, with installation times of typically weeks not months. The solution’s scalability makes it cost-effective for small operations right up to the heavyweights that dominate the world’s bunkering hubs. “Bunkering operations have a rich choice of contending ETRM solutions so we think it’s highly significant that AspectETRM for Bunkering won three major deals, even before we formally launched the product,” says AES ceo Steve Hughes. One is a relatively modest sized trader and one is a major global player. “These two customers are at opposite ends of the spectrum in terms of size, yet their reasons for going with AspectETRM for Bunkering are the same – speed of implementation and affordability.” Three more customers have joined since March, and one of the existing users has expanded the scope of the solution, proving a real market demand.
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Managing fuel costs: a critical challenge
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ith 10% of the global fleet reported to have been idle, 2009 will be remembered as the year the shipping industry was overwhelmed by crisis. With declining world trade, plunging freight rates, high bunker fuel prices and eroded profits, survival was the mantra. Industry experts predicted that survival would continue to be the driving force for shippers through 2010. In such an uncertain financial climate, now more than ever, consumers and suppliers will constantly seek to lower fuel costs. The high cost of alternative fuels, together with price volatility and the need to maintain product quality, stability and availability, all pose challenges that have a direct impact on the profitability of both shipping and bunkering companies alike. All of this puts the spotlight on bunker trading and supply, and the need for measuring and optimising processes for the best possible margins. To do this, visibility throughout the trade process is crucial. When considering the selection of IT systems to support these requirements, bunkering firms need to ensure that systems can: • Enable traders and management to capture and report profitability on multi-product spot and term bunker deals, from contract through to settlement. • Allocate cargo purchases, sales, internal movements and outturn adjustments by location. • Report credit risks associated with new and existing customers. • Create reports using access to timely local and global crude prices, bunker prices, port information, • analysis, and news. • Report key performance indicators and metrics.
But for many bunkering companies, large ETRM systems are often too complex. This can scare companies away from trying to implement a solution, leaving them to continue managing their inventories in the way they been managed for many years – with spreadsheets. But this leaves value on the table. Spreadsheets don’t allow collaboration between traders, inventory managers and accounting. Spreadsheets don’t give good visibility, let alone provide the capability for what-if analysis. Aspect Enterprise Solutions (AES) has built a specific energy trading and risk module for the unique trading scenarios of bunker trades. AspectETRM is the fastest-growing next generation solution globally for downstream traders and buyers of oil, products, petrochemicals and other commodities. AspectETRM for Bunkering combines all the required core functionality required for trading together with ultra-fast speed of implementation – typically a few days, not weeks or months – and a scalability that makes it cost-effective for small operations right up to the heavyweights that dominate the world’s bunkering hubs. AES’s any-to-many scalability results from its Software-as-aService (SaaS) foundation, which means bunkering operations never need to install and maintain software and IT hardware, or the associated costs. Users simply but securely access AspectETRM for Bunkering through a standard desktop or mobile browser. The architecture enables key elements of a fully end-to-end solution, including fuel procurement capture, derivative-based risk hedging, and back office accounting to be in place and delivering savings within a matter of days. Today’s bunker trader
What’s in your tank? The value’s in the visibility
Knowing exactly what stock is held in multiple tanks in ports across the world, together with product value, title and specifications, is critical to the profitability of a bunker supplier. Visibility of what’s available for sale or transfer is crucial for credit reporting and for the banks to understand who you’re doing business with. In today’s uncertain times, any shipper or supplier who made payment six months ago can easily be in trouble today. Energy Trading and Risk Management (ETRM) systems with strong inventory capabilities provide a real strength and competitive advantage in a market where spreadsheets have long been the norm for managing trades, and have created blind-spots in the supply chain. Leveraging the right ETRM System helps bunker traders manage trades and understand profits & losses (P&L) and exposure in real time against changing inventories.
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Most of today’s bunker traders are responsible for the entire trade, from receipt of an inquiry for product to collecting payment. Some also have responsibilities for managing other traders and monitoring the day-to-day risk. They need to be able to make arrangements for contracted supply with customers and ensure product is loaded for vessels from the right supplier. They also manage spot deals, and so having real-time market data for crude oil, bunker prices and analysis is necessary. Many of our customers access real-time and historical market data, charting tools and other news and exchange feeds through our market data portal AspectDSC. It’s on the same platform as their energy trading and risk bunker module, and provides a tremendous advantage in the market, and cost savings on the solution. The focus on price given today’s shipping conditions is very competitive. But traders are more than buyers and sellers. Clients are looking for advice for the best product and timely supply, so
World Bunkering Autumn 2010
This screen shows a simple multi-commodity trade spot order for marine diesel and fuel oil from Singapore. From order entry to settlement, this trade is tracked through the system for shared information with your front and back-office teams
again real-time information from regional markets is critical for success. What may look like an obvious deal may actually result in getting caught in a line of backed-up vessels and supply delays. Other alternatives may be available and so information aids timely, smart decision making for the customer, and keeps that customer coming back. About Aspect Enterprise Solutions
Aspect Enterprise Solutions provides enterprise-class market information, trade and decision support tools for oil and gas, metals, agricultural and other commodities professionals. We deliver near real-time position keeping, risk management, market prices and intelligence to users virtually anywhere, anytime. Trusted by over 500 corporations in more than 80 countries, our solutions routinely support more than US$10 billion of transactions every day. Our solutions go live quicker, fit more exactly and deliver greater ROI, yet cost far less to implement than first generation offerings. AES clients are bunker companies with supply and trading activities, oil and gas suppliers, refiners and marketers, large end users, and physical and financial trading firms, big and small. AspectETRM includes a Standard Edition and a customised Bunkering Edition,
World Bunkering Autumn 2010
specifically developed to meet the unique trading requirements of bunkering companies. Other vendor systems do not cater to bunker company needs and are often cost-prohibitive, unlike AspectETRM for Bunkering. Other AES applications include AspectDSC and Aspect TradeFlo. AspectDSC is our multi-commodity market data portal and decision support centre; Aspect TradeFlo is the professional edition of AspectETRM, which is designed for small to mid-size companies with less complex trading and risk requirements. All of our applications are integrated on the same web-based platform and delivered SaaS. This means you receive your applications swiftly, not in months or years. Our on-demand commodities trading and risk-driven performance applications deliver a robust suite of tools to create a seamless, visible transfer of activities between trading, operations and back-office teams.
For more information, visit www.aspectenterprise.com or e-mail us at moreinfo@aspectenterprise.com
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COURSE DIRECTOR
John Vautrain, Senior Vice President & Director, Purvin & Gertz Inc, Singapore KEY ISSUES TO BE COVERED • Overview of refining, production & shipping to locations • Key quality parameters of bunker fuel and petroleum products • Drivers for demand growth of bunker fuel • Non-bunker uses of fuel oil • Crude oil alternatives • Refineries & bunker fuel • Bunker fuel blending • IMO sulphur regulations and their impact on bunker fuel markets • Cutter stocks • Bunker fuel market structure CERTIFICATE OF ATTENDANCE All Participants who successfully complete the full 1½day course will be given a Certificate of Attendance
ISO 8217
What next?
World Bunkering talks to Wanda Fabriek about ISO8217 2010 – and beyond
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t is a month after the publication of the 4th edition of ISO8217 standard, which was released just five years after the publication of the 3rd edition. Time for the ISO committee to sit back and take a deep breath? Far from it. “We have already been active and planned a meeting in November to discuss how we should move forward towards the next revision,” says committee chair Wanda Fabriek. “There were some technical comments received during the DIS ballot that could not be addressed at that time and which now need to be resolved. In addition, we have to be swift to decide what we’re going to work on so that future editions of the specification for marine fuels will make perfect sense around 2018/2020. We won’t be covering the huge range of issues for the next edition that we did this time, but the work will go deeper into specific areas.” For the moment, though, the industry is beginning to take stock of ISO8217:2010. A number of significant changes were made to the standard, including: • Hydrogen sulphide limits introduced • Acid number limits included • Ash limits reduced • Vanadium limits reduced • Aluminium and silicon limits reduced • CCAI (Calculated Carbon Aromaticity Index) added • There is no provision for the inclusion of biofuels in the standard Biofuels and blends
The biggest issues to resolve were not necessarily those where major changes were introduced. “The most important issue for us to resolve was the inclusion of bio-derived fuels. We debated it at every meeting over two years of work,” says Fabriek. Ultimately, the committee concluded that the scope of the standard could not be changed, meaning that fuels with FAME content are still excluded from the ISO standard. “I am confident that we reached the right conclusion. Maersk only recently announced its study to look at whether biofuel is suitable for use in marine engines and how it needs to be handled by the fuel system on board. It is clear that [the
World Bunkering Autumn 2010
use of biofuel] is a serious technical issue, which is related to the lack of sufficient experience at this point in time. This study indicates that companies are concerned about the inclusion of biofuels in the fuel standard at a time when the marine industry is not yet ready for this.” On the other hand, Fabriek says, the situation is changing fast, and it may soon be necessary to revisit this question. “We cannot hang about, and it will probably take a few years working on the biofuel issue in terms of research before we can include it in the standard. The committee needs to answer certain questions, including how the purifiers will work, whether the reduction of cat fines will be affected, and so on.” In particular, she says, the committee is concerned to protect the DMX grade, a special grade for emergency purposes. It is absolutely essential that the grade must be usable without the risk of it stalling engines or causing damage. “Perhaps ultimately the answer will be to insert a single biofuel grade into the standard, but the research and the experiences gained through the industry studies will guide the committee members and allow us to decide how to best proceed with this issue,” she says. H²S
The inclusion of an H²S limit was another major point of discussion, and caused considerable comment from across the industry. The new limit is 2mg/kg in the liquid phase, which can translate to considerably higher levels in the vapour phase. This led to considerable controversy in the review phase, with suggestions that the concentration should be measured in the vapour phase after delivery, and that it should be set at zero. These issues were discussed in great depth by the committee. “Regrettably, the H²S limit was and perhaps still is misunderstood by many. I believe that many stakeholders didn’t understand what we were trying to do in setting a limit. The committee adopted the industry’s acceptable guiding limit and proposed an additional check point for this important fuel characteristic,” says Fabriek. “It would appear that perhaps there is insufficient knowledge of how refineries work today to release marine fuel, and of the limitations of the test
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Keynote and Industry addresses
VIsIonarIes In shIppIng Forum
Niels-Henrik Lindegaard Group Vice President, A.P. Moller Maersk marIne Fuel BusIness heads
Carlos Barbosa General Manager, Petrobras Fuel standard and emIssIons polIcy experts
HIN LEONG
SIBCON2010 (World Bunkering Publication-Aug 2010).indd 1
8/2/10 2:38:51 PM
methodologies available for the measurement of H²S. By including a limit, where previously there had been none, the ISO standard did not increase the permissible level of H²S. The methodology chosen in the standard gives us the potential maximum level of H²S present that can potentially be released into the vapour phase, but might not be. In fact, it is more dangerous to use a methodology that underestimates the levels and shows them as lower than they are, than to overestimate it.” CCAI
CCAI limits of 850 for RMA grade, 860 for RMB, RMD and RME grades, and 870 for both RMG and RMK grade fuels were included in the standard in order to avoid fuels with uncharacteristic densityviscosity relationships. The introduction of CCAI was a controversial issue, with the committee criticised for setting CCAI at levels that could still potentially cause damage to some engines. Ultimately, though, the panel is happy with the limit that was set, says Fabriek: “We have taken a step forward in this important area. Annex F of the standard is worded appropriately to help the suppliers and buyers of marine fuels, where ignition is known to be very critical, to agree on tighter specifications in respect of ignition quality.” On the other hand, the panel were accused at the review stage of ignoring commercial realities by setting standards that were too strict. This was not at all the case, says Fabriek: “Although we were challenged on the changes to the CCAI, the panel is aware of the commercial reality. If we drive every specification limit right down to the demand of some few stakeholders, we will eliminate 40% to 50% of fuel availability in today’s market.”
Reaching consensus
The ISO balloting process – involving reaching a national, and then an international consensus on each of the issues raised – was long and thorough. “No decision can be taken in a hurry because we have to face the industry at the end of it, and have to produce a workable and useful standard,” says Fabriek. “Everything is backed up by vast amounts of statistical data provided by committee members from around the world, which have been constantly reviewed. That means we are able to be really thorough in looking at the effects of each of the proposed changes.” While the process of revision took just over two years – instead of the more usual nine – the committee met 13 times over this period. A lot of time and hard work was assigned to resolve the DIS technical comments to the ISO DIS draft version: “We spent over a week in sessions just to look at and resolve the comments on the technical issues.” On the whole, Fabriek says, the new standard has been well received. “We have already seen some suppliers stating that they are ready now to supply to the new ISO8217.” She herself is pleased with the outcome, and the way that the industry has responded to it: “I think I’m happy with the results, and I know that the committee members are happy with the standard too.” Far from resting on her laurels, though, Wanda is already planning the next move. “I’m happy to move on. It’s good to make use of the momentum created by the introduction of the 4th edition – that’s why the committee will meet in November. Before Christmas, we should be clear on the next main issues to be worked on and what steps we need to take to deal with them. “
Biofuels are excluded from the ISO standard – for now
World Bunkering Autumn 2010
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GLOBAL BUNKER SUPPLIERS AND TRADERS
Peninsula Petroleum is a major physical bunker and lubricant supplier operating from the ports of Gibraltar, Ceuta, the Canary Islands, Panama, Athens and Singapore. As a physical supplier and a worldwide trader with annual sales in excess of 5,000,000 tonnes, we have the resources and capabilities to guarantee the highest quality products and first-class customer care at all times. With offices in London, Gibraltar, Geneva, Tønsberg, Athens, Dubai, Singapore, Shanghai, Tokyo and Montevideo our highly skilled staff, which includes more than 15 nationalities, is ideally placed to make the most of their vast experience and expertise. Available 24 hours a day, 7 days a week, 365 days a year, we provide professional, cost-effective ways of meeting marine fuel needs, swiftly and efficiently – anywhere in the world.
LONDON Tel: +44 (0) 207 766 3999
GIBRALTAR Tel: +350 200 52641
GENEVA Tel: +41 22 322 9600
TØNSBERG Tel: +47 333 40 100
ATHENS Tel: +30 210 4287800 1
DUBAI Tel: +971 4 4458435
SINGAPORE Tel: +65 6238 6621
SHANGHAI Tel: +86 21 5386 8866
TOKYO Tel: +81 90 4019 9025
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GEoGraphical focus: south east asia
Recession? What recession?
Bucking the worldwide trend, Singapore continued to see volumes grow despite the global downturn, and now appears to be in the vanguard of the recovery
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ast year it seemed open to question whether Singapore could continue to buck the global trend of falling volumes. The 2009 total volumes figure of 36.4 million tonnes, a 4.2% increase on 2009, seemed almost too good to last. The figures for the first half of 2010, however, seem to indicate Singapore is in for another surprisingly buoyant year in terms of bunkers supplied, with some 20 million tonnes delivered and insiders predicting that the 40 million tonnes mark will be passed this year.
Container recovery drives boom
A Maritime and Port Authority (MPA) spokesperson said that the “amazing” bunker figures largely reflected a recovery of the container trades although supplies to bulker carriers had also picked up significantly. The renewed confidence in the container trades, which form the mainstay of Singapore’s port business, is reflected by a decision by Neptune Orient Lines (NOL) to embark on an ambitious $1.2 billion newbuilding programme for its container shipping arm APL. It has ordered 10 8,400 TEU vessels from South Korea-based Daewoo Shipbuilding & Marine Engineering for delivery in 2013 and 2014. It has also signed a letter of intent for two 10,700 TEU vessels. NOL said it is investing in new vessels to meet future growth needs and to replace vessels with charter agreements that will expire in the next few years. Return to ‘normal’?
Dan-Bunkering’s manager in Singapore, Kenni Goldenbeck, has also seen signs of an upswing. He says: “We have seen some positive trends in the market lately – not only in Singapore, but in South East
World Bunkering Autumn 2010
Asia in general. The turnaround for vessels at Singapore anchorage has increased and the movement of tonnage in many segments has seemed to improve since the shipping crisis. Whether we are out of the crisis yet, is very difficult to say. I don’t expect us to go back to the ‘good old days’ – that period is history. Now we are probably closer to ‘normal’ levels than earlier. Both owners, charterers, and suppliers shall consider these levels as ‘normal’ and adjust and act accordingly to manoeuvre their business to a safe future.” So there is an optimistic feel in the Singapore market, but it is tempered with caution. Mr Goldenbeck comments: “The main challenge is still the overall shipping industry. Will the freight rates improve to better levels or go down? In which direction will the oil prices go? All that can naturally lead to some shipping companies going down as worst case scenarios, which can result in big financial losses to local suppliers and traders as well. Credit risk management should still be top priority and to say no is sometimes better than taking any chances. We are all here to keep the ball rolling, but using common sense and taking some care is still the way to go for all of us.” He believes the potential implementation of flow meters is going to be interesting. He said that while the idea is good, it could be difficult persuading local suppliers to accept it. He added: “MPA will, as of now, not make it mandatory for suppliers, hence I foresee that only suppliers who have clients demanding flow meters will use it. The remaining will continue as per normal practice. If they do decide to make it mandatory, then I expect bunker prices in Singapore to go up, and will Singapore then lose market share to other countries? This is yet to be seen. We are all interested in making Singapore the best bunkering port worldwide and any improvements should be welcomed by all parties involved.”
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Meeting the need for training
Government support
While volumes may be increasing, so too are costs and pressures on margins. Singapore remains a fiercely competitive market but players are having to continuously invest in modern equipment and facing increasing difficulty in funding newbuilding projects. At the same time the costs of employing bunker barge crews is also rising, partly because officers in the local fleet are aware they may be able to earn higher salaries sailing on the international deep-sea merchant fleet. An exodus of experienced bunker officers a couple of years ago, combined with the continued growth of the local bunker market, threw the spotlight on the need for training. This has been taken up by IBIA and the first three graduates of the association’s new Professional Training Programme for Bunker Cargo Officers (BCO) completed their course and were awarded their certificates of competency in June. The course, which was jointly developed by IBIA’s Asia Branch, Wavelink Maritime International (WMI) and bunker industry stakeholders in consultation with the MPA, aims to raise professionalism through recognised industry qualifications. IBIA Asia Branch Executive Committee chairman Simon Neo emphasised the importance of the initiative, saying: “IBIA is delighted that it has paved the way for standards of certification in the bunker industry and we hope to develop this programme for other industry professionals in the future. The sky’s the limit”. IBIA’s Asia regional manager Chong Kam Wah said that the initial course had been highly successful and that registration for the next course was in hand. He said: “This programme will certainly continue and the Asia Branch plans to roll it out in phases to other bunker ports in the region. We estimate that there are at least 200 potential candidates for the course from the Singapore bunker fleet and regionally at least twice that number.” Mr Chong said that there were no plans to make the course mandatory in the near future, but in the longer term the IBIA Singapore branch is working with the MPA to put it on a “continual refresher education basis.”
While the BCO is a major step forward it is also an example of the increased investment required by barge fleet operators. The Singapore government is very much aware of the cost pressures on the maritime sector and earlier this year announced an extension of a port dues concession brought in to help tide the shipping industry through the economic downturn and which also benefits the bunker tanker fleet. A 20% port dues concession for harbour craft engaged in commercial activities within Singapore port waters was extended for another six months, from 1 April to 30 September this year. The measure was initially brought in on 1 April last year. Singapore Shipping Association president, and ceo of container line PIL, SS Teo, welcomed the decision but called for the concession to be extended further. He said: “Whilst we are very appreciative of the incentives offered to the shipping industry, more needs to be done. The six-month extension on the port dues concession will be a great relief to the shipping industry, but we hope that the government bears in mind that, despite tentative signs of recovery and a marginal increase in cargo throughput, international shipping is not really out of its doldrums yet. In particular, the threat of over-capacity arising from new buildings coming on-line over the next two years will serve to dampen freight levels.” He continued: “As such, we hope that the port authority will be able to extend the port dues concessions past the 30 September 2010 deadline. Any proposed cost increase that could have a detrimental effect on the shipping recovery should be withheld for at least another year. ”
The bunker sector faces a potential crew shortage
World Bunkering Autumn 2010
New players
Despite increasing costs, Singapore continues to attract new players while existing ones are expanding their operations. Among recent entrants are a number of Chinese companies. At the time of writing Sinopec affiliate, Southernpec, was in the process of becoming a licensed bunker supplier and had already brought in two barges. PetroChina bought the 12th largest supplier, Singapore Petroleum, last year, while Brightoil has massively and controversially expanded its Singapore-based trading operation. A number of BP staff moved to Brightoil, triggering a legal dispute. BP, however, has emphasised it is still fully engaged in the Singapore market, and has filled most of the vacated positions on its bunker trading team internally. In July, BP Singapore president Pek Hak Bin, presenting the annual BP Statistical Review report, said that the annual revenue of its Singapore operations remained robust at $40 billion. He said: “We are committed to growing our business from here.” Meanwhile among existing players in expansion mode, KPI Bridge Oil has moved into bigger and more centrally located premises in order to accommodate plans to further expand the trading teams over the coming months. KPI Bridge Oil group ceo Jan Obel said: “We are very pleased with the consistent strong performance and growth of the Singapore office and we’re continuing to look for more experienced traders to join the established teams. I believe that the Asian market offers great opportunities for growth and for the company to expand further in 2010 and beyond.” United Bunkering & Trading (Asia) has also moved to new, larger premises as part of a move, it says, to intensify its business in the Asia Pacific Region. A UBT spokesperson said that the company had “enjoyed tremendous growth since its incorporation in 2001”. She added: “UBT offers a wide range of bunker services, from physical supply capabilities in Hong Kong, to agency services in the Greater China region, together with our extensive network of reputable business partners.”
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Premium Bunkering Services
80 Marine Parade Road, #13-05/06 Parkway Parade, Singapore 449269 Tel: +65 6344 1108 Fax: +65 6344 1128 Website: www.searights.com.sg Email: bunkers@searights.com.sg / operations@searights.com.sg By Courtesy of PSA SINGAPORE TERMINALS
GEoGraphical focus: south east asia
Surveyors keep busy High bunker prices boost demand for surveyors
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emand for the services of Singapore’s bunker surveyors has been running at a high throughout the past year. If anything, the economic crisis and high fuel prices have boosted demand. The managing director of Universal Marine Surveying & Consultancy, N Shankar, notes that, despite the economic crisis, Singapore has continued supplying between 3.2 million and 3.4 million tonnes a month. He also notes an increase in sales of 500 cSt fuels this year. He says: “High bunker prices did indeed increase demand for our bunker services. We note that buyers and sellers, to mitigate losses, prefer to engage surveyors as the survey fee incurred is small set against the considerable loss of time and costs in the event of a bunker dispute. “The number of bunker surveys carried out by our company has increased but competition still remains high. To remain in the competition we are always on our toes to ensure smooth deliveries and reporting irregular practices of bunkering procedures to our principals,” says Mr Shankar. Bunker management gains importance
Similarly, Rahul Choudhuri, DNVPS regional manager for the Asia Pacific markets, says: “According to the Maritime and Port Authority of Singapore, the first half of 2010 saw a 10% increase in bunker sales over the same period last year. DNV Petroleum Services shares similarly positive sentiments in the Singapore bunkering market, where our fuel quality testing volume has experienced a corresponding rise. We are also enjoying a dramatic increase in our Bunker Quantity Survey volume, which is a reflection of shipoperators continuing to be cost conscious and wanting to account for every tonne of fuel purchased. “Overall,” Capt Choudhuri adds, “operators are now paying greater attention to the management of bunkers than previously, and we hope this will continue when the shipping market eventually picks up. More importantly, with the introduction of stricter fuel regulations and their impact on the entire bunker supply chain, shipoperators are also realising that marine fuel management has
World Bunkering Autumn 2010
Captain Rahul Choudhuri
become much more complex, especially with new and emerging fuel quality issues impinging on safe and efficient operation of shipboard machinery.” Lloyd’s Register’s Singapore-based Global FOBAS manager
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Douglas Raitt says his company has become even busier over the past year. He also says that, as far as Singapore is concerned, this is partly due to the continuing increase in bunker sales. Globally, however, owners are paying more attention to bunker issues as prices have risen. High bunker prices tend to encourage disputes, Raitt says, as owners have become more sensitive to minor quality issues that they may not have been too concerned about a few years ago. In any event, there has been increased demand for testing services and FOBAS is increasing its staff this year. Compliance issues
So far it seems the implementation of the Northern European emission control areas (ECAs) appears to have had little impact in Singapore. Capt Choudhuri says: “There will be less demand for low-sulphur fuel oil in the Asia Pacific region, at least for the time being as the regulations are now more Eurocentric. However, we do see an increase in distillate fuel testing in our Singapore lab. This is a good development as marine distillates are not without quality issues even though they are cleaner and more environmentally-friendly than heavy residual fuels. On the adoption of ISO8217: 2010 in Singapore, Capt Choudhuri says that there is likely to be a transitional period as industry players take time to adjust to the changes. Mr Raitt says there has been some increase in demand for lowsulphur fuel (1%) in Singapore with the introduction of the lower cap in the European ECAs to facilitate liner trade between Asia and EU ports of destination. He believes ensuring sufficient availability of low-sulphur fuel is something Singapore will keep pace with. Surveyors taking a bunker sample
Is there a future for surveyors?
Mr Noirdent Shankar is confident of the future for bunker surveyors. He says: “Bunker surveying has always been part of the bunker supply chain and with MPA implementation of its Accreditation for Bunker Surveying firms, we note that there are 55 companies accredited or in the process of obtaining accreditation.” Universal Marine Surveying & Consultancy itself achieved accreditation in July 2009, way ahead of the Jan 2010 dateline. Mr Shankar says: “The volume of bunker surveys in our company has increased but competition still remains high. To remain in the competition we are always on our toes to ensure smooth deliveries and reporting irregular practices of bunkering procedures to our principals. We then leave the decision to the principal to report malpractice to the authorities concerned.” He adds: “Bunker surveying in Singapore will stay for a long time, even if flow meter devices become standard, contrary perhaps to the logical view that physical measurements may not be necessary. This is because bunker surveying has many components and is not only a question of the measurements issue or determination of quantity alone. There are other issues, such as making sure proper sampling procedures are adhered to and reporting requirements of any impediments to the SS600 standards. The attending surveyor can also play a role in training the less experienced ship staff during bunkering operations and familiarising the staff with the bunkering requirements and, most importantly, the understanding of bunker sampling procedure.” Dispute handling
“Another area of concern in the bunker surveying industry is the handling of disputes. As there is no standard requirement stating that flow meters are better than traditional conventional measurements disputes will still needed to be sorted out,” Mr Shankar explains. While disputes do occur, he says his company has so far not
World Bunkering Autumn 2010
carried out any de-bunkering surveys in Singapore Port. He explains: “We reckon with the tight regulations, licensing and enforcement by MPA the bunker quality has been effectively controlled. We note that contracts of bunker sales reflects quality of fuels supplied to meet requirements of ISO8217:2005.” Mr Raitt says that high bunker prices tend to encourage disputes, as owners have become more sensitive to minor quality issues that they may not have been too concerned about a few years ago. In recent years he has frequently pointed out that Singapore is a “good quality” port and that myths about high numbers of quality disputes are just that, myths. The sheer volume of deliveries in the world’s busiest bunker port mean that there will be more disputes, in absolute terms, than in some other ports but he stresses that the proportion of disputes is very small. Ensuring quality
Quality in Singapore has been enhanced over the years by the Codes of Practice for bunker surveyors and bunkering by bunker tankers reflected in the Singapore Bunkering Standard (SS600). He says that the recent move to accreditation of bunker surveying companies, rather than just individual surveyors, is welcome and “adds another level of quality control” in the bunker supply chain. He stresses a point that he says is applicable not just not to Singapore but globally: “The industry focuses on whether fuel is fit for purpose. This is often overlooked and disputes can arise over minor quality issues when in fact the fuel can be used without causing any harm.” Mr Shankar goes on to say: “With tighter regulations and the accreditation of surveying companies, regular training and familiarisation of the requirements are now standard practice among surveyors who want to survive in the market. We support the initiatives of MPA and also IBIA in enhancing productivity and efficiency in the bunker industry.”
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GEoGraphical focus: MIDDLE EAST
Margins evaporate
The main Middle East bunkering centres are as busy as ever, but intense pressure on profit margins is starting to claim victims, writes David Hughes
T
he attention grabbing headline was that Emirates National Oil Company (Enoc) stopped supplying at Fujairah at the beginning of July. After market rumours had been circulating for several days, a brief statement from the company’s brand and marketing manager Khalid Hadi said: “We have stopped operations since July 1.” Subsequently, an ENOC source confirmed that it had transferred all afloat bunkering resources to other projects but that its other activities in Fujairah, including ex-pipe supply to vessels, would continue. The decision would appear to be connected with ENOC’s barge chartering arrangements, which apparently came to an end in June, but it was also clear that the company was operating unprofitably. Gulf News reported that traders believed the company has lost around $20 million from its bunkering operations there. While ENOC is believed to have been supplying about 250,000 tonnes a month in 2008, its recent monthly volumes are thought to have been more like 30,000 tonnes. ENOC has left and returned to the Fujairah market before, in 2007/2008. ENOC’s pull-out from the Fujairah anchorage market is, however, only a sign of the huge downward pressure on profit margins in the region. Negative margins
Shiraz Babrawalla, bunker sales manager for major player in the region, FAL Energy, says: “Due to the current economic crisis and other related problems, margins have been very much affected, to the extent that certain suppliers have reduced their sales and some have even stopped their operations.” He notes that ENOC pulled out of offshore bunkering at Fujairah because of “cut-throat competition and negative margins”. He adds: “I will not be surprised if others too decide to reduce their operations. This did happen in the first half of 2009 when bunkers were
World Bunkering Autumn 2010
sold below cargo prices and all of sudden a few suppliers decided to reduce their volumes, including ourselves, just to minimise losses. “Until May 2010,” says Mr Babrawalla, “we saw a certain percentage of business shift to Iranian ports and offshore bunkering points as they had been quoting competitive prices compared to Fujairah. However, we have seen some shipowners have again returned to Fujairah/UAE ports, as some of the bunker suppliers either did not have availability or due to other reasons.” Generally, Khorfakkan/Fujairah has been cheaper than Singapore, according to Mr Babrawalla, unless there has been a quality problem or delayed replenishment with a few bunker suppliers “which is normal in all key bunkering ports. However,” he says, “this doesn’t last very long.” LS demand remains low
Despite the implementation of the 1% sulphur cap in the European ECAs, Mr Brabawalla says demand for ECA-compliant low-sulphur fuel hasn’t picked up in the region. He says: “We have always had low to medium-sulphur fuel oil, as our Trading Department actively traded in this product and arranged supplies as and when shipowners enquired. I must admit that so far there haven’t been enough regular enquiries to keep stocks for a fully fledged supply operation.” Despite the fierce competition, FAL Energy hasn’t changed its activities significantly in the past year. It is still active in supplying bunkers at Khorfakkan and Fujairah – in the port as well as at anchorage. Mr Brabawalla says: “We operate 11 barges at these places and use our floating storage VLCC for replenishing our bunker barges in addition to leased storage tanks at Vopak Terminal, Fujairah. This year the FAL Group took delivery of four new aframax tankers that are now either bringing fuel oil cargoes from various refineries in the region for Fal Energy or transporting cargoes for FAL’s trading arm, FAL Oil Co.” FAL also supplies at Sharjah, Dubai and Jebel Ali Port and anchor-
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BGK BUNKERS COVERS ALL NORTH PERSIAN GULF WITH NEW LOCATIONS Iraq
• Asaluyeh • Bandar Imam Khomeini • Mahshahr • Bandar Abbas • Larak B BGK Bunkers is now adding tthree new bunkering locations sserving the ports of Asaluyeh, Bandar Imam Khomeini (BIK) B aand Mahshahr at the north end of the Persian Gulf, providing a convenient service for vessels calling these ports.
Bandar-e Mahshahr Bandar Imam Khomeini
Kuwait
Iran
Persian Gulf Bandar Asaluyeh Bandar Abbas Jazireh-ye Hormuz
Strait of Hormuz
Jazireh-ye Larak
Saudi Arabia United Arab Emirates
Oman
These new locations complement the company’s existing services at Bandar Abbas and near Hormuz & Larak islands in the Straits of Hormuz. Thanks to the company’s direct access to the Bandar Abbas refinery and dedicated physical resources BGK Bunkers can offer best in class service and excellent product at very competitive prices - probably the best in the Middle East.
sales@bgk-bunkers.com • www.bgk-bunkers.com
FNSA FUEL LTD
PO Box 4861, Fujairah, UAE Tel: +971 9 2228447/2228426 Fax: +971 9 2228430 E-mail: skbhasin@emirates.net.ae fnsafl02@emirates.net.ae Website: www.fnsafuel.com
age where it operates three barges. All FAL’s bunker grade fuel oil is stored either at its new 70,000 cu m Jebel Ali Terminal or at Al Hamriyah, Sharjah Terminal.
picking up bunkers in Iranian waters “through five, maybe six, suppliers” while the two major Iranian shipping companies use in-house bunker operations.
FNSA thinks positive
Is Iran a player?
Interestingly, but perhaps not surprisingly, not all players have identical views of the market. The chief executive officer of Fujairah-based FNSA Fuel, SK Bhasin, says there are “more and more” enquiries for low-sulphur fuel and that “the demand is there”. He believes the main suppliers will definitely be able to source low-sulphur fuel as well as distillates. Capt Bhasin says: “I personally see the regional market as being at least stable, possibly with volumes increasing, certainly not going down.” He confirms that there is increased competition in the region, “obviously cutting margins”. While he does not expect to see any additional physical suppliers entering the market, he does predict an increase in terminal capacity. He notes that many vessels are now
BGK Bunkers is one of the main players in the Iranian market, supplying from offshore stations near the entrance to the Middle East Gulf. The company’s sales and marketing director Mehran Ghobadian agrees that “low margins are affecting everyone”. He feels that “very low prices” at Singapore may be among the causes for this. He says: “As for volumes, we are still keeping at the same level, 200,000 tonnes, despite strong competition in the area.” He says that one of the competitive advantages of Iranian fuel oil is that it is unblended and has a low density, with a high calorific value of 42.5. He says: “That is a very important factor for many buyers. They are well aware that they are purchasing energy, not just bunkers by the tonne.”
One of FAL’s barges in operation
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12 years of quality bunkering in the Russian Far East and Pacific Region
HEAD OFFICE: Room 708 3, Portovaya Street Nakhodka Russia, 692900 Tel/Fax: +7 4236 629779, 679341 E-mail: nayada@nakhodka.ru Website: www.nayada.biz VLADIVOSTOK BRANCH: Room 412, 10a, Okeanskiy Prospect Vladivostok Russia, 690091 Tel/Fax: +7 4232 302606 E-mail: nayada@vl.ru
russian UPDATE
News and views Olga Bogacheva provides a round-up of the latest
Olga Bogacheva
bunkering news from Russia
Duma to discuss bunker market problems
T
he Federation Council‘s Commission for National Marine Policies is to initiate parliamentary hearings on oil spill response (OSR) in Russian ports and inland waterways. This decision was adopted by the Commission at a session held at the beginning of June. The Russian Transport Ministry’s practice of putting pressure on companies responsible for emergency oil spill response was presented as a violation of antitrust legislation. The Commission discussed an order issued by the captain of St Petersburg Sea Port requiring compulsory additional certification of emergency response teams. Several private companies found themselves in a very complicated situation as a result of this order. Tatiana Presnyakova, general director of Morskaya Ecologia OOO, said her company had been responsible for emergency oil spill response for over 10 years, and was now facing “aggressive bureaucratic pressure” for the first time. Business representatives invited to the hearing insisted that bureaucratic pressure is aimed at establishing a state monopoly in the OSR services market. Bunker suppliers reported that the private sector offered services that are several times less expensive than similar offers from state-owned companies. In November 2008, Russian’s Federal Anti-Monopoly Service (FAS) accused the Federal Agency for Transport Supervision (FATS) of violation of antitrust laws after relevant claims were brought by the Russian Association of Marine and River Bunker Suppliers. Courts at all levels have ruled in favour of the Association, emphasised Senator Vyacheslav Popov, a member of the Commission. However, Popov continued: “At present, Transport Ministry subsidiaries are still using administrative pressure against private companies. Violation of antitrust legislation still takes place; the sources [of the problem] haven’t been eliminated.” The Commission of the Federation Council will make all reasonable efforts to solve this problem. It will propose legal action and
World Bunkering Autumn 2010
submit relevant recommendations to the Russian government, Russian Transport Ministry and FAS. “This case should be given more publicity,” the Commission for National Marine Policies declared. In order to achieve this, “A Minister of Transport should be called to report at ‘Government Hour’ during the coming session of the Federation Council in the fall”, according to the Council’s official website. There are several issues to be considered, including compensation for damage incurred by companies as a result of non-payment for services rendered, and the liability of officers responsible for preventing the violation of antitrust legislation.
COMPANY NEWS Transit-DV Group to modernise Vostokbunker terminal
Transit-DV Group has taken a loan from the European Bank for Reconstruction and Development (EBRD) to finance the modernisation of the terminal owned by its subsdiary Vostokbunker. Managers of Transit-DV Holding have reached a preliminary agreement on financing opportunities for the modernisation with the head of the EBRD’s Far East representative office, according to a statement from Tranzit- DV’s media office. Transit-DV is now preparing supporting documentation for submission to EBRD. This will include IFRS records for the previous two years and a feasibility study for the project. The company is to convert the records of its three subsidiaries, Torgovy Dom Transit-DV OOO, Severo-Vostochnaya Shipping Company and Vostokbunker ZAO, to meet international standards for financial records. It is likely that the three companies will then be merged, with a further audit to be performed by Moore Stephens, an EBRD approved auditor. Vostokbunker ZAO owns the third largest marine oil terminal in Primorsky region. The terminal provides bunkering services to Russian
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and foreign vessels in Russian ports and the Asia-Pacific region, and to Okhotsk and Bering Marine Geology Engineering companies. Forty percent of liquid fuel supplies for the Far East are transhipped there. The administrations of Magadanskaya region and Kamchatsky Kray are also clients of Vostokbunker. Vostokbunker produces VB marine fuel (company’s own trade mark) and F-5 bunker oil. Bergen-Tank delivered to customer
Nevsky Shipbuilding and Shiprepairing Factory has delivered a second 850 dwt coastal bunkering tanker to Haugland Tankers AS, a subsidiary of Bergen tankers AS, Norway. The vessel, Bergen-Tank, is a sister to Oslo-Tank, delivered in November last year, and will operate in the port of Bergen. The 750 cu m tanker is intended for the transportation and delivery of light and heavy oil products with flash point above 60°C. The vessel was designed by Skipskonsulent AS, Bergen, Norway. Bureau Veritas supervised construction. It is 47.85 metres long and 10 metres wide, with a hull height of 4 metres and draught of 2.85 metres. The vessel has a service speed of 8 nautical knots, and a main engine capacity of 2x500 kW from two high-speed Mitsubishi motors. The main motors are connected to variable pitch propellers,
diameter 1.4 metres, via flexible coupling and reduction gearing. The lateral thruster has a capacity of 200 kW with a fixed pitch propeller. The vessel’s power plants comprise two shaft generators of 450 kW each, and a 50 kW diesel-generator for use in harbour. Lukoil Murmansk to modernise single-hull tanker
Lukoil-Bunker’s Murmansk branch has bought the SH tanker Desna for reconstruction into a double-hull vessel. The Desna has been on charter to Lukoil from MASKO Company for the last year. Reconstruction will be carried out by Kanonersky Ship-Repairing Company, St Petersburg. The tanker is expected to start operations in Murmansk in December 2010.
PORT NEWS St Petersburg berths for Nevsky Mazut
Nevsky Mazut has acquired a six-hectare site previously operated by Interferrum Metal stevedoring company from Sovfraht-Sovmortrans in Petersburg port. The facility specialises in cargo handling operations, including hazardous cargos. At present, activity at the berths
Delegates at the St Petersburg forum
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remains unchanged, although the company is working on a development programme for the site. The company assets consist of a six-hectare container terminal located within St Petersburg Marine Port (Turuhtannaya harbour) with two berths of 130 metres (IF-1) and 167 metres (IF-2) long, railway tracks leading to Avtovo station on the Oktjabrskaya Railway OAO, a trestle approach, and both out-of-door and roofed storage facilities. The berths are 5.2 metres and 3.8 metres deep, designed for use by vessels of 7,000-8,000 dwt. Lukoil offers LS in Kaliningrad
Lukoil’s Kaliningrad branch has been offering fuel with a sulphur content of 1% or lower since 1 July 2010, in compliance with MARPOL
Convention 73/78 restrictions governing sulphur content in the ECA (Baltic and Northern Seas).
ASSOCIATION NEWS The Russian Association of Marine and River Bunker Suppliers held its General Meeting on June 23, 2010
Participants commended the results achieved by the Association and its executive body during the past year. The Association’s ratings and influence grew significantly over this period, and the Association has become a well-recognised body with a remit for resolving problems within the industry.
Alexander Sobolev (centre), Chairman of Nevsky Mazut Board
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Bunkering in the southern ports of Primorskiy Krai: Vostochny Vladivostok Nakhodka Slavyanka Zarubino
132, Verhne-Morskaya str. Nakhodka 692917 Primorskiy Krai Russia Tel/Fax: +7 4236 629626 Tel/Fax: +7 4236 697060 Tel/Fax: +7 4236 645852 E-mail: tsetan@yandex.ru
Alexander Sobolev, Chairman of Nevsky Mazut Board, said that the economic efficiency of the Association is at least 1:100. This means that for each rouble contributed to the Association as part of the membership fee, companies gain revenue of at least 100 roubles through the Association’s upholding of fair competition rules and its campaigning for necessary amendments to regulations. Bunker Forum
The Russian Association of Marine and River Bunker Suppliers (the Association) held its third forum on ‘Current Trends and Highlights in the Russian Bunkering Market’ in St Petersburg on June 24-25, 2010. Participants and speakers unanimously declared the Forum a success. One hundred and forty delegates attended the sessions. Most
of them represented bunkering companies from various Russian regions, including the Far East, Novorossiisk, Rostov-on-Don, Moscow, Chelyabinsk, Novokuznetsk, Murmansk, Arhangelsk, Perm, Astrahan, Samara, and Kazan. As in previous years, delegates from related industries also attended, including representatives from the insurance, finance, oil, legal, and equipment supply sectors. The Forum was sponsored by RN-Bunker, Gaspromneft Marine Bunker and Infotech Flex. In his opening address, Vitaliy Kovalev, President of the Russian Association of Marine and River Bunker Suppliers, emphasised that the Association was marking its first major milestone, five years of existence. The Association is now able to solve both national and regional problems, regardless of the exact location and specific
Vitaliy Kovalev, president of the Russian Association of Marine and River Bunker Suppliers
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features of the issue. Association members are now influential when new industry related rules are considered and are able to press for favourable legal conditions in bunkering business, he said. The Forum programme featured sessions on overall industry performance, current issues with bunkering fuel quality in Russia, a survey of the bunkering markets, the building and renovation of small tankers, applications for government subsidies for vessels building and renovation, and self-regulation in the bunkering industry. Concerning the future of Russian ports, most speakers noted that the after-effect of the world economic crisis is gradually smoothing out. The first half of 2010 definitely brought a certain amount of industry recovery against the relevant period of 2009. Total cargo turnover in 2010 is predicted to be more than 520 million tonnes, against 496.4 million tonnes in 2009. Yury Orlov, deputy captain of St Petersburg Sea Port, described the process of merging Russian ports, using the reorganisation of ports in the Finnish Gulf as a case study. This reform, carried out on the orders of Russian President since 2005, has now reached its final stage. Six ports in the eastern part of the Finnish Gulf (St Petersburg Sea Port, Primorsk, Ust-Luga, Vyborg, Vysotsk and the passenger port of St Petersburg) will be governed by a united administration. The united marine structure is expected to be more consolidated and manageable, and will lead to reduced management costs. V. Kapustin, general director of VNIIPIneft, an engineering company specialising in oil processing, presented the current forecast for oil products supplies accompanying modernisation of Russian refineries. The total output of oil products in 2009 was 235.6 million tonnes, while export reached 120.6 million tonnes. Produced
Yuri Orlov, deputy captain of St Petersburg Sea Port, speaking at the forum
World Bunkering Autumn 2010
Exported
Petrol
35.7 million tonnes 4.5 million tonnes
Diesel fuel
67.4 million tonnes
Fuel oil
63.7 million tonnes 52.2 million tonnes
37.5 million tonnes
Every 100 tonnes of crude oil produces 15.3 tonnes of petrol, 28.6 tonnes of diesel fuel and 27.2 tonnes of fuel oil. The total conversion rate is 71.8%. The total output of fuel oil is 63.7 million. Veronica Karpuhina, deputy general director of Lukoil Bunker Istanbul, described Lukoil Bunker’s activities abroad, and outlined specific features of regional markets where Lukoil operates, including markets in Bulgaria, Turkey and Italy. Lukoil has a number of basic criteria which must be met in order for the company to open a branch, she says. These are:
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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 Nizhegorod Bunker Ltd 13/2 Ilyinskaya Street Tel/Fax: 007 831 434 4845 Tel/Fax: 007 831 430 9226 E-mail: noilnn@mail.ru Website: www.nizhgorod-bunker.ru
AMKOIL LTD P art o f A M K G roup o f C ompanies
Amkoil Ltd 86 Podgornaya Street Office 413 Murmansk Russia 183038 Tel/Fax: 007 (8152) 287828 Tel/Fax: 007 (8152) 287337 Tel/Fax: 007 (8152) 286028 E-mail: amkoil@mail.ru
Your bunker supplier in the port of Murmansk and other ports of Murmansk region. We supply: • bunker fuel • all types of petrol • fuel oil M-100 • fuel IFO-380, IFO-180, IFO-30
Proximity to Lukoil refineries An attractive bunkering market Availability of Lukoil group resources Economic efficiency Mrs Karpuhina outlined the problems her company faced in various countries, highlighting the complexity created by variations in legislation and business culture in the different countries in which Lukoil operates. However, Lukoil’s clients need high-standard services
• • • •
in different regions, and they expect the consistently high quality of marine fuel delivered by Lukoil refineries. Other speakers discussed current issues around bunkering fuel quality in Russian markets, the building and renovation of bunker tankers, applications for government subsidies for vessel building and renovation, and self-regulation in the bunkering industry. Animated discussions continued, even after the official sessions were over.
The forum in session
World Bunkering Autumn 2010
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Argos Oil, Your bunker supplier in the Port of Rotterdam
Argos Oil is one of the largest independent suppliers of high quality marine bunker fuels in the ARA area (Amsterdam, Rotterdam and Antwerp). The bunkering division supplies on location, all conceivable types of fuel oils, and marine gas oil to sea going vessels and inland barges. Rotterdam-based Argos is strategically positioned close to the centre of the oil industry.
T: +31 (0)10 295 47 80 I: www.argos.nl E: bunkers@argos.nl
Feel the Energy
Port focus: ARA
ARA heads for market recovery Volumes appear to be back on the rise, and the market is attracting new players, either entering the market directly or through acquisition
I
n common with most of the shipping industry, 2009 was not a good year for the bunker industry in the ARA region. While Rotterdam retained its position as the second busiest bunkering port, overall bunker sales fell by 6% over the previous year from almost 13 to 12.2 million tonnes. This still reflects a moderate success for the bunker sector under the circumstances, given that cargo throughput was down by 8.5% over the same period. The number of bunker deliveries fell slightly, from 21,864 to 20,748. A Port of Rotterdam spokesman said that the decline was “due to the crisis”. Marcus Buts, a bunker trader with Lukoil Benelux, said that the company’s market fell by some 25-30% from the start of the crisis. However, he added: “We do see a small recovery of the market lately.” The drop in volumes was particularly acute in Rotterdam itself, says Michael Schaap, sales manager at Klaas de Boer, a mid-sized bunker supplier that specialises in the ARA region. “We had seen a sharp drop in bunker demand, especially in Rotterdam and therefore have focused even more on the Amsterdam port region, where we saw a decline in volumes but much less of a drop than in Rotterdam.” By contrast, Oilchart, a specialist small quantity supplier, says that is suffered no decline in bunker demand at all, with volumes remaining constant at 80,000 tonnes a month, reinforcing the impression that it was largely the container trades and their suppliers that suffered. Low sulphur volumes rise
Despite the crisis, volumes of gasoil bunkered in Rotterdam rose last year by about 20%, from 252,414 tonnes to 302,607 tonnes. Sales rose considerably at the end of 2009 ahead of the 0.1% sulphur
World Bunkering Autumn 2010
limit for ocean-going vessels which berth for more than two hours, imposed by the European Union, which came into force on 1 January 2010. “MDO enquiries are now practically non-existent,” says Sonja Verstijlen, managing director at Oilchart. “The demand for MGO has rasied considerably as from January 2010.” The introduction of tighter ECA regulations seems to have had little overall effect on the market. “We expect to see more 1% demand compared to the 1.5% market as vessels have to switch earlier from HS to LS to be ECA compliant upon entry,” says Schaap. “There will be enough supply available to meet demand but it could well be that the premium over HS will increase. The market has the ability to balance supply and demand, so I have no worries about this.” “For the time being there are no problems with the availability of 1% fuel in the ARA region,” emphasises Sonja Versteijlen. “The switch over from 1.5% to 1% sulphur was done in a smooth way, although in the beginning there were here and there some quality problems.” As a result, quality testing has bee exapdned to include tests for TSE, aluminium, silicon, calcium, zinc, styrene, DCPD and Indene, in addition to existing tests for viscosity, water and sulphur levels, she says, According to Lukoil’s Marco Buts: “There have been no real changes to the bunker demand, as 1.5% sulphur demand has been replaced by the 1%. Up to now and until the year end, we foresee no problems for supply to meet the demand.” Despite the change to lower sulphur fuels, there has been no corresponding change in demand for lubricants suitable for use with these fuels, says Schaap. However, seagoing vessels leaving the ECA can cope with the less lubricating characteristics of the oil for a certain amount of time. He suspects that companies who are operat-
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BUNKERING & WORLD WIDE TRADING
As an independent supplier we give you the best of 2 worlds: good (major) quality and sharp pricing. Our main physical operation takes place in the Amsterdam & IJmuiden region, where we can deliver products with our own barges. We also deliver in Rotterdam Port area. Other ports: see our website. Throughout the years we have developed into the preferred partner for the fishing fleet and have specialized in delivering product tankers, cruise and off-shore vessels as well as dredgers. All deliveries are Marpol Annex VI compliant and in accordance with the ISO 8217 specification. Products offered: IFO 380, IFO 240, IFO 180, IFO 80 & IFO 60cst. Gasoil DMA 0.86 max 0.1%. Lower viscosity fuel upon request subject availability.
Contacts: Oliehandel Klaas de Boer B.V. Address: 58 Trawlerkade 1976 CB IJmuiden The Netherlands Telephone: +31 255 513240 Fax: +31 255 518207 E-mail: ijmuiden@klaasdeboer.nl Website: www.klaasdeboer.nl
A view of Rotterdam harbour from the Euromast
ing permanently in ECA waters have contacted the suppliers directly, rather than going through resellers, as this option is more expensive. Other changes in demand continue to develop: “The shift towards higher viscosity fuels is still ongoing. Vessels that used to burn 180 are often adjusted to cope with 380 cSt. Also, older vessels are being scrapped at the moment so we see more demand for higher viscosity fuels [as newer vessels replace them],” Schaap says. Likewise, Lukoil’s Marco Buts says that requests for 180 cSt requests have gone down. “It’s now mainly HS 380 and LS 1% 380 + MGO 0.1%.” “During the last years there has been a switch from 180 cSt to 380 cSt,” says Versteijlen. “Also, viscosities below 180 cSt are rather an exception” Market consolidation
The ARA region appears to have been going through a period of consolidation recently, with regional players being taken over by international firms. At the beginning of the year, Aegean made headlines by purchasing Verbeke Bunkering, which had a substantial share of the Rotterdam market, delivering some 3.5 million tonnes of fuel in 2009. Verbeke now operates as a wholly owned subsidiary of Aegean. “The accretive acquisition of Verbeke represents our largest acquisition to date, positioning Aegean well to significantly increase future sales volumes and strengthen the company’s global brand recognition. Based on its extensive operating history and strong reputation for high-quality service, Verbeke has built a leading market position in the ARA region. We intend to capitalise in the favourable growth prospects of the world’s second largest bunkering market and meet the demand for our comprehensive marine fuel services,” said Nikolas Tavlarios, president of Aegean, announcing the acquisition. “By joining Aegean’s premier global network, we expect to expand our opportunities for long-term growth and strengthen our leading position in our core markets.” Another move towards market consolidation took place at the beginning of June, when South Africa-based Grindrod announced that it was acquiring the Rotterdam-based Associated Bunker Oil Contractors (ABC) group. As with the Aegean acquisition, ABC’s existing senior management will continue in their management roles. The group is a well established physical supplier of marine bunker fuels, operating four bunker tankers in the ARA region. The ABC group is linked to the Vinotra Pool, a scheduler of bunker tanker delivery services in the ARA ports. Laurence Stuart-Hill, executive director of Grindrod Limited, said “The acquisition of ABC in Europe expands the recently established bunker barge business in South Africa. The expansion of our bunker
World Bunkering Autumn 2010
barge business into Europe supports our strategy of expansion into international and niche market sectors”. The two components of ABC, namely barge operations and physical supply will be separately managed by the shipping (in respect of barge operations) and trading (in respect of physical supply) divisions of the Grindrod Group. Hans Boer, shareholder and managing director of ABC said: “The acquisition by Grindrod Limited of the ABC group of companies will provide a major benefit to our customer base. They bring a level of expertise and experience that will complement and enhance our core services in both the trading and physical supply disciplines. I am confident that the acquisition will allow us to further improve our already excellent quality of service to our customers and grow our market share”. International players move in
One of the most significant changes in the long term may be the entry of Chinese company Brightoil into the ARA market. The company announced early in 2010 that it intended to enter the market in the first half of the year, establishing a trading office in Rotterdam in April. According to Willian Chia, executive director at Brightoil, physical operations began during May using chartered barges. The company sells all grades of fuel oil except MGO. Information on sales volumes was not available at time of going to press. Lukoil Benelux has been consolidating its own operations in the region, closing its Amsterdam office at the beginning of August and centralising all commercial and operational matters to the Rotterdam office. The company is also working on obtaining a full bunker licence in order to be able to offer all products in the port of Antwerp, says Marco Buts. Lukoil will continue to operate its existing fleet of six barges under long-term timecharters. Another international company to expand its presence in the region was Petrobras, which opened an office in Rotterdam in February. Petrobras is an important player in the LSFO market, selling 850,000 tonnes a year, much of which is supplied to the bunker market. The Port of Rotterdam Authority estimates sales of low-sulphur bunkers at 15-20% of the total bunker sales; between 2 and 2.5 million tonnes a year. Petrobras imports around 600,000 tonnes of product with a sulphur percentage of 0.8. This is blended with higher sulphur fuel up to the levels permitted by ECA requirements. Since May last year, Petrobras has also been selling locally-purchased HSFO; to be able to offer its clients a complete package, the company has been selling high-sulphur fuel oil since May.
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Bunkering Disputes 18-19 November 2010, Singapore A two-day course designed to help you learn and understand the technical and contractual basis of fuel quality, quantity & specifications; how to avoid bunkering problems, disputes and claims; and through hands-on problem-solving case studies, formulate strategies to resolve disputes or defend a claim. Visit www.cconnection.org/BunkeringDisputesHome.htm for further details. Apply for a 30% MCF course subsidy - applicable to singapore companies.
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PREVIEW – SIBCON
New venue, new challenges David Hughes previews Singapore’s 16th Sibcon, being held from 27-29 October.
T
aking place every two years, Sibcon always features prominently in bunker industry calendars, and for good reason. It is the biggest bunker gathering in the world’s biggest bunker port. It really can’t go wrong, and it never does. This year sees the 16th Sibcon but this time Singapore will not only be showing off its bunkering expertise but also its latest venue – Resorts World Sentosa. Billed as Asia’s ultimate destination, it includes the region’s first Hollywood movie theme park, Universal Studios Singapore, and also incorporates the Resorts World Casino. Nobody who hasn’t been to Sentosa, or even the Harbourfront (formerly the World Trade Centre), for a while will fail to be impressed by just how much this piece of Singapore has changed. The publicity material says that the casino “with its blend of elegant interiors, captivating entertainment, sumptuous dining options and warm hospitality, provides you with the chance to play in style”. Just how many Sibcon delegates will be playing the casino in style, who knows? What is a good bet though is that yet again the conference and exhibition will be packed. IBC, which runs the conference for the Singapore Maritime and Port Authority, says there were some 1,000 attendees at the 2008 event. As ever, Sibcon has strong official support, demonstrated by a welcome address by guest of honour Raymond Lim, Minister for Transport and Second Minister for Foreign Affairs. This year’s theme is ‘Forging Ahead – A new era for Marine Fuels’. BP Singapore’s president Pek Hak Bin will deliver a keynote address on ‘Global Shifts in Oil Markets’. Dr Kyuho Whang, CEO of Korea’s SK Shipping will present a second address on ‘World Trade and the Shipping Economy’. The two keynote speeches will lead on to a new feature, a Visionaries in Shipping Forum where top CEOs from shipowning companies will discuss emerging trade routes, forecast the markets for container, dry bulk and tanker sectors and the implications for marine fuel demand. DNV president Tor Svensen will be moderator
World Bunkering Autumn 2010
and the panel will also include Hanjin Shipping (Terminal Business Unit) executive vice president and chief executive GS Choi and Norden’s managing director, Singapore, Peter Borup. They will discuss the current state of play in different shipping markets, and their response to a changing trade and economic environment. There are a number of other innovations this year. A Sibcon Industry Think Tank has been put together specifically to consider the challenges posed by new fuel specifications and a collaborative industry response to ISO 8217. In a Marine Fuels Market Watch session, senior executives of top marine fuel companies will debate demand trends, market opportunities and security of supply. Singapore has taken a lead role in developing mass flow metering. The last but one session looks at industry experiences in this area, the new Singapore standard, and what more is needed to encourage uptake of new measurement technologies. Unsurprisingly, emissions control occupies a significant slot in the event and the last session takes a look at possible market based measures to reduce greenhouse gas emissions and their commercial and environmental impact on the bunker business. As in previous years, this year’s event will once again feature an oil spill exercise, on Friday 29 October, which will give participants a chance to experience practical issues associated with managing a spill. Golf enthusiasts, however, will face a dilemma as the SIBCON-IBIA Golf Challenge 2010 also takes place on Friday morning at Tanah Merah Country Club. Of course, there is always the possibility that some may find it hard to tear themselves away from the region’s first Hollywood movie theme park, or perhaps even the casino?
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PREVIEW – IBIA CONVENTION
Shaping the industry “Everything you wanted to know about bunkers (but were afraid to ask?) …”
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he 8th IBIA Annual Convention will meet at the Stamford Marriott Hotel, Stamford Connecticut, USA. As the second convention to be produced by IBIA we are excited to continue the success of the 7th Annual Convention, in Singapore in 2009. Our location this year is Stamford, Connecticut, which lies in the heart of coastal Fairfield County on the shores of Long Island Sound, just 25 miles from New York City. Stamford uniquely combines a vibrant downtown with a host of cultural attractions, museums, great shopping, galleries and theatres, with nearby beaches and surrounding rolling hills. It is also the location for one of the major shipping clusters in the US, home to a wide range of maritime companies with a global reach. This year the IBIA Annual Convention 2010 will take delegates into the world of the bunker industry through three sessions aimed at highlighting the current hot topics and debates on the Environment, Technical and Quality, Contracts & Commercial. The Convention opens with a keynote speech from Rear Admiral Robert North, looking at the case for a compensation fund for international shipping to reduce greenhouse gases. John Aitken, secretary general, will give a second keynote on the benefits of Emissions Trading Schemes. The presentations, and the following discussion, will provide vital background for the IBIA session, where the Association will present on its position on greenhouse gas reduction. Later sessions include presentations on a wide range of topics from some of the industry’s leading experts. One session looks at the implications of the new ISO standard, including the use of biofuel and biodiesel in the bunker industry, the changing quality of fuels, availability and sourcing. At the end of the session, members will develop a statement from IBIA to ISO, setting out the Association’s position. Other issues to be addressed on the first day include the ‘greening’ of the bunker industry, and a look at the latest legal and regulatory issues, including the question of terms and conditions of sale.
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Core to the IBIA Annual Convention is the IBIA Session, held on the second day of the Convention, where you get the chance to meet the members of the Board and hear from them how they will direct IBIA in the future and what they will bring to this successful organisation. CE, Ian Adams, will give an update on IBIA’s activities at IMO and open up the forum to conclude on our position as an association on the hot topics discussed throughout the two day conference. IBIA will conclude the Convention with an afternoon of interactive workshops designed to challenge the participant to think through Technical and Commercial problems. Creating and strengthening links between members is a vital part of IBIA’s role, and the Convention will offer plenty of opportunities to do so. The Convention opens with a welcome and networking event on Tuesday evening. As well as breaks during the sessions, the convention includes a cocktail reception on the first night, a reception and dinner on the second, and the IBIA golf tournament at the North Hempstead Country Club on Friday. The Convention is designed for IBIA members. Ultimately, this is an event for all in the bunker industry to really grasp the idea of how the industry works and how we want to shape it in the future. We want you to participate in influencing IBIA activities to lead us towards our position at the International Maritime Organization and position us as THE association for the bunker industry. We look forward to seeing you in Connecticut in September!
World Bunkering Autumn 2010
BOOK review
Bunkering for the desktop An Introduction to Bunkering Operations by Nigel Draffin
I
t is often said that there is no substitute for on-the-job training, especially in areas such as bunkering operations, where practical, hands-on work is the norm. However, there are many in the industry who may never get their hands dirty on a bunker barge, oil terminal or receiving vessel but who, nevertheless, still need to understand exactly how the industry works. This is the gap that Nigel Draffin’s latest book, An Introduction to Bunker Operations, aims to fill. It explains the basics of bunker operations for those – be they traders, brokers, lawyers, insurance agents, shipmanagers – who need to know the basics of the business that they deal in, without being involved in it on a daily basis. “I know from the questions I have been asked over the years that for most of us, the operations involved seem to throw up problems and restrictions that we do not understand. This book is intended to explain and put the whole process into context,” says Nigel. The book is filled with photographs, charts and diagrams intended to help the reader visualise important aspects of bunker operations. Starting with a brief history of the industry to put everything into context, it goes on to cover issues from ship design and crewing to delivery by road tanker, pipeline and barge, and all the issues associated with each method of delivery. Quality control issues, including sampling and measurement, are looked at in detail, and a final section looks at dealing with potential problems, including debunkering and pollution prevention and control. Nigel examines each of the key elements involved, from ordering the right type and amount of fuel, to making sure it is safely delivered and properly accounted for. He covers the paperwork that needs to be done and looks at the various regulations now in place, including
World Bunkering Autumn 2010
MARPOL Annex VI and the International Ship and Port Facility Security (ISPS) Code. The book includes a vast amount of informed detail on some of those areas that are often ignored – sometimes to great cost and inconvenience – such as variations in flange and hose sizes. Despite this, though, it is clearly laid out and easy to follow, setting out detail where necessary without getting bogged down in it. As with earlier books in the series, there are comprehensive indices and appendices, as well as a useful ‘where to go for help’ section. “Conveying complicated subject matter in an easily-understood manner is Nigel’s speciality and helps explain his success and popularity as an author, teacher and mentor,” says publisher Llewellyn Bankes-Hughes. An Introduction to Bunker Operations is Nigel’s third book on bunkering. In May 2008, Petrospot published the first in the series, An Introduction to Bunkering, which provides a comprehensive entry-level introduction to the bunker industry, and is also available in Spanish. In June 2009, Nigel Draffin’s second book, An Introduction to Fuel Analysis, was published, tapping into a growing thirst for information on bunker quality issues. This book is intended to help anyone who has any doubts about what can be found in marine fuels and, once found, what can be done about it.
An Introduction to Bunker Operations By Nigel Draffin M.I.Mar.E.S.T. Published by Petrospot Limited Website: www.petrospot.com/books
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equipment and services
Equipment and services
A round-up of news for the bunker industry – what’s new, what’s useful, what’s changed?
Wärtsilä develops low-emissions engine
Wärtsilä, ABB and HUG are cooperating on the joint development of next generation low emissions technology that will increase efficiency while lowering NOx emissions. In April this year, Wärtsilä and ABB Turbo Systems announced their cooperation in a joint development programme for a new and groundbreaking application of two-stage turbocharging on large diesel engines. The application of two-stage turbocharging technology on Wärtsilä diesel engines has been developed through close cooperation between the two companies. In this programme, Wärtsilä is focusing on developing advanced engine technology, which with the turbocharger is able to reach the highest possible performance and become a cost-effective commercial solution for its customers. ABB Turbo Systems is delivering the turbocharging technology with defined performance in terms of airflow, pressure ratios and efficiency. In an extension of this cooperation, after-treatment specialist Hug Engineering, based in Elsau, Switzerland, is to join the project. The new joint project is to develop an innovative compact selective catalytic reduction (SCR) system especially tailored to operation with two-stage turbocharging. Wärtsilä, ABB Turbo Systems and HUG Engineering will target a further expansion of flexible engine operation at reduced NOx emissions and optimised fuel consumption, as well as targeting savings in first and life cycle costs. By combining their expertise and resources, the partners hope to achieve early readiness for market. RINA introduces LS rules
The technical committee of classification society Registro Italiano Navale, (RINA) has outlined new additional class notations for commercial ships using low-sulphur fuel.
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The new Low Sulphur Fuels (LSF) notation, reflects the introduction of Emissions Control Areas (ECAs) and current national and international rules such as EU Directive 2005/33/EC, the California Code of Regulations (CCR) and MARPOL Annex VI, all of which are designed to achieve a progressive reduction in the sulphur content of marine fuels. The new class notation will be assigned to both new and existing ships whose machinery uses low-sulphur-content fuel. The list of machinery and percentage of sulphur content in the fuel used will be recorded in ship survey documents. Laser emissions monitoring system launched
WR Systems, Ltd. (WR) has announced the release of a second generation laser-based marine emissions monitoring system. The system will be formally launched at the SMM Exhibition in Hamburg in September. According to the company, Emsys is the world’s first QCL (Quantum Cascade Laser)-based, fully extractive, combined emissions and particulate matter (PM) monitoring system. It has been designed to be compliant with MARPOL Annex VI, the NOx Technical Code, and ECA requirements. Emsys is installed within the funnel space, but is unique in that it monitors PM emissions “outside the stack”. The system is the first production system to incorporate QCL technology. The laser can monitor multiple gases and is designed to be relatively maintenancefree. Combining highly accurate measurements with a unique gas path design eliminates many of the problems associated with traditional extractive and in-stack technology. The compact configuration greatly decreases installation time; correspondingly, installation costs are significantly lower than first generation extractive systems, WR claims. Emsys is designed and tested for continuous operation in multiple engine applications, and provides PM measurements in mg/m³ and g/kWh. Conventional gaseous measurements include NOx,
World Bunkering Autumn 2010
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SOx and CO² for all installed engines, with the optional facility for NH³ (ammonia) in Selective Catalytic Reduction (SCR) applications. Geographic position (GPS) data is recorded and time-stamped against each emission record, enabling full traceability for assured compliance. Emsys employs a sophisticated dashboard to display voyage emissions performance and compliance information. Configurable emissions reports, which include graphical representation of realtime values and historical trends, are also available. The system can provide real-time alarms for all monitored emissions based upon the applicable limit and geographical position. Fuel sulphur content is continuously monitored (% m/m) to allow optimised management of fuels for MARPOL, CARB (California Air Resources Board), EU (European Union) and other regional regulatory limits. Emsys™ is suitable for both diesel engines and boiler installations. WR systems senior vice president David Edwards comments: “We are truly delighted to be launching Emsys™ to the International Marine Community in Hamburg. Emsys™ is the first in a strategic range of products and services designed to satisfy the market demand for high-reliability, vessel-critical systems and raise the standards of technical support from those currently accepted within the industry.” DNVPS launches distillate data service
Singapore-based fuel testing service DNV Petroleum Services (DNVPS) has launched a new data service on marine distillate quality delivered to commercial vessels globally. DNVPS managing director Tore Morten Wetterhus says: “Ship operators intending to procure distillates in problematic areas can use our statistics to narrow down on individual suppliers who have good track records in delivering reliable products. Otherwise, the statistics are also a good reference for planning alternative bunkering stops.” According to DNVPS, close to 20% of all distillate deliveries in the first quarter of this year had over 10kg/m³ density differences between the values stated in bunker delivery notes and laboratorytested values. The company says that, as marine fuels are bought by weight but delivered by volume, lower actual densities imply short-delivered quantities. DNVPS notes: “Compared to heavy fuel oils, density differences for marine distillates were higher and happening more frequently. Since distillates cost more, buyers in the first quarter of 2010 would have incurred bigger losses from the short-deliveries of these fuels.” Mr Wetterhus warns that progressively stricter fuel regulations and rising demand for marine distillates are putting suppliers under constant pressure. He says the latest DNVPS distillate data point to quality issues concerning flashpoint, density, viscosity and sulphur. Flashpoint off-specification, for instance, is a major onboard safety hazard which contravenes SOLAS regulations and could render a ship ‘out of class’ if it has received such a non-compliant fuel. According to DNVPS statistics, about 2% of distillates tested by the company and supplied globally in the first quarter of 2010 did not meet flashpoint requirements. Over 70% of distillate deliveries from the major Antwerp-Rotterdam-Amsterdam (ARA) bunkering area were in fact very close to the specification limits for this parameter and had little margin for errors. DNVPS warns: “If this trend continues, any minor quality glitch could lead to a massive flow of off-specification products into the market.” Available online, the DNVPS Marine Distillate Quality Statistics provides fuel buyers with a variety of search options, ranging from supplier-specific data to wider quality trends and patterns in worldwide bunkering locations. It is presented in the same format as the
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DNVPS Residual Fuel Oil Statistics, which is well-established and used by shipoperators to track and benchmark heavy fuel quality. DNVPS says shipoperators subscribing to the Marine Distillate Quality Statistics can monitor the performance of fuel suppliers in fulfilling ordered qualities and quantities of distillate products, or gauge their vessels’ consumption efficiency of these fuels. They can then make informed procurement decisions and also better manage other operational aspects related to the onboard handling and use of marine distillates. Updated quarterly, the Marine Distillate Quality Statistics draws on a database consisting of over 1.2 million tested fuel samples from DNVPS’ two-third market share in the global bunker testing business. The new product comes at a time when shipping operations are increasingly driven by fuel regulations, such as the EU Directive 2005/33/EC, to use more marine distillates. Since Jan 1, 2010, ships at berth in the EU Community Ports have had to consume fuels with no more than 0.1% sulphur content. This effectively means only marine gas oils may be used in the ports. Additionally, the revised ISO 8217 marine fuel specification, to be introduced by July 1 this year, will contain new quality parameters and stricter limits for marine distillates. “Compared to heavy residual fuels, marine distillates are ‘cleaner’ as they produce less sulphur oxide, nitrogen oxide and particulate matter,” says Mr Wetterhus. “But distillates are much higher-priced and therefore one of the most important considerations for buyers is to determine if their ships have received the right type, quality and quantity of distillate fuel.” Kittiwake opens in India
Kittiwake Developments has opened its latest international office, in New Delhi, India. Headed up by managing director, Deepak Sharma, the long time distributor of Kittiwake in India, the New Delhi office trades as Kittiwake Proactive Technologies Pvt Ltd. Recent rapid growth in sales in the territory prompted Kittiwake to form the company with Mr Sharma, providing a permanent base and to demonstrate commitment to the market. Deepak Sharma, managing director, Kittiwake Proactive Technologies Pvt Ltd, said: “It is both an honour and a pleasure to be so closely associated with such a fast growing, professional and innovative company as Kittiwake. We have no doubt that this move will have a truly positive effect on our customers as we work to grow the market.” The company says it has already won major contracts – both private and government – supplying a full range of condition monitoring technology and establishing the Kittiwake brand in this previously under exploited market. Central to Kittiwake’s recognition and success has been the ability to provide local after sales support. Kittiwake’s managing director, Martin Lucas, said: “Ten years ago Kittiwake was a £2 million company with 20 people. Today, we have grown into a £8.5 million company with six global offices, employing 60 people and partnering with 45 distributors and agents. Nearly 78% of the business is now represented by international sales.” He added: “Over the next few years we aim to reach in excess of £10 million through organic growth by continued access to new markets and geographies, as well as introducing new technologies. We will also be pursuing an aggressive acquisition programme to further expand the business. Our presence in India has provided us with the necessary platform to consolidate our position in this rapidly developing marketplace, enhancing the service that we provide to our customers, worldwide.” Kittiwake now has five international offices, in the UK, Germany, Malaysia, US and India.
World Bunkering Autumn 2010
Company News
OW Bunker Group A/S Placing the customer at the heart of strategic development
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hile the past 18 months have been tough for the shipping industry, there are signs of impending recovery, albeit slow, as global trade has begun to increase. And while certain economies teeter on the brink, we can still be optimistic about the future. However, there are still significant challenges; the pressure to increase efficiencies, yet reduce costs; adapting to the new environmental legislation and compliancy standards; managing rising oil prices and increased levels of risk to maximise profitability. All are potential threats, but not insurmountable; and when managed effectively, can prove the key to real competitive differentiation and success. From the perspective of the fuel supplier, adapting to these dynamics is critical. Delivering quality fuel and associated products when and where customers need them, is now a ‘given’. It is expected. The focus must be on adding more value above and beyond this industry standard. A relationship that is based on partnership and working consultatively with customers is central to achieving this. Ultimately, getting close to your customers – understanding their business and challenges as well as they do – facilitates the implementation of the right solutions, increasing efficiencies, mitigating risks and driving profitability. It is a principle that OW Bunker has always subscribed to. The significant growth that the company has delivered is evidence of a formula that works. To continue this, and as an example of anticipating the changing dynamics of the industry, OW Bunker has recently announced the development and implementation of a new corporate strategy that will enable the business to sustain its exponential growth over the coming years and meet its ambitious plans for further expansion.
The process, which will be completed by 2011, will see the implementation of a global business and sales strategy that is devolved from a central function, and delivered and managed across five key regions where the Group has a significant presence: Asia, Northern Europe, Central Europe, the Mediterranean and the Middle East, and South America. The new strategy will serve to maximise business optimisation in each region and enhance operational synergies across the Group by ensuring closer collaboration and alignment between regional and local offices, as well as the sharing of knowledge on a worldwide basis. Critically, this strategy empowers the regions and localities to take responsibility for decision making as a means of increasing momentum and speeding up processes so that deliverables and objectives can be met faster. At the heart of this strategy is ‘the customer’. It is a strategy that is founded on ensuring that the same high standards and levels of service that customers experience, and rightly expect, is uniform right across the world. It is about delivering global excellence, but at a regional and local level. Whether in Singapore, Rotterdam, Fujairah, Panama, or offshore in the Pacific, they can be assured that the Group’s key motivator is to ensure that customers’ demands are being met, and that their challenges are being solved. It is based on the simple principle and recognition that the success of the customer is inextricably linked with the success of OW Bunker. Ultimately, the challenges for customers within the market are too great to not deliver such a strategy; whether it’s understanding the changes to compliancy in line with the new low-sulphur legislation, or the technical issues and fear of vessel and engine damage and subsequent downtime when switching to low-sulphur fuel oil and distillates; or the uncertainty of which hedging strategy to adopt as a means of mitigating the increasing risks that need to be faced, and the need to better manage cash flow and lock in costs and profitability; or concern over increasing efficiencies within the supply chain and the lack of time to deviate from a course to refuel. Whatever the challenge is, the role of the fuel supplier is to solve it. Building a partnership-based relationship with customers takes time. It also takes trust, which can only be gained by delivering tangible results. But ultimately, the organisation must have the right structure, the right values, the right culture and training, and most importantly, the right people that can combine customer and in-depth industry knowledge with a fundamental understanding of business to enable calculated and responsible decision-making that delivers bottom line benefits.
Website: www.owbunker.com
World Bunkering Autumn 2010
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Company News
Nayada Co. Ltd
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ayada Co. Ltd. was founded in 1998. Throughout its 12 years of operation the company has successfully provided high grade bunkering services to Russian and foreign shipowners. At present we are a leading company on the bunkering market of the dynamically developing South Pacific Region. Additionally, the company is engaged in transporting fuels to the ports of the Primorsky Territory such as Nakhodka, Vostochny, Vladivostok, Posiet, Zarubino, Slavyanka and Bolshoy Kamen. Our average monthly sales of bunker fuel, including transportation, are between 25,000 and 30,000mt. Currently we own five barges with a total capacity of 7,850mt, which are immediately available to deliver fuel to any berth or to the roadsteads at any port of the Primorsky Territory. We operate under long-term supply agreements for export quality petroleum products, produced by our own company and a number of major Russian concerns such as Gasprom-Neft PLC, Alliance Khabarovsk Co. Ltd. and NK Rosneft PLC, which have their own oil terminals in the ports of the Primorsky Territory. All of our company’s barges are fitted out with certified equipment in compliance with the relevant international standards to measure the quantity of cargo and to take, calibrate, analyse and store bunker fuel samples. To provide a supplementary means of control, all of our barges have portable express laboratories which are able to carry out a shipboard control testing of the quality of bunker fuels immediately before the commencement of bunker fuel delivery. We have contracted and co-operated successfully with the largest test centres in Far East, namely Saybolt Petroleum Analysts and SGS (Nakhodka Representative Offices), both world-famous institutes. In 2006, the company’s technical management developed a set of large-scale production methods to make IFO-30 and marine diesel oil aboard our ships, under the proprietary specifications. The specifications have been introduced for the first time, and registered at federal level. The large-scale production lines and the resulting products were inspected and tested to prove compliant with the respective regulations of the Russian Federation. A brand name has been given to the products, the manufacturer being Nayada Co. Ltd. To complete the job we applied to the leading research institute in the country for a relevant certification procedure to be carried
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out in respect of our large-scale production lines, which has resulted in Certificates of Compliance. Thus, Nayada Co. Ltd. has become the first and the only bunkering company in the Far East region that is granted a Manufacturer License to produce IFO-30 and marine diesel oil on a large-scale basis aboard Evgeny Gryaznykh, bunkering barges. Now we are making efforts to Director, Nayada Co Ltd. develop and introduce a quality management system within the company to conform to the requirements of the ISO 9001 standard, and to support this endeavour we plan to undergo a relevant certification procedure with a generally recognised certifying institution in 2008. The operational technique, resources, and internal and external policies of our company always enable us to meet our commitments to our customers. We treat any customer as a long-term business partner and we believe that our customer’s success means the guarantee of our company’s success. Welcome to Nayada Co. Ltd. – a company of high quality, reliability and stability.
For more information please contact us at: HEAD OFFICE: Room 708, 3, Portovaya Street, Nakhodka, Russia, 692900 Tel/Fax: +7 4236 629779, 679341 E-mail: nayada@nakhodka.ru Website: www.nayada.biz
VLADIVOSTOK BRANCH: Room 412, 10a, Okeanskiy Prospect, Vladivostok, Russia, 690091 Tel/Fax: +7 4232 302606 E-mail: nayada@vl.ru
World Bunkering Autumn 2010
Company News
Lukoil Benelux B.V. set to grow and optimise its activities in ARA
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UKOIL Benelux B.V. is a prominent and reliable physical supplier of bunker fuels in the ARA region (Amsterdam-RotterdamAntwerp). We are supported by the logistic and financial strengths of our parent company, LITASCO SA in Geneva, Switzerland. LUKOIL Benelux B.V. is part of the Russian oil major LUKOIL, which also has wide-scale operations outside of Russia. Our clientele varies from the well-known large and medium shipping lines to other physical suppliers, and the smaller niche companies from different sectors. In the last couple of years LUKOIL Benelux B.V. has had a market share of 10-15% in our home market of the Rotterdam and Amsterdam ports. In June 2010 the Credit Risk Management Committee of LITASCO SA approved a strategy of further growing our bunker trade in ARA, increased the credit lines for a significant number of our customers, and allowed more flexibility in dealing with new customers. This step clearly shows that LITASCO SA and LUKOIL Benelux B.V. have adapted themselves very well to the post-crisis situation in the bunker industry and feel comfortable to explore new market opportunities. However, we continue to closely monitor the situation in the market and are ready to implement necessary changes to sustain the growth of our business. In July 2010 LUKOIL Benelux B.V. made a decision to close its Amsterdam office and centralise handling of all the bunker enquiries through one contact point, the bunker desk in Rotterdam (Capelle aan den IJssel). This step will help our company to optimise its operations and serve our clientele more quickly and efficiently. The formal closing of our Amsterdam office will take place by the end of July 2010. Since September 2009 LUKOIL Benelux B.V. has supplied bunker fuels to the Belgian port of Antwerp from the refinery TRN (Total Raffinaderij Nederland) in Flushing, where the LUKOIL Group purchased a 45% stake this year. We are also planning to receive a bunker license for the fully-fledged operations in Antwerp in the second half 2010. In addition to the ARA region, we are also active in the Baltic Sea, Black Sea and Mediterranean Sea. Our company is planning to get on a firm footing with its bunker supplies in a number of European ports. In the last two years LUKOIL Benelux B.V. has also been successfully targeting the Russian northern ports of St Petersburg, Kaliningrad, Vysotsk, Primorsk and Murmansk, supplying bunker fuels to a wide variety of shipping companies. Since 2005 LUKOIL Benelux B.V. and our partner, Burando, have been jointly operating Service Terminal Rotterdam (STR), which enables LUKOIL Benelux B.V. to store and blend fuel oils to required specifications. Currently, new storage tanks are being constructed
World Bunkering Autumn 2010
at STR, which will significantly increase total storage capacity of the terminal. The new tanks are expected to become operational by the end of June 2012. Having our own terminal and purchasing almost all of our bunker fuels from our parent company, LITASCO, gives us a competitive advantage in this saturated market with slack demand, ensuring that we are in a position to design and implement flexible delivery strategies. As a supplier of a wide range of grades, we receive bunker enquiries and provide quotations for the products IFO 700, 600, 500, 380, 240, 180, 120, 80, 60, 40, 30, 20 cSt, MDO DMB and MGO. We can also supply other products upon request. In order to ensure quick and timely deliveries of our products to sea-going vessels or to other physical suppliers, we currently have a fleet of seven time- chartered barges with deadweights ranging from about 686 MT to 6,130 MT. They include several new double-hull barges with greater bunkering capabilities, provided for us by FTS Hofftrans, the barge operating company of our partner, Burando. Should we require a greater capacity, we have the option of hiring other barges for spot deliveries in the range from 500 MT up to 9,200 MT, with alternative reliable transport companies in the ports of Rotterdam and Amsterdam. Our team of bunker traders and operators has all it takes to become and remain your reliable partner: experience, expertise and a thorough knowledge of the bunker markets. They are friendly, and available for your enquiries 24 hours a day. LUKOIL Benelux B.V. will gladly look into your enquiries for regions where we have been actively operating, as well as for any other regions in the world.
We look forward to your bunker enquiries both in and outside the Netherlands and hope to do business with you soon.
Benelux B.V. Office address: De Linie 1, Capelle aan den IJssel, NL-2905 AX, the Netherlands Post address: PO Box 377, Capelle aan den IJssel, NL-2900 AJ, the Netherlands Tel. 24/7: +31 10 264 27 00 E-mail: Bunkers@lukoil.nl
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Company News
Nakhodka-Portbunker Co. Ltd
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akhodka-Portbunker Co. Ltd is a reliable experienced and efficient bunker services provider and a shipagency in the Russian Far East region. We provide high quality services to our international clients in compliance with all international regulations and standards. The company operates a fleet consisting of six double-hull bunker barges of various capacity. Our bunkering fleet and bunker product meet all the rigid shipping and bunker industry requirements. Due to the vast experience of the company’s employees in the bunkering area, we guarantee a flexible approach to the client as well as effective interaction and operative performance. We invite companies working on the Far Eat shipping routes to use our services!
For further information contact: Bunkering Department: 15 Pavlov’s str. Nakhodka, 692926, Russia Tel/Fax: +7-(4236)-630-641, 657-806 E-mail: nakhodkaportbunker@nhk.infosys.ru Agency Department: Tel: +7 (4236) 698880; 698881; 698882 Fax: +7 (4236) 698880 E-mail: npb_agency@nhk.infosys.ru
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Company News
Rosneft
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osneft, the leading Russian oil company, began its bunkering business in 2008. The company’s bunkering activities are carried out through two subsidiaries, RN-Bunker and Rosneft Marine, integrated as part of the parent company structure, serving the all main Russian bunkering regions as well as several areas outside Russia. RN-Bunker Ltd is a subsidiary of OJSC Rosneft – one of the leading vertically integrated oil companies that emerged after the reorganisation and large-scale privatisation of the Russian oil industry. The company has a huge network of oil infrastructure (factories, oil terminals etc), located in almost all regions of Russia. This enables RN-Bunker Ltd to have comprehensive control over the products’ movement from the refineries to bunkering vessels, and to ensure great attention to quality. Thus the company guarantees the availability of high quality products in all significant ports of Russia. Operating for less than two years the company’s bunkering business has developed significantly and continues to increase its presence both in the Russian bunker fuels market and internationally. In allocating its bunkering business to a separate subsidiary, Rosneft is able to fulfil the following objectives: • Maximise the effectiveness of product sales by implementing a policy to reduce expenses, balance investments and increase capitalisation. • Deliver products to the end consumers, guaranteeing a high quality in accordance with international standards and MARPOL rules, controlling product movement at all points of delivery. • Expand the share of product sales though the private retail network, therefore providing a stable and highly effective supply of bunker fuels in Russia and abroad. Currently, RN-Bunker Ltd. has representative offices in Hakhodka, Vladivostok, Yuzhno-Sakhalinsk, Arkhangelsk, Murmansk, St Petersburg, Tuapse, Samara, Rostov and Astrakhan. This allows the company to make timely shipments of bunker fuel to buyers’ vessels and ensure that the quality of oil products delivered conforms to world’s standards. The company plans to open new representative offices in the future, in order to expand its geographical reach. RN-Bunker Ltd. works in close cooperation with the Ministry of Defence of Russia regarding fuel supplies for Navy vessels, and also with the world’s major oil companies: BP, RD Shell, Chevron, and Exxon Mobil. The company applies high-level management standards, executes costs reduction and logistic expenses optimisation programs (90% of all RN-Bunker Ltd. shipments are made on FOB basis). This enables RN-Bunker Ltd to offer competitively priced fuel products to its partners in all regions in which the company operates. The process of bunker fuel delivery to the buyer is monitored throughout the entire logistic chain and this in turn reduces the time of enquiries regarding bunker performance. Due to its dynamic investment activity, the company is creating and developing its own infrastructure by leasing, buying and building oil terminals, tanker fleet and bunker fuel filling stations, the quality of which meets requirements of the highest international standards. To realise this investment strategy the company cooperates with
World Bunkering Autumn 2010
the Federal Agency for Fishery of the Russian Federation regarding port infrastructure, and with Rosnefteflot and Sovkomflot companies regarding tanker fleet acquisition and building. Currently, the company is negotiating with Rosnefteflot to prepare the necessary documents for building six bunkering tankers of 2,500-6,000 dwt. RN-Bunker Ltd, along with the Federal Agency for Fishery of the Russian Federation, participates in the program for development of bunker fuel filling stations (BFFS) at the Russian fishery ports (Far East, Sakhalin, the Kurils, Kamchatka, Murmansk and Kaliningrad), as well as further construction to enable operation of all-season bunker fuel supply for the fishing fleet. It is also involved in collecting, refining, separating and inclusion into the bunker process cycle, oil-contaminated water and shipboard wastes. In March 2010 RN-Bunker Ltd. became a member of the Russian Association of Marine and River Fuelers. RN-Bunker Ltd. can provide the following types of bunker fuel depending on the region: • Far East region: IFO 180, MGO • North-West region: IFO 180, IFO 380, MGO, MDO, HS, LS • South region: IFO 180, IFO 380, MDO, MGO • North region: IFO 180, IFO 380, MGO, MDO, HS, LS • River bunkering: MGO, MDO Being highly experienced in the bunkering business and continuing to enhance its performance in this field, RN-Bunker Ltd pursues its main goal to develop a modern, dynamic, flexible and efficient company of international standing, determined to establish longterm mutually beneficial relations with its partners.
RN-Bunker LTD 115054, Dubininskaya Str. 31 A Moscow, Russia Tel: +7 (495) 777 4601 Fax: +7 (495) 231 4010 E-mail: rnbunker@rosneft.ru Website: www.rosneft.com Additional address: 117152, Zagorodnoe Route, bld.1, office 1001 Tel: +7 (495) 755 5243
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Company News
Lukoil Bulgaria Bunker Company
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UKOIL Bulgaria Bunker LTD was established in 2008 and within only one year became the major physical bunker supplier in Bulgaria, providing a full range of bunker fuels. The company supplies bunkers in Varna, Bourgas and in the main Danube river ports – Rousse, Vidin and Lom. We have two of our own bunkering tankers and another three under our operation, one of which is used as a bunker barge on Danube River. The company’s team, well-educated and professionally experienced, is ready to provide you with high quality services in the all above mentioned ports. We offer all grades of products, including gas oil and IFO with viscosity from 30 cSt up to 380 cSt. Although a new player, LUKOIL Bulgaria Bunker has became a leader in bunker sales in Bulgaria, providing a high quality and flexible service.
We are reliable. We are “Lukoil” team. LUKOIL Bulgaria Bunker LTD Head office Bunker inquiries 42 Todor Alexandrov Blvd. Tel: +359 2 9174383 1303 Sofia Tel: +359 2 9174315 Tel: +359 2 9174121 E-mail: rdimitrova@lukoil-bunker.bg Fax: +359 2 9174395 dkalinov@lukoil-bunker.bg sales@lukoil-bunker.bg Bourgas office 6 Khan Krum Str. 8000 Bourgas Tel: +359 56 900700 Fax: +359 56 897709
Baltic Bunkering Company
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he Baltic Bunkering Company was founded in August 1995. Over the last 15 years the company has succeeded in creating a reliable and high quality bunkering service and has became one the leading players in the St Petersburg bunker market. Backed by a strategic alliance with the Petersburg Oil Terminal (POT) (www.oilterminal.ru) – the biggest oil storage facility in northwest Russia – as well as with oil trading company PNT-GSM, the Baltic Bunkering Company always has very good availability of the full range of high quality fuel products. We supply high quality bunker fuels, including low-sulphur products. All the fuels are transshipped through POT and are closely monitored and controlled in POT’s laboratory to ensure that they meet ISO 8217:2010 (E). The process of quality control starts before purchase of fuel; we buy fuel only from the refineries that have proved the quality of their product over a long period. Furthermore, we have introduced additional quality control at the barge loading process of our operations. Our bunker barges Alana (3,500 mt), Viland (3,000 mt) and Viking (2,500 mt) are equipped with an express laboratory to test all bunkers before supplying to our clients. Quality is the milestone of our business and is guaranteed by the ongoing work of skilled specialists. The Baltic Bunkering Company is a member of International Bunker Industry Association (IBIA), and is approved for the ISO 9001 Quality System Certificate by Det Norske Veritas. We are paying special attention to the ecological aspects of our bunkering activity. In our practice we strictly follow and observe all existing standards and rules prescribed for petroleum transshipping operations and prevention of leakage of oil products. Among our competitive advantages are: • Full range of fuel oil products available, from IFO-30 to IFO-600 • LSFO always available • All products conform to ISO 8217:2010 (E) plus later amendments • Our own bunker fleet • Prompt delivery of all bunker services • Fuel deliveries conform to Regulations 14 (1) or (4) and 18 (1) of MARPOL 73/78, Annex VI.
For more information please contact us at: 48, Stachek Prospect 198097 St Petersburg Russia Tel: +7 812 320 82 00 Fax: +7 812 325 45 33 E-mail: bbc@bunkering.spb.ru Website: www.bunkering.spb.ru Sales department: Tatiana Sorokina Mobile: +7 921 905 70 63 E-mail: tanya@bunkering.spb.ru
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Company News
Oliehandel Klaas de Boer B.V.
Ocean Bunkers, Pakistan
Bunkering and worldwide trading
Bunkering services at Port Muhammad Bin Qasim, Port Karachi, and Port Gawader, and anchorage through self-propelled oil tankers
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stablished in 1914, Oliehandel Klaas de Boer B.V. (KdB) has developed into a well known and respected physical supplier in the ARA region. KdB provides services to clients who need and appreciate the extra mile we go to offer the right balance between service, quality and price. As a company, we believe in long-term relationships with our suppliers and clients; several of them have been with us for decades. KdB has grown into one of the preferred bunker partners in the Amsterdam port region, where we have storage for fuel and gas oil products, which are delivered by both our own and chartered barges. We offer a wide range of products: for heavy fuel we offer regular and max. 1.0% sulphur products in different viscosities, in quantities ranging from 25 mt to 2, 400 mt. Using owned barges, we also deliver distillates, with a quantity range of 500 lt to 2,000 cu m. We are regularly in the Rotterdam port area to source products and are happy to combine the loading of our products with a bunkering; our typical bunkering in Rotterdam is between 500 and 1,500 mt of regular and max 1.0% sulphur IFO 380. Heavy fuel can be delivered throughout the entire country by road truck. At the port of Harlingen, in the north of the Netherlands, we have recently completed the building of a brand new storage facility for gas oil, with a total capacity of 3,000 cu m, from where we load our own barges. We also offer gas oil products in Den Helder, Lauwersoog and Delfzijl/Eemshaven and any other location by road truck. Oliehandel Klaas de Boer is one of the leading independent lubricant suppliers in the Netherlands, with storage capacity for both bulk and packed product in IJmuiden, Harlingen, Den Helder and Delfzijl/Eemshaven, delivering all major lubricant brands with remarkably short lead-times. With more than 90 years of experience, we can obtain excellent international prices for both fuel and lubricants in almost any port in the world, where we always try to find the “Klaas de Boer”! Of course, we are fully up to date with the latest legislation, and our experienced team of 40 are available to provide technical assistance, 24/7, making the difference for our clients.
Trawlerkade 58 – 1976 CB IJmuiden The Netherlands Tel: +31 (0) 255 513240 Fax: +31 (0) 255 518207 E-mail: ijmuiden@klaasdeboer.nl Website : www.klaasdeboer.nl
World Bunkering Autumn 2010
P
eople engaged in bunkering activities at the Pakistani ports of Karachi and Bin Qasim will be quite familiar with the name of Muhammad Yousuf. He started his bunkering career in 1994 and earned a good reputation in a short span of time and maintains cordial relationships with international bunker buyers, charterers, owners and agents. Mr Yousuf formed Orion Bunkers in Pakistan in 2004 and held the office of Director International Marine Sales to control the bunker trading and marketing activities of the company. In addition to this, he was also responsible for the financial matters of the company. He resigned from Orion Bunkers in May 2010 to become CEO of his own company, Ocean Bunkers, to take advantages of the growing bunkering industry in Pakistan. Combined with this, he is confident that his professional experience, and his team, will add new dimensions to the industry within Pakistan, helping him to achieve new milestones. Ocean Bunkers has the privilege of maintaining an exclusive supply source, Byco Petroleum Pakistan Limited, which is a refinery and major source of bunker fuels in Pakistan. This arrangement is the first of its kind in the country that ensures uninterrupted supply of quality fuels to Ocean Bunkers direct from a refining source. Ocean Bunkers provides round-the-clock reliable and costeffective bunkering services with fixed price agreements, offering competitive pricing compared to other suppliers and ports. We believe the fuel industry relies greatly on people and companies that consistently offer reasonable, accurate and efficient services. Our task is to provide the shipping community with quality controlled fuel products that conform to international recognised standards, ie ISO 8217 2005 and Marpol Annex VI. Ocean Bunkers has the privilege of maintaining an exclusive supply source, Byco Petroleum Pakistan Limited, which is a refinery and a major source of bunker fuels in Pakistan. This arrangement is the first of its kind in the country that ensures uninterrupted supply of quality fuels to Ocean Bunkers direct from source. We also have the advantage of shore tanks, a facility used for fuel storage. Ocean Bunkers has, in a short period of time, earned the greater confidence of the shipping community. Furthermore, we are pleased to announce that Ocean Bunkers Pakistan are providing smooth bunker deliveries to foreign flag vessels, fishing trawlers and other ocean-going crafts through owned self propelled oil barges. We seek strong and solid business relations with good companies and assure you of our best business services. Please send enquiries to: Muhammad Yousuf, CEO (International Marine Sales) Ocean Bunkers (Bunker Supplier) Ground Floor, Al Rehman Trade Avenue 15 Timber Pond, Keamari, Karachi – Pakistan Tel: +9221 3285 9511 / 2 / 3 Direct: +9221 3285 9515 Mobile: +92 333 2344610 Fax: +9221 3285 9514 E-mail: oceanpk@cyber.net.pk Yahoo id: orionkhi
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Company News
Tsetan Company Limited
Portugal fuel stop
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setan Company Limited provides customers with services in bunkering, transportation and trade of oil products. A young and dynamically growing company, Tsetan entered the bunkering market in 2003. At the early stage of its activity Tsetan operated one bunkering barge in the port of Nakhodka. At present the company owns three bunkering tankers, the first of which was purchased in 2003 and the other two in 2005 and 2008 respectively. Recently the a newly purchased Japanese made double-hull bunkering vessel Tsetan has been put into service, which will increase transportation and bunkering services in the ports of South Primorye. The total deadweight of Tsetan’s fleet is 5,000 tonnes, and the company’s annual cargo turnover is 50,000 tonnes. The scope of the bunkering services provided by the company covers all the ports of Southern Primorye, namely Nakhodka, Vostochny, Vladivostok, Slavyanka, Zarubino. The main supplier of the oil products for the company is Khabarovsk Oil Refinery (Khabarovskiy NPZ). The oil products are transported in cisterns by rail and then transhipped via the oil transhipments terminals of Nakhodka, Vostochny and Vladivostok. The company aims to maintain the high profile, international image of a professional supplier of quality bunker fuel to its clients. We value our clients and take a good care of their bunkering needs. We always welcome new clients and are permanently ready to offer our services.
Tsetan Company Limited. 132, Verhne-Morskaya str. Nakhodka 692917 Primorskiy Krai Russia Tel/Fax: +7 4236 629626 Tel/Fax: +7 4236 697060 Tel/Fax: +7 4236 645852 E-mail: tsetan@yandex.ru
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ased at Lisbon, Petrogal SA, part of the Galp Energia Group, is able to offer fuel supply services to all ships visiting this warm and pleasant country. Petrogal provides its customers with a professional bunkers team, high-quality fuels and services, and the highest safety standards in all bunkers activity. The company’s bunkering products fulfil the ISO 8217: 2005 specification in all grades. To help achieve customers’ targets on the environment, the company can supply low-sulphur fuels at several ports. The port of Lisbon is the main port for low-sulphur fuel. Petrogal optimises the logistics resources and storage to provide high-quality services and products. We can also supply a large quantity of marine distillates. Petrogal it is the main bunker supplier in Portugal, providing a bunker service using two barges with capacities of 2,300 tonnes and 3,000 tonnes each. A 2,300 dwt double-hull barge, Onyx began operations in 2009 to support the company’s business in Lisbon port. Galp Marine is well aware of the importance of safety and protecting the environment. The 3,000 dwt double-hull barge is equipped with anti-pollution measurers and is covered by European Maritime Safety Agency regulations in the Atlantic Ocean and Mediterranean Sea. Aware that the customer’s main concern is product cost, Petrogal offers competitive prices without compromising product or service quality. Visiting Lisbon and being supplied by Petrogal Bunkering will always be a good decision for customers used to working with a professional team. Petrogal is the only refiner in Portugal and operate two refineries, Sines and Oporto, and has 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 have a leading position in the Portuguese market, as we own the four largest Portuguese tank farms and 80% of national crude oil products storage. Our two refineries in Portugal together represent 100% and 20% of Portuguese and Iberian refining capacity, respectively, and collectively account for 88% of Portugal’s annual domestic petroleum product requirements. We have invested approximately €240 million in the last five years to upgrade and improve the efficiency of our refineries (€158 million for Sines and €82 million for Oporto).
For further information contact: Galp Energia SA Tel: +3512 1724 0637/654 Fax: +3512 1724 2957 E-mail: bunkers@galpenergia.com Website: www.galpenergia.com
World Bunkering Autumn 2010
Company News
Baltic Fuel Company Ltd enters Saint-Petersburg bunker market
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ontur Spb Ltd and JSC Perspective – two large independent companies working in the port of Saint-Petersburg – merged in July 2008. These two companies have for many years traditionally occupied a large segment of the dynamically growing bunkering market in the sea port of Saint-Petersburg and the Leningrad region. The Baltic Fuel Company Ltd. was created to manage the assets of the two merged companies and act as a bunker supplying and trading company for both Russian and international markets. Since its formation the company has achieved success in creating a reliable and high-quality bunkering service meeting all European standards and clients’ requirements. The newly formed Baltic Fuel Company owes its success to goal-orientated teamwork of experienced professionals and is now, rightfully, one of the leaders of the Saint-Petersburg bunker market. The newly formed holding also includes other companies providing the additional infrastructure required for bunkering operations. They are a transportation company, a towage company and a sea emergency and rescue formation. The cargo turnover of the company for the six months of operation in 2008 was 270,000 tonnes of oil products. The company’s activity is based on its own logistics and infrastructure. Baltic Fuel Company Ltd owns fully licensed and certified bunker tankers with a total capacity of 11,500 tonnes. There are 15 vessels in company’s ownership. In addition to bunkering activity the company provides transhipment and export of oil products. Baltic Fuel Company Ltd cooperates with the NK Rosneft bunkering department on contract bunkering services in the port of Saint-Petersburg. A wide range of ecological services for the vessels accounts for a very important segment of the company’s activity. The company has a separate quality-control department to guarantee the highest quality of oil products. A certified fuel-testing laboratory monitors the movement of oil products at all stages. All types of fuel supplied by the company are compliant with ISO8217 2005, including fuel oil and low-sulphur diesel fuel. All the departments belonging to the holding are certified by Det Norske VERITAS (DNV) according to the quality control and management ISO9001-200. Bunkering units of the Baltic Fuel Company Ltd are members of the Russian Association of Marine and River Bunker Suppliers, Saint-Petersburg Oil Club and are listed on the Register of the Bunkering Companies at Inter-Agency Commission for Oil Products transhipment in Saint-Petersburg and the Leningrad region.
TransOilBunker Co Ltd
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he bunkering company, TransOilBunker Co Ltd, was established in 1995 by the merging of several companies operating in the Russian Far East bunker market. The company provides bunkering services to vessels in the ports of Vladivostok, Nakhodka, Vostochniy, Slavyanka, Zarubino, and Posyet, amongst others. Since our appearance in the Far East bunker market we have gained and maintained a good reputation amongst our clients – both national and foreign – as a reliable business partner, and we are positioned in the top 10 bunkering companies in the region, with about 10% of the market share. Our monthly average volume of bunker fuel trade is up to 10,000 tonnes of heavy fuel, and up to 3,000 tonnes of light fuel (MGO). The company owns five bunkering barges with capacities ranging from 500 to 1,700 tonnes, one of which is equipped with blending facilities, permitting the production of lighter grades of fuels. The largest of our tankers has unrestricted navigation, giving us the opportunity to deliver bunkers to fishing grounds at the limits of the Russian exclusive economic zone in the Okhotsk Sea, Bering Sea and Japan Sea. Additionally, we are planning to acquire another tanker with even greater capacity, in order to meet the demands of our clients who require quantities of up to 2,000 mt of fuel. The company also operates its own tank tracks for delivering fuel to shoreside customers. It is our company policy to strictly maintain the quality of our service and fuel, to continually practice safe working procedures, and to protect the environment at every stage of the bunkering process. Additionally, we value highly the professionalism and reliability of all personnel who work for our company. Looking to the future, our company is focused on further development to expand its activities and attract new clients through means of cooperation with the best known bunker trading houses in Singapore, Hong Kong, South Korea, Japan, China and Europe.
Bunkering company TransOilBunker Co., Ltd 53 of., st. Aleutskaya 11 Vladivostok, 690001, Russia Tel: 007 (4232) 642-448/007 (4232) 642-449 Mobile: 007 914 704 2856 E-mail: bktob2006@yandex.ru Website: www.transoilbunker.org
The Baltic Fuel Company Ltd 13, Dubrovskaya Street Saint-Petersburg Tel: +7 (812) 438 12 80 Fax: +8 (812) 490 58 15 E-mail: info@gwbunker.spb.ru World Bunkering Autumn 2010
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Company News
Gazpromneft Marine Bunker
cea Co. ltd
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A
stablished in 2007, Gazpromneft Marine Bunker, a bunker subsidiary of JSC Gazprom Neft, executes the supply of oil products for vessels to the ports of Russia. The company is one of the leading suppliers in the Russian bunker market with an expected turnover of almost 1,500,000 mt by the end of 2009. The company provides a guaranteed, efficient, all year round supply, with high quality ISO8217-2005 compliant fuels including marine fuels and distillates. Gazpromneft Marine Bunker’s strategy focuses on operations in the Russian North-West region, the Far East, the Black Sea region and the Russian Rivers. Gazprom Neft’s main oil refineries are situated in the Moscow, Yaroslavl and Omsk areas. This range of locations makes it possible to cover nearly all the ports in Russia. Nowadays, the company operates in the major Russian ports of St. Petersburg, Kaliningrad, Ust-luga, Primorsk, Arkhangelsk, Murmansk, Vladivostok, Nakhodka, Vanino, Kavkaz, Novorossiysk, Tuapse, Yaroslavl, Kazan, Volgograd, Astrakhan, Rostov-on-Don and Azov. The company is now investing heavily in building a developed infrastructure including terminals in the main Russian ports and a bunkering fleet in order to form an advanced diversified proprietary network of distribution and logistics. The highly integrated logistic network “from the refinery to the bunker tanks” will lead to cost minimisation and a much faster service in general. One of the unique selling proposals of the Company is the permanent availability of low-sulphur products, which are received directly from the Omsk refinery. This factor is of crucial importance for the North West region, where the content of sulphur in the oil is highly restricted by MARPOL VI legislation. The Omsk refinery is one of the few production sites in Russia that can produce fuels with low-sulphur content. The well-organized proprietary logistic network makes it possible to conclude and support long-term wide scale contracts directly with the shipowners and the main world broker companies focusing on flexible pricing system. Gazpromneft Marine Bunker has an excellent two-year experience of furnishing cruise vessel contracts with Royal Caribbean International and Carnival Cruise Lines and we are looking forward to increasing our selling volumes for the cruise vessels in future navigation periods. Gazpromneft Marine Bunker is a subsidiary of one of the biggest corporations in Russia, Gazprom Neft and is a state-owned company. The company is focused on improving its operating and economic performance, minimising costs and raising its capitalisation. Our team of bunker traders and logistic operators are challenged to become, and remain, your long-term reliable partner, thorough knowledge of bunker markets, experience, competence and efficient, friendly service.
Vasilyevskiy Island, 3rd line, 62A, St Petersburg, Russia, 199178 Tel: +7 (812) 449 49 70 Fax: +7 (812) 449 49 71 E-mail: bunkers@spb.gazprom-neft.ru
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lthough founded in 2007, CEA Co. Ltd. can be considered an experienced bunker market player and a quality services provider due to its staff having more than 10 years’ experience in the professional vessel bunkering business. The core activity of the company is wholesale trade in oil products and ship bunkering in the Russian Far East region, covering all major ports as well as the Sea of Japan and the Ohotsk Sea. The key strategic task of the company is to supply clients with quality products. The quality control system applied by the company ensures high standards from the manufacturer to the end user. One of our key performance indicators is obtaining the highest quality of product, and this is guaranteed by the everyday working practices of the company’s experienced staff. Our affordable, competitive prices are based on direct supply from the product manufacturers. The company policy is based on three major factors: Quality, Quantity and Price, all of which allow CEA Co. Ltd to offer clients value for money. Another strategic goal of the company is to ensure the most efficient business with maximum environmental safety. Environmental and safety issues are paramount within our company; the following measures are taken to ensure environmental safety: • All activities carried out by the company are in compliance with Russian legislation and international norms and standards; • We ensure full control and monitoring of environmental safety norms of our suppliers (bunker fleet, technical management, recourses etc), and their compliance with Russian and international standards. Additionally CEA Co. Ltd. has made a decision to develop the company within the Government Concept of Sea Fleet Development of the Russian Federation. In the first instance it means fleet renewal. The company currently operates two tankers built in 1990 and 1993 respectively, and there are plans to buy a tanker built in 2004 which only proves that the company is moving in the right direction along the tendencies of world shipping. Secondly, the company implements a strict control over the quality and ecological safety of the shipping operations. The problem of double-hull vessels, which is one of the big issues in the Russian Federation these days, is being successfully overcome in CEA Co. Ltd. The company’s fleet has been certified by the inspecting and surveying organisation as one complying with Russian and international standards of shipping. Quality products, competitive prices, experienced personnel, environmental and social policy, and a high degree of responsibility to the client make CEA Co. Ltd. a transparent and accessible company, open to mutually beneficial cooperation.
Mr. Eugeniy Moroz General Director, CEA Co. Ltd. CEA Ltd 8/1B, Fokina Street, PO BOX 91/45, Vladivostok Primorskiy Krai, Russia 690091 Tel: 007 (4232) 40-64-91 007 (4232) 52 36 93 Fax: 007 (4232) 40 66 98 E-mail: cea_bunker@hotbox.ru Website: www.cea-bunker.com
World Bunkering Autumn 2010
Company News
Nizhegorod Bunker Ltd runs successful river bunkering business
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izhegorod Bunker Ltd specialises in quality bunkering services to vessels working in the area of Volzhskiy and its neighbouring basin. The company’s fleet consists of shallow-draft tankers with the capacity of 300 tonnes and automotive bunkering vessels with 600 and 1,500 Vladimir Nikiforov, tonnes capacity, whilst its total tonnage of General Director, bunkering fleet amounts to 7,000 tonnes.It Nizhegorod Bunker also has a non-propelled oil station. Ltd The company is an official representative of the Russian oil giant, OJSC Rosneft. Its current strategy of development aims at increasing its presence on the North-West bunkering market. “The main advantage of our company which, in my opinion, should attract partnerships from the shipping companies, is that we provide bunkering services at the two key bunkering spots – in Rybinsk and, most importantly, in Sheksna,” says Andrei Losev, Nizhegorod Bunker Ltd’s general director, Commercial Director, Vladimir Nikiforov. “As the ships follow the Nizhegorod Bunker Volga-Baltic route they require quality fuel, Ltd and this is exactly what our company will supply them with”. For all its years in the bunkering business, Nizhegorod Bunker has never received a single claim regarding the quality of bunker it provides. During the last navigation period, the company supplied more than 40,000 tonnes of high quality fuel to its customers. “It is very important to supply top quality bunker to shipowners as it affects the vessel’s engine and other important mechanisms and thus prolongs its operation life,” says Nikiforov. “This is why the quality of bunker fuel is the main priority for Nizhegorod-Bunker Ltd”. The company has the potential, and explores opportunities, for expanding its business. Nizhegorod Bunker Ltd is ready to go beyond its current area of service (limited at the moment to Samara) to deliver quality bunker to vessels requiring refuelling further down the river Volga. The company can provide 24-hour supply of high standard fuel in that area. We always welcome new enquiries for our services and partnership proposals.
Nizhegorod Bunker Ltd 13/2, Ilyinskaya Street Nizhniy Novgorod Russia 603109 Office Tel/Fax: 007 831 434 4845 E-mail: noilnn@mail.ru Website: www.nizhegorod-bunker.ru
World Bunkering Autumn 2010
NoreqFender© – protection guaranteed
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oreqFender is a specialised supplier of marine fendering products to the maritime industry. We deliver pneumatic fenders made to fully protect your vessel during ship-to-ship operations or while attending port. Our fenders are manufactured and tested in accordance with ISO 17357:2002, the only standard that ensures you high quality. The NoreqFender headquarters are located in Norway, but we have a global presence with a large network of agents, and our own stock and subsidiaries in Singapore and the Netherlands. In Rotterdam we hold one of the world’s largest stock of pneumatic fenders and we are ready to ship to any worldwide destination on short notice. NoreqFender is part of the Noreq Group and together we have many years of experience within the maritime industry. The market for pneumatic fenders has increased tremendously during the last couple of years. More and more vessel owners realise the advantages of pneumatic fenders over fixed fenders. In recent years, shipyards around the world have experienced a golden age, with more new buildings than ever before. Not only have the numbers of vessels been overwhelming, also the quality and technology level of the new buildings are constantly rising. Thus, it has become even more important to protect one’s assets against damage from external forces. Shipowners are realising that they cannot afford the cheapest solutions. As a result of the increased demand for pneumatic fenders, lots of new manufacturers and distributors of fenders have naturally arisen. Unfortunately, not all of them comply with international standards. In 2002 the ISO standard 17357 was launched in order to ensure the high quality needed for safe berthing during ship-to-ship or shipto-port operations. OCIMF (Oil Companies International Marine Forum) strongly recommends the use of ISO certified pneumatic fenders while performing ship-to-ship operations involving bunkering or discharging of oil or gas. Our main focus in NoreqFender is to support our clients, through offering them high quality products at competitive prices. We are also building up one of the world’s largest stock of pneumatic fenders in order to instantly meet demand. As a client of NoreqFender you always know that you will be offered high quality fenders at the best delivery times available in the market.
For further information, contact: NoreqFender 5460 Husnes Norway Tel: +4753464751 E-mail: noreq@noreqfender.no Website: www.noreqfender.no
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Company News
AMKOil Ltd
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ounded on 25 May 2004, the AMK Group of Companies is one of the biggest on Kolskiy Peninsula. The main activity of the AMK Group is the trade and transportation of the following oil products: • bunker fuel • all types of petrol • fuel oil M-100 • IFO-380, IFO-180, IFO-30 The AMK Group consists of several companies involved in different types of activities, such as bunkering, road transportation of oil products, utilisation of mixed oil waste and bilge water, and the use of a shipping and receiving platform. All companies within the group are licensed to conduct the above mentioned activities. One of the company’s main activities is the bunkering of foreign and Russian vessels in the port of Murmansk and other ports within the Murmansk region, as well as neighbouring shipping areas. The AMK Group of Companies’ fleet consists of the following tankers: Jamrat, Shalim, Olkhovets, Dnepr, and Don, allowing the transportation of all types of oil products and bilge water up to 300 tonnes, as well as up 3,300 tonnes of heavy oil products and bunker fuel. The tankers are capable of bunkering 20 miles offshore as well as travelling to foreign ports to provide their services. All the ships are staffed with experienced personnel who have at least five years’ experience of working on these classes of vessel. The AMK Group of Companies’ transport hub consists of eight units of equipment, namely four petrol tank trucks with capacity ranging from eight to 23 cu m, and four fuel oil trucks with capacity ranging from 15 to 23 cu m. The trucks are used for the transportation of bunker fuel, and all types of petrol and fuel oil in Murmansk, the Murmansk region and the Republic of Karelia. The company has its own overhaul and maintenance facility based within the Murmansk Sea Fish Port, which it uses for servicing its own machinery, as well as providing maintenance services for other companies. All the drivers are licensed to drive dangerous cargo vehicles and the depot mechanics are all highly qualified in their specialist areas. The various operations of the AMK Group of Companies are supported by a highly professional team of lawyers. The company is open for cooperation in the transportation and trade of oil products, and welcomes mutually beneficial partnerships.
Alexander Koltunov, Director Roman Moliboga, Commercial Director Maksim Vorobyov, Technical Director Anton Smolin, Head of Bunkering Mob: 007 9113090999 86 Podgornaya Street, Office 413 Murmansk, Russia 183038 Tel/Fax: 007 (8152) 287828 Tel/Fax: 007 (8152) 287337 Tel/Fax: 007 (8152) 286028 E-mail: amkoil@mail.ru
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Lukoil-Bunker enters the Italian market
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or a long time it has been rumoured that Lukoil-Bunker OOO was going to expand in the Mediterranean market; now it has happened. The ISAB refinery, one of the largest in the region, presented Lukoil with an opportunity to make inroads into the western European refinery business. The ISAB refinery has its own production capacity in two ports: ISAB Nord-Augusta and ISAB-South-Santa Panagia. Port Augusta is the third largest for bunker sales in Italy, with annual volumes of 370-400,000 mt. Thanks to its central position in the Mediterranean Sea, it is the most important Italian port for bunker, crew turnover, vessels repairs and maintenance. Santa Panagia Bay, where the ISAB-South Terminal has its own pier, is located at about 25km south of Augusta. The pier has five docking bays, is about 1,600 metres long and can accommodate ships of up to 400,000 dwt. Furthermore, Port Augusta experiences very good weather conditions and provides a good alternative to Malta, which suffers from harsh winds, especially during the winter months. All these factors confirm the existing potential of this region for bunker supply. For bunker purposes, Lukoil-Bunker Italy S.R.L. was established in December 2009. The subsidiary is already operating in Sicily and is fully owned by Lukoil-Bunker OOO, St Petersburg. Negotiations are currently taking place with the ISAB refinery regarding the possibility of producing regular high-sulphur 380 cSt bunker fuel and 0.1% sulphur MGO in volumes required for the market. In Italy, the sulphur content is not standardised, and the majority of supplied product in that region is fuel with sulphur content of up to 4.5% The fuel produced at ISAB has a sulphur content of not more than 2.5%. Consequently, it provides a more attractive product for some clients. An agreement has recently been reached with a barge operator who is happy to provide the company with barge facilities in Augusta harbor, and Lukoil-Bunker Italy S.R.L.’s first cargo delivery was made at the end of June 2010, when 6,000 mt of HS380 was loaded. The company sees a potential for monthly marine fuels sales of about 10,000 mt at Augusta, but also plans to undertake some deep market research to understand the needs of the area in order to become a reliable supplier throughout the region. Lukoil-Bunker OOO is a major bunker supplier in Russia and is also active, via its sister companies, in Bulgaria, Turkey, and Romania.
Lukoil-Bunker OOO Tel: + 7 812 346 81 30/31 Fax: + 7 812 346 81 32 E-mail: bunker@lukoil-bunker.com Lukoil-Bunker Italy S.R.L. Tel: +39 0931 207620 Fax: +39 0931 207621 E-mail: office@lukoil-bunker.it
World Bunkering Autumn 2010
Company News
New English Channel Bunkers-Only Service
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ockett Marine Oil is to start a bunkers-only service for shipping operators transiting the English Channel from September, transforming the availability of bunkering in the area. Until now Cockett Marine Oil has been known as a specialist marine oil trader based in London with a network of international offices. Its new service will be operated from three anchorages in the Thames Estuary in an area controlled by the Port of London Authority (PLA), with whom Cockett has worked closely to develop the service. The new service draws on the resources of a number of businesses within Cockett’s South African parent company The Grindrod Group, including Unicorn Shipping and Rotterdam-based Associated Bunker Oil Contractors. Sitting on one of the world’s busiest trading routes, and located approximately on 51deg 28min North/1 deg 20 mins East, the anchorages will offer cost-effective bunkers-only services close to the English Channel shipping lanes. Cockett Marine Oil predicts it will supply at least 1m tonnes of marine fuels, including low and high sulphur fuel variants, as well as gasoil. The new facilities will be able to host deep draft vessels of all types. By supplying fuel oils delivered by barge from Rotterdam and enabling customers to avoid time-consuming and costly diversions from the main shipping lanes, it will compete head-to-head with other major international bunkers-only supply centres as well as facilities in the English Channel. The new service requires a diversion of only 1-2 hours from the shipping lanes, in contrast to the diversions required to reach other bunkering facilities in the English Channel. Robert Thompson, General Manager Supply at Cockett Marine Oil, said: “Until now the English Channel has suffered from a lack of competitiveness which has hindered its development as a serious bunker hub. Our new operation will remedy this situation. We believe the commercial advantage of its location and ability to take advantage of cheaper fuel prices from Rotterdam makes the case a compelling one for owners and operators.” Karl Beeson, Group Managing Director at Cockett Marine Oil, said: “The new Cockett Marine service shows the synergy delivered by The Grindrod Group for the benefit of shipping operators. We can secure excellent prices through our years of back-to-back trading experience, combined with the barging expertise of our colleagues at Unicorn Shipping and utilising the procurement skills of Associated Bunker Oil Contractors in Rotterdam. “Operating two barges initially through Unicorn, each able to transport 5,500 tonnes of fuel oils, we will be able to provide ship owners and operators with a cost-effective and quicker service than other ports within the Emissions Control Area.” Cockett Marine will place a strong emphasis on quality control and reliability. The PLA will oversee the operation from its London Port Control Centre and as part of risk control measures is putting in place enhanced oil spill response capabilities at Ramsgate. Details of the new Cockett Marine bunkers-only can be obtained by visiting: www.cockettgroup.com
Cockett Marine Oil Limited Carrick House, 36 Station Square, Petts Wood, Kent NR5 1NA Tel: +44 (0)1689 883430 Fax: +44 (0)1689 877666 E-mail: thames@cockett.com Website: www.cockettgroup.com World Bunkering Autumn 2010
A/S DAN BUNKERING A/S GLOBAL RISK MANAGEMENT ADDAX BUNKERING SERVICES AEGEAN MARINE PETROLEUM ALBA PETROLEUM LTD AMKOIL LTD ARGOS CEEBUNKERS BV ASPECT ENTERPRISE SOLUTIONS LTD BALTIC BUNKERING CO BUNKER FUEL COMPANY LTD BGK BUNKERS C-FUELS AMERICA INC CEA BUNKER PTE LTD COCKETT MARINE OIL CUROIL NV EVRASIA BUNKER LTD FAL ENERGY CO LTD FNSA FUEL LTD GAZPROMNEFT MARINE BUNKER LTD LUKOIL BENELUX BV LUKOIL-BULGARIA BUNKER LTD LUKOIL-BUNKER LTALY SRL NAKHODKA-PORT BUNKER CO LTD NAYADA LTD NIZHEGOROD BUNKER LTD NOREQFENDER OW BUNKER GROUP A/S OCEAN BUNKERS OIL MARKETING & TRADING INTERNATIONAL OILCHART INTERNATIONAL NV OILTRADE MARINE LTD OLIEHANDEL – KLAAS DE BOER BV OMV PETROM SA PENINSULA PETROLEUM LTD PETROLEOS DE PORTUGAL PLATTS RN-BUNKER LTD SEARIGHTS MARITIME SERVICES PTE LTD SGX ASIACLEAR SHELL EASTERN PETROLEUM SOLARC INC TRANSOIL BUNKER TSETAN CO LTD UNIVERSAL MARINE SURVEYING & CONSULTANCY
For more information on these companies and to view this publication online using the innovative Page-Turning technology, visit:
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www.worldbunkering.com
World Bunkering WINTER issue
DiARY
Blending Blended, rather than straight-run, bunkers are the norm in most, though not all, bunker hubs. As stricter sulphur limits take effect more blending will be required. We look at the issues surrounding blending and the use of cutter stocks.
Looking ahead 13-17 September Oxford Bunker Course Oxford, UK
www.petrospot.com/events events@petrospot.com
15-17 September Price and Quality in Bunker Markets Singapore
www.ibia.net ibia@ibia.net
Rotterdam, Netherlands
www.bunkerexperience.com info@bunkerexperience.com
11-12 October Managing Carbon Emissions and GHGs in Shipping London, UK
www.informaglobalevents.com maritimecustserv@informa.com
13 October Bunker Asia 2010 Singapore
www.bunkerworld.com/events events@bunkerworld.com
20-22 October Sustainable Shipping 2010 Miami, USA
www.sustainableshipping.com/events events@bunkerworld.com
27-29 October SIBCON www.sibconsingapore.com ruohyi.tham@ibcasia.com.sg
2-4 November 2010 Informa Bunker Management School www.informaglobalevents.com/event/bunkerschool
24-26 November Bunkerworld Business Exchange
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With possibly unprecedented numbers of vessels under construction we take look at the sophisticated, and increasingly large, sea-going tankers that are usually referred to as ‘bunker barges’.
Our yearly look at a continent where growth rates can often be surprisingly high. Is piracy off the Horn of Africa still boosting bunker sales at the Cape?
Scandinavia & the Baltic
3-7 October Bunker Experience
London, UK
Barge Design
Africa
Stamford, USA
London, UK
With bunker prices unlikely to fall in the foreseeable future, the pressure is on to make as efficient use of fuel as possible. What role are additives likely to play in achieving this goal?
www.oxfordprinceton.com/
20-24 September IBIA Convention
Singapore
Fuel Additives
www.bunkerworld.com/events events@bunkerworld.com
From the Norwegian coast to the Skaw and around to St Petersburg we look what is happening in this major area for bunker supply. How has the industry coped with the 1.0% cap?
Maldives Last year we reported on promising developments in this fledgling Indian Ocean. We catch up on what’s been happening.
IBIA Annual Convention – Connecticut, USA (Review) A comprehensive report on the proceedings in the convention hall and the social and networking scene.
SIBCON – Singapore, SE Asia (Review) World Bunkering editor David Hughes reviews this major industry event, held for the first time in Singapore’s brand new and glitzy Sentosa Resort.
Regulars & news Including our regular environmental, technical, legal and operational updates.
Equipment & services A round-up of news for the bunker industry.
Diary dates All future dates for industry events. World Bunkering Autumn 2010
Nakhodka-Portbunker Co. Ltd Powered to perform bunkering services within the sea ports of the Russian Far East
NAKHODKA-PORTBUNKER CO. LTD 15, PAVLOVA STR, NAKHODKA 692926 RUSSIA TEL/FAX: +7 (4236) 630641, 657806 MOBILE: +79147166206 E-mail: nakhodkaportbunker@ nhk.infosys.ru
ARE YOU READY FOR THE NEW LOW SULPHUR EMISSIONS LEGISLATION IN THE NORTH EUROPEAN EMISSION CONTROL AREA? The marine industry is steering itself to meet the 1.00% sulphur restriction limit in new legislation which came into effect on 1st July 2010. Shell provides ready solutions with our leading innovation and comprehensive range of fuels and lubricants. www.shell.com/marine
Shell Marine Products