Wb autumn 2014 web by Maritime Media

AUTUMN 2014

World BUNKERING

Big independents expand But deep pockets are needed

THE ONLY OFFICIAL MAGAZINE OF

Inside this issue: Lubricants: Slow steaming and fuel switching pose challenges Far East: Singapore leads way on flowmeters, HK on emissions Russia: Crucial court case won by suppliers

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Editor’s letter

Challenges ahead

he latest statistics from the OECD’s International Transport Forum paint a mixed picture. The external trade of the US and the EU, measured in tonnes of goods moved, remains stagnant. On the other hand, the OECD notes “BRICS (Brazil, Russia, India, China, and South Africa) and Asia are locomotives of growth. China’s external trade by sea and air, measured in values, continues to grow.” In a similar vein, the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens states that confidence remains higher in Asia, although overall confidence levels in the shipping industry fell slightly during the threemonth period to May 2014. For the international shipping industry, and thus the bunker sector, the buoyant Asian scene should ensure continued growth. While a few doubts may be creeping in, confidence levels remain at their second-highest for the past six years. As one respondent to the survey put it: “World trade seems to be improving, and shipping will benefit.” But Moore Stephens also received more pessimistic responses, such as: “The market has improved slightly, but certainly not enough to start drinking champagne. The next few years will be difficult, and maybe the real recovery will be too little and come too late for some owners.” Hmm. So where does that leave the bunker industry. The prospect of tighter emissions regulations was one of two environmental challenges (the other was water ballast rules) mentioned frequently to Moore Stephens. Exactly what effect the impending 0.10% limit in emission control areas

World Bunkering Autumn 2014

will have is still unclear, but one interesting response from the dry bulk sector was: “The order book for bulk carriers is still quite high, but we believe there will be more scrapping due to the inefficiency of main engines, the price of fuel and the cost of retrofitting scrubbers.” The challenge of meeting the sulphur limits is indeed now concentrating minds. So, not surprisingly, much of this issue relates in some way to new sulphur limits. Scrubbers are seen by many as the realistic, practical option for much of the world’s fleet. Indeed, the CEO of testing firm VPS, Eirik Andreassen, makes some interesting predictions about the relative price of heavy fuel oil in 10 years’ time in our Interview. Nevertheless, a huge effort is now going into developing liquefied natural gas (LNG). Again, there are references to this throughout our autumn issue, but so much is going on in this area that from now on there will be a regular LNG slot in World Bunkering. In some respects, we have come a long way from the days when these pages were devoted almost entirely to quantity and quality. So much else, particularly environmentally, is going on. However, supplying good quality fuel in the exact quantity required is still fundamental to our industry.

So this issue includes a feature on quality, which, unfortunately, does not make for comfortable reading. As for getting the quantity right, Singapore is forging ahead with mass flow meters. This and much else are covered in our Far East report. My next task is to edit the special issue for the IBIA Conference in Hamburg in the first week in November. This promises to be a massive event, with much to discuss. World Bunkering will, of course, be there. I look forward to meeting as many of you as possible in Hamburg.

David Hughes, editor

Autumn 2014

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

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

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

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

Designer: Justin Ives

Published by: Maritime Media Ltd Suite 19, Hurlingham Studios, Ranelagh Gardens, London SW6 3PA, UK Tel: +44 (0) 20 7386 6100 Fax: +44 (0) 20 7381 8890 E-mail: inbox@mar-media.com Website: www.worldbunkering.com

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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 Ltd on behalf of IBIA and is supplied to members as part of their annual membership package.

On behalf of: IBIAâ&#x20AC;&#x2C6;Ltd Latimer House 5-7 Cumberland Place Southampton SO15 2BH, UK Tel: +44 (0) 20 3397 3850 Fax: +44 (0) 20 3397 3865 E-mail: ibia@ibia.net Website: www.ibia.net

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Contact: Shazmeer Jiwan Alba Petroleum Ltd PO Box 97155 Mombasa, Kenya Tel: + 254 734 539777 + 254 720 630000 Fax: + 254 20 2689549 Mobile: + 254 734 575744 E-mail: sales@albapetroleum.com

Autumn 2014

Editor’s letter Chairman’s introduction Chief Executive’s report Asia Report Africa Report New members Nomination Events report IBIA Convention Noticeboard Industry news Environment Interview Market Update Independents Fuel Quality Lubricants Risk Management LNG Testing Middle East Far East

IBIA reports 1 7 9 11 12 15 17 19 21 22 Special features 23 27 30 32 33 35 37 39 41 43 Geographical focus 47 49

Russian update

Innovation Legal news Equipment and services Review: Posidonia Preview: Sibcon Book Review

65 68 70 73 74 75

Diary

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IBIA Chairman Jens Maul Jørgensen argues the case for an increased focus on quality

t has been four months since I took up the role as chairman, and at the very start I said something was wrong with the global take-up and availability of fuel complying with the latest standard (ISO 8217 2012) of fuel around the world and its availability. We are now seeing in the market that more suppliers are stepping up and confirming that they also can do 2010/2012 specs. But still we are seeing the “bad/wrong” excuses, such as “it’s the others” or “the owners don’t want it”. So I can only repeat that it is a matter of respect because everything is possible. To the owners I say: “Don’t complain about bad bunkers if you don’t ask for the quality.” So everybody needs to get involved in this. Controversial? Perhaps, but I have only just started! It was 12 months ago that Simon Neo, the then-chairman said that he wanted IBIA to do more and reach out to its members. This is at the heart of what IBIA is about: Listening, responding, shaping and interacting. It is the very credentials upon which the association was formed 21 years ago. Are we going to please all the people? That’s simple, no we aren’t, but our objective is to achieve a net benefit to the majority. Transparency, standards, pricing, regulation and enforcement are all major challenges facing the industry. It is clear we cannot address these major challenges individually but IBIA can bring people together to do something about them! The CEO in his article addresses the types of things IBIA has been doing: listening to the marine community, attending several “all-party” shipping association meetings, meeting with hundreds of our members, interacting with governments and taking part in forums and delivering seminars.

World Bunkering Autumn 2014

Stepping up

So my first appeal is to each one of you reading this is do you agree? Or disagree? Whatever your answer, why not step up and take part? Key to addressing these challenges is shaping IBIA policy – representation at board level – and I would take this occasion to encourage your response to the board election notice in this edition, as a strong representation of all the membership is needed. It is essential that we have key “movers and shakers” in the industry represented. The industry also needs greater involvement and participation in addressing the detail of these thorny issues and considering how we can more effectively influence the regulatory authorities. We need to have a more robust and diverse working group participation – so why not join a working group?

I am told there will also be a few surprises and of course, Hamburg is a party city. Let’s tackle the issues but have fun at the same time – and remember to thank the German Shipowners’ Association VDR and Hamburg shipbrokers as we enjoy taking part in the Eisbeinessen festival. I leave you with the conference title: “Quality and Compliance”.

Chairman’s welcome

Getting to the root of the problem

Jens Maul Jørgensen, Chairman, IBIA

Take Part

Finally I look forward to welcoming you to the 2014 IBIA conference in Hamburg. I know the conference programme is packed full of challenging and interesting debates. • The new Fuels • Uncovering the dodgy practices – or as one person put it “101 ways to cheat” • What the ports are doing in the way of ‘green’ compliance rebates and discounts.

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find that we constantly wrestle with these three characters. They are all wrapped up in opinion and are presented through personality – where the impact is made or lost! I am reflecting on these topics, and raising them with you here, because IBIA is engaged in a number of forums, investigating the roles these three characters play in our industry. Our mission statement as an association is: “To be a world-leading, responsive industry association, providing international forum and representation by contributing to industry policy and regulation for the purposes of improving and developing industry methods and practices, as well as increasing professional understanding and competence in the provision of value-formoney affiliation, services and facilities for the benefit of its members.” But in short, our aims are to educate, inform and influence. To fulfil this we need to be fully engaged in the debates around us. That will definitely not please all our members all the time, but if we achieve an overall net benefit to the industry then the objective will be achieved. Therefore :• In Africa, IBIA is being consulted on maritime policy from macroeconomics to detailed licensing and safety issues – trying to rebuild and develop the industry. • In the Americas, IBIA members ran training courses and delivered presentations at Maritime Week Americas (MWA) in Panama – to educate and inform. • In Asia, IBIA met with surveyors to listen to concerns about the introduction of mass flow meters (MFM) by the Maritime and Port Authority of Singapore (MPA). A focus group has

World Bunkering Autumn 2014

been formed on this subject, with further meetings planned in the coming weeks. A training course has been established to inform on the implementation of MFM – to clarify and qualify. • In Europe, we met with the Port of Rotterdam to talk through the concepts of quality, traceability, quantity measurement and efficient bunkering processes – to develop the reputation of the industry. • In the UK, the technical work group has had a series of meetings with shipping associations and flag states to clarify matters on fuel quality. We have also taken part in the IMO Working Group’s fuel availability study.

arrangements for our annual conference in Hamburg. Check out the web site for the latest information. We have an agenda jammed with topical issues: the latest on the new fuels by ExxonMobil and Genoil (with whom OW Bunkering has signed a memorandum of understanding) and plans to produce a low-sulphur fuel oil (LSFO) with no more than 0.10% sulphur content You will also hear what is happening on the alternative fuels front, plus the challenge for shipowners, ports and regulatory authorities to encourage environmentally friendly operations, transparency and quality. I would like to encourage as many of you as possible to come along as it promises to be a memorable occasion, with some surprises in store for those who attend.

Chief executive’s report

Fact, perception and politics

Moving on & the future

It was a blow that Anna, our events manager, resigned at the beginning of June. With so much happening, it is never a good time for staff to move on. But she decided to move back to Devon and take up a role closer to her family (she is now Functions Manager at Paignton Zoo) and we wish her all the best. However, we have moved quickly to fill the gap and we are pleased to announce that Stephen Hoare took up the role in July. Stephen has a strong professional background in developing events and membership. He has great international experience and will help build our portfolio of professional events and membership around the world. During June we launched our new website and I hope you have had a chance to look over it

Captain Peter Hall Chief Executive The International Bunker Industry Association

Annual convention

Over the past few weeks, the management and convention work group has been busy finalising the

IBIA Asia Report

Significant developments IBIA's Asia manager , Kwok Fook Sing, reports on what is happening around this region

Singapore

IBIA Asia (Singapore office) launched its Mass Flow Metering System for Bunkering Course in August. This followed the announcement by Minister for Transport Lui Tuck Yew at the Singapore Bunkering Symposium on 8 April that the use of mass flow meter (MFM) system for bunkering would become mandatory. In a development that will have major implications for the local bunker industry, with effect from 1 January 2017, it will be mandatory for bunker suppliers to use the MFM system for bunker delivery of Marine Fuel Oil (MFO) in the Port of Singapore. Existing bunker tankers operating in port must be fitted with a MPAapproved MFM system for MFO delivery in the Port of Singapore by 31 December 2016 and all new bunker tankers applying for Harbour Craft (Bunker Tanker) licence after 31 December 2014 will be required to be fitted with a MPA-approved MFM system for MFO delivery. Bunker suppliers are receptive to the new requirements and to assist them, an incentive payout of S$80,000 from MPA will offset their cost of implementation. As of July 2014, 6 bunker tankers, having gone through a three stage calibration process, have been approved to carry out bunker deliveries with MFM.

World Bunkering Autumn 2014

At least 4 bunker tankers are now undergoing the approval process with more on the waiting list. The MFM system enhances transparency, increases productivity, accuracy and minimises illegal bunkering activities, as the system automatically measures the delivery in weight with the final results in printed form. The manual tank gauging, temperature checks and calculations will no longer be carried out and the bunker surveying community has raised concerns that they will no longer have a continuing role in the bunkering operation. MPA has given the assurance that the bunker surveyors will not lose their jobs but will have to assume greater responsibilities in the future of bunkering. Additional training will be required for them to understand the new technology and equip them with new skill sets to operate in the new environment. The Technical Committee for Bunkering appointed by the Chemical Standards Committee have already started work on developing standards for MFM. Currently, all approved bunker tankers will have their set of MFM bunker procedures onboard approved by MPA. More details are available to read at www.ibia.net.

Malaysia

The Malaysian Fuel & Energy Training Academy (MYFETA), an IBIA member in Johor, has been actively conducting bunker training for the industry members. The Bunker Operation Module Level 1, running for 99 days, is a comprehensive programme covering organisational behaviour, bunkering operations, safety, national laws and practical training, designed to prepare the graduate for entry to the bunker industry. IBIA members are also working to establish an IBIA branch in Malaysia and good progress has been made. An interim executive committee is expected to be formed by early next year. China

IBIA members can look forward to new opportunities in China with the establishment of the Zhoushan Archipelago New Area Bonded Fuel Oil Supply Centre. The island off the port of Ningbo, located in east China has been designated as a free-trade zone and freetrade port, promoting bunkering activities through open licensing, simplified documentation procedures, reduced fees, storage facilities and allowing the blending of oil. The island is accessible by land bridge from Ningbo and the planned construction of another bridge from Shanghai across Hangzhou Bay.

Africa Report

ÂŠ Brian Van Hansen brianvanhansen@yahoo.com

Forging foward IBIA's new Africa regional manager Tahra Sergeant reports on her first few weeks in the post

rowth and raising the awareness of IBIA go hand in hand. From the start I wanted to reach out to the existing membership and the industry. So over the past 12 weeks, I have had the pleasure of spending time with our members in their offices, learning about their business and how it fits into the bigger picture of 'Bunkering'. This has allowed me to develop both strong relationships and a deeper understanding of our membersâ&#x20AC;&#x2122; businesses. I have also had the opportunity to meet many of the key people in both government and associated government organisations. It all goes to raise the profile of IBIA in Africa. This has only been possible through the guidance of our Immediate Past Chair, Haydn Lockhart-Barker, as well as our Global Secretariat, the integration into the industry so far has been seamless and enjoyable. Business and Communication Strategy

We are in the process of developing a business and communication strategy for our local South African branch, alongside our Executive Committee. Together, we have highlighted the following key focus points for South Africa: increase the bunker volume for South African ports through lobbying via the IBIA Executive Committee Members and create relevance for IBIA in the South African maritime space through the forum on training and development.

I am currently involved in collating information from our members for onward distribution to the new and updated IBIA website, as well as further liaising with the various local media outlets and international publications to assist with raising our profile. Training

Training is a key component in developing the regional model. We are currently reviewing our training material and look to running 3 or 4 bunker courses next year, with the first planned for January 2015. We are also excited to be looking into running a one-day course with the various secondary education facilities in order to raise the profile of the maritime industry amongst our youth. Social Giveback

I have has also been brainstorming ideas with Brian Ingpen from Lawhill, the Simon's Town maritime school, on ways we can make a meaningful contribution to these students in terms of financial assistance and learning experiences. Ideas include office time for students, exposing them to the land-based workings of the maritime industry and sending our experts in to talk to the students about the opportunities offered by the maritime industry. Networking

We are looking at ways to develop industryrelated networking lunches, where we high profile industry leaders/specialist will give short presentations in a formal business lunch atmosphere. These topics would

obviously be relevant to bunkering (sulphur legislation, port cost perspectives etc). We have the pleasure of hosting our Chief Executive Capt Peter Hall in September, when we will be hosting our first network lunch.

1-3 September African Ports Evolution 2014 Durban, South Africa This event provides maritime industry professionals active on the continent with up to date information and future-proofed solutions for boosting the integrity of port operations, modernising facilities, and increasing bulk and container throughput. www.portsevolution.com/

1-5 December Maritime Week Africa Cape Town, South Africa The week-long series of events will feature a major two-day Oil & Shipping Conference focused exclusively on sub-Saharan Africa, two bunker training courses and some spectacular networking opportunities. www.petrospot.com/profilemwa2014-ct

World Bunkering Autumn 2014

AGM in October

Saturday 18th October, 2014

Thursday 20th November, 2014

Maritime Industry 7-a-side Soccer Tournament – sign up for the maritime industry’s sporting event of the year in aid of marine engineering bursary fundraising!

The General Botha Old Boys Association/ Society of Master Mariners – Marine Bursary Golf Day

Time: 10:00 to tournament end (may start earlier depending on number of teams entered) Where: Table View Soccer Club, Cape Town This year Mlamli from OW Bunkers has offered to be our team captain, and is looking for willing and able bodies for our team. We are looking for aspiring soccer heros, veteran players and anyone who is moved to chase a football round the field. We encourage you to bring your families and friends to support the day. We need to gert some practice in! Please would you let us know your availability as soon as possible. Please email tahra.sergeant@ibia.net and cc Mlamli mlfi@owbunker.com.

Time: Tee-off time booked 12h34 (off the 9th tee) Where: Rondebosch Golf Club Please let Tahra Sergeant know if you are keen to play, as we have sponsored a 4-ball and need four avid golfers. Email tahra.sergeant@ibia.net Thursday, 23 October

AGM Time: 5pm More details to follow, but please book in your diary now. Friday 5th September, 2014

First Networking Luncheon Where: Cape Town at the RCYC. Captain Peter Hall will be here to address our members with updates and information. Please diarise, more details to follow soon.

As always, towards the end of the year we take the opportunity to host our annual AGM. This year, it will be held in October and will be followed by a social get-together or members. Our members will also be participating in the SMIT Amandla Marine Maritime Industry Soccer Tournament and Grinrod General Botha Annual Golf Day towards the end of this year. In closing, I’d like to take this opportunity to thank the local Executive Committee, Immediate Past Chair and members for their continued support and passion for this industry.

Africa Report

Diary Dates

Conferences

Two big events being lined up for South Africa. Firstly, Africa Ports Evolution in September, we get a 10% discount for members signing up and IBIA chief executive Captain Peter Hall is a keynote speaker. http://ibia.net/ event/african-ports-evolution-2014/ Secondly Petrospot will be hosting their Maritime Week Africa in Cape Town first week of December. www.petrospot.com/profile-mwa2014-ct

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World Bunkering Autumn 2014

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Oryx Bunkering Services, Addax Energy SA 12, rue Michel-Servet, P.O. Box 404, 1211 Geneva 12, Switzerland Tel: +41 (0)58 702 90 40 Fax: +41 (0)58 702 91 40 Email: bunkering@oryxenergies.com Website: www.oryxenergies.com

New members

CORPORATE Bunker Supplier Ngando, John Foryam Corlay Cameroun S.A. 114 Blvd de la Liberte BP 214 Douala Cameroon Africa jngando@mrsholdings.com Bunker Supplier Kantysheva, Olga Tranzit-DV Group 13 Uborevicha Street Vladivostok 690091 Russia kantysheva@tranzitdv.ru Surveyor Al Sayda, Mohd H.I. Oil Lab & Marine Surveyors Co. LLC Room No. 105 Ggico Building Behind Burger King Restaurant Buhairah Corniche Sharjah 6400 UAE mohd@oillabuae.com Bunker Trader Bulut, Azize Fors Ikizler Denizcilik Sanayi Ve Ticaret Ltd STI Salacak Mah, Ogdul Sokak Ihsan Sitesi. No.: 37A Block D:1 Istanbul 34672 Turkey info@forceshipping.com Bunker Supplier Anda Ortega, Juan De Dios Marinoil Servicios Maritimos, SA DE CV Carretera Tampico-Valles KM. 4.5 Col. Moralillo Panuco Veracruz 92018 Mexico direccion@marinoil.com.mx

World Bunkering Autumn 2014

CORPORATE ADDITIONAL Bunker Suppler Panchenko, Michael Tranzit DV Singapore Pte Ltd 1 North Bridge Road #21-01 High Street Center Singapore 179094 Singapore panchenko@tranzitdv.ru Bunker Suppler Lee, Aleksander Marine Logistics Korea Limited (Tranzit-DV Group) #1821 Gwanghwamun Official Bld Jongno-gu 110-999 Seoul lee@tranzitdv.ru Surveyor Akbari, Syed Oil Lab & Marine Surveyors Co. LLC - Fujairah Al Sharia Building A/98 D Unit 5882 Fujairah UAE akbari@oillabuae.com Surveyor Al Sayda, Mohd Oil Lab & Marine Surveyors Co. LLC - Ajman Flat No. 104 Mushairef Ajman UAE mohd@oillabuae.com

New members

INDIVIDUAL Service Hughes, Phil Eastern Energy Services Pte Ltd 60 Kaki Bukit Place #02-19 Singapore 415979 Singapore info@eesgroup.com Service Verle, Martin DNV Petroleum Services, INC 318 N. 16th Street La Porte' Texas 77571 USA martin.verle@dnvps.com Bunker Trader Kaminskiy, Mark Merkator Co. Ltd Office 1, #12, Lesnaya Street Vladivostok 690022 Russia merkator@list.ru Service Deruyck, Michel Dredging and Maritime Management SA Tragel 60 Hofstade-Aalst 9308 Belgium michel.deruyck@jandenul.com

Ship Owner Kee, Kenneth 27 Limau Garden Singapore 467886 Singapore kkee27@gmail.com Legal Lewis, Lars Lewis & Co. AARPI 14 ave d'Eylau Paris 75116 France lars.lewis@lewiscolaw.com Bunker Trader Wakim, Elie Med Petroleum DmCC Unit No. 30-1-1869 Floor No. 1 Building No. 3 Dubai UAE bunkers@medpetroleum.com

Bunkering in Sea Of Ohotsk and Bering Sea. Transportation wholesale and retail of oil products in the Russian Far East ports

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Elections

Elections to the IBIA board of directors

rior to the Annual General Meeting (AGM) on Monday, 9th February 2015, there will be an election to replace 4 members of the Board whose term of office will end on 31st March 2015. These elections are an opportunity for new people with new ideas to join the Board and take part in the running of the Association. In the same way as the elected officers of the Association change, so should the Board Members. Members of IBIA are therefore invited to propose candidates for election to the Board whom they think will make a worthwhile contribution to the running of the Association. Prospective Board Members should be aware that being a Board Member is not just a titular position, they will be expected to take an active part in the direction of the Association. A copy of the Guidelines for Board Members and nomination forms are available on request and on the website www.ibia.net.

Candidates for election to the Board must: • Consent to stand for election • Be paid up Members of the Association • Be proposed and seconded by paid up Members of the Association • Complete and return the Nomination Form, which can be downloaded from the website www.ibia.net

COMPLETED NOMINATION FORMS MUST BE DELIVERED TO THE SECRETARIAT NO LATER THAN Monday, 27th OCTOBER 2014 EITHER BY POST TO: IBIA Ltd, Latimer House, 5-7 Cumberland Place, Southampton, SO15 2BH, United Kingdom OR BY EMAIL TO: ibia@ibia.net In both cases confirmation of receipt should be obtained from the Secretariat.

Nominations will not be accepted after the closing date.

World Bunkering Autumn 2014

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Tel: +65 6344 1108 Fax: +65 6344 1128 email: bunkers@searights.com.sg www.searights.com.sg

s Anna Trant leaves us to take up a new role as functions manager at a major Devon zoo – so Stephen Hoare now picks up the ball as IBIA’s new events and membership manager. Steve previously ran his own professional event management company and has worked in membership management roles for a number of large organisations. He is looking forward to learning a “new” industry’s language and terminology and getting out meeting as many members as possible over the coming months. Here are just a few of the jobs that Anna has handed to Steve on her “to-do list”. 1. Promote our 2014 convention in Hamburg. 2. Plan the 2015 IBIA dinner. 3. “Various other membership and marketing projects”. Steve’s first reaction was: “One thing is for sure – the events and membership manager’s job is varied and stimulating.”

Quality and compliance

We have just launched the 2014 IBIA convention. This year, the focus is on quality and compliance. You will hear about: • the “new fuels” announced by Exxon and Genoil; • what’s happening with compliance and the Trident Alliance; • the European perspective; • what ports are doing to encourage greener shipping; • quality, transparency and compliance; • how IBIA is working with shipping associations to develop clarity on fuel issues; • how to combat fraud and avoid being short changed. This year’s convention takes place from 4-6 November at the Hotel Grand Elysée in Hamburg, where we anticipate a record-breaking event. Why? Because this year the convention takes place in association with Eisbeinessen, the world famous ‘pigs knuckle’ bash, which draws 18,000 shipping professionals

World Bunkering Autumn 2014

IBIA events

Events and membership manager’s report

Stephen Hoare

to Hamburg – and to which our delegates will get preferential access. We are also combining with VDR, the German Shipowners’ Association, to make this our biggest event yet. In addition, a programme of networking events will keep you entertained between lecture sessions. For full convention information and to book tickets please visit: www.ibia.net/ event/annual-convention-2014/ The International Bunker Industry Association (Asia) Golf Challenge

Preparations for the annual golf challenge in Singapore on 17 October are in full flow. This year, the event follows SIBCON, the Singapore International Bunkering Conference and Exhibition, so, after a stimulating set of presentations, why not enjoy the tranquillity of the Jurong Country Club? The event once again raises money for our ASIA bursary fund. Bunkering in Asia

Continuing on an Asian theme, IBIA (Asia) has organised a half-day seminar in August at the Amara Hotel addressing the challenges of the introduction of mass flow meters. The event, Technology in Bunkering, is free to members. See our website for details: www.ibia.net/about-singapore-branch/ The 2015 Annual Dinner

We are now taking bookings for our annual dinner on Monday 9 February at the Park Plaza Hotel in London. This event attracts over 1,100 attendees, and is a great opportunity to meet fellow industry professionals. Please note, you have to be an IBIA member to buy dinner tickets. To book tickets – or grab a whole table – visit: www.ibia.net/ event/annual-convention-2014 New IBIA events

IBIA is expanding its event portfolio, and is planning a topical forum in Gibraltar in 2015. Keep an eye on our newsletter and website for further details: www.ibia.net

The International Bunker Industry Association

Join IBIA today Why Join IBIA? Are You a Bunkering Professional? Involved in the supply of bunkers to vessels? Want a direct line to IMO decision making? Want network access to over 600 professionals and their organisations?

Levels of Membership Corporate:

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IBIA Annual Convention 2014

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Book online now ww.ibia.net The Convention is an opportunity for the industry to meet up and discuss issues of the moment; we have over 650 organisations in 66 countries, and while they like our smaller, regional events it’s the once-a-year chance the convention gives to network that draws them. Ours is the only convention happening during Eisbeinessen week. We are running a programme of training courses alongside the convention, and there will of course be the usual well-attended programme of networking events. The title for the event is ‘Quality and Compliance’ and it is focussed on the impending change in emissions regulations. We will tackle the issues of fuel quality, availability and price, how to get what you have paid for, and how best to comply (should you choose to do so). Please book via our website: http://ibia.net/event/annual-convention-2014/

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Mark Williams Braemar Seascope

Dr Hermann Klein E.R Schiffahrt

John LA Rese ExxonMobil

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IBIA noticeboard Benefits to members as of 1 August 2014

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annual increases. These increases took effect on 1 July 2012 and in future there will be small Additional te Corpora listing of practice present the The Board has also decided that have changes some and needs s’ member meet fairly and Members does not properly ship to member of benefits the match ly accurate more will that ed therefore been introduc its cost; affected members will be contacted directly by the Secretariat. If you have any queries or comments about these changes, then please contact ibia@ibia.net or telephone: +44 (0) 20 3397 3850.

IBIA Publications and Benefits IBIA World Bunkering Magazine – free copies for Members of IBIA

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

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

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Evaluate the Merits of a Bunker Claim

Interpretation of specifications for bunker fuels and a guide to the question of repeatability. For sale to non-members at £35. IBIA Glossary of Bunker and Lubricating Oil Terminology

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World Bunkering Autumn 2014

Global news

Global round-up All the news from around the world

ICS calls for harmonised PSC on sulphur

The International Chamber of Shipping (ICS) says that it is “encouraging the Paris Memorandum of Understanding on Port State Control to ensure that a harmonised approach to PSC inspections has been developed in advance of the 1 January 2015 deadline” for the implementation of the 0.1% Sulphur Emission Control Areas (ECAs). ICS has underlined the shipping industry’s commitment to full compliance with the IMO sulphur ECA requirements from January 2015. However, ICS is concerned that information collected by its member national ship owners’ associations suggests that many governments are not yet prepared to implement the requirements in a uniform manner, in order to ensure the prevention of a potentially serious market distortion. ICS Secretary General Peter Hinchliffe explained: “The shipping industry is investing billions of dollars in order to ensure compliance with this major regulatory change, and the huge costs involved could have a profound impact on the future structure of the entire shipping industry. We therefore think it is vital that governments get the details of any PSC intervention right as we enter a new world in which fuel costs for many ships will increase overnight by 50% or more.”

World Bunkering Autumn 2014

He added: “There are only six months to go and it is vital that the Paris MOU and its member states – in co-ordination, as may be appropriate, with the United States and the European Commission – clarify all of the details of ECA implementation with respect to PSC inspection as soon as possible. ICS believes it is important for the maintenance of fair competition that implementation occurs throughout the

Paris MOU region in a consistent and harmonised manner.” ICS has just written to the Paris MOU in order to draw attention to the global shipping industry’s serious concern with respect to the sulphur ECA implementation. With the exception of the United States, all of those coastal nations that are located within the IMO sulphur ECAs (in North America, the North Sea and the Baltic) are party to the Paris MOU.

Global news

Evergreen’s big fine for small spill

Evergreen Marine, which operates the UK registered container ship Ever Sigma, has been ordered to pay £17,311.01 (US$29,661) for breaching oil pollution legislation. The ship was on passage from Greece to the Netherlands when 700 litres of heavy fuel oil went overboard, according to a UK Maritime and

Coastguard Agency (MCA) statement. The incident occurred during an internal transfer of heavy fuel oil. Some heavy fuel oil spilt overboard about 83 miles off Kalamata in Greece. By pumping cold heavy fuel oil with two pumps, the ship’s staff had over-pressurised the tank, which then forced the fuel out through an air

pipe. There was also a breakdown in the ship’s safety management system and procedures were not followed during the incident, which occurred on 24 January 2013. The operator was fined £10,000, plus costs of £7,191.01, and a victim surcharge of £120 after pleading guilty to a breach of oil pollution legislation.

Oil Marketing & Trading International (Europe) SA MARINE FUELS

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in JAMAICA Office 2001, Saba Tower 1, JLT DUBAI, UAE Tel: 00971 4 4350500 Fax: 00971 4 4350505 E-mail: bunkers@oil-marketing.com

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World Bunkering Autumn 2014

UK-based marine gas oil (MGO) supplier Geos Group is advising shipowners and operators to prepare for a surge in demand for low-sulphur fuel from the beginning of next year, when the level of sulphur allowed in bunkers in emission control areas (ECAs) will reduce from 1.0% to 0.10%. Geos notes that, to comply with the new rules, all companies operating ships in the ECAs will need to switch to low-sulphur fuel such as 1000 parts per million (ppm) MGO. It says: “Demand for this type of fuel will inevitably increase and, as a result, there is likely to be a shortage of stock.” The company says that many shipowners and operators are expecting

major oil refineries to increase their output of 1000ppm MGO in order to meet the increased demand. However, Geos discounts this, saying: “This is not likely to happen on a large scale, because refineries are set up to produce a number of different grades of fuel from crude oil, and to change the product mix is not at all straightforward. Blending ultra-low sulphur fuel oil with 1000ppm MGO at the refineries is an option, but the process is difficult and there may be limited production capacity available.” ECA “kills ferry route”

Ferry operator DFDS says that its passenger ferry route between the English port of Harwich and Esbjerg,

LNG-powered ferries for Vancouver

Canada-based BC Ferries has ordered three new Intermediate Class vessels at Remontowa Shipbuilding, Gdansk, Poland for a total of $165m. The vessels will be classed by Lloyd’s Register (LR). The new intermediate class vessels will be the first vessels in BC Ferries’ fleet to operate as dual-fuel capable, using Liquefied Natural Gas (LNG) or diesel fuel for propulsion and power. Mark Wilson, BC Ferries’ Vice President of Engineering, said: “This is an exciting initiative for BC Ferries that can reduce upward pressure on fares due to lower fuel costs for LNG, and reduce the environmental emissions substantially as LNG is a cleaner and greener fuel compared to current alternatives.” Mr Wilson said: “BC Ferries is very pleased to have LR as the classification society on these new Intermediate

Denmark, is unable to bear the extra £2 million (US$ 3.4 million) that it is expected to cost to meet the 0.10% sulphur limit. It says the route has been struggling for a long time with high costs, loss of passengers and freight being switched to road transport, and it will close on 29 September. DFDS says it is “now gathering its efforts to secure the major freight route between Esbjerg and Immingham and the many jobs that this route also generates”. It adds: “This route will also be hit by substantial extra costs as a result of the new sulphur rules. We therefore need to keep a tight focus on costs to prevent the transfer of freight to road transport that will otherwise become a consequence of the new sulphur rules.”

Global news

MGO shortage “likely”

Class ferries. LR has had a strong relationship with BC Ferries over the years and has the necessary experience and presence in Canada as we make this important transition to LNG-fuelled ferries.” Bud Streeter, President, LR Canada, said: “This project is the culmination of a great deal of hard work. The outlook is good for LNG in Canada – there is availability of Canadian gas at highly competitive prices, so commercially this is looking like a smart decision for BC Ferries. Our job was, and will be, to help ensure safety and reliability in the design, build and the bunkering and operation of these ships. Passengers are the most valuable cargo so we will endeavour to contribute to the safe operation of these ships. LNG can provide significant environmental benefits and, as BC Ferries is well aware, safety comes first. We are pleased to provide BC Ferries with our assistance and expertise.”

BC Ferries’ LNG-fuelled passenger ferry

World Bunkering Autumn 2014

Global news

Galle move

GAC Bunker Fuels and its local partner in Sri Lanka, Interocean Energy (IOE), have moved the bunker barge Kandy to Galle “to meet growing demand for bunker supplies at the port on the southern tip of the island nation”. GAC says in a statement: “Thanks to its proximity to international east-west shipping lanes, Galle is a popular choice for vessels taking on supplies. For more than two decades, the GAC Group has taken advantage of that strategic location, with its ship supply base at Galle with a fleet of 12 craft serving ships passing off port limits (OPL). Now, GAC Bunker Fuels is adding the convenience of bunker deliveries by barge to the GAC package of services on offer there.” Jointly operated by GAC Bunker Fuels and IOE, The Kandy can deliver 770 tonnes of IFO 380cst and 250 tonnes of MGO fuel, as well as 50 tonnes of fresh water. Deliveries will be made within the port or at Galle anchorage and outside port limits.

Gibraltar tariffs are being cut

Gibraltar tariffs

The Gibraltar Port Authority (GPA) is introducing new incentives to enhance the competitiveness of its port. The new fees include a 75% reduction on tonnage dues for vessels calling at the eastern anchorage whose purpose is conducting provisions, stores, spares and crew changes. This accompanies a proposed 75% reduction (previously 50%) on the completion of bunkers at the Western Anchorage within the time legislated. By applying this new fee structure, Gibraltar’s Minister for Tourism, Public Transport, Commercial Affairs and the Port, Neil Costa, says that he is confident that the eastern maritime zone will become far more attractive, both as a waiting area for vessels calling at Gibraltar for bunkers, and for other vessels wishing to avail themselves of agency support and ship husbandry services. Actual bunkering is not allowed in the Eastern Anchorage. These new tariffs follow recently implemented measures that enable more bunker barges to operate in the bay as a result of the release of two bunkering slots. GPA says that the new policy not only allows operators to supply more vessels but also reduces even further any possibility of waiting time for bunkers. Newly appointed Chief Executive and Captain of the Port, Commodore Bob Sanguinetti says that the new measures will increase Gibraltar’s competitive edge and further consolidate its position as a leading supplier of the full spectrum of marine services at the strategic gateway to the Mediterranean. A large storage tanker is currently berthed alongside the port’s detached mole, rather than taking up space in the anchorage. Commodore Sanguinetti told World Bunkering that the options for providing storage for bunkers, both ashore and afloat, were under review. He also said that ongoing political differences with Spain were not having any practical impact on bunkering.

World Bunkering Autumn 2014

Environment

ECSA’s last-minute alarm on sulphur limit But some owners form pro-enforcement lobby group

n 18 June, the deadline for EU countries to transpose the European Sulphur Directive into national legislation, the European shipowners’ body European Community Shipowners’ Associations (ECSA) issued an open letter calling for “fair, realistic and harmonised implementation” of the EU Sulphur Directive. The letter was part of co-ordinated moves across Europe to win some flexibility in the application of the new 0.10% sulphur limit. The new sulphur requirements require that ships sailing in the sulphur emission control areas (SECAs) – the Channel, the North Sea and the Baltic Sea – use bunker fuels with a maximum sulphur content of 0.10% or that the same level of emissions is reached by the use of alternative fuels or compliant abatement technologies. ECSA warned that the “shipping industry was faced with a number of legal and technical uncertainties, which the Commission and member states urgently needed to address if they hoped to lend shipowners a helping hand in preparing for the 1 January 2015 deadline”. Over the past few months, however, some major shipowners have been getting together to press for tough enforcement of the new regime, rather than flexibility. Discussion between these

World Bunkering Autumn 2014

companies led, in early July, to the formation of the Trident Alliance. ECSA said that, in general, shipowners that have made irrevocable investments in good faith to be compliant in time but are facing some of the uncertainties and problems, should be able to rely on well-defined and strictly limited transitory exemptions, such as extended compliance paths. “Member states and the Commission need to clarify without delay how they intend to apply and harmonise enforcement policies,” remarked Patrick Verhoeven, ECSA secretary-general. “This, however, cannot be to the detriment of competitiveness. Establishing legal certainty about proper compliance and enforcement together with a fair level playing field between shipping operators and between transport modes are therefore a must,” he continued. “European shipowners are committed to fully comply with the requirements of the EU Sulphur Directive and with the corresponding requirements of MARPOL Annex VI. During this demanding period of change for shipowners, we ask that the rules to ensure enforcement of the EU Sulphur Directive are put in place in a pragmatic way,” said Verhoeven, before concluding: “The Commission and the member states need to be strict but they also need to remain realistic.”

It would seem, however, that ECSA’s efforts have not achieved a great deal. An attempt by the UK Chamber of Shipping, an ECSA member, to persuade the UK government that the industry needed more time to comply with new sulphur emission limits entering force on 1 January next year received short shrift. Addressing MPs in the House of Commons, the then UK minister for shipping, Stephen Hammond, said: “I am pretty disappointed that the Chamber of Shipping continues to act as if these are new limits, and that these limits are inherently undesirable and that the UK government should have avoided them.” He referred to a statement made by the chamber in June 2008 that described the deadlines agreed at the International Maritime Organization (IMO) as realistic and giving the shipping and oil industry sufficient time to prepare. The minister said that the chamber had been brought into government consultations about the new emission control area (ECA) sulphur limits agreed in 2008 at every stage. Hammond said: “So to pretend today that this is something new is slightly disingenuous.” The chamber has set out its case in a letter to Prime Minister David Cameron. Although it agrees with the 0.1% sulphur limit within ECAs, it points out that IMO recognised that new technology would need to be developed. For this reason, and owing to concerns over the

Environment 28

supply of low-sulphur fuel, IMO said that the implementation of these regulations should have a degree of flexibility to allow companies to make the transition into the new era without damaging their business. The chamber, and ECSA, argue that the European Commission removed this flexibility and pragmatism – and that jobs will be lost as a result. ECSA has sent an open letter to EU member states and to the European Commission. In presenting its case, the chamber quoted a recent report by consultancy firm AMEC that said implementing new regulations before the technology was ready could cost 2,000 UK jobs and result in thousands more lorries clogging up the country’s roads and 12 million tonnes of additional CO2 being emitted into the atmosphere unnecessarily. AMEC put the cost of switching to distillate fuel at over £300 million. The chief executive of the UK Chamber of Shipping, Guy Platten, said: “We support the move to reduce sulphur emissions and the introduction of tough new limits. But the sharp increase in demand for low-sulphur fuel will see a massive spike in costs both for shipowners and potentially for ordinary diesel car users – so we need to use the new technology instead. But that technology is only now beginning to work, and could take up to two years to fit properly to all of our ships. Reducing sulphur is a job we agree needs doing, but it needs to be done in a pragmatic way that protects jobs as well as the environment. All we’re asking is for the EU to understand the practical realities we face and give us the time we need to comply.” By the end of June, ECSA was focusing on the need for “urgent clarification of the rules regarding to the use of scrubbers”. The move followed a plenary meeting of the European Sustainable Shipping Forum (ESSF) at the end of June, when representatives of all 28 EU states and 32 non-governmental organisations and companies gathered to discuss maritime environmental issues. ECSA pointed out that scrubbers have been identified as one of the few abatement technologies available allowing ships to reduce the sulphur content in their emissions. “However,” ECSA complains, “a lack of clarity in EU rules jeopardises their uptake.”

ECSA continued: “First of all, EU member state legislation differs when it comes to discharges of water used by the scrubbers to filter ship exhaust gases. While some countries allow water discharges close to their shore, others don’t, while in some others strict conditionality applies.” Moreover, according to ECSA, clarifications are urgently needed regarding the classification of the scrubber water discharges in the provisions of the EU Water Framework Directive, which foresees a progressive reduction for some pollutants and a complete phasing out for others. As a result, because of a lack of accurate information on the composition of these discharges, there is very high uncertainty on whether the operation of some scrubbers will be allowed close to shore. “Not only does the current uncertainty jeopardise investments already made by operators, it also hampers the commissioning of future installations, while time is dangerously running out,” said Verhoeven. “We urge the Commission and the member states to clarify these points, lest some operators start retrofitting their ships too late to be compliant with the new rules by 1 January 2015”. “The Commission is actively promoting scrubbers as one of the solutions to meet the new SECA obligations. It is time though to replace the question marks with clear answers, in particular in the case of open loop systems,” said Isabelle Ryckbost, secretary-general of the European Sea Ports Organisation (ESPO): “Policymakers should work towards a more coherent approach both at EU and national level as concerns the conditions under which this

technology can be used in the different member states. “The threat of weak enforcement of sulphur regulations is escalating fast. Responsible industry is taking the initiative to mitigate this threat, serving the best interests of the environment and human health as well as creating a level playing field for business. By speaking with one united voice we have the greatest chance to bring about change.” Meanwhile, the Trident Alliance is starting to push its pro-enforcement agenda. It describes itself as “a coalition of shipping owners and operators, who share a common interest in robust enforcement of maritime sulphur regulations and are willing to collaborate to help bring it about”. The alliance says it will also partner with other stakeholder groups, who share a similar interest in robust enforcement, to work towards the same objective. The initial membership list included: American Roll-on Roll-off Carrier (ARC), EUKOR Car Carriers Inc, Höegh Autoliners, J Lauritzen, Maersk, Rickmers-Linie, Stena, Torvald Klaveness, UECC, Unifeeder and Wallenius Wilhelmsen Logistics. Roger Strevens, vice-president, global head of environment, at Wallenius Wilhelmsen Logistics, has been elected chairman of group. He said: “Robust enforcement of sulphur regulation is needed for health and the environment, and, from the perspective of maintaining a level playing field, it is a business imperative. Already, during its formation, the Trident Alliance has raised awareness of the current shortcomings of enforcement and related consequences, particularly in the European ECA. Now our work starts in earnest.”

World Bunkering Autumn 2014

Environment Climate change discussions continue ICS says that if shipping has to pay towards climate change mitigation, only a fuel levy would be acceptable

hile the imminent tightening of the sulphur limits within emission control areas (ECAs) has taken much of the industry industry’s attention over the past few months, there remains the longer-term prospect of a regime to greatly cut shipping’s carbon footprint. Peter Hinchliffe, secretary-general of the International Chamber of Shipping (ICS), has repeated the organisation’s view that, if marketbased measures (MBMs) are required to reduce the shipping industry’s carbon emissions, only a fuel levy would be acceptable. In a keynote speech at a UK conference hosted by the Tyndall Centre for Climate Change Research in Liverpool in June, he also highlighted what he saw as a growing need for the industry to take account of the impact of climate change on shipping Hinchliffe said that shipping is the only industry with a mandatory global regime in place, agreed by the International Maritime Organization (IMO), to reduce its CO2 emissions. “We are therefore already on a pathway to deliver ships by 2030 that will be 30% more efficient than those of just a couple of years ago.” He added: “There is a clear mood to address supply chain efficiency at

World Bunkering Autumn 2014

every stage. In particular, the enormous financial pressure of the global recession on freight rates, coupled with virtually year-on-year fuel increases – some 300% over 10 years – has meant that the quest for efficiency is much more than enlightened self-interest and really a means to survive to fight another day.” Hinchliffe said that ICS’s current focus is on helping to ensure that the existing technical and operational measures agreed by IMO are properly implemented. He said that the desire of some governments to develop additional MBMs remains very controversial. ICS believes that the high cost of fuel – set to increase again as the industry switches to low-sulphur bunkers – already means that shipowners have every incentive they need to reduce CO 2. As well as addressing regulatory developments, Hinchliffe drew attention to the fact that extreme weather events appeared to be becoming more frequent. “Currently, ships are built to regulatory requirements upon a definition of North Atlantic winter conditions – these determine the strength of the ship, the thickness of steel, the spacing of strengthening beams and so on,” said Hinchliffe. “Will there come a time when the definition will have to

be upgraded? If so, how soon will that be, bearing in mind the 30-year design life of a ship?” He added: “Very few port authorities are doing work to raise infrastructure – higher jetties, higher railway lines and roads – building with a 50year time frame in mind. But how many hydrographic offices are thinking about prioritising surveys to ensure that port approaches are surveyed ready for the requirement for new charts in 20 or 30 years’ time – or is it needed sooner than that?” Hong Kong bans dark smoke

It is now an offence for any vessel, while within Hong Kong waters, to emit dark smoke, which is as dark as, or darker than, Shade 2 on the Ringelmann Chart for three minutes or more continuously at any one time. According to a Hong Kong Marine Department notice the owner, agent, and master each commits an offence each time dark smoke lasting for three is detected. They are liable for a fine of HK$25,000 ($3,225) for a first offence and of HK$50,000 for any subsequent conviction. Refusing to cooperate with an authorised officer attempting to determine whether this regulation has been breached is also an offence.

Interview

Going it alone David Hughes talks to Eirik Andreassen, chief executive, Veritas Petroleum Services

ack in 1981, an offshoot of Norwegian classification society Det Norske Veritas (DNV) introduced the first commercial bunker fuel testing programme for ships. Three decades on, DNV Petroleum Services (DNVPS) has become a global provider of fuel quality testing and bunker quantity services with a network of customer service offices across the world. But last year, following the merger of DNV with German classification society Germanischer Lloyd, DNVPS was sold off to IK Investment Partners and, this July, the testing agency was rebranded as Veritas Petroleum Services (VPS). So World Bunkering caught up with VPS’s chief executive Eirik Andreassen recently to find out more about life after DNV for this major player in the bunker testing scene. Firstly, though, I asked what he saw as the biggest challenge facing the bunker industry at present. “Right now there are many challenges, and most of them driven by upcoming environmental regulations,” Andreassen replied. “One of the challenges facing the industry is, of course, how to ensure availability and sufficient stocks of compliant fuels based on customers’ needs and operating profiles. The demand for fuel compli-

ant to the 0.10% sulphur limit will most probably increase from quarter four this year, and the fight for compliant fuels and blend stocks will drive the price upwards. This implies that the bunker suppliers/traders and brokers will have additional challenges to optimise the blends to provide a compliant fuel that is fit for purpose, and they may need to look beyond traditional sources. “We will also see new fuel types coming into the market. Some we already know and have seen, and others will be developed continuously. “For our customers, price and availability of emission control area-compliant fuel will probably be first on their minds, but we also see an increasing concern over the quality of compliant fuel. “Another challenge that will affect the whole industry is enforcement of the environmental legislation. This is, of course, something that is also of great concern to shipowners, the authorities and the general public. I am concerned that we will see huge

regional variations in enforcement, but administrations are gearing up to address this challenge. The shipping industry has long seen that inconsistent enforcement

Eirik Andreassen, CEO, Veritas Petroleum Services (VPS) World Bunkering Autumn 2014

World Bunkering Autumn 2014

the reduction in demand for HFO will make this product more attractive for ships in combination with scrubbers. We also believe there will be slightly less coupling between the prices of the various fuel grades.” So, will there be more or less need for testing companies in the future, and why? “We believe the need will continue to be there,” said Andreassen. “The types of fuel will change and, from 2020, the fuel mix will make for an even greater degree of complexity compared to what we see today. While most distillates are compliant with sulphur regulations, and cat fines pose a problem only to a limited degree, there will be more operational issues related to compatibility, lubricity, viscosity and cold flow properties.” Turning to one of the major parts of VPS’s current work, I enquired: “Will mass flow meters mean there will be no need for surveyors to attend when bunkering takes place?” “No,” came the definite answer. “A surveyor is still needed for the

verification of the flow meter reading and control of sampling. As a prudent measure, the buyer should always have a surveyor onboard to take the opening manual measurement of the bunker tanker for the verification of the flow meter reading. “Currently, VPS is experiencing an increase in both bunker quantity surveys and investigative surveys, because of the need to accurately account for the bunkers replenished and the bunkers already onboard.” “Do you think biofuels will take on in the shipping industry, and what challenges would that pose?” I asked. “Good question,” Andreassen responded. “I don't think biofuels will take off significantly in the marine industry. You will see the occasional products that contain some biofuels though. A lot probably also has to do with the price differential between bio and traditional marine gas oil. I would assume that bio can be sold at a better price elsewhere, for example to the automotive industry. Let us say my assumption is correct – why would anyone sell bio at a lower price to the marine market?” He summed up the challenges related to bio fuels as “cold flow properties, oxidation stability and microbial growth”. From this point, the discussion focused on VPS. Asked what he saw as the opportunities and challenges for the company as it is launched as a separate business, Andreassen first listed the opportunities. “We will be much more agile and flexible when it comes to developing new services and growing the business organically and inorganically. “We will continue to leverage our rich historical information, data analytics supported by deep technical expertise and experience to provide insights that will help our clients make the right decisions to improve their operational and financial performance.” “And the challenges?” I asked. Andreassen conceded: “The support from a big organisation like DNV was much more comprehensive. But, while independence means a greater challenge for our new organisation, it also gives us the opportunity to become a leaner, more nimble and efficient service provider.”

Interview

may be a threat to a level playing field, and is gearing up to put pressure on legislators to introduce a consistent approach to enforcement.” On the subject of the impending environmental regulations, I asked: “Do you think the widespread use of scrubbers will mean heavy fuel oil (HFO) will continue to be the main marine fuel for the foreseeable future?” According to Andreassen: “It will be part of the solution. When you look at it, there will still be a considerable amount of residuals available. These residuals have to go somewhere. The main consumers today are ships, oilfired power plants and other refineries that use these as feedstock, but the pricing varies a lot, and while ships and power plants are moving to cleaner fuels, meaning a reduction in demand for HFO, our belief is that this product will still be in abundance, and will be an important energy source for ships. “The question is also when will this start to make an impact. It is very difficult to say what will happen in 2020, but, from 2025, we believe that

Market Update

Market “set for expansion”

number of factors will result in an increased demand for marine fuel over the next few years, according to major global bunkering and lubricant trading and brokering company Glander International Bunkering. A company spokesperson told World Bunkering: “The world bunkering market is set to expand, in particular the cruise and passenger segment. It is going to increase about 75% more than the current levels. Apart from that, the offshore market is also set to increase and the container segment is projected to double by 2016.” Glander International Bunkering expects that January's 0.10% sulphur limit in Emission Control Area (ECAs) will cause the volume of Heavy Fuel Oil (HFO) sales to drop a bit, “but not drastically”. The effect will be limited as “vessels will run on marine gas oil in the ECA areas and will still have to run on hfo in other areas”. There will definitely be a spike in distillate demand (MGO). Alternatively, some owners might consider using scrubbers but with the next regulations coming in 2020, that would not be a long-term viable option. The trader and broker warns, however, the engines are specifically designed to run on hfo and if MGO is suddenly used, it will create wear and tear on the cylinder linings.

Given the current focus on quality issues, World Bunkering asked whether owners actually consider quality when buying bunkers or is it just something to be argued about later? According to Glander International Bunkering, this depends on who is actually operating the vessel, whether it is the owners who are buying the fuel or the charterers or operators who are buying the fuel. There are some owners who are very particular about the quality of fuel and there are some owners who follow the engine manufacturers recommended specifications. But most buyers are guided by the industry standards set by marine regulatory bodies. The owners are forced to buy expensive fuel to comply with the emission regulations. Looking ahead, Glander International Bunkering has a particular focus on the two largest bunker markets in the world, the Middle East and the Far East, and on getting competitive prices from the suppliers located there. The company says it is expanding organically in these regions “by making sure to recruit the right talent for our team”. Glander International Bunkering are actively seeking experienced traders to join their team, for more information please visit their company website www.gibunkering.com or email hr@gibunkering.com.

World Bunkering Autumn 2014

Independents

“Cash is king” Consolidation among the independents could be on the cards as the need for financial strength grows, but the top companies appear to be going from strength to strength

iquidity and credit together provide the biggest challenge in the shipping industry when it comes to fuel supply, according to major trader Dynamic Oil Trading in comments that have profound implications for the markets in which the independents operate. The company believes that the impending 0.1% emission control area (ECA) regulations and the increase in distillate use, which will create demand for more credit from shipowners and operators, will lead to further consolidation among bunkering companies. “In today’s bunker market, cash is king, and those in the market who lack the financial strength and access to capital will find it very hard to compete and grow,” says Dynamic Oil’s chief executive, Lars Møller. “This trend will become more acute following the introduction of the 2015 ECA regulations, owing to increased distillate use. Put simply, customers operating in ECAs and burning distillates to comply, will require significantly more credit than those operating outside ECA waters. While we are fortunate at Dynamic Oil Trading to have the financial resources, many bunkering companies are already finding it hard to finance the shipping industry in its current form; having to further increase credit will act as a catalyst for more consolidation.” Møller continues: “As the amount

World Bunkering Autumn 2014

of credit increases, so does the risk. The financial viability of who we provide credit to is critical, and the due-diligence that is conducted will be of paramount importance. Of course, at the centre of this is ensuring transparency and trust in the relationship between the supplier and the customer, as well as access to financial information.” OW Bunker

It has been a busy time for major physical marine fuel supplier and trader OW Bunker as it continued to expand its global operations. It has bought marine fuel broker Wilhelmsen Marine Fuels from its parent company Norway-based Wilhelmsen Maritime Services for an undisclosed sum. Wilhelmsen Marine Fuels’ main activity is broking services from offices in Oslo, London and Singapore, servicing customers on a global basis, but with a key presence in Singapore and the Amsterdam-Rotterdam-Antwerp (ARA) region. OW Bunker’s executive vice-president, Götz Lehsten, said: “Wilhelmsen Marine Fuels has a strong team and an interesting customer base that fits well into OW Bunker’s integrated business model. Apart from strengthening our position in Norway, Wilhelmsen Marine Fuels has the potential to support both our reselling and physical distribution activities.”

The Denmark-based company has also recently established physical distribution operations in Los Angeles and Long Beach, California. In addition, the company is starting physical supply operations in New York and New Jersey. The company will charter a double-hulled barge from Westoil Marine Services and use additional Westoil barges as required. Meanwhile, OW has time chartered an additional barge in Panama to further strengthen its physical operations there. The company says that the move “reinforces the company’s ongoing commitment to its customers operating along the Panama Canal, helping them to effectively navigate the region’s changing fuel dynamics”. Vitol

As a result of Vitol’s acquisition of 50% of the Cockett Group, it was decided to separate the trading and physical supply activities. Since 1 March 2013, all physical activities have operated as V-Marine Fuels. This was aimed at bringing even greater clarity and value to its customers. The existing physical activities, Associated Bunkeroil Contractors (ABC) and Cockett Marine Oil Supplies Ltd (CMOS) have been absorbed into this new division. This move provides V-Marine Fuels the autonomy to expand its current footprint and range of physical supply services globally.

Independents

V-Marine Fuels will offer a superior service to the global shipping industry and capitalise on the strength of its parent companies Vitol and Grindrod. This combination provides an unrivalled position and counterparty in today’s global marine fuels supply sector. V-Marine Fuels plans to develop and strengthen its positions in the Rotterdam and UK/English Channel markets and will imminently launch a new physical supply operation in Houston, US. Further announcements about the Houston operation will be made in due course. V-Marine Fuels looks forward to continuing to service the requirements of its valued customers into the future and in new markets as it executes its expansion strategy. Aegean Marine

Bunker supplier Aegean Marine announced its first quarter results in May. Nikolas Tavlarios, president of Aegean Marine Petroleum Network, commented: “During the quarter Aegean continued to build upon the momentum we established across our business as we extended our track record of profitability and growth. The sustainable growth drivers we have put in place enabled our team to continue delivering positive results despite persistent industry headwinds.” Tavlarios continued: “With Aegean’s US East Coast operations successfully integrated, we have strengthened our industry leadership and global market share. We remain focused on diversifying our geographical presence and increasing asset utilisation both through the expected introduction of our new Fujairah storage facility in the second half of 2014 and the potential addition of new service centres. In addition, with the sale of two older, non-core vessels, Aegean continued to streamline its expense structure and generate sustainable results. We are excited about our opportunities to build significant shareholder value over the long term.” The company achieved net income attributable to Aegean shareholders for the three months ended 31 March 2014, of $5.1 million, or $0.11 basic

diluted earnings per share. Net income attributable to Aegean shareholders excluding a non-cash loss from the sale of non-core assets and vessel impairment charge was $8.7 million or $0.18 basic and diluted earnings per share. For the three months ended 31 March 2013, the company recorded

net income attributable to Aegean shareholders of $7.2 million, or $0.15 basic and diluted earnings per share. Net income attributable to Aegean shareholders excluding a non-cash loss from the sale of non-core vessels was $6.3 million or $0.13 basic and diluted earnings per share.

Chemoil

Singapore-based Chemoil has recently experienced what can happen when things go wrong in a transaction. It has been reported as claiming $1.7 million in unpaid bunker bills and costs from Gulf Marine Management (GMM) relating to stems for the very large crude carrier Artemis Glory at Fujairah in January this year. However, the surprise news regarding Chemoil is the reported June departure of Tom Reilly. Citing market sources, specialist energy analyst and news provider Platts said Reilly left the company at the end of June. Reilly’s move comes shortly after Chemoil’s May delisting from the Singapore Exchange. The company is wholly owned by commodities trader Tom Reilly Glencore, which decided listing was no longer necessary. In February, Chemoil announced a profit after tax of $79.7 million in the fourth quarter and $101.9 million for the full year 2013. The company said then that gross contribution per metric tonne (GCMT), the company’s key margin indicator, was up 10% for the fourth quarter 2013, at $7.0 (2012 – $6.4) and up 22% for the year at $8.2 (2012 – $6.7). In a statement, it said: “The margin improvements offset a 5% fall in annual revenue to $13.0 billion, driven by small reductions in both volume traded (down 0.4 million metric tonnes) and average sales value per metric tonne.” At the time, Reilly said: “This year, our profitability was driven by strong fuel operations in North America and by our global biodiesel business. Start-ups such as Chemoil Energy, which sells diesel to the fracking industry in the US, have turned profitable and have begun to contribute to our success. The 22% improvement that we achieved in our GCMT reflects the hard work put in by our traders and senior management’s emphasis on business unit profitability. Our solid financial performance came despite losses in our marine business in Europe, where we have now restructured. In 2014 we will continue to build on the strong global businesses we have established.” Meanwhile, the joint venture between Chemoil and the Adani Group, Chemoil Adani, has expanded its bunkering operations to East and Southern Africa. It can now supply at Mombasa, Dar es Salaam, the ports of Mozambique, Durban, Richards Bay, East London, Port Elizabeth, Cape Town, and in Namibia.

World Bunkering Autumn 2014

Quality

Quality matters Quality has become a major issue for several reasons, as David Hughes reports

uel quality has become a subject of debate at the International Maritime Organization (IMO), both at the recent meeting of the Marine Environment Protection Committee (MEPC 66) and the Maritime Safety Committee (MSC 93). IBIA made sure its voice was heard at both. MEPC 66 debated a joint submission from Liberia, the Marshall Islands, the International Association of Independent Tanker Owners (INTERTANKO) and the International Association of Dry Cargo Shipowners (INTERCARGO). The Marshall Islands complained that there was no control of quality prior to delivery, and by the time problems were discovered it could be too late for the ship to do anything. The submission asked for port authorities to “examine ways to strengthen implementation of the current provisions in regulation 18 of MARPOL Annex VI and to be more proactive in auditing and inspecting local bunker suppliers”. IBIA and the Baltic and International Maritime Council (BIMCO) responded by reiterating the need to strengthen implementation of regulation 18 of MARPOL Annex VI. However, the issue was put back for further discussion in October. At MSC 93, IBIA stressed that goodquality fuel was very much in the interests of the bunker industry too. During the past few months, quality has been high on

World Bunkering Autumn 2014

IBIA’s agenda along with meeting shipping associations and relevant flag states to clarify and inform on fuel quality issues. In June, IBIA organised a half-day seminar in Liverpool that brought together experts from the industry to address these issues and clarify the existing standards. It has also organised road shows on the topic. IBIA chairman Jens Maul Jørgensen is well known for his views on quality issues. He said: “I am delighted that we are getting visibility on this issue, and that it has been accepted that quality is a problem. I encourage all parties to work together for the benefit of the marine industry.” Quality can be guaranteed to be a major debating point at this November’s IBIA Conference in Hamburg. Wilhelmsen Ships Service (WSS) notes that the quality of bunker fuel continues to be a source of concern to shipowners and charterers. During the past 30 years, it says, enhanced refining techniques have resulted in a decline in marine fuel quality. In addition, demand for low-sulphur fuel has resulted in heavy blending and inappropriate blend components. Unfortunately, says WSS, some marine fuels have also been used as a dumping ground for waste chemicals and organic substances that have caused serious operating and ship engine problems, resulting in higher operating costs and lost profits.

The firm says that changes to refinery practices, increased slow steaming and controls on sulphur content mean fuel testing and treatment are critical to efficient operations. It has responded to changes in the marine bunker market with a campaign that aims to help shipowners get the best from their residual and distillate fuels. A consistent reduction in the quality of fuels available to shipowners, the need to comply with IMO and EU regulations on sulphur content and the adoption of slow steaming have created a ‘perfect storm’ of operational and compliance requirements, according to Jonas Östlund, product marketing manager, marine chemicals, at WSS. Taken together, he says these changes will have a profound effect over the next 10 to 15 years as refinery output shifts towards new fuels and the next wave of pollution regulations begins to bite. “The pressure to increase efficiency and reduce operating costs is bringing speeds down across the industry. But because few engines were built to operate at slow speeds, the result can be poor combustion and reduced efficiency. Such problems are exacerbated by the decline in quality of blended marine fuel, which often exhibits very poor stability,” says Östlund. At the same time, regulations are driving owners to use lower-sulphur

Quality 36

fuels. In four years’ time, the IMO will decide whether to apply a cap of 0.5% maximum sulphur by 2020 or 2025. Inside the three existing emission control areas (ECAs), maximum sulphur content must be no more than 0.1% after 1 January 2015. But even if owners accept the 50% price difference in switching from residual fuel to cleaner distillates, these ultra-low-sulphur fuels are no panacea, says Östlund. “Quality problems when using distillate fuels are fundamentally different from those of residual fuels and focus on lubricity, storage stability and microbial contamination. Lubricity problems are most likely to happen in fuels with a sulphur content lower than 0.1%,” he adds. For owners who want to protect their investments, many of these issues can be solved by chemical treatment, which has proved to be an economical solution for improving the quality of fuel by increasing its stability to a more reliable level. Östlund argues that testing and treatment are vital for owners who want to remain compliant and efficient. “To help manage the unique challenges of distillate fuels,” WSS says it has developed a new product range, Unitor DieselPower, specifically for this fuel type. A series of advanced formulations helps to keep fuels bright and stable. WSS also provides a range of fuel testing kits that can help owners understand the quality of their fuels when problems are suspected, enabling them to detect issues early and take action that avoids the time and cost of remedial action later. Global trading company Dynamic Oil Trading has highlighted “the important role of fuel suppliers in helping shipping companies to reduce their exposure to fuel quality and quantity risks, including bunker fraud”. The company believes that shipowners can achieve even greater assurance over fuel quality and quantity by developing longer-term, partnershipbased relationships with bunker suppliers that will work with them to reduce their exposure to disputes and fraudulent behaviour. Chief executive Lars Møller acknowledged that mass flow meters can be useful in reducing

technical system that analyses where short deliveries, whether accidental or potential issues may arise, who might be deliberate. “However,” he cautioned, affected, as well as any common trends. “even where mass flow meters are This has enabled the company to build available, shipowners need to be aware an operational and scalable system of of other factors that can give rise to real intelligence and value that facilitates disputes, not just over fuel quantity, insight and improves performance on a but also off-spec products or fuel concontinual basis. tamination. This can have extremely IBIA’s Jørgensen commented: serious consequences, including non“Not only are these impressive results compliance with emissions regulations in terms of claims reduction by OW and damage to engine components.” Bunker but also it is a good example Møller warned: “Under pressure to of how bunkering companies can take keep their costs down amid low freight responsibility for implementing new, rates and high bunker prices, it is easy to practical measures that mitigate against see how shipowners could be tempted to the risk of off-spec fuels and increase cut corners when it comes to conducting accountability for ensuring quality. due diligence on their bunkering pur“IBIA’s objective is to help the chasing decisions, perhaps by purchasing industry to meet the serious challenge the fuel directly from the cheapest local of off-spec bunkers, and to work colsupplier. However, they need to be aware laboratively with all stakeholders within of the risks that this poses, not just in the marine fuel supply chain to improve terms of bunker fraud but also other quality standards and professionalism risks that can threaten their operational at every level. Part of this approach is activities and their reputation, as well to encourage transparency within the as proving very expensive. While the industry, and communicate ‘good pracultimate responsibility rests with the tice’ such as that developed by leading shipping companies from whom they companies such as OW Bunker. We choose to procure their fuel, we firmly welcome this open approach about the believe that they should take advantage significant work that is being done to of the local supply chain knowledge held reduce claims.” by well-established bunker suppliers.” Meanwhile, global physical distributor and reseller of marine fuels OW Bunker says that it has reduced global claims on physical products to 0.9% for the first quarter of 2014. This is down from an average of 1.6% in 2013. OW set a target of reducing global claims to below 1% when it introduced its own global quality standard (GQS) at the end of 2012 to ensure the quality of products supplied by its physical operations on a global basis. As part of the GQS, customers are provided with a specification analysis on physical product orders, which is delivered prior to the usual testing procedures conducted by an external fuel oil analysis provider. This ensures complete transparency in the physical distribution process. In addition to the GQS, OW Bunker says it has established a Jonas Östlund, product marketing manager, dedicated quality control departmarine chemicals, Wilhelmsen Ships Service ment, which has developed a

World Bunkering Autumn 2014

Lubricants

Sulphurous atmosphere With the next round of environmental regulation coming into force on 1 January 2015, owners and operators face a challenging environment as they move to the use of low-sulphur fuel

ubricant manufacturers are gearing up to help their customers tackle the demands of the new environmental legislation covering emission control areas. New sulphur regulations from January 1, 2015, will lead to more use of distillate fuels than LNG says Total Lubmarine spokesman Serge Dal-Farra because of the issue of availability. “LNG is seen as a very good candidate for the future with regard to emissions and SOx, NOx, Co2 and particulate matter, but we think that the product is not really available on a worldwide basis today.” He says the fuel will have a great future, but in the next few months there is unlikely to be significant uptake. According to Dal-Farra, the use of distillate fuel for two stroke engines is not usual and presents its own challenges and Total Lubmarine will need to have its lubricant product available in time to meet the 2015 deadline. In terms of the product the company provides there has to be a distinction between the two stroke and four stroke engine market, he explains. The company has a good deal of experience in delivering lubricants for four stroke engines using distillates, as well as LNG, and is in the process of developing products for two stroke engines.

World Bunkering Autumn 2014

The switch to distillates in January 2015 presents some new challenges for operators because distillates have a much lower viscosity and a much lower lubricity – raising issues with the lubrication of fuel pumps in particular when switching the fuel. Total is developing a new product with a lower basicity, yet high detergency which will be dedicated to distillates. Total is confident that there will be enough supplies of distillates to meet the 2015 deadline, however Dal-Farra says the 2020 global cap of 0.5% might be “ambitious”, and there may be a delay. He believes the real driver for LNG uptake will be the 2020 deadline. However, the issue of whether a pure gas engine or a dual fuel one is in play is a major consideration. If using pure gas the story might appear simpler he says. As gas is already being used in four stroke engines, its function is more clearly understood through experience. In the case of a dual fuel approach, as far as two stroke engines are concerned, he says, a pilot fuel such as a heavy fuel oil is needed, which means there may be a certain amount of sulphur. This means the lubricant has to match both types of fuel in a percentage mixture that is not known in advance. As the pilot fuel contains sulphur, there can be a build up of sulphuric

acid, which needs to be fought with basicity contained in the lubricant, Dal-Farra explains. The big challenge he says is producing a lubricant that will be used in the future to match the different fuel configurations. With the increased automation on board ships and technological development, Dal-Farra says that if one supplier is able to reduce the complexity and has good local networks to help customers and deliver them worldwide, and training and services and helping crews. The company does training courses for customers and crew members and also supports maritime academies world-wide. There hasn’t been enough training in the lubricant area before, he says. ACT product

American Chemical Technologies (ACT) has announced global availability of Neptune® Series polyalkylene glycolbased lubricants. These will allow vessel operators to comply with the US Environmental Protection Agency’s vessel general permit (VGP) regulations, which require the use of environmentally acceptable lubricants (EALs). According to ACT, the water-soluble chemistry of Neptune® Series lubricants is the only fluid chemistry that is in full compliance with both VGP and the Clean Water Act require-

Lubricants 38

ments. The act assesses fines based upon the extent a fluid leaves a surface sheen on water. The company claims that because its lubricants are heavier than water and dissolve completely, they leave no surface sheen in the event of a leak or spill, eliminating the need for clean-up. These lubricants also meet the EAL standard specified by the US Coast Guard’s Surface Force Logistics Center. Under the new VGP regulations, which came into force on 19 December 2013, all vessels of 79ft or longer must use EALs recognised by the Environmental Protection Agency (EPA) in all oil-to-sea interfaces. This includes stern tubes, thruster bearings and other equipment that is, or may become, immersed in water. Vessels constructed before that date must adopt EALs in all oil-to-sea interfaces, except where deemed technically infeasible. The EPA defines EALs in the regulations as lubricants that are biodegradable, low in aquatic toxicity, with low potential for bioaccumulation. According to ACT, Neptune® Series lubricants have been shown to be biodegradable using the OECD 301 B test method and are classified as “relatively harmless” or “practically non-toxic” to fish and other aquatic wildlife by the US Fish and Wildlife Service. They have been found to be non-bioaccumulative in the tissues of living organisms using the OECD 107 and 117 test methods. ACT said Neptune® Series lubricants are water-soluble polyalkylene glycol-based lubricants offering excellent lubricity, a high viscosity index and corrosion protection. The lubricants are especially well-suited for use in oil-to-sea interfaces, because they retain their performance characteristics in the presence of humidity or upon water influx better than EALs formulated from synthetic ester, vegetable oil and bio-PAO base oils. The hydrolytic stability of the lubricants reduces formation of corrosive acids and sludge resulting from water contamination, protecting components from damage and supporting the vessel’s operating reliability. Neptune® Series lubricants include anti-wear fluids as well as gear lubri-

cants in a broad range of viscosity grades to meet the requirements of oil-to-sea interface, deck and other marine vessel applications, as well as requirements for dockside or other shoreline systems. Castrol development

Castrol has announced that it will become the sole brand for BP Group’s marine lubricant offering. The decision to consolidate the marine lubricants offerings that are currently provided under both BP Marine and Castrol Marine brands will create a single product and service portfolio that will provide greater simplicity and efficiency for customers. The transition has been under way for over two years, beginning with the gradual migration of ancillary products from BP to Castrol. Main-grade marine lubricant products and services will also be moved over to their Castrol equivalents in the coming months. Upon completion, this will enable a globally consistent product and port offer that maintains choice under a single brand and widereaching global coverage. Castrol Marine’s marketing director, Jonathan Hutchinson, said: “Consolidating BP’s marine lubricants offering under the Castrol brand is just one example of our ongoing aim to continuously offer our customers greater value and efficiency. As part of BP, Castrol provides the same bestin-class offering, global reach and technical support. The main change is simply the name under which products and services are supplied. The Castrol brand is already recognised by marine customers in over 820 ports and in 82 countries worldwide and has built a reputation over 100 years that is synonymous with first-class service and innovation.” During the transition period, customers will start to receive Castrol main-grade products in place of the BP main-grades. All Castrol-branded maingrade products have the same original equipment manufacturer (OEM) approvals as the BP-branded products and offer the same leading quality and performance benefits. Castrol’s maingrade portfolio is also fully compatible and miscible with corresponding BP

lubricants. This ensures that a tank already containing a BP product can be filled with a Castrol product and the two will mix without causing problems or affecting performance. Furthermore, these revisions will also enable existing BP customers greater access to all Castrol’s ancillary products, including its BioRange products. At the same time, BP Enercare services will be transferred to Castrol Caremax. This will not affect service or historical used oil analysis data, and existing BP customers will be able to continue using current test kits and sample bottles, even if they are BP-branded. There will be some adjustments to customer services locations and account teams to reflect the changes, but ordering processes will remain the same. Sales advisers are fully prepared to help customers move smoothly through the transition process. There will also be no effect on pricing as the Castrol and BP price lists are fully aligned. Hutchinson concluded: “We are coming to the end of a process that we hope will be well received by our customers. Once complete, this will help to simplify customers’ lubricant purchasing processes, as well as streamlining our operations to create mutual efficiencies.”

World Bunkering Autumn 2014

Risk management covers a number of areas – from hedging fuel prices, to protecting crews and cargoes, through to geopolitical risk – as Sandra Speares reports

reight Investor Services, one of the world’s leading brokers of freight and commodity swaps, has unveiled a raft of upgrades to its fuel oil trading screen. Fuel oil traders are now able to take advantage of tighter spreads and firm prices on more period and spread contracts when trading the key Singapore and Rotterdam benchmarks. The changes are as follows: Tighter markets. Bid/offer spread on balance of month, the front six months for Singapore 180cSt and 380cSt and Rotterdam 3.5% Sulphur Barges contracts will be reduced to $2. New products. Prices for the Viscosity Spread (the difference between the Sing180 and 380 contracts), the EastWest Spread (the difference between the Sing180 and Rotterdam contracts) and Time Spreads (for Sing180, Sing380 & Rotterdam) will change from implied to firm across the same tenors as the flat price. Longer Dated. Real-time prices, from seven months to four years forward, will also be published on an indicative basis for all contracts. Damien King, derivatives broker with Freight Investor Services (FIS), says: “FIS was the first to introduce the single tonne fuel oil swap to the market and we have worked closely

World Bunkering Autumn 2014

with market makers and our clients to continue to innovate.” He adds: “This enhancement has replaced implied prices with firm numbers, tradable in real time across spreads and outrights. No other fuel oil trading screen offers the market this level of commitment in terms of trading depth, liquidity or flexibility.” The changes have been made to bring additional transparency to the fuel oil derivatives market and offer a neutral environment for both hedging and trading purposes. The updated version of the screen is offered with no subscription fee, and logins are available on request by contacting the FIS fuel oil desk. King adds: “For shipping companies and charterers, managing bunker prices is still important. Historically low freight rates, coupled with higher prices, mean that fuel represents a high proportion of Damien King the total freight cost.

Risk management

Risky business For example, on the key route ballasting from Singapore to East Coast South America and carrying grains back to China, bunkers represent up to 60% of the cost of the voyage, making fuel price risk management a fundamental tool to keep costs within the forecast budget and minimise risk of unexpected losses.”

Risk management

Dryad warning

Dryad Maritime is warning of an increased threat from piracy in SouthEast Asia following the release of its Q2 figures, which show that the area continues to experience the highest number of maritime crime incidents in 2014 compared with traditional piracy hot spots. The warning comes in the wake of the recent hijack of a tanker, the Moresby, off the Anambas Islands on 4 July, when pirates boarded the vessel taking the crew hostage before stealing part of the 2,200 tonne cargo of marine gas oil. This year alone has seen 12 reported cases of vessels being boarded underway and a further 19 reports of robberies, attempted robberies or suspicious approaches in the anchorages to the east of the Singapore Strait. The Ai Maru became the fifth product tanker to be hijacked since April 2014 when it was attacked at the end of June. According to public policy think-tank the Nautilus Institute for Security and Sustainability (NISS), the increase in piracy in South-East Asia is attributed to a number of causes. These include; over-fishing, poor maritime regulation, organised crime syndicates, widespread poverty and politically motivated groups. In addition, the NISS says the rise in trade in South-East Asian waters adds further incentive for pirates. Overall trade in the Association of Southeast Asian Nations (ASEAN) increased by 16.8% to $2.1 trillion ($2.6 trillion) in 2011 from 2010. In particular, ASEAN exports of mineral fuels and oils as well as their distilled products were worth $228 billion in 2011.

Ian Millen, chief operating officer, Dryad Maritime

The increased threat in the area comes as Dryad Maritime take steps to open new offices in the Asia Pacific region, providing regional companies with better access to their expanding suite of products and services. Ian Millen, chief operating officer at Dryad Maritime, commented: “Our team of analysts have assessed that at least one gang is operating to the east of Singapore, hijacking small product tankers and stealing fuel cargoes. These criminals have knowledge in the workings of ships’ equipment and procedures for carrying out ship-to-ship transfers. Without more proactive efforts by local maritime forces to counter this crime, we predict further incidents of this type in the region.” Dryad Maritime is also warning seafarers travelling around the southern Philippines and adjacent coasts to maintain vigilance following the attack on the motor yacht, Catherine, during Q2. Mike Edey, head of operations at Dryad Maritime, added: “Terror group Abu Sayyaf continues to operate with impunity. Although the majority of their activity centres on coastal terrorist attacks, the kidnap of a German couple from the Catherine serves as a reminder of the need for caution. While there is no evidence that Abu Sayyaf will start to target larger, commercial vessels in the region, as a politically motivated group the possibility to develop such a capability remains.” Dryad’s warning comes as the Eastern Sabah Security Command (ESSCOM) is reported to have initiated routing measures for commercial vessels to help improve maritime security in the region. Better news comes in the Horn of Africa section of Dryad’s quarterly figures, where the company welcomes the release of the remaining 11 crew members from the Albedo and praises those involved in the release of the seafarers and support of their families. After almost four years in captivity and having seen other crew members released in 2012, the remaining crew endured extended misery that included the sinking of their ship, as well as the death and disappearance of other crew members. According to Millen: “The release of Albedo’s remaining crew has been great

news, but it highlights the good, the bad and the tragic in the story of Somali piracy. Good in that we have seen charities such as the Maritime Piracy Humanitarian Response Programme (MPHRP) work tirelessly with others to support the seafarers and their families; bad in that the owner of the vessel reportedly abandoned the crew, resulting in a longer than necessary captivity, and tragic in that approximately 40 seafarers remain in captivity. Seafarers get precious little attention from the wider media or general public. We must not forget them.” Geopolitical risks

Geopolitics once again top the agenda for the oil market. Both Iraq and Ukraine are making headlines and “the risk of oil supply disruptions (and thus higher oil prices) has increased since our last report in April,” says Global Risk Management in its most recent quarterly newsletter. “Returning to a peaceful situation in Iraq seems difficult and currently unlikely. Adding to expectations of higher oil prices is that top oil consumer the US seems to be heading out of the financial crisis with recent decent key data. Though Europe is behind in the economic recovery race, the European Central Bank has recently taken easing measures to turn that around and return to growth,” the report suggests. Although Iraq made a spectacular recovery in terms of oil production after production had dropped to nearly zero with the invasion of the country by US and UK troops, current unrest in the country means that increased production seems unlikely to hold up, the report suggests. One question is whether or not rebels fighting the government will succeed in disrupting production in the south of the country, where oilfields contain about 50% of Iraq’s total reserves of oil. Global Risk Management puts the chances of production in the south and of exports being disrupted as low but “definitely plausible” given the current developments. As far as Nigeria is concerned, the report says that shale oil production in the US has made it difficult for Nigeria to sell supplies there, and Nigeria has been turning more to customers east of Suez.

World Bunkering Autumn 2014

LNG LR is classing this advanced multi-fuel ferry

Class gears up for LNG The main classification societies are enthusiastic backers of the shipping industry’s move towards LNG

he recently elected chairman of the International Association of Classification Societies (IACS), Philippe Donche-Gay, told journalists at a press conference in London in July that the introduction of liquefied natural gas (LNG) as a marine fuel would be one of the issues topping the organisation’s agenda in the coming year. He said the next step for IACS would be to develop common procedures for LNG bunkering. This would involve producing high-level guidelines based on existing documentation, and he referred to the work already done by IACS members in producing guidelines and recommended practices. Donche-Gay noted that LNG as a marine fuel satisfies the regulations in emission control areas (ECAs) and that it would be covered by the International Maritime Organization’s international code of safety for ships using gases or other low-flash point fuels (IGF Code), which was likely to enter into force in 2016 or 2017. IACS was also looking at the technical specifications in ISO18683 for LNG bunkering safety. He said that IACS’s work would cover truck-to-ship, ship-toship and terminal-to-ship simultaneous operations and would be carried out in cooperation with the industry. In response to a question from World Bunkering, Donche-Gay confirmed that IACS would be approaching

World Bunkering Autumn 2014

guidance on how LNG bunkering can be the International Bunker Industry undertaken in a safe, efficient manner. Association (IBIA) on the topic of LNG. According to DNV GL, despite Meanwhile, classification society the well-established large-scale LNG DNV GL says it has been asked market, challenges remain regarding the by exploration and production development of the small-scale LNG (E&P) companies to initiate a joint sector. Areas of concern include quality industry project aimed at a better management, material specification, understanding of the consequences metering and sampling methods and of an LNG release. It will be run in lack of safety standards and guidelines. collaboration with E&P companies To address this, regulation authorities and LNG market stakeholders. in European countries including the DNV GL says the project will Netherlands and the UK are currently contribute to the development of working on issuing standards for rigorous safety standards and guidelines for small-scale LNG bunkering and filling stations. It adds: “Other E&P and energy companies still have time to join the project.” The classification society notes that LNG is evolving from large-scale seagoing vessels and large bunkering and regasification plants towards small-scale use as fuel for road transport and short seagoing vessels. It is an attractive fuel since it offers less emissions, reduced noise levels and competitive prices compared with other conventional bunker fuel like marine gas oil (MGO). DNV GL has already taken steps to harmonise LNG bunkering operations IACS chairman Philippe Donche-Gay says producing by launching a recommended guidelines for LNG use is a high priority practice, which provides

LNG

safe design, siting, construction and operation of LNG filling stations. Classification societies are rapidly building up experience of classing gaspowered ships. Lloyd’s Register (LR) will class a 1,750-passenger, 350-vehicle, double ended ferry for operations between the Dutch islands of Texel and Den Helder. Ordered by Royal N.V. Texels Eigen Stoomboot Onderneming (TESO), the Texelstroom will be constructed at the LaNaval Shipyard in Spain for delivery at the end of 2015. She will then undergo four months of final commissioning and training before entering service in the spring of 2016. It is planned that the ferry will operate mainly on natural gas stored in two batteries of compressed natural gas (CNG) bottles installed on the top deck. Electric batteries will also form an integral part of the advanced energy management system. In addition to this, with over 700m² of solar panels, the ferry will have power available from the sun in the sunniest region of The Netherlands. The design of the ferry was supported by the European Union’s Innovative Transport Solutions for Fjords, Estuaries and Rivers programme, iTransfer, which aims to make ferry transport more freely accessible and sustainable, and encourage more people to travel by water. As well as the innovative power arrangements, the design incorporates features important to ferries operating in the area. The vessel is to be ice class, with a strengthened hull in case of winter ice. Additionally, she will have LR’s notation for passenger and crew accommodation comfort (PCAC). Ports embrace LNG

The International Association of Ports and Harbors’ World Ports Climate Initiative (WPCI) has launched a new website – www.lngbunkering.org – focused on LNG as a maritime industry fuel. The website is an initiative of WPCI’s LNG Fuelled Vessels Working Group. The new LNG bunkering website provides a detailed overview of the use of LNG as ship fuel, and it lays out the technical requirements for ships, bunkering infrastructure and vessels under development, as well as the business case for using LNG in the maritime environment.

“Representatives from some of the world’s largest and most progressive ports developed this site for the benefit of all interested industry parties, including port authorities, fuel suppliers and shipping companies,” said IAPH president Grant Gilfillan, who is also chief executive and director at the Port Authority of New South Wales, Australia. “The site is intended to be a resource and a conversation-starter among ports and stakeholders because we believe that LNG is the ship’s fuel of the future and ports must prepare to offer safe storage and bunkering of LNG for shipping lines.” Focusing on the use of LNG as a marine fuel, the LNG Fuelled Vessels Working Group has developed guidelines for safe LNG bunkering operations, providing ports around the world with useful background information to pursue this technology. In addition, the working group has aimed to create LNG awareness in ports by developing this website. The working group has kept in close contact with industry stakeholders currently using and/or handling LNG, as well as government agencies. It has developed harmonised checklists for known LNG bunkering scenarios: ship-to-ship, shore-to-ship and truck-to-ship. These checklists reflect the extra requirements of ports with regard to LNG bunkering operations in or near their port environment. By using bunkering checklists, a high level of quality and responsibility on the part of LNG bunker operators can be ensured. IAPH says that harmonised bunker checklists will be of great benefit to the vessels bunkering LNG in different ports, as this will reduce the potential for confusion caused by having to comply with different rules and regulations in different ports. A number of bunkering projects are already under way. Among them, Swedegas and Vopak LNG Holding have been given planning authority permission to build an LNG terminal at the Energy Port in Gothenburg. It will be capable of supplying shipping, industry and heavy transport with gas as fuel “as they make the switch from oil” and, a statement adds: “It will also be possible for ships to bunker LNG as fuel.” The Port of Gothenburg is to give 30% port tariff discounts to LNG-fuelled

ships from next year. The port says the discount will continue for four years and adds: “The aim is to induce more shipping companies to switch to cleaner fuel.” In another development, Shell is buying into the new Gas Access To Europe (Gate) terminal at the port of Rotterdam in the Netherlands. The Gate terminal is a joint venture between Gasunie, Vopak and OMV. Shell has committed to buy capacity from the Gate terminal, which has enabled this investment in expansion of the terminal. Maarten Wetselaar, Shell’s executive vice-president, integrated gas, said: “We are pleased to have reached this agreement. The collaboration between Gasunie, Vopak, the port of Rotterdam, and Shell will provide security of supply of LNG for marine and road transport customers in northwest Europe through dedicated and scalable infrastructure. LNG is a viable option for fuelling cleaner and more sustainable transport. We believe LNG will form a bigger part of the transport fuel mix in the future, and this project demonstrates our confidence in LNG.” To serve marine customers in the port of Rotterdam, Shell intends to charter a specialised LNG bunker vessel to facilitate ship-to-ship transfer operations, and will also deliver LNG to secondary distribution terminals outside the port area. EIB puts money into LNG

The European Investment Bank (EIB) is providing a e124 million loan to Norwegian Fjord Line for the expansion of its fleet. Two new LNG cruise ferries are already operating between the Norwegian ports of Bergen, Stavanger, Langesund and Hirtshals, Denmark, carrying up to 1,500 passengers and 600 vehicles. Stavangerfjord and Bergensfjord were delivered by the Norwegian shipbuilder Bergen Group in 2013 and earlier this year. Peter Frølich, Fjord Line’s chairman, said: “The EIB’s involvement is recognition of Fjord Line’s commitment to sustainable sea transportation between Norway and the EU. We are proud to be the first Norwegian maritime transport company to have signed a loan agreement with the European Investment Bank. The loan assures us long-term financial resources at a lower cost, thus providing financial value added for Fjord Line.”

World Bunkering Autumn 2014

Testing

Terminal testing Rotterdam takes a move that responds to bunker industry concerns

n an initiative to improve the reputation of the portâ&#x20AC;&#x2122;s bunker industry, the Port of Rotterdam Authority plans to require representative samples to be taken when bunker fuel is loaded onto barges at terminals. This move is likely to be welcomed by the industry, as a frequent complaint is that there is usually no authoritative testing of what is loaded onto the barge. The additional testing requirement was announced by the portâ&#x20AC;&#x2122;s director of oil storage, refinery and shipping, Roland Van Assche. Speaking to journalists in May, he said that a pilot programme was already under way. He said that it was proposed to make sampling during loading from tank terminals to the barge mandatory and that the samples would be available on request for quality testing by the authorities. As such, this would be a statutory sample, like the MARPOL sample, which is taken only for use by port state control to determine compliance with MARPOL Annex VI. Van Assche said the Dutch press had alleged that chemical waste was being routinely dumped into marine fuel in the Amsterdam-Rotterdam-Antwerp (ARA) region. Even though these allegations have never been proven, the port has come under political pressure to clean up the industry. Currently, bunker suppliers often take samples when loading at

World Bunkering Autumn 2014

Taking samples from a bunker barge, but Rotterdam also wants samples taken at the terminal

Testing

terminals, but Van Assche said that these had no status. He believes that Rotterdam’s terminal operators support the introduction of sampling during loading, which would be paid for by the bunker suppliers. This would be “a major step” towards improving the transparency of the bunker supply chain, he said. Two-fold increase in “bunker alerts” in first half year

Veritas Petroleum Services (VPS), formerly DNV Petroleum Services (DNVPS), saw a significant increase in bunker alerts in the first six months of 2014 compared with the same period in 2013, according to the company’s senior technical consultant, Jeroen de Vos. A total of 43 bunker alerts were issued in the first half of the year compared with only 16 bunker alerts during the same period last year. Of these 43 bunker alerts, eight were related to distillate fuel, which is six more than in the first half of 2013.

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World Bunkering Autumn 2014

Testing

For distillate fuels, the main reason for issuing the bunker alerts was flash point. Marine fuels with a flash point below 60°C are not allowed to be used, as the SOLAS Convention (chapter II-2, Reg. 4) requires a minimum flash point of 60°C. Owing to the different composition, distillate fuels tend to have a lower flash point than residual fuels. As a result of increased demand for distillate fuel, it is also expected that fuels intended for the automotive market may be supplied as marine fuel. Automotive fuels normally have a flash point of below 60°C, resulting in a fuel that is not allowed to be used as a marine fuel. For residual fuels, the biggest share of bunker alerts was related to aluminium + silicon followed by density. Fuels containing high concentrations of highly abrasive cat fines will cause accelerated wear of cylinder liners, piston rings, injectors and fuel pumps if aluminium + silicon is not sufficiently reduced. High density will make fuel treatment more critical, especially when a vessel is equipped with conventional separators that are limited to treat fuels up to a maximum of 991.0kg/m 3.

World Bunkering Autumn 2014

Other bunker alerts issued in 2014 were related to sediment, sodium, water, potassium and used lubricants. As no clear patterns or trends can be derived from the bunker alerts, whether on a global or geographical basis, each bunker alert should therefore be seen as an incident. As such incidents can take place anywhere and at any time, VPS recommends that you should always test the fuel quality before use. VPS bunker alerts are issued exclusively for members of the company’s fuel quality testing programme. Meanwhile, DNVPS appointed Tejs Beltov as its new chief operating officer for Europe in the run-up to its rebranding as VPS. Beltov, who joined the company on 1 May, takes over from Bill Stamatopoulos, who has become group commercial director. Stamatopoulos will develop and execute the company’s commercial and marketing strategy, manage customer relationships and drive business development. Beltov is a graduate of the Technical University of Denmark with extensive experience in the maritime industry. As well as having trained as a deck officer on merchant ships, he served as a first lieutenant in the Royal Danish

Navy. Subsequently, he has held key positions in several leading maritime and shipping-related companies. Immediately prior to joining DNVPS, Beltov was managing director of Lloyd’s Register Consulting A/S. “We are very pleased to have a maritime heavyweight like Tejs join our management team. With his expertise and solid background in working with and for our clients from the shipping industry, Tejs will definitely be a huge asset to our company as we raise the bar for testing and surveys in the maritime industry,” says VPS’s chief executive, Eirik Andreassen. Beltov said: “Given VPS’s recognised position as the leader in fuel testing and bunker quantity surveys, I am privileged and excited to have this opportunity to contribute to the company’s next phase of growth. The past month has been an invigorating experience of learning about the company, its core values of integrity, quality and reliability, which resonates with all employees. I also look forward to continue collaborating with my current and expanded network of clients, partners and friends in the maritime industry as VPS augments its portfolio to bring even more value for its clients.”

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Middle East

Iran is hoping to take a slice of Fujairah’s market.

Shifting up a gear The Middle East’s oil industry continues to grow, despite the region’s many troubles, as John Rickards reports

xpansion is the order of the day for many of the Middle East’s chief fuel suppliers. Among recent developments, Emirates National Oil Company (ENOC) subsidiary Cylingas has signed a deal with Pyramid Engineering to build a new modular refinery plant, including bunker storage for diesel, gas oil and fuel oil in Fujairah. ENOC said the 7,500 barrels per day (bpd) refinery will have 91,000 cubic metres (m3) of storage and should be completed by the end of 2015. Earlier this year, ENOC’s new 240,000m3 Horizon Fujairah Distribution Terminal began operations in the port. Pyramid managing director Ashish Bajpai said: “The modular refinery in Fujairah further builds on the emirate’s reputation as one of the fastestgrowing global hubs. Cylingas supports our vision to develop a modern refinery and associated systems, with proven expertise in developing worldclass projects.” Local bunker suppliers have also been expanding, with both Dan-Bunkering and Glander International Bunkering (GIB) increasing their office presence in Dubai. Dan-Bunkering has added Sam Mathew to the administration team at the office it opened last year, while Laura Toplar, Elza Adamyan and Brian Turnbull have joined GIB as bunker and lubricant traders, all of them with years of experience in Turkey, the Middle East

World Bunkering Autumn 2014

and Russia, and South Africa respectively, and Morten Langthjem as sales manager at the company’s Dubai office. International bunker supplier Monjasa expects the market to remain largely stable for the time being. The company supplies marine gas oil (MGO) and heavy fuel oil (HFO) across the UAE’s ports through its six-vessel fleet and Khorfakkan oil terminal and has been firming up its presence through its Dubai headquarters. Managing director Mikkel Jacobsen told World Bunkering: “The past 12 months have been busy and we have spent

significant time on proper onboarding and development of new colleagues at our Dubai office. Right now, we are experiencing a stable market and we hold the same expectations for the coming year, with the potential for a slight increase in activities.” In Oman, the new US$50 million bunkering facility slated for the state’s port of Duqm continues to move forward. Development began last year with the signing of licences for land leasing and bunker supply, and the facility, owned by Oman Oil Marketing Company, has now completed its design

Further expansion will expand Fujairah’s already impressive capacity

Middle East

A number of traders have increased their Dubai staffing levels, although the market isn’t expected to grow hugely

phase and should see a building contract signed shortly after World Bunkering goes to press. The facility will supply HFO, marine diesel oil (MDO) and lubricants from 2016 onwards. The facility is intended to boost the economic attractiveness of the Special Economic Zone at Duqm (SEZAD) as Oman hopes to draw extra cargo traffic from ships that might otherwise have looked to bunker elsewhere. Duqm has been operating a pilot scheme to draw oil and construction traffic since the launch of SEZAD while the port remains under development. Plans for a liquid terminal able to handle products likely to include fuel are going out to tender shortly and the terminal, which will have 3km of berth space, is expected to begin operations in 2017. Iran, meanwhile, is aiming to take a 20% slice of the region’s bunker traffic by the end of 2015. The National Iranian Oil Products Distribution Company (NIOPDC) is hoping to claim a greater portion of tanker traffic, according to local press reports, as it increases supply levels of fuel oil at Iranian ports. In the 12 months to March, Iran sold 2.86 million tonnes of bunkers, with fuel oil in particular seeing a sharp annual rise of 31%, with NIOPDC predicting total sales of 4m tonnes this year, almost as much as the country’s peak of 2009 before a two-year slump in volumes. World Bunkering reached out to a number of other Gulf bunker suppliers, particularly those selling through the region’s main hub of Fujairah. Perhaps unsurprisingly, none of them were willing to go on the record with their opinions as

to the probability of NIOPDC achieving its aims, or of their likely market strategy should Iran make serious inroads into Fujairah’s bunker market. Qatar is looking to alternative fuels. The state is the world’s largest exporter of liquefied natural gas (LNG) and this year started a push to speed its adoption as a fuel in the EU, particularly Greece, as well as Qatar and the rest of the Gulf Cooperation Council (GCC) countries. M. Shahrin Osman, maritime regional manager for DNV GL in the Middle East and India, using the Qatari announcement as a jumping-off point to launch the class society’s own recommended practice guidelines for LNG fuelling, said: “Qatar’s entry as a provider of LNG for the marine industry will be a game-changer given that it is the largest single exporter of LNG globally.” Abdul Aziz Al Muftah, director of industrial cities for Qatar Petroleum International (QPI) and chairman of the steering committee on LNG as fuel, said: “The forthcoming international environmental regulations will create

demand for more LNG-fuelled ships. Concrete initiatives will be taken by Qatar Petroleum to build the first LNG-fuelled harbour tug for the Ras Laffan port and the first two LNG-fuelled offshore service vessels for QPI offshore fields.” It is QPI’s overtures towards Greece that could have the most impact. While no one at QPI was available to comment on the nature of the discussions between the company and Greek shipowners, it is thought that Qatar sees a potential opening in the supply sector, given the EU’s plan to have LNG infrastructure in place by 2025. Greek owners, who have already been critical of the slow pace of developments, may see the assistance of QPI as a way of firming up vague commitments to providing LNG supply. If GCC investment and infrastructure establishes a market, it could easily pull Europe and other regions along with it. With some suppliers predicting shortfalls in MGO as operators attempt to meet ECA requirements, and owners weighing rising fuel costs, the Qatari move could come at just the right time.

Oman is hoping to build its bunker market

World Bunkering Autumn 2014

Far East

Singapore volumes dip But leading global bunker port is continuing to focus on enforcing standards and ensuring accurate deliveries

fter years of generally increasing volumes, Singapore has seen a slight decline in the three months up to and including June. Maritime and Port Authority of Singapore (MPA) statistics show that total bunkers delivered in June amounted to 3.37 million tonnes, down 3% from the same month last year and down 7% month-on-month. Fewer vessels called for bunkers – 3,074 in June, which was a drop of 4.7% compared with a year previously and down 6.8% month-on-month. Marine gas oil (MGO) sales were 80,300 tonnes, a drop of 15.5% over the year, while 180 cSt sales were down 22% month-on-month. Meanwhile, however, MPA is pushing ahead with plans to further regulate the local bunker industry and has been cracking down on illegal activities. Singapore has become the first port anywhere to announce that it will make the use of a mass flow metering (MFM) system for bunkering mandatory. “To assist the industry to offset a portion of the cost of the MFM system adoption,” the MPA says it will pay a lump sum incentive of S$80,000 for each existing bunker tanker delivering marine fuel oil in the Port of Singapore. The money will be paid out once the MPA has approved the MFM system fitted on the barge. The move was announced by the country’s transport minister, Lui Tuck Yew, at the Singapore Bunkering Symposium in

World Bunkering Autumn 2014

April. He said that as the first port in the world to mandate the use of mass flow meters for bunkering, Singapore would set a new benchmark for bunkering practices worldwide. He highlighted that the use of the MFM system for bunkering in the Port of Singapore would not only enhance transparency in the bunkering process but also improve operational efficiency and increase the productivity of the entire industry. MPA chief executive Andrew Tan added: “To safeguard Singapore’s reputation as a top bunkering port in the world, we are taking the lead in being the first to mandate the use of mass flow meters. It is a significant milestone for the bunkering industry in Singapore and it will strengthen our position in the long term as a reliable and trusted port for bunkering operations.” The MPA claims that the MFM system “enhances transparency, increases productivity and minimises illegal bunkering activities”. It says it is confident that the adoption of the MFM system for bunkering in the Port of Singapore will provide better assurance to both the bunker buyers and suppliers on the quantity of bunker delivered, and safeguard Singapore’s reputation as the world’s top bunkering port. With effect from 1 January 2017, it will be mandatory for bunker suppliers to use the MFM system for bunker delivery of MFO in the Port of Singapore. All existing bunker tankers operating in port must be fitted with an MPAapproved MFM system by 31 December

2016. All new bunker tankers applying for a harbour craft (bunker tanker) licence after 31 December 2014 will be required to be fitted with an MPA-approved MFM system for MFO delivery. An MPA statement says that “to ensure that the MFM system is suitable to be used for bunkering”, MPA and enterprise agency SPRING Singapore jointly initiated an MFM working group to develop and validate the use of MFM systems for bunkering in 2009. The working group, which consists of members from SPRING Singapore’s Weights and Measures Office, the Agency for Science, Technology and Research’s (A*STAR’s) National Metrology Centre, the MPA and various stakeholders in the bunkering industry, has been conducting extensive trials using MFM since 2011. MPA stressed that it had undertaken in-depth industry consultation through the Singapore Shipping Association and the International Bunker Industry Association in implementing mandatory MFM, and it claims that “many members [of both bodies] are supportive”. In a related move, the National Metrology Centre announced the opening of its liquid flow metrology laboratory to conduct further research and development in high-viscosity fluids. It has signed a research collaboration agreement with Mogas Flow Lab Pte Ltd to establish a primary mass flow standard and facilities for mass flow measurement of marine fuel oil.

Far East

While there are still relatively few mass flow meters in operation on Singapore’s bunker fleet, a number of companies are enthusiastic pioneers of the system. The latest barge operated for global physical bunker supplier and trader OW Bunker has an MPA-approved Coriolis Flow Meter installed. The Marine Noel, operated by Sinanju Tankers Pte Ltd, is a modern, 4,700 dwt barge, built in 2012. The vessel has fast pumping rates and can distribute the full range of bunkers. It has been operational for OW Bunker since June and has made initial deliveries. An OW statement says: “In conjunction with using a Coriolis Flow Meter, customers are ensured a fast and efficient service, as well as a guarantee on the quantity of products that they order.” “We are pleased to continue the expansion of our physical operation in Singapore. Asia is a critical region for OW Bunker, and we are committed to providing our customers with the highest-quality products and services possible that deliver real operational and cost efficiencies,” said OW Bunker’s vicepresident, Søren Christian Meyer.

“As part of this, and in line with our other vessels in the region, we have chartered an MPA-approved Coriolis Flow Meter barge called the Marine Noel,” he continued. “The MPA has shown real leadership in championing the use of mass flow meters as a means of driving industry professionalism, and we are committed to supporting them in this initiative both in Singapore and as part of our wider strategy for our global fleet.” OW Bunker launched its physical operation in Singapore in 2013. In addition to the Marine Noel, the company has two other bunker barges in the region – the Nepamora and An Hong, both of which also have Coriolis Flow Meters installed and are in the process of obtaining approval from the MPA. Meanwhile, by July, oil major ExxonMobil will have doubled its fleet of chartered bunker tankers equipped with MPA-approved MFM systems to six. It said this meant it would deliver the majority of its marine fuel in Singapore via MFM systems. ExxonMobil was the first marine supplier to deliver fuel via an MPA-approved MFM system in June 2012.

The company says that mass flow metering is estimated to save up to three hours and up to US$7,000 in the surveyor charges and costs that result from measuring errors caused by temperature and density delivery ranges per delivery. The estimate is based on a 1,000 stem and a price of $600 per tonne, but does take into account additional discrepancies caused by dipping errors. “The MPA’s recent announcement that it will mandate MFM systems supports ExxonMobil’s view that this technology delivers significant value to vessel operators. This is why we have been providing our customers with the benefits of the MFM system in Singapore for almost two years,” said Molina Albright, general manager, marine fuels, Asia Pacific, at ExxonMobil Marine Fuels & Lubricants. She added: “Our expanded mass flow metering capability will enable us to offer more marine operators the possibility of achieving the valuable time and cost savings provided by this advanced technology.” ExxonMobil says its on-board MFM system has been developed in close collaboration with both the MPA and SPRING Singapore enterprise agency.

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World Bunkering Autumn 2014

Far East

Enforcing the law In the past year, the authorities in Singapore have taken action against several companies that broke the terms of their licences

ingapore-based company Progressive Power Co pleaded guilty in court on 20 May to five charges of supplying bunkers on five occasions in the Port of Singapore without a valid bunker supplier licence issued by the Maritime and Port Authority of Singapore (MPA), as required by MPA port regulations. Another 10 charges were taken into consideration. An MPA statement does not mention whether any penalty has been handed down to the company yet. The MPA had brought charges against Progressive Power for delivering bunkers on eight occasions as a bunker

World Bunkering Autumn 2014

craft operator between 17 March 2013 and 5 July 2013, and for supplying bunkers on seven occasions as a bunker supplier between 11 October 2012 and 22 January 2013. It had used bunker delivery notes (BDN) belonging to Lian Hoe Leong & Brothers Pte Ltd for the seven transactions as a bunker supplier. The MPA cancelled Lian Hoe Leong & Brothers’ bunker supplier licence on 15 January for its involvement in this case, as its actions breached the terms and conditions of the licence. The MPA warned the local bunker industry: “All bunker suppliers operating in the Port of Singapore are required to be licensed by the

MPA, and we would like to remind all licensed bunker suppliers to adhere strictly to the terms and conditions of the bunkering licence. “The bunker supplier’s licence is not transferable. Any bunker supplier or bunker craft operator found to have contravened any terms and conditions of the bunkering licences will have their bunkering licence suspended or cancelled. “All licensed bunker craft operators are also advised not to make use of bunker tankers to deliver bunkers on behalf of any person, firm or company that is not a bunker supplier licensed by the MPA.”

Far East

Hong Kong tackles sulphur New rules to reduce sulphur in emissions are backed by penalties

ong Kong’s Legislative Council has approved a regulation requiring bunker suppliers within the territory to sell marine gas oil (MGO) with a sulphur content of no more than 0.05%. The regulation is primarily intended to reduce emissions from local vessels. The limits have been backed up by penalties for supplying non-compliant bunkers, which include fines of up to HK$50,000 ($6,440) and up to three months in prison. In addition, from next year, ships will have to burn fuel with no more 0.5% sulphur while alongside the berth. This follows on from a voluntary agreement that saw many lines switch to low-sulphur fuel when alongside the berth. Atmospheric pollution is a major issue in Hong Kong and the Hong Kong Shipowners Association is a strong supporter of making the measures mandatory, partly because it will create a level playing field. Hong Kong officials have been working closely with their counterparts in Guangdong Province to extend similar measures across the Pearl Delta. They have also visited Beijing to urge the central government to push for emissions control. Meanwhile, Hong Kong-based Orient Overseas Container Line

(OOCL) says its emissions data, reported into the Business for Social Responsibility’s (BSR’s) Clean Cargo Working Group environmental performance metrics assessment tool, has been verified by Lloyd’s Register as true and accurate. OOCL says the move supports its commitment to reducing greenhouse gas emissions from its vessels. The verification, for calendar year 2013, was carried out by Lloyd’s Register Marine and Lloyd’s Register Quality Assurance (LRQA) – both of which are members of the Lloyd’s Register group using the basic principles of ISO14064-1:2006. The ISO14064 series give guidance for the quantification, reporting, validation and verification of greenhouse gas assertions. BSR’s Clean Cargo Working Group (CCWG) is a global business-to-business initiative by leading cargo carriers and their customers, dedicated to environmental performance improvements in marine container transport through measurement, evaluation and reporting. The CCWG gathered environmental data from more than 2,600 container vessels for calendar year 2013. Lloyd’s Register developed the verification procedure for BSR that is now used by all CCWG verifiers. According to Lloyd’s Register, the OOCL work was unique in that it not

only assured the CO2 and SOx data of the 97 vessels submitted to the CCWG but also included the total direct greenhouse gas emissions of the whole OOCL 2013 container fleet. OOCL’s director of trades, Stephen Ng, said: “This is the third consecutive year that OOCL completed the verification by using the CCWG standard. By extending the scope of the verification to include the ISO standard for greenhouse gas, it not only demonstrates our long-term commitment to emissions data integrity and environmental performance but also enhances OOCL’s sustainability profile to a wider audience of stakeholders that appreciates greater transparency and forward-thinking green objectives.” John Rowley, managing director, management systems, at Lloyd’s Register and previously president, Asia Pacific, until earlier this year, said: “As an organisation, we have been involved with developing and delivering schemes to recognise the safety, commercial and environmental performance of shipping for many years. OOCL’s achievement is a testament to their environmental commitment, through publicly demonstrating that the environmental performance data of their fleet is prepared with high accuracy, completeness and transparency.”

World Bunkering Autumn 2014

Russian update

Bunkering news from Russia Olga Bogacheva reports on developments in the Russian bunker sector

Crucial ruling for bunker industry

In June, the Ninth Arbitration Appeal Court settled an issue that threatened the existence of the Russian bunkering industry in favour of the marine fuel companies. This was the end of a case that lasted for almost a year and made the Russian bunkering market very anxious. In August 2013, the Central Energy Customs (CEC) office prohibited offshore bunker services and ordered companies to deliver fuel only to vessels at specially equipped berths. This benefited one large company but seriously reduced the opportunity for most bunker firms to refuel ships. Bunkering services were completely cancelled in several ports.

World Bunkering Autumn 2014

The Russian Association of Marine and River Bunker Suppliers appealed against the CEC actions in court. Simultaneously, complaints were submitted to the Prosecutor General’s office and several other state bodies to draw their attention to this illegal restriction of business activities. In March, the Moscow Arbitration Court ruled against the CEC, and CEC’s appeal against that ruling has now been dismissed in a final and binding judgment. Taman’s problems and plans

Tamanneftegas has announced that it intends to reinforce its position in the region. News provider Kommersant said that the company plans to double oil and liquefied petroleum

gas (LPG) capacity in Taman and to build a new terminal for handling dry cargoes, grain and fertilisers. The total estimated investment is RUB40 billion, but that figure may increase by RUB7 billion if the state does not provide funds for railway and port infrastructure. Earlier it had been announced that the Russian government had temporarily frozen development projects in Taman and redirected previously allocated funds to the construction of transport infrastructure in Crimea. Tamanneftegas operates an oil and LPG terminal in Taman that was built in 2012. It is owned by Michel Litvak’s company OTEKO. Terminal turnover reached 6.9 million tons in 2013.

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

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

For more information, contact: Rostov-on-Don Tel: +7 (863) 242-44-86 +7 (863) 242-44-87 +7 (863) 242-44-88 E-mail: rostov@ybunker.com Yeisk Tel: +7 (86132) 2-60-64 E-mail:yeisk@ybunker.com Port Kavkaz Tel: +7 (86148) 4-43-47 E-mail: kavkaz@ybunker.com

www.ybunker.com

and 13,150 million tonnes in 2016. The most interesting part of the talk dealt with port development. St Petersburg port, the largest in north-western Russia, keeps its leading position, despite a slight reduction in throughput to 2.1 million tonnes, down 0.15 million tonnes on 2012. In this geographical location, growth is possible only in new ‘avantports’ or

urning to the substance of the VII All-Russian Forum of the Russian Association of Marine and River Bunker Suppliers, Nadezhda Malysheva, development director at PortNews media group, gave a talk about trends in Russia’s regional bunkering markets. According to official statistics, marine port turnover reached 589 million tonnes in 2013; the total amount of

Total supplies (Million tonnes)

Light/Heavy (%)

North-western Russia

3770

10/90

Russian Far East

4550

4/96

Southern Basin

2750

5/95

Inland waterways

670

90/10

Region

delivered bunkers grew to 11.7 million tonnes – a 40% increase on the 8.5 million tonnes recorded in 2012. Malysheva predicts further growth of bunker supplies, with tonnage rising to an estimated 12,370 million tonnes in 2014, 12,590 million tonnes in 2015,

World Bunkering Autumn 2014

outer harbours, which include Ust-Luga, Bronka and others. Bronka port, for example, is considering the installation of a bunker storage tanker next year. The northern ports of Arkhangelsk and Murmansk traditionally provide supplies in the Arctic regions. Bunker

sales there are still low at 120,000 tonnes and 375 tonnes respectively. However, prospects for an increase in shipping traffic along the Northern Sea Route are good. Currently, cargo traffic along this route is not very impressive, but it has continued to grow and reached the record level in 2013 of 1.3 million tonnes, a 7.4% increase on 2012. This volume includes a pilot project supplying 75,000 tonnes of naphtha from Ust-Luga to South Korea. Russia is actively developing the Northern Sea Route, leading to the East from the Barents Sea along the Russian coastline, through the Bering Strait, to the Pacific Ocean. It hopes to use this route to deliver oil produced in the Arctic regions to the world markets, providing an alternative to the existing international trading route from Northern Europe to the Asia-Pacific region. The Northern Sea Route offers a number of advantages, including reducing passage time by approximately 20 days.

Russian update

Russian bunkering markets today and tomorrow

Bunkering company TransOilBunker Co., Ltd 53 of., st. Aleutskaya 11, Vladivostok, 690001, Russia Tel: +7 (423) 2642-449 Tel/Fax: +7 (423) 2642-448 Tel/Fax: +7 (423) 2610-537 Mobile: +7 914 704 2856 E-mail: bktob2006@yandex.ru

Logistic services/wholesale trade of fuel oil We supply vessels with the following oil products: MGO / IFO 30 / IFO (IFO 120 - IFO 180) bunkering in the ports of: Vladivostok Nakhodka Vostochny Slavyanka Zarubino Posiet Kozmino

www.transoilbunker.org

World Bunkering Autumn 2014

bunker fuel pricing and the market outlook in Russia. Huge growth potential and high margins boosted fuel supplies to Russian ports. This was most evident in the Russian Far East, where growing transit traffic led to a 80% rise in fuel oil deliveries last year. A preferential tax regime allows Russian suppliers to offer very competitive pricing compared with ports in Europe and Asia-Pacific. Over the past five years, government subsidies had led to dramatic increases in crude distillation capacity. Russian fuel oil output grew by 18% and reached 77.5 million tonnes in 2013. The share of bunker supplies in Russiaâ&#x20AC;&#x2122;s overall fuel oil use over the past year increased by 4% to 14% of the total as a result of lower export profitability and falling domestic demand caused by power stations switching to gas. A major refinery upgrade programme will put pressure on fuel oil output and quality. However, tax subsidies remain in place and new primary distillation capacity is expected to be built in Russia.

Information about the Crimean situation also attracted much attention. There are five sea ports in Crimea: Kerch, Sevastopol, Feodosia, Yalta and Evpatoria. Existing facilities are able to handle 33.7 million tonnes of goods a year, excluding oil and cars, and 2.6 million passengers. In 2013, the turnover of Crimean ports was 13.8 million tonnes, of which Sevastopol accounted for 42%, Kerch 25%, Feodosia 23%, Evpatoria 9% and Yalta 2%. The total number of vessel calls in 2013 was under 3,000. Port infrastructure throughout Crimea was described as being â&#x20AC;&#x153;far from optimalâ&#x20AC;?, but the potential of this territory was high. It was too early to discuss large-scale development of Crimean ports, however. The immediate priority was to maintain port facilities in an acceptable condition. This approach would not demand significant investment and appropriate funds would be found. When the political situation calms down, and RussianUkrainian relations become positive, Crimean ports will develop rapidly.

Russian update

Volumes in the Russian Far East reached 4.6 million tonnes last year and accounted for 39% of the total Russian market, overtaking the traditional leader, north-western Russia, for the first time. This trend is expected to continue over the coming years. A number of large projects have been announced for this region, and government support means they are likely to go ahead. Bunker sales in the Azov and Black Sea region reached 2.7 million tonnes in 2013, or 23% of the Russian market. Prospects for this region are still unclear. The single largest project there, Taman port, has come to a halt, because funds were relocated for Crimean development. The inland waterways market differs significantly from the sea market. Although there are plans to develop this market, even optimistic forecasts say that significant growth is unlikely. Mikhail Perfilov, senior vicepresident, business development, at price reporting agency Argus Media, grabbed the full attention of the audience with his presentation on

Physical supplier of LSFO, HSFO and MGO in the port of Saint-Petersburg

www.forumbunkering.ru

Two companies have joined the Russian Association of Marine and River Bunker Suppliers: KavkazMorService and Morraschetservice. KavkazMorService was founded in November 2006 and provides bunkering services in the ports of Temruk, Kavkaz and Taman. The company charters four tankers and leases an oil terminal. Morraschetservice is a ship chandler and fuel supplier in Taganrog port. Massive shipbuilding programme

Alexander Chemodanov, deputy division head at the Krylov State Research Centre, described the current condition of Russian shipbuilding and its future development under a state programme – Shipbuilding development in 2013-2030. The former USSR had been a leading country in world shipbuilding, he said, but most attention was paid to the construction of naval vessels. About 30% of total industry output was accounted for by military vessels. In 1989, 50 warships of various types were built. Currently, government orders accounted for 56% of the orderbook, while domestic civilian orders accounted for 27%. However, Russia’s share of the world market has reduced significantly. In 2012, only 12% by tonnage of naval vessels and 0.5% of the total number of ships built worldwide were built in Russia. The country’s shipowners build and refit much of their tonnage abroad – in China, Turkey, Norway and Germany. As a result, the government has approved a programme to significantly improve the Russian shipbuilding

Baltic Yantar Shipyard

World Bunkering Autumn 2014

industry and to meet the demand for modern vessels. The programme budget is $17 billion, including $9.9 billion from the state. The programme is intended to provide economic stimulation for fleet modernisation. Chemodanov discussed in detail the plans for expansion of production facilities and their correlation with the number of orders for ship construction. He stressed the scale of the project, describing it as a large and ambitious programme. Oil companies anticipate a need for further exploration and production platforms as well as over 300 maintenance vessels, technical and support boats, tankers and LNG carriers, including about 40 Arctic ice-breakers. In addition, the programme includes about 20 sea-going and port ice-breakers and 500 vessels for sea and river navigation. However, Chemodanov said that the plans were over-optimistic and unlikely to be fully implemented. There is still considerable uncertainty about the level of shipbuilding orders at Russian yards. Nevertheless, bunkering companies aiming to upgrade their fleets should take into account that, in the near future, Russian shipyards may be full. New legislation brings bureaucratic nightmare

Sergey Matsenko, chief executive of UZHNIIMF, shared his experience of getting approval for plans for the prevention and control of accidental oil spills from the government’s environmental officials and criticised the bureaucracy’s efficiency and reliability. On 1 June 2013, amendments to two federal laws covering, firstly,

the continental shelf of the Russian Federation and, secondly, the internal maritime waters, territorial sea and contiguous zone of the Russian Federation came into force. Matsenko said that the intentions of the legislator deserved full support because they were intended to protect the environment. However, certain provisions caused the bunkering sector considerable concern, as they were included into the laws after their first reading, without consultation with the shipping and bunkering industries and without considering all the possible effects of the new legislation. So prevention and control of accidental oil spills came under the control of the government’s environmental officials, who saw the need to create a mountain of documentation. Matsenko said that this was expensive and took several months, but did not make any practical sense. The new rules required a bunkering company to provide evidence of vessel safety, despite a classification certificate issued by the Russian Maritime Register of Shipping and MARPOL 73/78 certification. If international requirements differed from local construction rules, the experts could refuse to approve the document, even though official policy was to accept international standards. According to Matsenko, the requirement to hold a public discussion of prevention and control of accidental oil spills is excessive and “almost absurd”. Every local authority has to hold these meetings, which would mean several meetings for a bunkering company operating in multiple ports. Even without taking into account the multiple-stage, strictly regulated procedure of the public hearings, which takes a lot of time and funds, it remained, he said, absolutely unclear what the meetings were intended to achieve. The new laws have created other significant problems for bunker companies, causing losses and affecting the national economy. Matsenko asked the Russian Association of Marine and River Bunker Suppliers to intervene and propose solutions. The idea was supported at the forum, and the association is expected to give the issue priority.

Russian update

Russian Association’s new members

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

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Anton Lutskevich of the Arctic Engineering Centre, which forms part of the Krylov State Research Centre, caught the audienceâ&#x20AC;&#x2122;s attention with his concept of a low-cost, very basic bunkering vessel to support liquified natural gas (LNG) bunkering services during an initial period when the demand for this type of fuel would still be low and unstable. Plans to provide LNG bunkering services in Russia have to contend with the countryâ&#x20AC;&#x2122;s regulations for LNG infrastructure and gas handling, which are much stricter than elsewhere and practically prohibit LNG bunkering. These regulations were clearly outdated and would be revised, but revision would take a long time. Lutskevich and his colleagues have, however, designed several types of vessels, including non-self-propelled and unmanned barges that could be operated under the existing rules.

Russian update

Basic LNG bunkering vessels

Anton Lutskevich of the Arctic Engineering Centre, which forms part of the Krylov State Research Centre

World Bunkering Autumn 2014

Company news 62

TRANZIT DV NEWS On its 20th anniversary, JSC Vostokbunker celebrates its growth with a contract with China Sergei Vasilyevich Zhidkov: “We work for the people’s sake”

In June, JSC Vostokbunker (a part of the Tranzit-DV Group of Companies), the largest enterprise in Slavyanka, part of Russia’s Primorsky region, celebrated its 20th anniversary. Sergei Vasilyevich Zhidkov, vice-president of the Tranzit-DV Group of Companies and executive director of JSC Vostokbunker, told us about life at the enterprise. Sergei Vasilyevich, how does JSC Vostokbunker feel now?

I joined our enterprise 10 years ago and soon after I took part in preparations for JSC Vostokbunker’s 10th anniversary. At that time, the company employed 50 staff. Now we have 377 employees working directly for JSC Vostokbunker. If you include employees of other companies within the group that are based in Slavyanka, this number rises to 768. This means the number of employees has increased 15-fold in 10 years. What does having 768 employees mean? It means 768 families. This is a sizeable proportion of the 14,000 strong population of Slavyanka and its nearby settlements. It isn’t unusual to find family dynasties working within our enterprise. People join us on their relatives’ recommendations. The other day, when Slavyanka celebrated the Day of Spring and Labor, JSC Vostokbunker’s procession was the biggest of all. Year by year and from one celebration to another, it becomes bigger and bigger – and this can’t help but delight us…

of Dalian at the distance of approximately 1,500km. We are ready to allow them to ship goods through Slavyanka, using container carriers calling on our port. This will reduce the distance travelled on land to the port to about 100km. In preparation, we are planning to extend our port. We have already signed a contract with Chinese state asset management company Zhong Gong Xin detailing China’s investment in the project, with estimated freight traffic expected to reach some 10 million tons per year.

We pay great attention to improving our employees’ qualifications. Our enterprise is growing in size and in quality. We have not yet become the leader in oil and transshipment of oil products in the Russian Far East, but among oil terminals we are leading with our technologies. Implementation of advanced innovations is the policy of our company president, so we have to take care of our employees’ professional skills level. ⏏

Do you have a rapid turnover of staff?

I monitor the situation: who resigns and why. There are generally three reasons for resignation. First of all, layabouts do not stay with us for long. Our employees have to work hard and those who work well keep an eye on their neighbours so that they work well too and don’t spin it out at others’ expense. Secondly, those who drink leave us. No one can come to work with the morning-after feeling and especially not drunk as our production process has been assigned a class two level of danger. We don’t need any emergency situations, so we are very strict about it. And the third category consists of those who are dishonest with their colleagues and the company. Later, many of them ask to be re-employed. Our human resources department maintains records on applications to return to the company. When they get another job and are given salary off the books without any benefits package or when they face employer’s deceit, their eyes soon open.

Sergei Vasilyevich Zhidkov

For more information, contact:

What about development. Are you going to diversify your enterprise’s business activities?

Are there many young employees within JSC Vostokbunker?

Yes, bunkering became a kind of step for further development. Chinese north-eastern provinces situated in our neighborhood do not have access to the sea. Products manufactured in those provinces have to be transported by land to the nearest port

Yes, there are lots of young people. We have older employees too, but, on the whole, we are a youthful company. I am glad to employ young people as they are full of initiative. All I need to do is to direct that initiative.

13 Uborevicha Street, Vladivostok, 690091, Russia Tel: +7 (0)423 2491199 Fax: +7 (0)423 2481128 E-mail: tranzit@tranzitdv.ru Website: www.eng.tranzitdv.ru

World Bunkering Autumn 2014

Scarlet Sails, White Nights and bunkering Olga Bogacheva reports on a major bunkering conference in St Petersburg

t has become a tradition to hold a major bunkering conference in St Petersburg in June, coinciding with the traditional and spectacular Scarlet Sails event on the River Neva, which is a major feature of the White Nights art festival. The seventh All-Russian Forum “Current State and Prospects for Development of the Russian Bunker Services Market” was held on 19 and 20 June, with almost 180 guests attending – a record number. The following comments from participants during coffee breaks give a flavour of the Forum and why it is so popular “Russian bunker industry players participate in many international events, but the St Petersburg Forum is the only one which attracts almost all professionals. Only 40 to 50 of our decision-makers usually attend International Petroleum (IP) Week in London. The reason is clear. People from Kaliningrad and St Petersburg are interested in European conferences, Far Eastern operators feel more comfortable in Singapore. Those who work in the Black and Azov Sea are ready to discuss their problems in Turkey.” “This is the best place to pick up fresh rumours. Official information is only a part of the story. The true picture often differs from it drastically. And there are also secret

World Bunkering Autumn Autumn2014 2014

sources that everybody needs to be aware of. The St Petersburg Forum provides an opportunity to find out a lot of interesting details.” “Of course, there is an official Forum programme. Certain speeches are truly interesting and bring new ideas. Some presentations were rather formal and really boring. The most interesting situations occur on the margins. Here you may be introduced to a person whom you could only dream about meeting.” “I’ve come to St Petersburg with my husband and daughter. We’ve never been to this wonderful city during the White Nights season and wished to do so for a long time. This year, the Forum has coincided with Scarlet Sails and I was glad my family could enjoy this opportunity.” Scarlet Sails originated shortly after the Second World War and has evolved into a massive annual demonstration of freedom from ‘schools and rules’ and has become the most popular public event celebrating the end of the school year. It is based on a romantic story about a young girl’s dream. Her true love had to arrive on a ship with scarlet sails. The story ends when this dream comes true. The climactic scene of the event is an old ship with scarlet sails passing along the Neva River at night when the bridges are raised.

Russian update

SPECIAL REPORT

7-10 October 2014 Expoforum, Saint Peterburg, Russia

Offshore Marintec Russia will be held from 7 - 10 October 2014 with the support of the Government of the Russian Federation. Organising Committee headed by Mr Dmitry Rogozin, Deputy Prime Minister of Russia, the highest level of the governmental support determines the importance of the event. The project will continue the best traditions of the forum RAO/CIS Offshore which has been held for more than 20 years in St. Petersburg, and the world-famous network of exhibitions on shipbuilding and marine technologies Marintec.

Offshore Marintec Russia Conference Plenary Session (8 October 2014)

Sustainable Development of the Arctic: Strategic Goals and Priorities

Conference Sessions (8-10 October 2014) Session 1: Innovative Oil and Gas Projects on the Arctic Continental Shelf Session 2: Offshore Infrastructure Development Session 3: Development of Modern Offshore Fleet for the Exploration of the Arctic and the Continental Shelf of Russia Session 4: Emergency Management in the Arctic as a Guarantee of Environmental Safety in the Arctic and on the Continental Shelf Session 5: Regulatory Support of Development of Continental Shelf. Russian and International Experience Session 6: Social and Economic and Human Resources Aspects for Provision of Arctic Offshore Development Session 7: Insurance Aspects of Arctic and Continental Shelf Development Session 8: Green Shipping and Energy Efficiency Session 9: Ballast Water Management

Please visit our website for more conference details

www.offshoremarintec-russia.com For more information, please contact: Felicia Chow UBM Asia Ltd Tel: (852) 2827 6211 Fax: (852) 3749 7310 Email: marintec.omr@ubm.com

General sponsor:

Official sponsor:

Round-table meeting sponsor:

Innovation

The Dina Star is powered by four Caterpillar 3516 engines

DC system cuts fuel consumption ABB’s Onboard DC Grid achieves significant savings

wiss-based power and automation technology group ABB says that measurements and test conducted by Pon Power in collaboration with ABB on Myklebusthaug Offshore’s platform supply vessel Dina Star identified reduction of specific fuel oil consumption of up to 27%. These are the first documented results from a vessel outfitted with ABB’s Onboard DC Grid, which allows engines to run at variable speeds for top fuel efficiency at each load level. The tests also measured fuel consumption in dynamic positioning operations during challenging weather conditions, identifying fuel savings of 14%. ABB notes that dynamic positioning operations, where computers automatically maintain a vessel’s position and heading, account for a considerable portion of a typical offshore vessel’s operational profile. Pon Power and ABB also measured Onboard DC Grid’s effect on engine room noise levels. Tests showed a 30% noise reduction, contributing to improved working conditions aboard the vessel. The Dina Star is powered by four Caterpillar 3516 engines in combination with a C32 in a variable speed application.

World Bunkering Autumn 2014

Hi-tech accounting

Global cloud-enabled software and IT services company Inatech has launched a treasury management product designed specifically for the bunkering industry. Treasurytech allows companies to automate, streamline and manage their complex treasury functions from one dashboard, giving them a real-time view of their finances and allowing them to facilitate better, quicker decision-making. Inatech says that, in an industry where fuel suppliers require large amounts of working capital, treasury departments are managing multiple credit lines with complex credit terms. Integration with IT systems including ERP software and banking platforms means Treasurytech is able to deliver all of this information in a single place. The product equips chief finance officers and treasurers with a consolidated, real-time view of their cash position, finances and credit lines, allowing them to quickly answer questions such as ‘How much cash does the company have?’, ‘Is there sufficient cash to meet my current operating needs today?’ and ‘What is the best interest rate currently available from all my different lines of credit?’ – all crucial information for a truly global industry such as bunkering. Major bunker company Chemoil has already bought Treasurytech, Inatech’s treasury management product, and has rolled it out across the business worldwide.

The software will be used by Chemoil to manage its treasury functions, replacing existing Microsoft Excel-based systems. Sniffing out sulphur

An electronic ‘sniffer’ that can analyse sulphur levels in funnel emissions from passing vessels has been in operation at the Hook of Holland, Netherlands, since early April. In its first week, while still in its testing phase, the equipment detected a vessel apparently burning 2% sulphur fuel, way above the 1.0% maximum currently allowed in the North Sea Emission Control Area. According to Meindert Vink, a senior adviser with the Human Environment and Transport Inspectorate of the country’s Ministry of Infrastructure and the Environment, the vessel was subsequently boarded and the fuel in use found to have a sulphur content of 2.53%. He added that there were proposals to install similar detectors at Amsterdam and Flushing. He also said that aircraft were increasingly being used to detect use of non-compliant fuel by vessels when at sea. However there were challenges in proving such cases as ships might be found to be using compliant fuel on arrival in port. Replying to questions on how the inspectorate would enforce the new 0.10% sulphur limit coming into effect on 1 January next year, Vink said that it

Innovation

would target “high risk” vessels identified by the sniffers. This approach would replace the current random testing of fuel on about 100 ships a year. He added that many shipowners had contacted his office saying that they wanted to see a ‘level playing field’ when the new regulations come into force.

Netherlands, and is the result of highly experienced design engineers having access to the very latest and most

sophisticated software and analysis tools. CFD calculations analyse not only the propeller performance but, most

New prop saves fuel

Machinery and equipment designer and manufacturer Wärtsilä has launched a new “state-of-the-art” fixed pitch propeller (FPP) design concept. It says the concept has been developed utilising the latest computational fluid dynamics (CFD) technology and offers fuel savings of up to 4%. The Wärtsilä FPP Opti Design has been developed at the company’s Technology and Service Centre in the

Wärtsilä’s new fixed pitch propeller

Electric-powered tug

Netherlands-based Iskes Towage & Salvage has taken delivery of the Bernardus, the first tug built to the ASD 2810 Hybrid design, from Damen Shipyards Group. Damen claims that the delivery “represents a turning point for the tug industry as operators and port authorities demand innovative solutions to rising fuel costs and stricter emissions regulations”. Iskes has been operating a conventional Damen ASD Tug 2810 since November 2011. “We already had a very good experience with our existing Damen ASD 2810, which is ideally suited to Amsterdam,” says Iskes owner and managing director Jim Iskes. “We are very happy with its performance and so are the crew; it was a logical move to choose Damen for the hybrid version.” The ASD 2810 Hybrid design combines diesel-direct, diesel-electric propulsion and battery power, allowing the vessel to achieve average fuel savings of up to 30% and up to 40% reduction of emissions. Despite this, the Bernardus still has a bollard pull of 60 tonnes. During station keeping, manoeuvring and low-speed sailing (up to 5 knots), the Bernardus will utilise battery packs to operate under 100% electric power. The same batteries will be used when the tug is alongside at night, doing away with the use of generators. “This will not only be very economical but will also be so much more comfortable for the crew,” says Coen Boudesteijn, Damen’s product director, tugs.

“Harbour assisting tugs typically operate in polluted areas with high levels of particulates and NOx, so being green is becoming a more and more important selling point,” adds Boudesteijn. “The coming decade will see a lot of changes happening in engine rooms as they become greener and cleaner. He says: “This delivery demonstrates that the shipbuilding industry has the knowledge and ability to build greener vessels. But we need more support from governments in terms of subsidies because being green has to be commercially attractive too.” Damen is building four more tugs to the same design, three for the Royal Netherlands Navy and one for stock.

World Bunkering Autumn 2014

Funding for lithium battery firm

BW Group company Green Marine Capital (GMC) has agreed in principle to back Corvus Energy, a lithium-ion battery systems manufacturer that produces battery packs with the capacity deliver sustained power comparable to diesel engines “The board of directors and majority shareholders of Corvus are very pleased to partner with GMC,” said Corvus chairman Nick Andrews. “The firm is focused on the benefits that our technology brings to the marine industry and understands its future potential.” In March, Corvus announced it had been selected as the energy storage

system (ESS) of choice by Scandlines for its next three ferries to be converted to hybrid propulsion. The move followed the “tremendous success” of Scandlines’ first hybrid, the Prinsesse Benedikte. The next three hybrids will again use a 2.7MWh ESS consisting of Corvus Energy AT6500 advanced lithium polymer batteries integrated with Siemens drive systems. New ‘green’ notation

Italian classification society RINA has launched a new voluntary notation to identify new ship designs that meet eco-ship criteria. The first ships to be issued with the Efficient Ship notation are a series of nine 39,000 dwt bulk carriers, built for d’Amico Dry in China, at the Yangfan Group yard. The Efficient Ship notation is granted to ships and new designs assessed by RINA to have very high overall efficiency of engines, a lower fuel demand at owner defined speed, deadweight higher than the average for the particular type of ship and a system to monitor their performance during their life. Dino Cervetto, RINA’s head of technical services, says: “It is easy for shipyards to offer eco-ship designs, but it is much harder for shipowners and especially charterers to distinguish which vessels are actually more economical in service than others. We can look across the

DP system saves fuel

Navis Engineering says that recently completed sea trials by the 99,430 gt cruiseship Mein Schiff 3 have confirmed the high performance of the company’s dynamic positioning (DP) control system, Navis Nav DP4000. The Mein Schiff 3 DP control system was designed in close cooperation with TUI Cruises. It features special functions that contribute to substantial fuel reduction, particularly during tendering operations. The vessel incorporates a number of eco-friendly features, with particular emphasis on energy efficiency. According to Navis, this means Mein Schiff 3 consumes around 30% less energy compared with cruise ships of similar sizes.

World Bunkering Autumn 2014

market and compare ship performance and help owners to choose the right ships and then, with this notation, help them to stand out in the market place.” New biocide approved

I-Tech says that its Selektope® marine biocide for antifouling has passed the EU evaluation criteria for marine biocides and therefore can be authorised for approval in the EU. Authorisation from the UK Health and Safety Executive means that all necessary investigations and tests are completed, approved and evaluated to ensure that Selektope does not pose a risk to humans or the environment when used as an antifouling biocide. All other EU member states have been given access to the Selektope® dossier and have been given the opportunity to raise questions or concerns. Final EU approval is expected by the end of 2014. Selektope® has already received regulatory approval in Japan, Korea and is under registration in China. Selektope® is a biodegradable, non-metal substance developed to avoid fouling on boats and ships by barnacles and other shell-forming animals. I-Tech says the biocide has proven effectiveness in concentrations of about 0.1% percentage by weight. The antifouling effect is achieved through stimulation of the barnacle larvae’s swimming behaviour. It thereby makes the larvae unable to attach to a surface painted with Selektope®. As soon as the barnacle leaves the surface, the effect disappears and so is reversible. The company adds that, owing to the low concentration needed, Selektope® does not compromise the paint’s chemical structure, colour or other cooperative biocides involved.

Innovation

importantly, the interaction between the propeller and hull. This provides extremely accurate information to achieve design and parametric optimisation. “Wärtsilä has more than 100 years of experience in developing highquality propeller solutions. To this huge knowledge resource we have now been able to add a highly sophisticated state-of-the-art design approach that is unmatched in the industry. The hull and the propeller, and the interaction between the two, can both now be taken into account during the design process. The result is a higher level of efficiency and lower operating costs,” says Arto Lehtinen, vice-president, propulsion, Wärtsilä Ship Power.

Legal

Unpaid bills and politics Sandra Speares surveys a busy legal scene

hip arrests for non payment of bunkers, potential closure of Crimean ports to international shipping and the effect of Iranian sanctions are some of the important issues on the bunker industry agenda. Skuld P&I Club has highlighted the issue of arrest for non payment of bunkers in an advisory prepared with the assistance of Sochannam Legal in Mumbai. “It has been an unwelcome feature of the shipping bust that followed the financial crisis, and the effects of which are still being felt today, that shipowners have found themselves being held to account for debts incurred by their charterers. “In particular this has been the case for allegedly "unpaid" bunker supplies made to a vessel by now defunct charterers, leaving the owners to face legal action and ship arrest by the suppliers.” There as a recent decision from the Mumbai High Court on a matter where a vessel had been arrested on the basis that supplies of fuel had been made and which remained unpaid. The fuel had been ordered by the time charterers of the vessel. The owners sought legal redress both in Korea, where the supplier was based, and in Mumbai where the vessel had been arrested and released after the provision of security.

“The decisions that followed are very much to be welcomed by shipowners as it was established that, in the Korean court, the owner did not have an obligation to pay the supplier and this was a decision the Mumbai court recognised. “As to whether the suppliers had a maritime lien on the vessel, under Indian law, necessitated a further examination of US law which governed the terms of the supply contract. Ultimately the Mumbai court also held in favour of the shipowner. “It was a key fact, however, that the master had endorsed the bunker delivery receipt to state that the bunkers were being only accepted on behalf of the charterers and not on behalf of the owners or the master.” Skuld says that it had been notified It has been notified to that in some places bunker suppliers have sought to demand that vessels accept delivery receipts with endorsements that would seek to create a direct link, contract and / or lien with the vessel for the bunker supply. These should be resisted, otherwise owners may need to consider that they are accepting the risk of having to pay for the bunkers should the charterers who ordered them fail to do so. Wherever possible, masters or chief officers who sign for the receipt of the bunkers should seek to endorse

the receipt with terms similar to those used by the master of the vessel in this case, such as: "The bunkers, receipt of which are hereby acknowledged, are accepted solely for the account of charterers of m/v [...] and not for the account of said vessel or her owners and accordingly no lien or other claim against said vessel or her owners can arise here from." Skuld has also highlighted the Crimean port situation with a contribution to the advisory provided by correspondents DIAS . “Following on from recent developments, the Association has now learned that the Ministry of Infrastructure has issued a Directive No. 255 titled "On Closure of Sea Ports". As a resuot Ukraine is formally closing sea ports in the Crimean region to international shipping. This affects the following ports:Kerch; Theodosia;Sevastopol;Yalta and Evpatoria The Directive is presently with the Ministry of Justice of Ukraine, and will take formal effect once officially published. “Our correspondents caution that if a vessel were to call at a port in Ukraine after a call at a port in the Crimean region, then penalties could follow, including delays, detention and fines. Formal prosecution steps could also follow by Ukrainian authorities.

World Bunkering Autumn 2014

While there has been a perception that with the international agreement everything has settled down, but this is not the case, he believes. The US in particular is quite to see if they can prosecute people for sanctions busting, he says because failure to enforce US sanctions could undermine the whole regime against Iran, and the US needs to keep the pressure on Iran to keep the negotiations going, he explains.. In cases where courts have ordered that companies be delisted from the restricted list, it remains possible to re-list them by modifying the wording of the legislation, and this has happened in a number of cases. On 23 June 2014 the European Council published Council Decision 2014/386/CFSP, which was implemented by Regulation 692/2014 of 23 June 2014 (the Regulation) “in response to the illegal annexation of Crimea and Sevastopol”, which prohibits the import into the EU of goods “originating from” Crimea or the city of Sevastopol, Reed Smith pointed out in its recent sanctions update. Under the Regulation goods originating in Crimea or Sevastopol are defined as goods wholly obtained in Crimea or in Sevastopol or which have undergone their “last substantial trans-

formation” there in accordance with EU customs law, the law firm said. “The relevant EU customs law sets out that “goods wholly obtained in a country” may include inter alia: (i) mineral products extracted within that country; (ii) vegetable products harvested within that country; and (iii) waste and scrap products derived from manufacturing operations and used articles, if they were collected within that country and are fit only for the recovery of raw materials.” Goods whose production involved more than one country are deemed to originate in the country where they underwent their last, substantial, economically justified processing or working which resulted in the manufacturing of a new product or represented an important stage of the manufacturing process. The prohibition also extends to the direct or indirect provision of financing or financial assistance, as well as insurance and reinsurance services, related to such goods. The effects of the Regulation came into force on 25 June 2014 and shall apply until 23 June 2015. However it could be amended further, as is appropriate, so it shall remain under constant review, Reed Smith said.

Legal

“As members are aware, the present jurisdictional and legal situation with respect to the Crimean region is a political matter without a certain position. “The Association would advise members to always seek to comply with the laws of the jurisdiction within which their vessels operate or make ports of call. One of the key legal issues facing bunker suppliers presently is the issue of Iranian sanctions, Patrick Murphy, legal director in Clyde& Co’s Dubai office. Of the issues that affect the bunkering community “that is one of the bigger ones, and one of the most UAE-specific issues they need to worry about”. Fujairah is obviously the big bunkering hub in the region and courts are quite happy to arrest vessels arriving in the port, and that could be for bunker claims, although on one occasion Murphy mentions although a arrest order was issued by the courts, the harbour master did not serve it on the vessel, so it got away. Turning to the sanctions question Mr Murphy says this was a big issue because of Dubai’s links with Iran. There are strong historical trading links between the two countries. The real issue is to how to deal with bunkers that might have been refined in Iran and make their way to Dubai. The proximity of Iran to Fujairah means there is a risk of Iranian refined bunkers entering the supply chain. The issue, Mr Murphy said that any vessel entered with an International Group P&I Club is unable to load and carry bunkers of Iranian origin because to do so would invalidate their insurance. While some elements of the sanctions has been temporarily eased following negotiations between Iran and six Western powers including the US and UK, Mr Murphy says this has not affected the position with regard to bunkers and the international group. “They remain in force and everyone has got to comply until such time as the law is changed,” he says. Whether or not it does change is a political question. If they reach an agreement, there might be some letting up as far as the bunker situation is concerned but Mr Murphy says he is not optimistic tht they will reach agreement on everything. “It’s a waiting game”.

Fujairah is obviously the big bunkering hub

Equipment and services

EGR proving its potential NOx removal technique logs almost 3,500 hours

AN Diesel & Turbo says that its exhaust gas recirculation (EGR) solution, being developed with Alfa Laval support, is proving its potential aboard two A.P. Møller Mærsk vessels. Between them, the Alexander Maersk and the Maersk Cardiff have logged nearly 3,500 hours of EGR operation so far. The engine manufacturer says: “These seagoing installations, which involve water cleaning with Alfa Laval’s PureNOx, show why EGR is at the forefront of [International Maritime Organization-mandated] Tier III NOx abatement – and how fuel can be saved in Tier II operation.” MAN explains: “EGR, which involves the recirculation of exhaust gas, is one of two technologies being developed to meet Tier III NOx limits without resorting to liquefied natural gas. Unlike selective catalytic reduction (SCR), which is an after-treatment technology that removes NOx with the help of a catalyst, EGR is integrated into the engine and prevents the formation of NOx during combustion.” MAN says the advantages of EGR can be seen clearly in installations aboard the two container vessels. The 1,092 teu Alexander Maersk, with a MAN B&W 7S50MC engine, was retrofitted with an EGR prototype in 2010. She

has now spent more than 2,200 hours operating at 50% NOx reduction over today’s basis emission level. Lessons learnt from this installation have been applied to the 4,500 teu newbuild Maersk Cardiff, which has an EGR-equipped engine that is fully compliant with Tier III and also well past the 1,000-hour operating mark. “Alfa Laval is proud to be part of these pioneering EGR installations, where our PureNOx has the vital role of cleaning the wash water in the wet scrubber,” says Alfa Laval’s Kristina Effler, business manager, water treatment exhaust gas emissions. “No other vessel has EGR installed and operating reliably at Tier III. Moreover, it has been possible to demonstrate substantial fuel savings at Tier II.” As confirmed recently at the International Maritime Organization’s (IMO) 66th Marine Environment Protection Committee (MEPC) meeting, Tier III air pollution regulations will require the reduction of NOx emissions by 80% from existing Tier I limits during operation in emission control areas (ECAs). This will apply to marine diesel engines of over 130kW output power and installed from 1 January 2016 onwards, except for the engines of certain recreational vessels. At present, both North American coastal waters and the US Caribbean Sea are defined as NOx ECAs.

Gas carriers use integrated solution

Three new 27,000m3 liquefied natural gas/multigas carriers for Evergas, the Denmark-based transporter of petrochemical gases and natural gas liquids, are to incorporate the integrated Wärtsilä solution, comprising the main propulsion equipment, the gas fuel supply system, and the cargo handling system. This order is an extension of one placed in 2013 for a series of three similar vessels. The ships are being built by the Sinopacific Offshore & Engineering (SOE) shipyard in China, and feature an advanced design that offers very high efficiency and unparalleled flexibility. The order was signed in March. “Wärtsilä is extremely pleased to continue this valuable cooperation with Evergas and SOE. The concept that has been developed has proven to be extremely successful as evidenced by the fact that it is being continued for a further three vessels. Our integrated solution fully meets the design criteria for excellent fuel economy as well as superb redundancy,” says Jaakko Eskola, senior executive vice-president and president, ship power, at Wärtsilä Corporation. “These vessels are the largest, most flexible and advanced multigas carriers yet to be built. By utilising Wärtsilä dual-fuel propulsion machinery capable of running on clean LNG, the ships will be Tier III compliant

World Bunkering Autumn 2014

Mass flow meters for Turkey

Turkish supplier CYE Petrol has chosen Emerson Process Management’s Micro Motion® Certified Bunker Measurement Solutions for two new bunker barges being built in Turkey. “We want to be able to offer our customers a new level of accuracy,” says Deniz Eraydin, general manager of CYE Petrol. “The real-time and certified heavy fuel oil and marine gas oil bunker measurements provided by Emerson’s Certified Bunker Measurement Solution will help improve our overall operational efficiency and raise customer confidence in the quality of our deliveries.” Based in Istanbul, CYE Petrol is a physical bunker supplier, blending and distributing bunker fuels using a fleet of bunker barges and land-based tankers. The company supplies 15,000-20,000 tonnes of bunkers a month to the Istanbul and Izmit bay areas as well as ports in the Black Sea and Sea of Marmara. Emerson’s Certified Bunker Measurement Solutions will be installed on CYE’s new Kalamis-E and Beykoz-E, 1,650 dwt, double-hull bunker barges that are expected to be operational during autumn 2014. The other four vessels in the CYE Petrol bunker barge fleet will be fitted with Emerson systems over the next 18 months. “CYE Petrol is continually looking for ways to increase the already high standards of our bunkering procedures and technologies,” continued Eraydin. “Emerson’s Certified Bunker Measurement Solution supports this objective by promoting the reputation and integrity of our quality and service in a highly competitive market. In addition, by reducing measurement uncertainty and the resultant disputes that can delay deliveries, our potential capacity may be increased from 15,000-20,000 tonnes/month to 25,000-30,000 tonnes/month.” Emerson’s mass flow meters are already being used by CYE Petrol at its Poliport loading terminal near Istanbul. Installed in 2005, the company says that the meters are providing accurate mass flow measurement data used when blending diesel fuel and fuel oil to achieve the desired grade.

Equipment and services

and have a minimal environmental footprint, which is important to our company. We appreciate Wärtsilä’s valuable cooperation in this newbuild programme, and we are pleased that this extended order allows us to continue this excellent cooperation,” says Martin Ackermann, CEO of Evergas. For each vessel, Wärtsilä will supply two Wärtsilä 50DF dualfuel main engines, two Wärtsilä 20DF auxiliary gensets, the gearbox, and the controllable pitch propeller. Wärtsilä will also supply the cargo handling system with reliquefaction and an integrated LNG fuel supply system, enabling the vessels to utilise the LNG energy even further. This integration means that less energy and power is needed for cooling the cargo, thereby increasing both efficiency and environmental sustainability. The delivery of the 178m-long vessels will take place during 2015. Wärtsilä says that its cooperation with the shipyard will continue until the vessels are completed.

SAVE THE DATE! December 1 - 2, 2014 | Hotel Rey Juan Carlos | Barcelona, Spain

3rd Annual

MEDITERRANEAN BUNKER FUEL

OVERCOMING REGIONAL CHALLENGES

Platts 3rd Annual Mediterranean Bunker Fuel conference will once again assemble the region’s leading ship owners, operators, brokers, fuel suppliers, refiners and many other marine fuel industry organizations to assess the changing landscape of the bunker industry and discuss solutions for the new challenges ahead.

WHY ATTEND: 3 Join industry leaders as they discuss their perspective on pertinent challenges currently facing the industry

“Well organized. Provided a range of views and opinions, touched on several industry related matters, particularly about the fuel of changing trends in the industry.”

Monjasa

3 Receive a detailed update on the key market developments, including the ramifications of fuel regulations 3 Understand fuel quality trends and their implications to the value chain

“Our overall impression of this conference is that it was interesting; many topics were discussed in a good way. ”

3 Discover how the bunker fuel industry is evolving to keep up with changing regulations

Mediterranean Petroleum & Shipping

3 Gain further insight into the future of the bunker and shipping industry including development in LNG facilities

FOR MORE INFORMATION AND TO BE FIRST TO SEE THE AGENDA

conf_registrations@platts.com

+44 (0)20 7176 6300

In an atmosphere of renewed optimism, Greece’s massive biennial shipping event attracted more participants than ever

osidonia 2014 ended on a high note by breaking event records in both the number of unique visitors and participating countries. The world’s biggest, most diverse and, arguably, most prestigious shipping event attracted a total of 19,421 visitors. That meant the number of visitors walking the lengthy corridors of the four Athens Metropolitan Expo halls during Posidonia week was up 10 per cent on the previous Posidonia event in 2012. Meeting this massive influx were members of the Greek shipowning community as well as representatives of 1,843 exhibitors from a total of 93 countries – another Posidonia record. Already the organisers are confident that the next Posidonia, scheduled to take place at the same state-of-the-art Metropolitan Expo venue from 6-10 June 2016, will be an equally successful and productive event for all exhibitors. “Forward bookings look exceptionally encouraging and we are confident that the success of this year’s Posidonia will be emulated in two years’ time,” said Dimitra Michael, managing director, Posidonia Exhibitions. She added: “Shipping is slowly rebounding because global trade conditions are improving and the busier our oceans become over the next 24 months, the more optimism we will witness on the Posidonia 2016 floor space.”

World Bunkering Autumn 2014

Major Posidonia exhibitors, including the organisers of the national pavilions of the Netherlands, Japan, Turkey and Denmark, as well as repeat exhibitors such as ABB, Transas, MAN Diesel & Turbo, Alfa Laval, Marichem Marigases and many more, have already confirmed their participation for Posidonia 2016. “Posidonia’s strong links with the Greek shipping community and its proven track record as the place where deals get done, are two of the most important assets that distinguish this event in the minds of the global maritime community. Our reputation for blending business deals and networking with a compelling conference and seminar agenda, enriched by our sporting events – the Posidonia Games, makes Posidonia’s floorspace a coveted asset for every member of the international maritime industry,” said Michael. Posidonia is sponsored by the Greek Ministry of Shipping, Maritime Affairs and the Aegean, the Municipality of Piraeus, the Hellenic Chamber of Shipping, the Union of Greek Shipowners, the Greek Shipping Co-operation Committee, the Hellenic Shortsea Shipowners Association and the Association of Greek Passenger Shipping Companies. The organisers noted that while, as in recent years, the majority of new Greek newbuilding orders contribute to the ballooning GDP and shipyard fortunes of China – Asia’s dominant shipbuilding

Posidonia Review

Posidonia breaks all records nation, Japan and South Korea are reinventing themselves and this was evident in the pavilions. Asian yards outside China aim to win orders on the basis of innovation in eco design and fuel efficiency, sectors that took centre stage at Posidonia. Indeed, environmental considerations, and thus fuel efficiency, were prominent at this year’s event. Strengthening environmental regulations and a global industry drive to reduce energy costs made Posidonia a fertile ground for a record number of oil and lubricants providers and fuel analysts, many offering ground-breaking, technologically advanced products and solutions designed to help make the seas ‘greener’ and the energy costs ‘leaner’. In a similar vein, a total of 50 energy specialists from around the world showcased the latest trends and technologies, designed to help the shipping industry reduce its global greenhouse gas (GHG) emissions footprint. This is in line with the European Commission’s proposed rules in support of a staged approach to setting global energy efficiency standards for existing ships from 2018. By 2016, these energy-related issues will have attained even greater prominence and can again be expected to dominate at the next Posidonia. Details of this year’s event can be found at http://www.posidonia-events. com/general/general-info.aspx

Sibcon preview

Sibcon 2014 participants will get the chance to see an oil spill recovery exercise close-up

Sibcon “bigger and better” This year’s event is set to tackle key issues in Singapore and globally, as the bunker scene changes rapidly

he biennial Singapore International Bunkering Conference and Exhibition (Sibcon) is back for its 18th run and, the organisers say, 2014 looks set to be bigger and better. Certainly, they are packing a lot into the event, from 14-17 October, including a pre-conference forum and site visits. Once again the venue is Resorts World Sentosa, Singapore, and over 1,600 participants from more than 50 countries are expected. The event always attracts many of world’s most influential buyers, suppliers and traders and is intended to offer a wide range of networking opportunities alongside new market insights from experts. Sibcon 2014 takes place as Singapore continues to act to strengthen its position as a reliable and trusted port for bunkering operations, with 42.7 million tonnes in bunker sales in 2013. Regulation, standardisation and control remain an important focus of the Maritime and Port Authority of Singapore’s (MPA’s) initiatives. The MPA recently announced that it is to make the use of mass flow metering systems mandatory. The pre-conference forum on 14 October delves into mass flow metering in more detail. It is likely to tackle questions such as: ‘What possible implementation issues could arise from this initiative?’, ‘How can the industry get their metering systems approved?’ and

‘What are the commercial and dispute resolution matters to consider?’. The forum looks at: bunker custody transfer – risk management in the era of the mass flow meter. As part of this, it will cover trends in bunker quantity disputes; the role and future of mass flow metering; a practical guide for implementing metering in Singapore; industry experiences in installing and operating mass flow meters; the legal implications of the mass flow metering system; and a P&I perspective on claims management. The topic of mass flow metering is high on the agenda in Singapore right now and will also feature in the main two-day conference. There is, however, much else to talk about, and the conference programme features high-level roundtables or panel discussions on: the impact of sulphur caps on different fuel segments; marine fuel price points; trends in fuel quality; bunker buyers’ interface on trade, procurement and operations, standardisation and control in Singapore; emission control area (ECA) compliance; the commercial viability of scrubbers; and LNG as a marine fuel. These discussions will culminate in a round-up on game-changers for marine fuels. This year’s speakers include: Dr Parry Oei, director (port services) and chief hydrographer at the MPA; Dr Alam Khorshed, vice-president and regional manager at DNV-GL Maritime Advisory, South East Asia and Pacific,

chairman of the Singapore Shipping Association’s bunkering committee, and convenor of the working group on the SS 600 code of practice for bunkering; Aloysius Seow, chief operating officer at Ocean Tankers and convenor of the working group on the SS 524 quality management standard; Lim Teck Cheng, chief executive at Hong Lam Marine; and Teo Choo Wee, executive director at Pacific International Lines. On liquefied natural gas (LNG), the challenge has often been seen as a ‘who first’ dilemma – shipowners, LNG suppliers or infrastructure developers. That stalemate has now been broken and all three are slowly but surely jumping onto the LNG bunkering bandwagon. As well as covering LNG in the conference, Sibcon will feature LNG in one of its two post-conference site visits. The first will allow attendees to experience firsthand the operations and facilities at the country’s first LNG terminal, built and managed by Singapore LNG Corporation. The second visit is for a joint oil spill exercise, when Sibcom participants go out to sea for a half-day demonstration on preventing and managing oil spills. So Sibcon will again be an important part of this year’s bunker industry diary. Sibcon is organised by the MPA and IBC Asia. For more details, see http:// www.sibconsingapore.com/sibconcontact-us.php

World Bunkering Autumn 2014

Book review

Read all about it! As David Hughes comments, Nigel Draffin’s latest book provides a very useful overview of the shipping industry

ell known in bunkering circles as a marine fuel expert and specialist handbook author, Nigel Draffin has cast his net further in his latest piece of work. Shipping: An Introduction to the Technical, Operational and Commercial Aspects is described by its publisher as a “comprehensive and well-planned book, which is easy to read and highly accessible both to newcomers to shipping and to those needing to refresh their knowledge and understanding of this highly dynamic and global industry”. That is all quite true; it could also usefully be made compulsory reading in journalist training establishments and be on the bookshelves in newsrooms. A read of this book would go a long way to remedying the total ignorance that the media usually demonstrates when covering any maritime issue. The book covers the essentials of shipping, taking the reader through manning, safety, training, navigation and communications. It covers classification and insurance, international conventions and maritime law, and it looks at ports, workboats, cranes and dry docks, as well as pilots and agents. The author discusses charter parties and contracts of affreightment, shipbroking and vessel vetting, and the main costs, such as manning, mainte-

World Bunkering Autumn 2014

nance, insurance and bunkering. He covers sale and purchase, new building and scrapping, as well as ownership structures, mortgages and public and private ownership issues. Not forgotten are the engines and the propellers, speed and efficiency, emissions regulation and pollution. The book provides a handy ‘where to go for help’ section, a glossary of abbreviations and shipping terms, as well as informative appendices illustrating vessel type dimensions and what might be found in voyage and time charter contracts. Given its scope, Draffin’s book could equally well be entitled (Nearly) All about Shipping. Draffin himself has an encyclopaedic knowledge of the shipping industry, having been involved in shipping for almost 50 years and with the commercial bunker market for over 25 years. He is a founder member of the International Bunker Industry Association (IBIA), has served several times on its council of management and executive board, and has served as chairman. He is director of the Oxford Bunker Course and the Oxford Bunker Course (Advanced), a member of the Institute of Marine Engineering, Science and Technology and a past Master of the Worshipful Company of Fuellers. His day job is senior broker and technical manager at US-based broking

house LQM Petroleum Services. His previous books include: An Introduction to Bunkering, Commercial Practice in Bunkering and An Introduction to LNG Bunkering. Despite this track record, one of the book’s strengths is that it is also the result of detailed research and consulting with many others involved in particular parts of the industry, including the editor of World Bunkering. One person who does know the industry very well is Peter Hinchliffe, secretary-general of the International Chamber of Shipping, who has written an introduction. He notes: “All in all, this is a very accomplished piece of work, which I am certain will be a great asset to anyone embarking on a career in international shipping or wanting to know more about different sectors of this great global industry.” Shipping: An Introduction to the Technical, Operational and Commercial Aspects is published by Petrospot Limited, www. petrospot.com Nigel Draffin

Company news

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

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

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

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

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

•

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

Our competitive advantages • Wide range of top-grade marine fuels • • • •

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

For more information, contact: Rostov-on-Don Tel: +7 (863) 242-44-86 +7 (863) 242-44-87 +7 (863) 242-44-88 E-mail: rostov@ybunker.com Yeisk Tel: +7 (86132) 2-60-64 E-mail: yeisk@ybunker.com Port Kavkaz Tel: + 7 (86148) 4-43-47 E-mail: kavkaz@ybunker.com Website: www.ybunker.com

World Bunkering Autumn 2014

Whichever high-quality product you choose, you can expect great service on time wherever you are

oreqFender AS is a specialised supplier of marine fendering products to the maritime industry. The market for pneumatic fenders has seen a tremendous increase during the past couple of years, with shipowners realising the advantages of pneumatic fenders over fixed fenders. In January, the latest edition of the ISO standard 17357 was launched in order to ensure the high quality needed for safe berthing during ship-to-ship or ship-to-port operations. The Oil Companies International Marine Forum (OCIMF) strongly recommends the use of ISO-certified pneumatic fenders while performing ship-to-ship (STS) operations involving bunkering or discharging of oil or gas.

We deliver pneumatic fenders made to fully protect your vessel during bunkering operations. Our fenders are manufactured and tested in compliance with ISO17357, which is the only standard ensuring highquality fenders. In addition to pneumatic fenders, we manufacture and deliver fixed fenders for any type of vessel, related equipment such as ropes and hardware and composite hoses for STS operations. The NoreqFender headquarters is located in Norway, but we have a global presence with a large network of agents, stockists and subsidiaries in Busan, Singapore, Dubai, Rotterdam and Bergen. In Rotterdam, we hold one of the world’s largest stocks of pneumatic fenders and we are ready to ship to any destination worldwide at short notice.

NoreqFender is part of the Harding Group and together we have many years of experience in the maritime industry. Harding Safety AS specialises in the development and manufacturing of lifesaving products such as lifeboats, rescue boats and davits. For more information, visit www.harding.no In cooperation with Harding, we manufacture first-class fender davit systems. The NFD series is scaled to fit the most common fender sizes and the davit is based on the same success formula as the Harding NPD series. We firmly believe the NFD davit is an excellent alternative for clients looking for a reliable and easy launching and storage arrangement. As a client of NoreqFender, you should know that you will always be offered highquality products and services – on time! ⏏

Company news

First-class fenders

NoreqFender AS P.O. Box 144, 5480 Husnes Norway E-mail: post@noreqfender.no Website: www.noreqfender.no

World Bunkering Autumn 2014

Company news

CYE Petrol Tic Ltd Şti Physical bunker supplier in Istanbul with 26 years of experience is investing for Transparency, Quality and Environment.

YE Petrol (founded on 1988), as bunker only, family owned company, is the most qualified Physical Bunker Supplier with over 48 000 bunker supplies in Turkey. Bunker Deliveries are managed professionally by a bunker barge fleet under CYE Petrol’s control. CYE Petrol was the first company to use “mass flow meters” (EMERSON) together with computerized line blending facility in Istanbul as early as 2004. On the product side The Company is: • supplying only ISO 8217:2012(E)

specifications guaranteed for all products ( gasoil 0.1, HSFO - all grades from 20 cst to 380 cst) • applying MARPOL 73/78 ANNEX VI regulations for bunker delivery

procedures and documentations since 2005. • Using “Continuous Dripping” method for sampling

2. to register her service quality, eliminate uncertainty and bring the quality and quality parameters into the center of the competition.

Quality and Quantity is ensured with new generation environmentally friendly bunker barges:

CYE Petrol’s Bunker Barge Fleet:

New double hull builds, M/T BEYKOZ-E launched on May 2014 and M/T KALAMIS-E launched on September 2014, are both fitted with EMERSON Coriolis Mass Flow Meters. The company is planning to fit EMERSON Coriolis Mass Flow Meters to whole bunker barge fleet until 2016. With doing that CYE Petrol is aiming: 1. to offer a new level of accuracy and to increase the efficiency of the delivery process.

The Bunker barge fleet is capable of supplying 50 000 MT/month with qualified personal. All Barges has sufficient equipment to supply in all Turkish Ports. Bunker barge names and capacities are as follows: M/T BEBEK-E M/T BEYKOZ-E M/T KALAMIS-E M/T MODA-E M/T FLORYA-E M/T TARABYA-E

3300 dwt 1650 dwt 1650 dwt 1300 dwt 1100 dwt 650 dwt

For more information, contact: CYE PETROL TIC LTD STI BAGDAT CAD NO:91 ISTANBUL/TURKEY Tel: +90 216 345 4700 Fax: +90 216 330 5068 E-mail: cye@cyepetrol.com.tr Website:www.cyepetrol.com.tr

World Bunkering Autumn 2014

A unique Electronic Trade System for online trading offers accessibility, convenience and fair deals

n October 2013, the Russian firm Merkator Co. Ltd launched a demo version of Electronic Trade System (ETS) by RusBunker. By May 2014, the full version was freely accessible to the public and working at full power. ETS is a bunkering exchange that allows users to make online trades. Experts believe that such a system can significantly change relationships among members of the bunkering market, taking it to a more global level. How does it work? Vessel owners or charterers start a Dutch auction and provide details of date, time, product and bunkering location. Bunkering or trade companies that show the name and location (harbour) of their service automatically receive an email with these details and then register for an auction. At the selected time, when trades start, participants bid freely, with all users able to see the offers of their competitors. The firm offering the best price wins. In order to improve competition and decrease the chances of collusion, participants cannot see the names of their competitors, who are only labelled Participant 1, Participant 2, etc. It is all fairly simple. The main principles of the project are accessibility, convenience and fair deals. Anti-corruption policy is very important nowadays, and high fuel prices can result in vessel owners spending a huge amount of time searching for the best offers to save money. ETS helps them with this process. Vessel owners who use ETS RusBunker get a real view on prices. It is no secret that today’s fuel trade often causes tension between different firms, some of which use their market power to put pressure on other fuel suppliers. Suppliers do not have confidence that the vessel owner will get the lowest price from competitors. This means that participant’s offers are made based on intuition. In an experiment in Singapore, workers from one firm were separated into two groups. The first group used a traditional method of trading, using Skype for communicating with potential consumers. The second group used ETS. The results exceeded all expectations. Everyone was satisfied with results and pleased with the fairness of the prices. All companies who participate in trades have access to the trading process and, at the end of every trade, statistics of

World Bunkering Autumn 2014

prices based on real offers are calculated. Everything that companies need is accessible on the internet, so it does not matter where the firm is situated. Internet spaces have no borders. However, ETS was not created solely for vessel owners. In the section called Resources, oil companies and firms that have any relation to oil are able to make offers. All trades are done in the same way: simply, quickly, efficiently. This section will always be interesting for traders and other participants in that sphere. Some traders are not pleased by the possibility that such a system could disadvantage some intermediaries – it is likely that mediators who do business only by phone will exit the market. Nevertheless, qualified intermediaries will strengthen their position. It is no secret that vessel owners try to avoid prepayment, just as the majority of oil companies do not offer payment in instalments. This is one of the advantages of trading, along with the high speed of transactions. As a result, traders do not need to panic. Moreover, if a participant has registered as a “Trader”, they can act as a supplier or a vessel owner. A similar project was attempted 15 years ago, but failed – in our opinion, mainly for technological reasons. But we believe the future for ETS is bright. The most frequently asked question about the system is “Does something similar exist?”. The answer is no. RusBunker’s is the only one. Another factor that has slowed down market development is that fuellers wait for the registration of vessel companies, while those companies are waiting for them. As a result, it is a closed circle. Registration for the RusBunker ETS is free and fairly simple, so do not waste time. First come, first served. Our first observations of and consultations with the largest participants in the bunkering market showed a great interest in and need for such a product. The market is ready for a higher standard. Since, traditionally, such high prices are involved, participants spend a great deal of time examining all possible ways to optimise production processes; however, we hope that our system will improve the efficacy of such operations. ETS by RusBunkering is simple, convenient, fair, and cost efficient. ⏏

Company news

Rusbunker

RusBunker If you have any questions do not hesitate to contact us at Merkator Co. Ltd, 690022, Vladivostok, 12, Lesnaya St. Tel: +7 (0) 4232 2499671, Fax: +7 (0) 4232 2499672 E-mail: office@rusbunker.com Website: www.rusbunker.com

Company news

Nayada Co., Ltd Our company keeps on developing and constantly improves the service

unker boom is ongoing for the second year in the Russian Far East. Bunkering main point is port Nakhodka. Some container ships owned by the biggest world companies call port Nakhodka almost every day. This port has become a North door to the Southeast Asia same as Singapore geographically takes a position of a South gateway and a lot of operators and owners have already appreciated the advantages of port Nakhodka. Many customers appraise high quality of services provided and evaluate the best as compared to other ports. Nayada Co., Ltd takes a leading position and offers a bunker product with a full range of related services in the port. Our new tanker "Zaliv Nakhodka" has Ice class A2 and stainless steel propeller will allow proceeding with loading operations at the terminals with heavy winter ice conditions. There are 12 cargo-discharge pumps with flow rate of 340 m³/hr installed in 12 cargo tanks that allows a total discharge of about 2000 m3/hr. Bow

thruster and controllable pitch propeller allow mooring without using tugs. Master Tselobanov E. is delighted with tanker operation, emphasizing her speed characteristics and usability of the cargo system. Crew members are fully satisfied with their cabins and other

accommodation facilities since there is a gym and sauna on board. Tanker "Zaliv Nakhodka" fully meets the objectives of bunkering large container ships. Nayada Co., Ltd company is still searching for high-quality tankers easy-touse in bunkering operations. ⏏

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

stablished in 2007, Morskoy Trust LLC fuel supply company is based in the city of PetropavlovskKamchatskiy in Russia. Its main activities are fuelling of fishing vessels operating in the Sea of Okhotsk and the Bering Sea, wholesale and retail sale of oil products in the Far Eastern sea ports, and oil transportation. The company operates 11 vessels, comprising eight oil carriers and three fuel vessels, with a total deadweight of 47,550 tons. All the company’s vessels are ice-class ships capable of operating in any navigation area throughout the year. They meet all the requirements of the Russian Register of Shipping and the latest requirements of MARPOL 73/78 – International Convention on Marine Pollution.

All vessels are equipped with heating cargo systems, which makes it possible to transport any oil products and they can carry several types of various oil products at one time. During in the 2013 navigation our tanker Svatoy Petr sailing via Northern Sea Route. Morskoy Trust holds membership with the

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

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

World Bunkering Autumn 2014

Providing direct access to high-quality fuel oil, 24/7

orum Ltd. supplies bunker fuels in the port of Saint-Petersburg. The company entered the market in 2011 and has proved to be a reliable supplier of bunker fuels, providing clients with fuel oil produced by Antipinsky refinery, an independent modern refinery with monthly production capacity of over 200 000 metric tons. Our main product is straight run fuel oil complying with ISO-F-RME, ISO-F-RMG and Regulations 14 (1) and 18 (1) of MARPOL 73/78, Annex VI. We supply MGO (DMA) 0,1% sulphur from the leading refineries in Russia as well. The company has several contracts with leading shipping companies to ensure smooth and secure supply. Product transshipment is carried out on the most up-to-date terminals of the region. Quality is the corner stone of bunker business, therefore, in collaboration with world-acknowledged surveying companies, we ensure the highest quality of the products we deliver. All our products are compliant with ISO 8217:2010(E) standard.

Since its beginnings of 2011, Forum has earned the trust of customers and partners by supplying high-quality products at competitive prices and on flexible payment terms. The company ensures a consistent supply of fuel oil, working on a contract basis as well as the spot market. We provide our services for a vast number of major companies in the shipping industry, as well as traders 24 hours a day, 7 days a week. ⏏ Our competitive advantages are: • direct access to high quality fuel oil; • products conform with ISO8217:2010 (E)

plus the later amendments; • 24/7 services;

For more information and bunker enquires please contact us at: Forum Ltd. Office 411, Barochnaya str. 10/1, St. Petersburg, 197110, Russia Bunker trader: Aleksey Miloradov Phone: +7 (812) 449-65-91 Mobile: +7 (921) 757-11-33 Yahoo ID: aleksey.miloradov E-mail: trade@forumbunkering.ru www.forumbunkering.ru

Company news

Forum Ltd.

Seabridge Bunkering Pte Ltd 海橋油供有限公司

(A member of Bilsea Group)

Connecting your business with the brand that you can trust

eabridge Bunkering Pte Ltd is part of the Bilsea Group which engages in a diversified range of shipping activities including ship bunkering, ship chartering, commodity trading of asphalt and other petroleum products, paper trading and futures trading. Within 20 over years of business development in the shipping industry, the Bilsea Group of Companies has established itself as a reliable and reputable brand for shipping related services in the global shipping industry. We attribute our success to: • The unwavering valuable support of our customers and fuels suppliers around the world; • Adopting the right strategy to focus on our core businesses with the support of an efficient team who serves with passion; • The core values which we endorse and nurture our employees all these years: Rooted in the beliefs of Humility and Integrity, we dedicate our Passion for Excellence in the Community. World Bunkering Autumn 2014

Seabridge Bunkering Pte Ltd

In a span of ten years, Seabridge Bunkering has established its reputation as a service orientated company with broad knowledge of the bunkering business, particularly in the Chinese market. Our offices in Shanghai, Hong Kong and Singapore being its head office are able to offer different grades of marine fuel with competitive bunker prices globally. Our team of professional bunker traders are dedicated to building and maintaining solid relationship with our customers. Besides our specialized knowledge of physical bunker trading and deliveries, we also have a dedicated Risk Management Team to service our customers to secure stable cash flows through fixed bunker costs and improve their cost forecast and profit margins. Through the combined efforts of our employees, Seabridge Bunkering consistently strives to create value for our customers and stakeholders. Our core competencies, coupled with our

commitment to excellence, provide a strong foundation for delivering optimal service and support for all our customers around the world. ⏏ For bunker enquiries, please contact us at: Singapore Tel: +65 6536 4198 Fax: +65 6536 4482 Email: email@seabridge-bunkering.com Shanghai Tel: +86 21 5026 6391 / 5026 6380 / 5026 6062 Fax: +86 21 5026 6170 Email: shanghai@seabridge-bunkering.com Hong Kong Tel: +852 3975 8166 / 8167 Fax: +852 3975 8300 Email: hk@seabridge-bunkering.com

Company news

Fuelling excellence From purchasing to delivery, Niko Group offers the best terms for bunkering in the Russian Far East

iko Group offers fuel-related services – from purchasing all fuel types to delivery, which is completed by the group’s own bunker fleet. The services are undertaken by the group’s specialists, who each have broad experience. Partners working with Niko Group have achieved benefits for over 20 years. One of Niko Group’s strengths is that it owns tank farm complexes in Vladivostok with a total capacity of 40,000m3 and a drain front for 30 railway tank cars. Piers located close to the port allow docking to take place quickly – four tankers with a draft of up to 10m can be loaded and unloaded. The group’s fleet provides bunkering at all ports in the Russian Far East, as well as the fishing expedition areas in Okhotsk and the Bering Sea. It also transports fuel to ports in the Asian-Pacific region. Niko Group owns six tankers with a total bunkering tonnage of more than 30,000 tons.

The group provide barges for its partner companies Gazprom Neft Marine Bunker and RN-Bunker and for companies such as MOL, ZIM and Maersk. Its fuel is covered by all MARPOL marine pollution requirements and regulations arising from the International Convention for the Safety of Life at Sea (SOLAS). Niko Group is also a trading and supply company, managing bunker operations in the Asian-Pacific ports of Korea, Japan and China. The group’s flexible price policy is aimed at attracting new partners. Currently, the group offers the best terms for bunkering in the Russian Far East. ⏏

NIKO GROUP 167 Svetlanskaya St., of. 318, Vladivostok, Russia, 690001 Tel/fax: +7 (0)423 2268105 +7 (0)423 2268256 Andrei Velikorodnyi Mobile: +7 908 4638906 Yahoo ID: velikorodnyi Ilya Shapovalov Mobile: +7 924 7305575 Yahoo ID: ilya.shapovalov Web: www.niko-group.com E-mail: office@nikobunker.com

Nizhegorod Bunker Ltd Going from strength to strength

izhegorod Bunker Ltd, the official representative of the oil company Rosneft, specialises in fleet bunkering in the areas of Volga and the adjacent basin. The company is extremely optimistic about the new navigation season, its reason for this being the strengthened relations with Rosneft and an ever-growing number of clients. “The task of expanding our client data base is constantly being worked on,” says Vladimir Nikiforov, general director of Nizhegorod Bunker. “At the moment we are not only successfully working with Rosneft, but have also concluded 200 new contracts for bunker supply, including one with Volzhskoye Parohodstvo. By the start of the navigation season we had received pre-payment for 3,000 tons of bunker fuel from our partners. This method has been used by our company for the first time and we see it as both a successful way of doing business and a demonstration of trust from our customers.”

The fleet consists of a park of flatbottomed tankers with a total capacity of 300 tons and self-propelled bunkering vessels with the capacity of 600-1,500 tons. The company also owns a stationary oil station. The total of bunkering fleet tonnage is more than 7,000 tons. In the recent years the company has increased its’ clientele from the NorthWest region of Russia. The bunkering spots in Nizhniy-Novgorod, Rybinsk and Sheksna are very handy and attractive to the shipowners of the North-West Shipping Company. “We always aim for an honest partnership,” says Mr Nikiforov. “The customer should be confident that he is buying exactly the type of fuel he is paying for. As a result of this strategy we have strengthened our position in the North-West region and won the trust of the shipowners from the capital. In the near future we plan to open bunkering spots at the mouth of Kama and Nizhnekamsk.” ⏏

Vladimir Nikiforov, general director, Nizhegorod Bunker

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

World Bunkering Autumn 2014

SPECIAL FEATURES Blending With continued pressure on margins plus the need to blend fuels to meet sulphur emission regulations, blending remains a hot topic.

Next issue

World Bunkering Winter 2 014 i s s u e

Fuel Additives This remains a controversial area. Are additives worth using? Are more operators turning to additives, and if so why? Barge Design As more vessels are designed to operate on LNG (Liquefied Natural Gas), the need for LNG bunker barges is growing. We look at the designs coming forward to meet this need. GEOGRAPHICAL FOCUS Americas North America is now surrounded by an Emission Control Area and the 0.10% sulphur limit comes into effect in a just few weeks. What effect will it have? Will there be implications for Central America and the Caribbean? We also take a look at the South American Bunker scene. Africa African trade is increasing but do bunker volumes reflect this. We report on the challenges facing the African bunker industry. RUSSIAN UPDATE News, Views, Analysis. REGULAR FEATURES Interview, Industry News, Environment, Testing, LNG, Risk Management, Innovation, Legal News, Equipment and Services, Diary. EVENT PREVIEWS Fujcon.

w w w. wo r ldbunker ing .com World Bunkering Autumn 2014

Diary

22-25 September

Ship Performance Monitoring & Energy Management Miami, USA Improving operational practices for fleet efficiency. Our expert speaker Kristinn A Aspelund, Sales and Marketing Director, Marorka will discuss: developing a performance monitoring system for ships, setting up systems onboard, measuring output, managing data transfer and handling, data analysis and case studies.

www.marorka.com/ship-performance-monitoring-energy-managementseminar-miami-22-23-september-2014/

3-7 November

IBIA Convention, Hamburg Following on from a hugely successful convention in Hong Kong in 2013, the 2014 Annual IBIA convention will be taking place in Hamburg at the Grand Elysée Hotel. The title and focus of this convention is “Clarifying Quality and Compliance” and the convention will feature many guest and keynote speakers, along with seminars, breakout sessions, working groups, exhibitions and of course many networking opportunities for you and your business.

www.ibia.net

9-12 September

SMM Hamburg, Germany SMM is the leading international forum of the maritime industry. Every two years, the representatives of the shipbuilding and marine equipment industries from all parts of the world meet in Hamburg, present innovations and forward looking technologies, and set the course for future success of the industry.

smm-hamburg.com/en

28-30 September

RESCON 2014 – The Red Sea and Gulf Bunkering Conference Dubai, United Arab Emirates RESCON 2014 is the comprehensive business gathering of bunker professionals focused on the Red Sea and Gulf region, this year including North and East Africa, India and Pakistan.

http://rescon.iirme.com/#sthash.1kUfCJP0.dpuf

8-10 October

Marintec Russia, St. Petersburg The first Russian specialized Exhibition and Conference Offshore Marintec Russia dedicated to development of continental shelf infrastructure will take place in Saint-Petersburg.

www.offshoremarintec-russia.com

1-2 December

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

http://www.platts.com/conferencedetail/2014/pc451/inde

23-25 March 2015

The 9th International FUJCON 2015 Fujairah, United Arab Emirates FUJCON enjoys international recognition and attendance from 46 countries covering diversified sectors of the bunkering industry. Recognised as an international service anchorage, Fujairah is among the world’s top three bunkering locations & a global hub for both oil storage and oil product supply. It is an opportunity to meet with leading fuel oil/bunker producers, traders, shipowners & managers, terminal operators, refiners, classification societies, maritime lawyers, consultants and bankers.

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

14-17 October

18th Singapore International Bunkering Conference and Exhibition (SIBCON) 2014, Singapore As various regulatory and commercial developments continue to impact the bunkering industry, SIBCON 2014 will once again bring you a high-powered speakers line-up, and unrivaled networking opportunities. This 19th SIBCON will once again bring together the industry from around Asia and the world, with in excess of 1,600 delegates expected at the Resorts World Sentosa venue.

www.sibconsingapore.com

28-30 October

Sea AsiA

Since its launch in 2007, Sea Asia has firmly established its place in the marketplace as the platform for industry to do business, network and unveil new products and services in the Asia Pacific region. A record number of attendees in 2013 further reinforced the exhibition and conference as the region’s leading shipping and maritime event, paving the way for another edition in 2015.

www.sea-asia.com

SeaTrade Middle East, DUBAI

2-5 June 2015

Now firmly established as the region’s leading shipping event, the 2012 event welcomed 7,065 attendees across the 3 day exhibition and conference, whilst 242 exhibiting companies took part in the event from 33 countries over a net exhibition space of 4,338 sq m - a 7% increase on 2010.

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

www.seatrade-middleeast.com

25-26 November 2014 Saudi Maritime Forum

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

www.saudimaritimecongress.com

21-23 April 2015

Nor Shipping

www.messe.no/nor-shipping

27-30 October 2015 Gastech Singapore

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

www.gastechsingapore.com

World Bunkering Autumn 2014

days

1,600

participants

countries

Doing business at the forefront of maritime development and investment in the Kingdom With maritime and transportation in the region experiencing unprecedented growth, this timely industry gathering is a ‘must attend’ event for all stakeholders involved in one of the Kingdom’s most important non-oil growth sectors. This two-day conference and exhibition will feature interactive discussion, high level networking and the sharing of unrivalled business intelligence through participation of the country’s most foremost decision-makers, investors, trade specialists and economists. Register today to be part of this ground-breaking event www.saudimaritimecongress.com Sponsors

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