World Bunkering - Spring 2010

World

SPRING 2010

Spring 2010

Bunkering

World BUNKERING

l The

emissions maze: Where next after Copenhagen

THE ONLY OFFICIAL MAGAZINE OF

l Counterparties, credit and credibility l Traders: thriving or surviving? l Fujairah faces the future

World

SPRING 2010

Bunkering Publisher: W H Robinson Editor: David Hughes (editor@mar-media.com) Deputy Editor: Lucy Budd (lucy.budd@mar-media.com) Sales Manager: Taj Oberai (taj.oberai@mar-media.com) Project Manager: Dawn Barley (dawn.barley@mar-media.com) Project Consultant: Alex Corboude (alex.corboude@mar-media.com)

The views expressed in World Bunkering are not necessarily those of IBIA, or the publishers unless expressly stated to be such. IBIA disclaims any responsibility for advertisements contained in this magazine and has no legal responsibility to deal with them.

The responsibility for advertisements rests solely with the publisher. World Bunkering is published by Maritime Media (a division of Roxby Media Ltd) on behalf of IBIA and is supplied to members as part of their annual membership package.

Published by:

Maritime Media (a division of Roxby Media Ltd) The Diary House Rickett Street London SW6 1RU UK Tel: +44 (0) 20 7386 6100 Fax: +44 (0) 20 7381 8890 E-mail: inbox@mar-media.com Website: www.worldbunkering.com On behalf of:

IBIA Ltd Ground Floor Latimer House 5-7 Cumberland Place Southampton SO15 2BH UK Tel: +44 (0) 23 8022 6555 Fax: +44 (0) 23 8022 1777 E-mail: ibia@ibia.net Website: www.ibia.net

THE ONLY OFFICIAL MAGAZINE OF

ISSN 1367-5018

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

PEFC Council is an independent, non-profit, non-governmental organisation which promotes sustainable forest management through independent third party forest certification.

Visit online, with Page-Turning technology at

www.worldbunkering.com

Contact: Shazmeer Jiwan Alba Petroleum Ltd PO Box 97155 Mombasa, Kenya Tel: +254 41 2317001/2/7/8/9 Fax: +254 41 2317006 +254 41 2317010 Mobile: +254 720 630000 or +254 721 786310 E-mail: sales@albapetroleum.com

World

SPRING 2010

Bunkering

32

31 39

IBIA Reports

Chairman’s introduction

7

Chief Executive's report

8

Noticeboard

11

New members

12

Membership application

15

Industry news

21

Environment Interview

25 29

Special features 32 35 39 46

Testing Traders Risk management Quantity

Geographical focus

Northern Europe

51

Regional focus

India Subcontinent

53

Port focus

UAE

57

Russian update

61 34 53

Preview Legal news Equipment and services Diary

72 73 74 87

66 61

Global Presence Local Knowledge

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REPORTS

Chairman’s Introduction

I

t is said that a week is a long time in politics. That may well be true, but a year in bunkering is a great deal longer.

As I look back on the past 12 months as Chairman of IBIA, it seems an appropriate time to reflect not only on how quickly time flies when you are enjoying yourself, but also on the diverse and fascinating nature of the international bunkering industry.

Of course the bunkering industry’s performance is inexorably linked with that of the shipping industry which it serves. And what a difficult year it has been for global shipping. Depressed freight markets, slow steaming, accelerated scrapping and a glut of newbuildings coming onto the market at a time when existing tonnage is entering lay-up for lack of work; these are just some of the things that 2009 will be remembered for.

But shipping is a resilient industry.

Despite the low freight rates available in the market today, despite the worry over the newbuildings surge, despite the continued rise in operating expenses, despite the increasing cost of finance and insurance, and despite the worries about cashflow and the world economy, shipping stands ready for another year in which to do what it does best – mobilising world trade efficiently and cost-effectively in an environmentally friendly manner.

In many ways, 2009 will be remembered as the year of the great climate debate.

Many feared that the United Nations Climate Change Conference (COP 15) in Copenhagen at the end of last year would produce little in the way of substance but a great deal in the form of hot air. What it did in fact produce was a non-legally binding understanding between certain key nations which is widely regarded as a staging post to the next international summit meeting

World Bunkering Spring 2010

on climate change. What it didn’t produce was a clear mandate for IMO on how to build on the significant amount of work it has already undertaken in connection with technical, operational and economic measures to reduce emissions in the global shipping industry.

Shipping is widely acknowledged as the most carbon-efficient means of commercial transportation in the world. And IMO is widely acknowledged as the right place to create and implement binding legislation to make shipping as safe and as environmentally sympathetic as it is possible for it to be. IMO has said that it will study carefully the conclusions which emerged from the Copenhagen climate talks to see what, if any, implications they may have for shipping. It will then report to the 60th session of the Marine Environment Protection Committee, in March this year, so that any necessary action can be taken on a priority basis. As always, IBIA will use its observer status at IMO to help inform those proceedings, and will report back to its members as appropriate. IBIA, together with the rest of the shipping industry, is committed to following a green agenda, and members can be assured that it will continue to make an important contribution to the debate which is both in line with its environmental responsibilities and in accord with the interests of its members.

Last year also saw voting close in respect of the draft of the fourth edition of ISO8217, which could be ready for publication by June of this year. The bunkering industry has been working with ISO8217 for over four years, and the new standard for marine fuels which will emerge from the revision will affect everybody in our industry. There has been a lot of interest in and comment on the draft, and we wish the working group

Chris Fisher

well as it embarks on the difficult task of taking on board all the relevant feedback and coming up with a workable standard that will benefit all concerned.

I have left housekeeping until last in my reflections on the past year, but not because it is not important. As Chairman, I have had the opportunity to see just how efficiently IBIA operates on behalf of its members. The highlight of the past year was undoubtedly our annual convention, in Singapore, and it was gratifying to learn whilst there that our members are very much in favour of IBIA qualifications. The education group is now taking this on to the next stage, and there should be further news during the course of this year.

I cannot take any credit for the excellent manner in which the Singapore event was organised, but I can say how much I enjoyed running the training course and working with an outstanding group of speakers on the conference platform. These things don’t run so smoothly without a great deal of planning, and I know that Ian Adams and his team are even now working on the next convention, to be held in Connecticut this year.

Meanwhile, February is almost upon us, and that means our annual dinner and AGM. I am looking forward to meeting our new board members, as well as all the familiar faces which one sees at the dinner, which incidentally sold out within weeks of its being announced. At the dinner, also, Mike Ball, who was elected Vice-Chairman in 2009, is getting ready to take over as your next Chairman, and I wish him every success in that role.

IBIA remains in safe hands.

Chris Fisher

7

bunkers

REPORTS

a secure quality service @ Ceuta

Chief Executive’s Report Sulphur Regulation

With the latest stage of the implementation of EC Directive 2005/33 coming into effect on 1 Jan 2010, the administration received a number of enquiries at the end of last year regarding the implications. Our members will be aware that the European Commission also received a similar amount of queries, as they sent us a set of Frequently Asked Questions (FAQ) which we circulated. The FAQ went a long way to answering many of the members’ questions and thus proved extremely useful. Currently we have reached the end of changes to the sulphur regulations from a European perspective.

However, on 1 July 2010, ie six months time, we will have the first of the global changes as required by the International Maritime Organization (IMO) under MARPOL Annex VI. The change in July is applicable to Emission Control Areas (ECA) and requires the use of 1% Sulphur fuel in ECAs, or the use of abatement technology resulting in an equivalent emission. As you are all no doubt aware, the changes to MARPOL Annex VI will enter into force in four stages.

IBIA will ensure that its members are kept informed of the changes as they occur.

Board of Directors

By the time this edition of World Bunkering is received by the membership, the Board Elections will be complete. This year we have engaged the Electoral Reform Service to conduct our elections for us.

The elections will have been exclusively electronic with each member receiving a unique login to allow them to vote. The results will be announced at the AGM at the Naval Club on Monday 15 February and will also be published in the next edition of World Bunkering.

IBIA Annual Dinner

VILMA OIL, MADRID c/ Chile, 10 · Oficina 236 28290 Las Matas · Madrid · Spain Phone: +34 916 308 900 bunkers@vilmaoil.com · www.vilmaoil.es 8

IBIA has experienced a surge in membership over the last six months and this has been reflected in a corresponding increase in interest in the IBIA Annual Dinner. Last year we experienced an amazing response to the dinner, which resulted in a record attendance and a sell out in three weeks. This year we sold out in 10 days! Last year we managed to arrive at a solution which allowed us to increase the

World Bunkering Spring 2010

number of attendees. This year, utilising the arrangement from last year, we have had to find yet another method to increase the number of available places. We have succeeded in achieving this and we are expecting around 800 guests.

IBIA Annual Convention

Regular readers will have seen the report about the IBIA Convention in Singapore in the last edition of World Bunkering. Having now had the opportunity to analyse the feedback, I am delighted to report that it has been incredibly positive. There are always areas that can be improved upon, but in essence the delegates appear to have found the event a great experience.

This year’s event will be held at the Stamford Marriott Hotel, Connecticut, USA, from 20-23 September 2010. As SIBCON is also being held this year, we chose a date that would not clash! The conference programme committee will be meeting on the afternoon after the dinner, but if any member has any suggestions for the conference please do contact the IBIA Administration. We are open to suggestions about format as well as content. This is the IBIA membership’s opportunity to gather together for a couple of days, and it is important that it is in a format that brings the maximum benefit to all the attendees. It is extremely important to us that we make this the “must not miss event”, similar to the Annual Dinner. There are also numerous opportunities for sponsorship, and again we are open to suggestions, so we look for-

ward to hearing from you soon. For further information please contact Anne Chambers (anne.chambers@ibia.net).

Board Rotation

As mentioned above we are currently balloting the membership for the Board elections and whilst this will result in some new members of the Board, I would like to take this opportunity to recognise the contribution of the Board members who are to stand down in April.

The three Board members who are due to retire are Fritz Fredriksen, Alejandro Risler and Tim Wilson.

Fritz, as most of you will be aware, was our Chairman between February 2007 and February 2009. Among many other things, he presided over the restructuring of the Board and the introduction of the new governance structure. This has placed IBIA in a very strong position for the future and should be considered an achievement.

Alejandro has been a Council/Board member since 1994 and has been IBIA’s voice in South America for that period.

His support during the IBIA convention in Buenos Aires was invaluable and considering the distance involved, his attendance at meetings has been pretty impressive.

Tim has been on the Council/Board since 2006 but in that time he has managed to serve on the Executive Committee and, more recently, the Board Development Committee.

All three of the retiring Board members have made a significant contribution to IBIA

IBIA clarifies EU sulphur directive IBIA has moved quickly to dispel the apparent confusion currently surrounding implementation of the EU directive requiring all ships to use low-sulphur fuel while at berth in EU ports.

EU Directive 2005/33/EC requires that, with effect from 1 January 2010, member states must take all necessary steps to ensure that ships at berth in EU ports do not use marine fuels with a sulphur content exceeding 0.1% by mass. Although reports have been circulating in the industry that, because of the potential safety risks associated with the switchover on ships with unmodified boilers, the deadline may have been put back, IBIA stresses that such is not the case.

IBIA Chief Executive Ian Adams says: “We have heard various rumours, including one which suggests that the deadline for implementation of the EU directive has been postponed by six months.

Nothing could be further from the truth. The directive came into

World Bunkering Spring 2010

Ian Adams Tel: +44(0) 23 8022 6555 Fax: +44(0) 23 8022 1777

and on behalf of the Administration I would like to record heartfelt thanks to them all.

Finally, as mentioned by Chris in his introduction, we are reaching the end of the current Chairman’s term. Under the new regime, the Chairman’s term of office ends in April and Chris will then become the Immediate Past Chairman. I would like to say a personal thank you to Chris for all of his help and support over the last year. I would also like to wish Mike Ball every success when he takes over and I look forward to working with him during his year in office.

Ian Adams

force on 1 January, and all ships operating to EU ports must ensure that they are compliant with it.

“Ships are not exempt on the ground that the fuel changeover is unsafe because modifications have not been made to its boilers, or to the ship itself. Similarly, there is no dispensation for ships which have made arrangements to carry out the necessary modifications but have not yet implemented them. Such ships are not allowed to use fuel with a sulphur content higher than 0.1% in the interim.

“There are very few exceptions to the rules, although the European Commission has signified its awareness of the potential dangers associated with the switchover to low-sulphur fuel while in port, and has advised member states to enforce the regulations with a degree of flexibility for a transitional period in those cases where there is detailed evidence of the existence of an approved plan for vessel and/or boiler modification. IBIA understands that safety must always be the main priority for all ships, and the EU directive which is now in force must be included in all safety-related decision-making procedures.”

Any operator unsure whether it is in compliance with the EU directive as it is enforced in a particular EU port should contact the local authorities before entering that port.

9

Benelux B.V.

Reliable, efficient service in ARA and beyond. quick and timely delivery of a wide range of grades Main office (Rotterdam area) Office address: De Linie 1, Capelle aan den Ijssel, NL-2905 AX , the Netherlands Post address: PO Box 377, Capelle aan den IJssel, NL-2900 AJ, the Netherlands Tel: 24/7: +31 10 264 27 00 E-mail: Bunkers@lukoil.nl

Amsterdam office Office/Post address: Le Mairekade 77, Amsterdam, NL-1013 CB, the Netherlands Tel: 24/7: +31 20 684 42 99 E-mail: Bunkers@lukoil.nl

REPORTS

IBIA Noticeboard Benefits to members as at 1 February 2010 THE IBIA COURSES

IBIA Guide to Bunker Samplers

IBIA Annual Report

Sale price to non-members £50.

The 2008/2009 report is now available. All members will have already received their copy. The report is available free of charge to members and non-members. Please ask IBIA administration for a copy.

One-Day Basic Bunkering Course

The charge for the Basic Bunkering Course is £200 per head for members and £300 for non-members.

Advanced Courses

These courses are intended for those who already have at least one year’s experience in the bunker industry. £425 per head for members and £625 for non-members.

IBIA Guide to Arbitration

A loose-leaf book giving arbitration procedures in 13 countries, written by lawyers.

This is now available free to IBIA members.

Non-members may purchase at a price of £50 + postage.

Vanadium and Sulphur in Marine Fuels

What everyone should know about these two important elements in marine fuel bunkers. For sale to non-members at £35.

IBIA PUBLICATIONS Evaluate the Merits of a Bunker Claim IBIA World Bunkering magazine – Free copies for members of IBIA

Please note non-members are requested to subscribe to the magazine at a cost of Pounds Sterling £45, £60 or £80 depending on location.

Up to 20 additional free copies of the magazine are offered to buyer members of IBIA for forwarding to their vessels.

IBIA World Bunkering magazine – Discounts on Advertising

Discounted advertising rates are available for IBIA members Please contact the Advertising Sales Team on + 44 (0) 20 7386 6262 (London office) or +30 210 338 9898 (Athens office).

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

IBIA Glossary of Bunker and Lubricating Oil Terminology

A comprehensive guide to all those complicated terms which are in daily use in the bunkering industry. For sale to nonmembers at £45.

IBIA Guide to Good Commercial Practice

On sale to non-members at £50 per copy.

BOOK OFFERS

Informa Group is offering IBIA members a discount of 10% on the following publication. Please order, adding your IBIA Membership number, from Customer Services at Informa Group, Tel +44 (0)1206 772 223, Fax +44 (0)1206 772 771, E-mail: professional.enquiries@informa.com The BunkerNews Directory of International Bunker Suppliers, Traders and Brokers Recommended Retail Price £85

The publishers say: “Firmly established as the main source of bunker industry contact information, containing more than 800 companies, 2,000 personnel in 75 countries, all cross-referenced by two indices. First published in May 1993, the ‘Little Black Book’ is published every May and November.’’

IBIA Fuel and Lube Oil Training CD

This CD is available on request. Members – please contact administration for your free copy/copies.

IBIA Logo

Free bromide supplied for use by Corporate Members only.

IBIA List of Members

If your details are not correct then please let the IBIA Administration know. This publication is only available to members.

IBIA Guide to Avoiding and Resolving Bunker Disputes

IBIA Safety Cards for Vessel’s crews

IBIA buyer members receive copies of the IBIA Safety Cards for distribution to their ships, giving basic, plain English advice about safe handling of bunker fuels.

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

World BunkeringSpring 2010

11

REPORTS

New members Corporate

individual

MATRIX MARINE FUELS LP Marcy Bryant BUNKER SUPPLIER

MATRIX MARINE HOLDING GMBH Kevin Balke BUNKER SUPPLIER

15631 Jacintoport BLVD Houston TX 77015 USA Tel: +1 281 457 7922 Fax: +1 281 457 7954 E-mail: marcybryant@matrixmarine.com

Admiralitaetstrasse 55 Hamburg 20459 GERMANY Tel: +49 40 3700 40 Fax: +49 40 3700 4352 E-mail: matrix@matrixmarine.com

MATRIX BHARAT MARINE SERVICES PTE LTD Avik Ghosh BUNKER SUPPLIER

VILMA OIL S.L. Howard Johnson BUNKER SUPPLIER

83 Clemenceau Avenue #13-01 UE Square 239920 SINGAPORE Tel: +65 6305 8026 Fax: +65 6305 8018 E-mail: avik.ghosh@matrixbharat.com OW BUNKER FAR EAST Shann Tay Mottram BUNKER TRADER 600 North Bridge Road #14-02/03 Parkview Square 188778 SINGAPORE Tel: +65 6317 0000 Fax: +65 6398 1270 E-mail: owbsin@owbunker.com.sg CONOCOPHILLIPS LTD David Sharman BUNKER SUPPLIER Portman House 2 Portman Street London W1H 6DU UK Tel: +44 (0) 20 7408 6120 E-mail: david.sharman@conocophillips.com

12

Calle Chile, 10 Oficina 236 Las Matas Madrid 28290 SPAIN Tel: +34 91 630 8900 Fax: +34 91 630 8901 E-mail: howard@vilmaoil.com SEABRIDGE BUNKERING PTE LTD Ren Xinzhi BUNKER TRADER 3 Church Street #16-06 Samsung Hub 49483 SINGAPORE Tel: +65 6536 4198 Fax: +65 6536 4482 E-mail: email@seabridge-bunkering.com

Stefan Galea BUNKER TRADER MMS 2006 LTD Millennia Buildings Level 2 Aldo Moro Road Malta MRS 9065 MALTA Tel: +356 2123 2235 E-mail: info@mms2006.eu Yousuf Muhammad SUPPLIER ORION BUNKERS Suite #6, 1st Floor Al Rehman Trade Avenue 15 Timber Pond, Keamari Keamari, Karachi PAKISTAN Tel: +92 21 3285 8055 Fax: +92 21 3285 8057 E-mail: orionkhi@yber.net.pk Adil Sher SUPPLIER ORION BUNKERS Suite #6, 1st Floor Al Rehman Trade Avenue 15 Timber Pond, Keamari Keamari, Karachi PAKISTAN Tel: +92 21 3285 8055 Fax: +92 21 3285 8057 E-mail: orionkhi@yber.net.pk Alessio Simonetti SUPPLIER SERVICED Via Mariano Stabile, 160 Palermo 90139 ITALY Tel: +39 91 7993 0898 Fax: +39 91 804 0202 E-mail: marinefuel@serviced.it Paul Holland BUNKER BUYER GARDLINE GEOSURVEY LTD Endeavour House Admiralty Road Great Yarmouth NR30 3NG UK Tel: +44 (0) 1493 845 654 E-mail: paul.holland@gardline.com

World Bunkering Spring 2010

IS YOUR BUNKERING SUPPLIER FIT TO DELIVER? A dedicated approach to performance and delivery timed to perfection.

WEST & EAST AFRICA CANARY ISLANDS

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WORLDWIDE TRADING

WORKING SOLUTIONS FOR ALL YOUR BUNKERING NEEDS 12, rue Michel-Servet P.O. Box 404 1211 Geneva 12 Switzerland Tel: (41-58) 702 90 40 Fax: (41-58) 702 91 40 Telex: 412 174 e-mail: abs@aogltd.com website: www.addax-oryx.com

Addax Bunkering Services AN AFFILIATE OF THE ADDAX AND ORYX GROUP

Premium Bunkering Services

80 Marine Parade Road, #13-05/06 Parkway Parade, Singapore 449269 Tel: +65 6344 1108 Fax: +65 6344 1128 Website: www.searights.com.sg Email: bunkers@searights.com.sg / operations@searights.com.sg

By Courtesy of PSA SINGAPORE TERMINALS

REPORTS

The International Bunker Industry Association Ltd panies and associations with an interest in bunkering, whether they are involved in the day-to-day business of bunkering ships or have an interest in the industry.

Each member has one vote in association business, but corporate membership has the advantage of allowing companies to delegate different members of their company to participate in different working groups.

• Corporate sponsor: this is the newest category and allows a company to contribute any sum they see fit to the association. In return they receive the same benefits as a corporate member but in addition have their logo printed on all IBIA publications and are offered further sponsorship opportunities ahead of other members.

• Implement the running of IBIA’s two-day

In the beginning

The board

Environmental

Eight members of the industry conceived the International Bunker Industry in October 1992, and the association was formally registered on 29 January 1993. Since then it has expanded steadily with a worldwide membership comprising shipowners, charterers, bunker suppliers, traders, brokers, barging companies, storage companies, surveyors, port authorities, credit reporting companies, lawyers, P&I Clubs, equipment manufacturers, shipping journalists and marine consultants.

In 2008, our membership stands at over 500 and is spread over 67 countries.

There are three categories of membership, namely: • Individual membership: open to all people with an interest in bunkering, whether they are involved in the day-today business of bunkering ships or have an interest in the industry. Each member has one vote in association business, but this category does not allow delegation.

• Corporate membership: open to com-

The board is constrained to have a balance of members from each sector of the industry in order to preserve the industry-wide representation and approach of the association.

The board regulates the association and is elected by the membership to perform that role.

• Discuss IBIA approach to EC initiatives; • Develop environmental policy.

The Aims of the Association • To provide an international forum to

• •

•

•

address the concerns of all sectors of the bunker industry; To improve and clarify industry practices and documentation; To represent the industry in discussion with relevant governmental and nongovernmental bodies and to make the concerns of the industry known to such bodies; To assist members in the event of disputes by identifying the options and exploring the alternatives open to them and eventually to provide a panel of experienced mediators and arbitrators; To increase the professional understanding and competence of those working in the industry.

World Bunkering Spring 2010

The working groups

Because IBIA is an association dedicated to its membership, it must reflect members’ wishes and react to their needs. In the past this has been achieved by the formation of Working Groups. These groups reported back via IBIA’s official magazine, World Bunkering, or through special circulars where appropriate. There were six Working Groups, as listed below, with the issues that they each addressed.

Education • Run further IBIA Basic Bunkering courses

Intermediate Bunkering courses; • Run further IBIA half day Ships Agents

courses.

Safety • Investigate the issue of Safe Access; • Produce a best practice for pre-delivery

checklists.

Operational Standards and Procedures • Looking at turning ISO(TR)13739 into a

bunkering procedure.

Technical • Continue to provide answers to technical

enquiries from members; • Report on the latest technical issues to

the members.

Commercial Working Group • Has been responsible for the production

of the IBIA Guide to Good Commercial Practice; • Cooperated with BIMCO on the Standard Bunker Contract.

Task Forces

IBIA now operates a Task Force system.

When an issue is identified as requiring attention a Task Force is formed, the issue investigated, and upon completion the Task Force is disbanded.

Issues that have been tackled by Task Forces to date are: • Sales Tax • SIBCON/IBIA Golf Tournament • IBIA Convention 2007 • IBIA Seminar – Cruise & Ferry 2007

worldwide;

15

Membership application

PLEASE PRINT VERY CLEARLY Applicants must fill out all appropriate sections including method of payment.

Corporate members must give the name of the individual contact.

Name of individual

Title (eg Mr, Mrs, Miss, Dr, Capt)

Company name Address

Zip (Postal) code

Country

Tel No

Fax No

Cell/Mobile

E-mail Please indicate your company’s principal business activity: (please mark one only) Owner/Charterer/Buyer Supplier

Trader

Port Operations/Storage/Delivery Broker

Services (eg Legal/Financial/Analytical)

Please indicate the type of membership being applied for: Individual Member £110

Corporate Member £550

Free (please state reason)

Corporate Additional £

Please state amount being remitted to us in Sterling £ Individual members must provide the following information: Home address

Zip (Postal) Code

Country

Payment instructions

Payment must be made free of all charges at both the paying bank and its overseas correspondent where applicable.

Amex Telegraphic Remittance

Cheque

UK Sterling

Visa

Amex

Switch

1. Credit card payment. Please complete following details: PLEASE PRINT VERY CLEARLY

Cardholder’s name

Card number

Billing address

Zip (Postal) code

Country

Signature

Date

Expiry date

/

2. Telegraphic remittance Clydesdale Bank plc, Mountbatten House, Grosvenor Square, Southampton SO15 2JU, England

IBAN GB95 CLYD 8260 0410 247 629 SWIFTBIC CLYD GB2S GB£ Sort Code 82-60-04 Sterling Account Number 1024762 Account Name IBIA Ltd 3. Cheque: Made payable to The International Bunker Industry Association Ltd. Application forms must be sent by mail or by fax to the

IBIA Administration Office.

ALL APPLICANTS MUST SIGN AND DATE HERE:

Signature

Date

The Administrator, The IBIA Ltd, Ground Floor, Latimer House, 5-7 Cumberland Place, Southampton, Hampshire SO15 2BH, United Kingdom.

Tel: +44 (0) 2380 226555 Fax: +44 (0) 2380 221777.

World Bunkering Spring 2010

17

The 31st International Bunker Conference Mission (im)possible?

IBC is the world's longest-running and most respected bunker conference. This year’s much-anticipated event is focused on fuelling marine transportation into the future and on legislation and regulations challenging the bunker industry. How is legislation impacting marine transportation? What are the changes, and what are the drivers? And last, but not least, what is the most cost effective way going forward?

More than 200 people from 125 companies in 23 countries participated at IBC 2009 in Oslo. With a strong attendance anticipated also in 2010, the conference provides an ideal networking opportunity for businesses and organisations working within the bunker sector and beyond.

28 – 30 April 2010 Stockholm, Sweden

Target Group The conference targets oil companies, ship owners and operators, charterers, brokers, traders, agents, classification and survey companies, testing companies, terminal and barge operators, insurance and law firms, media, maritime institutions as well as national and regional authorities.

Quotes from participants at IBC 2009 in Oslo: • In general IBC is for me the most leading conference in Europe.

• The presentations were of a high standard and there were good opportunities to meet many new people and some old friends.

• Exceptionally well organised. The social programme was of vital importance to our business.

• Quality and sequencing of the presentations was very good.

• Very professional speakers and participants.

Companies in the Executive Programme Committee: DNV, ExxonMobil, Norse Bunker/WFS, Norwegian Shipowners’ Association, WWF and BI Norwegian School of Management.

Read more about the conference and register at:

www.bunkerconference.com

Industry news

Global round-up ASIA Singapore navy signs up to MSM bidding system

Multi Service Marine has signed a long-term agreement for providing bunker fuel and service procurement to Singapore’s Defence Science and Technology Agency (DSTA).

The agreement allows bunker suppliers on the Multi Service bunker network to provide tenders on marine fuel and chandlering services for the DSTA through the company’s web-based bunker procurement solution, altivisTM. Multi Service will process and reconcile all transactions with bunker suppliers directly, including payment of suppliers. Suppliers on the network can choose exactly which refuelling contracts they would like to bid for, and have the option of standard or fast payment terms from Multi Service.

“Primarily, the Singapore Navy operates in the Asia Pacific region,” said Colin Wills, Business Development Representative for the Marine division of Multi Service Government Programs. “Our network of bunker suppliers in this region is strong and continues to grow. This puts the government of Singapore in a position to acquire competitive pricing from a collection of suppliers who would otherwise find it difficult to quote efficiently.”

Since finalising the contract, Multi Service has successfully completed transactions in Indonesia and Australia.

The two tank barges are currently under construction at Trinity Marine Products’ shipyard in Madisonville, LA. The first tank barge is scheduled for delivery in June 2010 and will be deployed in the ports of Los Angeles and Long Beach. The second barge, scheduled for delivery in July 2010 will be deployed in Seattle, WA. This letter of intent includes an option for Maxum to charter a further two similar new tank barges for delivery in the second half of 2010.

“We are pleased to have signed this letter of intent with Global Marine Transportation as an important step in modernising Maxum Petroleum’s marine delivery capabilities,” said Chuck McDaniel, President of Maxum Petroleum’s Marine division. “These new OPA 90-compliant barges will allow Maxum Petroleum to continue providing our customers with the high quality service they have come to expect from us for years to come.”

Inisfada to act for Addax

US-based Inisfada Bunkering and Consulting is to act as a consultant for Addax Bunkering Services to facilitate bunker trading and credit facility operations in North and South America. Inisfada will also assist Addax in marketing its physical supply operations in /offshore West and East Africa.

Inisfada is managed by Dennis Sears, who worked for the AddEast joint venture between Addax and Eastwind.

Bunker licence cancelled

The Maritime and Port Authority of Singapore (MPA) has cancelled the Bunkering Licences of Faber Marine Pte Ltd with effect from 9 December 2009. This follows the conviction of a director of Faber Marine Pte Ltd in court for offences under the Prevention of Corruption Act, in connection with the delivery of bunkers.

AMERICAS Maxum Petroleum launches new tank barge charter program

Maxum Petroleum announced in December that it has signed a letter of intent to charter two newbuild 10,000 barrel US Flag, OPA 90-compliant, double-hull ABS Oceans tank barges from Global Marine Transportation, as part of its fleet renewal programme.

World Bunkering Spring 2010

AFRICA Stena Oil launches bunkering operations in West Africa

Stena Oil has expanded its bunkering services into West Africa.

Starting at the end of January, Stena Oil and its partner Tarntank have been using customised tankers to supply fuels to vessels from Abidjan to Lagos, Pointe Noire and down the coast to Luanda, operating 30-50 miles off the coast. The venture operates two customised tankers on long-term timecharter, Tarnsjo (10,887 dwt) and Tarnfors (8,245 dwt)

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AUSTRALIA Strong start for OW Bunker

OW Bunker has reported a strong growth for its Australian office in its first year of operations. The customer base now includes some of the largest shipowners and operators in the region, as well as fishing fleets operating in New Zealand and around the Pacific Islands, and the cruise industry. OW Bunker Australia also acts as the purchasing centre for the entire Group in Australia, New Zealand and the Pacific Island.

Following the completion of feasibility studies, OW Bunker says plans for the future include the potential development of a physical presence, to work in conjunction with the trading and risk management divisions, as well as developing opportunities in the offshore sector, supplying marine diesel oil (MDO) to oil rigs and their support vessels in the extensive oil and gas regions of the North West Shelf. The company also aims to capitalise on the opportunities from the A$50 billion Gorgon petroleum project in Western Australia, which involves the development of the Greater Gorgon gas fields, providing quality fuel products to the support and supply vessels, as well as the LNG vessels, on the conclusion of the project.

Commenting on the development, Stefan Poulus, Branch Manager, OW Bunker Australia, said: “Despite the economic downturn, shipping is critical to the Australian economy, a region that is so rich in natural resources and relies heavily on export. Coupled with the developments in the offshore market, and the LNG sector, Australia is a market of opportunity for OW Bunker in its own right, as well as providing vital support to the Singapore operation and the rest of the Group. We are confident of continuing the successes and growth of our first year, expanding our presence accordingly, and looking for all opportunities that can help improve our service and offering for customers.”

Aegean wins Belgian EMSA contract

Aegean’s Belgian subsidiary, Aegean Bunkers at Sea, has been awarded a clean-up stand-by contract by the European Maritime Safety Agency (EMSA). This is part of an EMSA scheme to increase the available oil pollution response capacity in the English Channel and its Atlantic approaches.

The Sara, a 7,233 dwt double-hull bunkering tanker, will serve on stand-by through 2013, and will continue to provide bunkering services in the area during the stand-by period.

Nikolas Tavlarios, president, commented, “Aegean is proud to team with EMSA to ensure a rapid response in the event of an oil spill. This prestigious contract is directly related to our steadfast commitment to safety and environmental protection.”

TURKEY New board for TBA

The Turkish Bunker Association (TBA) has elected a new board of directors. Yesim Muhtaroglu of Energy Petrol has been elected as president for the association for period 2010-2011.

Established in 2001, TBA has become the main body representing the Turkish bunker industry in official and non-official platforms, and organises the biannual Istanbul Bunker Conference.

The new board of directors is: President – Yesim Muhtaroglu (Energy Petrol) Vice President – Sibel Buyuk (TBS) Secretary General – Mustafa Yilmaz (DTO Petrol) Treasury – A. Deniz Eraydin (Cye Petrol) Member – Mustafa Aslan (Asmira Petrol) ON THE MOVE New offices for the Mamidakis Brothers Group

EUROPE New barge for CEPSA

CEPSA Marine Fuels has put into place a new barge in Algeciras Bay, providing service for the ports of Algeciras and Gibraltar.

The 4,200 cu m double-hull barge Spabunker Cuarenta can deliver up to five products from segregated tanks; three for fuel oil, one for MGO and one for MDO, providing a great versatility in everyday operations. The barge has a pumping rate of 3x600 cu m/h for fuel oil and 200 cu m/h for MGO and MDO, with a total capacity of 3,600 tonnes of FO and 500 tonnes of MGO/MDO respectively.

World Bunkering Spring 2010

The Mamidakis Brothers Group has moved all its enterprises under one roof. The companies now located in in its new offices in Kifisia are JETOIL Bunkering, Styga Compania Naviera S.A. and JET TANK S.A.

Contact details are: JETOIL Bunkering 27 Evrota & Kifissou, 14564 Kifisia.

Tel: 210-8763140 Fax: 210-8763139 E-mail: bunkering@jetoil.gr

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environment

Disappointment at Copenhagen

Efthimios Mitropoulos

Shipping stayed largely below the horizon at the UN conference

A

fter all the hype, all the build-up, the United Nations Climate Change Conference (COP15) at Copenhagen turned out to be an anti-climax. There was disappointment for both the environmental lobby desperate for action on global warming and for the shipping industry, which wanted to see IMO put in charge of developing CO2 reduction measures for the maritime industries.

With all the attention on the broad issues facing the world’s leaders and the limited agreement that was eventually reached, COP15 got nowhere near addressing shipping’s unique issues. The painstaking and detailed work undertaken by the shipping community and presented by the International Maritime Organization (IMO) stayed off the top table.

IMO

IMO Secretary-General Efthimios Mitropoulos put on a brave face, saying: “Like many others who have made comments on the outcome of COP15, I have viewed the end result of the Copenhagen Conference with mixed feelings: with concern that the target initially pursued, following the 2007 Bali Conference, of a legally binding instrument, was not achieved; with measured satisfaction that, through the Accord tabled at the end of the deliberations, a step in the right direction was taken enabling progress to be made towards a legally binding instrument; and with hope that, following new rounds of consultations to be held post-Copenhagen, the required consensus on action needed to be taken to save the planet will be reached at the next Conference – possibly in Mexico one year from now.”

The reality must be that Mr Mitropoulos was very disappointed, given the huge effort he personally has put in to ensuring IMO did its utmost to make sure shipping is prepared to make meaningful cuts in greenhouse gas emissions.

World Bunkering Spring 2010

Mr Mitropoulos made the point that COP15 has given the industry more time to make “real progress in our work. At the same time it creates an increased obligation on IMO to intensify its efforts so that it may be able to present, to COP16/17, concrete results as evidence not only of its determination to play its part in the world efforts to stem climate change and global warming, but also of its continued capability to serve the environment, as it has successfully done over the years”.

That was a reference to what shipping will see as COP15’s failure to give IMO the mandate to oversee the industry’s response to the need to cut greenhouse gas emissions.

International response

The International Chamber of Shipping (ICS) couched its response to COP15 in diplomatic language, acknowledging “the progress made by governments, reflected in the Copenhagen Accord”.

But it added: “ICS is disappointed that the text of the Accord is silent on the treatment of international shipping in the delivery of further CO2 emission reductions, to which the industry remains firmly committed.”

ICS also highlighted the big problem that still haunts the whole Kyoto/Copenhagen process. It said: “In particular, it remains unclear how the Kyoto Protocol principle of ‘Common But Differentiated Responsibility’ (CBDR) should be reconciled with the important need for global rules on CO2 reductions for the carriage of world trade – about 90% of which is carried by ships (acknowledged as the most carbon efficient mode of commercial transport).” Basically CBDR means that only the developed countries (the so-called Annex 1 countries) are committed to reduce CO2 emissions.

ICS stressed the point that it always makes with regard to regulation of the industry – that shipping is a uniquely international

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industry that can only work efficiently when operating within a environment framework of uniform global regulation that applies equally to all ships regardless of flag. The shipowners’ body warned that there is a serious risk that some countries will develop unilateral measures to regulate at national or regional level the CO2 emissions of ships trading internationally. It says: “Such unilateral measures would likely result in serious market distortions and – most importantly – be far less effective in ensuring the reduction of CO2 emissions by the global shipping sector as a whole.”

an international tax on aviation and shipping, to be administered by the United Nations Framework Convention on Climate Change (UNFCCC) secretariat. During COP15 there was a suggestion that money raised in this way could be used to partly fund an overall climate change deal.

At present there is a lot of work going on by UNFCCC and national officials to put the process back on track for a possible deal at COP16, which is being held in Mexico in December this year. The first major preparatory meeting is to be held in Bonn in May and June.

Where next?

That the possibility of unilateral regulations was raised does underscore the need for IMO to be able to go to COP16 next year with a fully worked-out plan to use financial incentives – market based instruments – to achieve significant cuts in emissions. That would mean IMO has to achieve a consensus on this issue – a consensus that has so far eluded it. That probably means a levy-based system rather than emissions trading.

Prior to COP15 it was clear that that the shipping industry was sharply divided on whether market based instruments should be in the form of an emissions trading scheme or a levy. In the past few weeks a third option has emerged, with the US and Japan separately proposing systems using IMO’s Energy Efficiency Design Index (EEDI). These proposals are at a tentative stage but are likely to to firmed up soon.

Meanwhile, it is understood that the Ad Hoc Working Group on Long Term Co-operation that had prepared a draft on options for COP15 on fuel for shipping and aviation is likely to rework its proposal, which did not manage to reach the plenary session at Copenhagen. The two options were to have been either giving IMO the responsibility for reducing emissions from shipping or imposing

Fuel cell demo at COP15

The offshore support vessel Viking Lady was docked in Central Copenhagen during the United Nations Climate Change Conference in Copenhagen (COP15), and shown off to the press and COP15 delegates as the “only ship with a fuel cell integrated as part of its power generation”.

It was claimed that, compared to a traditional ship, the Viking Lady’s advanced technology enabled her to reduce harmful NOx emissions by 180 tonnes and CO2 emissions are reduced by 20%. The Viking Lady’s LNG-powered engines emit no smoke or sulphur.

Classification society Det Norske Veritas’s chief operating officer Tor Svensen used the vessel as a venue for a press conference announcing the results of a study which points to potential emission reductions of up to 25% for the existing merchant fleet, which could translate into annual reductions of more than 250 million tonnes of CO2. He said that the potential for emission reduction in newbuildings is even higher.

The Viking Lady at Copenhagen

World Bunkering Spring 2010

27

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19.06.2009 13:20:10 Uhr

INTERVIEW

Making waves Mustafa Muhtaroglu, managing director of

Istanbul-based Energy Petrol, talks to David Hughes

A

n active member of the IBIA board and a prominent member of the Turkish bunkering community, Mustafa Muhtaroglu is frequently seen at industry events around the world and is known, amongst other things, as an expert on the Eastern Mediterranean and Black Sea bunker scene.

DH: Why are you in the bunker business?

MM: Back in 1986 I became sales manager of one of Turkey’s leading bunker suppliers. Then in 1997 I set up my own company Energy Petrol as physical bunker supplier involved with every aspect of bunkering, including sales, operations, cargoes, storage, barge owning and managing, blending, trading, customs, legal and administrative issues. In short, I now have extensive experience of all parts of our industry.

I was elected founding chairman of the Turkish Bunker Association which is now approaching its 10th anniversary. This meant representing the whole industry to the authorities and developing a deeper understanding on their part of bunkering and the need to support the sector.

In 2003 I was elected to the then IBIA Council where I got the chance to understand the global issues that affect our industry. Since last year I have been on the new IBIA Board.

Since 2005 I have been a member of the Assembly of the Turkish Maritime Chamber. I am on the treasury committee which oversees the distribution of 90% of the Chamber’s income to educational projects.

Looking at prospects now, would you still want to become involved in this industry if you were just setting out on your career?

Yes, I would. Bunkering is a very exciting industry. It is very lively, dynamic, changing rapidly and very international. You have friends and business associates from all over the world and the business can be both fun and profitable.

World Bunkering Spring 2010

Mustafa Muhtaroglu

I was born and still live in a city which has one of the world’s most important seaways passing through the middle of it, with over 50,000 ships a year transiting the Bosphorus. In your daily routine life in this city, you feel it, you feel and live ships, you see them every day of your life. While at university I used city sea ferries every day, sailing through big ships to the pier next to Istanbul’s passenger berth. It is really impossible not to be involved with shipping in Istanbul.

You have considerable experience of the recent development of the Turkish bunker industry. How has it changed over the years?

I was in at what was effectively the start of Turkish bunkering. Over the years the industry here has improved greatly. However, we have not done as well as we should have given those 50,000 ships passing by every year. To be honest, there was not a professional bunkering business worth the name before early 90s in Turkey. The first independent and international bunker supply operation was started during the late 80s but the sector only really developed as late as the early 90s. The Turkish business community, even those closely connected with shipping, and also the authorities, knew nothing about shipping. It is a surprising fact that the Maritime Chamber only established a bunkering committee in 2003.

We really lost about 10 years when we should have gained the active support of the authorities. In 1990 Gibraltar sold about 850,000 tons and Istanbul almost the same. In 2000 we sold only about 1.2 million tons but Gibraltar managed about 2.7 million tons.

In 2007 we reached 1.6 million tons but Gibraltar sold a record 4.3 million tons. In those 10 years we missed the chance of setting up the required physical and legal infrastructure for the industry.

Things improved greatly once the Turkish Bunker Association was set up. We managed to promote ourselves effectively to the various relevant authorities, including Customs, and consequently

29

bunkering is now recognised as an important area of the Turkish shipping industry.

By the end of 2009 we had become one of the best, most reliable and convenient bunker centres in the region but are still relatively small compared to Gibraltar and Piraeus. We are the region’s third biggest supply centre and are known for having no quality issues and for fast and efficient, trouble-free supplies.

What are the main challenges facing the bunker industry in Turkey, and more widely in the Eastern Mediterranean?

Infrastructure! If there was good infrastructure – including storage facilities and dedicated berths – all ships passing through the Turkish straits would bunker here. We have a very good location, safe seas, and ships usually have idle time before passing though the Straits.

Istanbul is the last stop before going into difficult Black Sea ports and the first possible place to take a breath after working cargoes there.

Unfortunately, the opportunity has been missed. Istanbul has grown so rapidly that all possible locations for such a bunker supply centre have gone. Any municipality with vision and shipping knowledge would have established a bunker centre in Istanbul to

serve international shipping. If that had happened we would now sell over 10 million tons of bunkers and bring very large income to Turkey from bunkering and other related services such as crew changes, luboil, fresh water and provision supplies etc. The income could be as high as $10 billion or almost 10% of Turkey’s total exports. In 2000 I wrote an article about our “exports at the door”. But the chance was missed.

There is another reason why some countries are more successful than others. In the Mediterranean we only have one real shipping nation, that is to say a truly shipping-orientated society. They are marine people by their blood and they know every aspect of shipping.

Bunkering is a service business and not all countries excel in the provision of services. Therefore, in the Mediterranean area I don’t really expect big surprises. The current supply centres will keep their positions. However, when (if) the nature of bunkering changes and all shipping burns only gas oil as Intertanko has advocated, Istanbul could take the lead. However, we should not forget that Turkey is completely dependent on imports for gas oil.

The global bunker industry is pre-occupied with environmental issues, and currently especially the sulphur issue and now CO2 emissions. How important are environmental issues for the Turkish bunker industry? Is there any demand for lowsulphur fuel?

Turkey has already acted on the sulphur issue. The Environment Ministry and the main regulating body for the petroleum industry, EMRA (Energy Markets Regulating Authority), have already issued several regulations implementing low-sulphur limits for marine gas oil from 1 January 2012.

Regarding low-sulphur fuel oil demand in Turkey, the local bunker industry mainly supplies vessels operating on trades within the Black Sea – Marmara Sea – Mediterranean range. Some 50 % of ships passing through the Turkish Straits stay in the Mediterranean. Very few ships loading from the Black Sea and/or from Turkey sail into an ECA and even those that do have a week or so sailing through the Aegean and Mediterranean where low-sulphur fuel is not required, and can take on compliant §fuel closer to the ECAs. Therefore, I cannot really say there is a huge demand in Turkey for low-sulphur fuel and that will not change as long as the Mediterranean is not an ECA. Low-sulphur gas oil is largely in demand and is widely available in Turkish ports.

50,000 ships transit the Bosphorus a year

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World Bunkering Spring 2010

As a Council member how important do you think IBIA is?

How do you see its role evolving?

Very important. And getting more important. Bunkering and shipping in general have become the target of international regulatory bodies and regulating institutes, to an excessive extent. Shipping carries about 90% of world trade but is responsible for only 2.7% of the world’s total emissions. There are other steps to be taken before concentrating on shipping. However, this is not a negotiable issue any more and we need IBIA more to protect our rights at all international forums. It is not also only about emissions. We need IBIA to promote and represent this important industry at every level and increase public awareness of our crucial support for world shipping.

What effects do you see the economic downturn having on the Turkish bunker industry, and the global bunker industry?

Do you think smaller and medium sized firms will be able to survive or do you expect significant consolidation?

The same number of ships passed though the Turkish straits in 2009 as in 2008. I am not saying, though, Turkey is not affected by the global crisis. I have been part of the shipping community here since 1986 and I have never seen such a huge number of ships laid up. Turkish shipping authorities have allocated special locations for the hundreds of vessels now in lay-up. It is worse for shipbuilding; Turkey had recently climbed to number five in the global shipbuilding league. Now our yards are really in trouble, with cancellations, no new orders and no prospect of recovery before 2011 or even 2012.

The Turkish bunker sector achieved the same volume in 2009 as in the previous year, about 1.5 million tons. As a company our volumes were in fact slightly up, by 3%, despite several availability problems in Istanbul.

In the meantime the global bunker industry is going through some confusing times. Some players have experienced such times before and know how to manage it. However, those players include funds and certain credit bodies and it will be interesting to see how they will react in such circumstances. It is very likely that profit margins are better for such bodies but they run risks which are difficult to assess.

We are hearing about bad results from the shipping giants but no one knows how much is due to bunker costs and hedging debts or who is involved. I believe people with traditional bunker knowledge will lead and define this period, and hopefully enjoy the benefits of the recovery.

I don’t think there will be consolidation. The smaller firms become more profitable and may be more healthy. It can be the case that some smaller players are squeezing bigger ones and maybe some

World Bunkering Spring 2010

larger companies need to acquire those smaller operations in order to balance their portfolios and profitability.

Bunkering is a unique industry. It is based on human relations and service. Some smaller companies become much closer to their core portfolios while bigger companies cannot really get involved in such niche markets but their typical credit issues are much more stressed and restrictive. On the other hand I don’t expect any surprising new entrants into the bunker business. There may be some consolidation, but it will be very limited.

Finally, what makes the bunker industry tick? Is it all about cut-throat price competition or more to do with building relationships and trust – or a bit of both?

A bit of both. No-one will pay more just because of good relationships but nevertheless price is not everything. Buyers never like to disclose their hands; however, they are very careful when choosing their suppliers. They are perfect in judging and balancing price, service and relations items all together. Time is not money now as it was in the past but bunker buyers will always value quality, quantity matters, timely deliveries, trouble-free bunkering and always calculate what they pay for and get.

Bunkering is really a very strange industry. The bunker industry is really important for shipping and shipping is one of world’s key economic activities. Without shipping we wouldn’t enjoy our current standards of living and bunkering keeps shipping going. I don’t think any other industry making such an important contribution to global transport would keep such a low profile. In the meantime the bunker industry is really very capital intensive and rather modest and easygoing. And shipping gets a good deal from the bunker suppliers who, even in times of crisis, provide credit terms customers would not get when making other purchases.

The bunker industry, however, does not get the respect it deserves from the rest of the shipping community, something I find hard to believe even after 24 years in this business.

While serving the shipping industry is bunkering’s top priority, our sector is the last in the line as far the shipping industry is concerned. This could be a legacy from the1970s when oil was too cheap but nowadays we are really one of most important parts of shipping. Bunker costs may be half of the total cost of any voyage and good bunker purchase and supply can make the whole voyage profitable especially in today’s markets. However, this situation is our own fault and we all have to try to change this impression. I believe local chambers and associations, and at international level IBIA, can do this and we all have to work hard on this issue.

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testing

Damage limitation Neil Griffiths of UK Marine Consultants descibes some of the most

common effects of fuel contamination – and some problems that look like it, but aren’t

O

nboard contamination from unusual, foreign, substances in marine fuel oils can be, at the very least, troublesome for all parties involved. When such contaminants are identified after analyses, the fingers can start pointing at the refinery, ship, and anything in between. The effects of “bad bunkers” generally hit those on board the vessel hardest, at least in terms of additional labour consequentially created. As a vessel’s engineer I was personally involved with trying to cope with poor quality fuels and, in one case, we persevered with the bad bunkers until the next port was reached, although doing so created more work for the engineers both during and after its use.

Bad fuel, or bad engineering?

My subsequent shore career, as both surveyor and consultant, has resulted in exposure to a multitude of fuel problems and the damages caused by the use of this fuel. I was also involved in a number of cases where the fuel was initially blamed for machinery damage, but after further detailed investigation and analyses, it was determined that the cause of the problem was either poor maintenance procedures or inappropriate handling and operation of the ship’s equipment. In one such case, it was identified that fuel pump barrel and plunger assemblies had been recently mismatched, a practice not recommended by the engine manufacturer. In another case, the scavenge air cooler was found to be leaking sea water into the scavenge air manifold and engine units, resulting in a detrimental effect on the cylinder liner film of a large slow speed engine. The effect of the sea water contamination in the cylinder units was not too dissimilar to using fuel oil with excessive levels of cat fines, with rapid wear of cylinder liners and piston rings.

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Maintenance matters

It almost goes without saying that I have seen numerous examples of situations in which fuel oil of either reasonable or borderline quality could have been successfully handled on board if the treatment system and machinery had been operated and monitored in accordance with good practice, including following the machinery manufacturer’s recommendations.

In a further case, I identified unusual deposits in the scavenge space of a large slow speed engine. Although the vast majority of the scavenge air spaces had been cleaned prior to my attendance on board the ship, there were sufficient warning signs to suggest that there had been problems before the engine was cleaned. After detailed inspection of the main engine, its systems and the documentation, together with detailed analyses, it was ascertained that the fuel in use was not of substandard quality as had been alleged.

The cause was found to relate to excessive quantity of cylinder oil at engine inlet coupled with blocked drains from the scavenge air space; the level of sludge in the scavenge air space had risen until it was level with that of the scavenge air ports, so that the piston rings and cylinder liners were effectively operating with the sludge as the lubrication medium. Again, the effects on the piston, piston rings and cylinder liner were similar to those found when the fuel contains excessive levels of cat fines.

As may be deduced from the above, it is far from certain that the quality of the fuel oil is the cause of machinery damage, so it is wise to use the term “alleged” when investigating the merits of a case.

Proving the case

It is generally difficult for an owner to show that machinery damage has been caused by poor quality fuel. Representative samples, and

World Bunkering Spring 2010

the use of reputable and independent laboratories, are paramount in determining the nature of the “contaminants” in the fuel oil. If analyses do not indicate any specific deficiency, it is difficult for owners to prove that a specific batch of fuel has not been “fit for its intended purpose”. Even in circumstances where the analyses indicate a specific problem, it may be difficult for owners to show that the specific fuel was the sole cause of machinery damage if the maintenance is not in accordance with the manufacturer’s recommendations or the equipment has not been suitably handled.

On a too frequent basis, I have seen poor onboard practices such as operating the treatment system with filtration either by-passed or with large holes in the mesh. Other common operating problems include the use of purifiers with incorrectly sized gravity discs, excessive flow rate or insufficient inlet temperature. The misuse of fuel oil temperature controllers and viscosity controllers also tend to be a relatively common issue where machinery damage is blamed on fuel oil quality. Unfortunately, the competence of the crew is often called into question where it is alleged that bunkers have caused engine operating difficulties. In one particular case, a physical test of all 16 fuel injectors for a medium speed engine found that 14 had been incorrectly set, with most of those leaking fuel oil at some point in their assembly. When access to relevant documentation was provided, it was ascertained that the injectors had recently been overhauled by the ship’s crew and installed in the engine prior to the commencement of the operational problems. When faced with the full facts, it is generally easier to understand the circumstances of the operational problems and what may have caused them. However, the various parties involved when a dispute arises have their own agenda, and access to relevant information is not available in many cases whilst the initial investigations are underway.

The above shows only one side of the story, that where the fuel oil quality is wrongly blamed for causing machinery problems. Where poor quality fuels are used on board the ship, the results can be devastating. It is not uncommon for “bad bunkers” to result in total loss of electrical or propulsion power, or both. Such circumstances

can lead to expensive towage or salvage to a safe port of refuge, legal and surveyors’ costs, and a detrimental effect on the safety of the crew, cargo and the environment.

What can go wrong?

Engine components that are commonly affected if the fuel contains high abrasives include fuel pumps, fuel injectors, pistons, piston rings, and cylinder liners. Damage to these items can cause further problems with scavenge space fouling, exhaust space and turbo charger fouling, reduced engine power output, and physical damage to the turbo charger. The damage caused when the fuel contains high abrasives can be severe and rapid. In one case the clearance between the fuel pump barrels and plungers was 10 to 15 times the nominal value. In another, the depths of piston ring grooves were up to twice that for a new piston crown.

Tank, filter and purifying fouling also tend to occur with certain aspects of poor fuel quality. Fuel oil compatibility or stability problems have a tendency to cause problems in the fuel oil systems prior to entry into the main and auxiliary machinery, although their effects can be just as costly to remedy. It has also been known for exhaust valve or bearing damage to occur if the combustion or injection qualities of the fuel are sub-standard.

In recent times, there have been numerous adulterant substances that have found their way into marine fuel oils. Their effects on the machinery and component parts tend to be fairly wide-ranging, dependent on the nature and extent of the adulterant substances.

Such effects can include fuel pump and filter blockages, or a reduction in the lubricity from the fuel itself, resulting in seizure between closely fitting parts.

It is hoped that the quality of fuel oil delivered to a vessel is of satisfactory quality in order to prevent some of the problems discussed in this article. Despite the likelihood of reduced income from investigations in relation to “bad bunkers”, it is hoped that the latest, and subsequent, revisions to marine fuel oil standards will reduce the burden on the owners and ship’s crew.

“Bad bunker fuel” is a risk – but is it always the fuel at fault?

World Bunkering Spring 2010

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Traders

New realities

Carsten Ladekjaer, managing director of International Bunkering Middle East DMCC, answers World Bunkering’s

Carsten Ladekjaer

questions on the changing nature of the market

F

rom its office in Dubai, International Bunkering Middle East DMCC supplies bunkers and lubricants world-wide. Managing director Carsten Ladekjaer readily agrees to share his thoughts on the new realities following the recent economic meltdown.

WB: Do you think the following is an accurate assessment of the current market situation: “Since many ships are currently sailing with only part cargo, a comparison of prices between ports has become more prevalent. Where previously, bunkers were often taken to facilitate each leg of a voyage and afford maximum cargo capacity, vessels with less than capacity cargo are bunkering to capacity where prices are lower?”

CL: I believe this assumption is certainly correct and in line with reality. Since the shipoperators may no longer be able to pick and chose between most suitable cargoes for their individual ships and since the freight rates have declined, it is only a natural reaction to optimise on other parameters, and bunkers happen to be one of the major running costs of a ship. Luckily this opens more doors for the professional bunker companies who are able to guide and assist their clients accordingly.

How has your attitude towards extending credit changed since the credit crunch took hold in 2008?

To tell you the truth we have had to adjust to the new situation just like everybody else. I would be lying if I told you that everything is “as before”. Before, a shipoperator could make a profit in nearly every corner of any shipping segment ... This changed rapidly and caught a lot of companies and people on the wrong foot. Since then the rules of the game have changed and the industry is now geared (you

World Bunkering Spring 2010

might say literally) in a very different way. In a way, the credit issue has changed from being a mere formality into becoming the prime issue in many cases.

What additional steps are you taking to secure or insure your risks?

The changes can be found in the details. We’re actually doing the same things that we’ve always done, ie trying to be as thorough as possible in our credit assessment. The world crisis has forced us to be even better than before in this field. Actually, this excercise can be quite healthy for a company to go through. So far we have come through without any major scratches but still we’re trying to be humble in the situation and take on a conservative approach. After all, a good deal only has one happy ending; it’s called ‘payment’!

Has the profile of your typical customer changed since 2008 and, if so, how?

Overall I would say no. We haven’t blacklisted any segments or changed focus towards specific ones. We still believe that each potential or existing client should be assessed individually. Of course we have turned down business that we might have been tempted to go for earlier when fundamentals were better, but overall our typical customer profile did not change noticeably.

What has been the reaction of physical suppliers towards you as a trading company, against which maritime liens are not enforceable?

Actually, we now have a stronger bond with our suppliers than ever before. There’s no doubt in my mind that the role of the bunker trading companies is more vital to the whole industry than ever and

35

TRADERS

that our counterparties are aware of this. This actually goes both ways in the trade, ie also towards our clients. The current economic situation has made it clear to everyone that we are needed. In our specific case we might actually come out of this crisis stronger than before. Being part of a financially very strong group and being a financially sound company ourself, our counterparties rightfully feel safe in choosing International Bunkering Middle East DMCC during the current turmoil.

Has there been a noticeable change in customer lifting patterns in the past year?

Some projects have been cancelled and some liner services have either been scaled down or even shut down entirely. A number of ships have been scrapped and then again a large number are still coming out. So you do tend see more of these final or initial bunkerlifts here and there. Then of course you have the laid-up ships and the slow steaming to consider. My personal estimate would be that the demand has fallen around 20% regionally and probably also worldwide since September 2008. However, this is far from a static picture and we are also beginning to see some signs of demand increasing, at least periodically.

Are you seeing customers applying different parameters to the purchase of their bunkers since 2008?

Our clients still need proper quality on time and with the right terms.

I do not see any changes there. It’s not like clients have begun to compromise on quality or have become less demanding about getting the products on time. Why would they? The clients seem more appreciative of the services we are providing than before. They do not take us for granted. I’m not saying they were before, but at least it’s clearer now. As a result the dialogue between us and our clients has become even better. It is like there is a mutual understanding of partnership in making things work.

Do you have any other comments on the current market and the prospects for traders?

The shipping industry worldwide still has a lot of serious challenges ahead. The lack of a balance between supply and demand for ships currently makes it hard for a large number of shipowners to make a profit. However, on a more positive note, the world will continue to need shipping and I believe in the continuing globalisation of the world economy.

Due to the complexity of financing, sourcing reliable products, and the importance of true value-added service and guidance I have no doubt that bunker traders will continue to play an important role in keeping the ships of the world moving safely well into the future.

The bunkering landscape has changed considerably over the last year

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World Bunkering Spring 2010

Traders

Vigilance required Credit risk becomes a major concern in a recession, says IBIA Board

member Bob Lintott of ISObunkers LLC, but some traders have made suppliers’ fears work for them

W

hen freight rates are high and cargo is abundant, bunker suppliers and traders can generally be comfortable extending credit to their clients.

Generally, too, the “bad boys” – the habitual slow payers, those who frequently and with dubious intent initiate quality and/or quantity disputes – are well known in the industry and afforded prices consistent with their performance.

However, when cargo volumes decline and freight rates collapse, the need for extra vigilance in assessing the liquidity of shipowners and operators is brought very sharply into focus. At the end of 2008, companies which had previously and justly enjoyed a good reputation suddenly found themselves strapped for cash and found it difficult to maintain their earlier high standing.

The collapse of the world economy towards the end of 2008 left many shipowners over extended. Newer ships were suddenly unable to yield income sufficient to cover the mortgages on them. With a collapse in demand for shipping came a fall in the value of ships. Ships ordered in the good times and now under construction became comparatively expensive liabilities. Many good, sound and far from old vessels became unemployed and were put in lay-up. By late 2009, there were, reportedly, around 600 ships either at anchor or in lay-up around Singapore. Reduced volumes of cargo were being moved in smaller quantities and by fewer ships. This applied across almost the entire cargo spectrum.

smaller cargos to move, shipoperators were no longer constrained by the need to bunker often, limiting their bunker quantities in order to maximise their cargo capacity. They now had the opportunity of looking to bunker larger quantities less frequently and in the cheapest locations. During the IBIA conference in Singapore, delegates were surprised to be told that in spite of the world recession, Singapore had actually seen an increase in bunker volumes in 2009.

This is in sharp contrast to many ports in the world, where bunker deliveries are significantly down.

Almost overnight, shipping companies which had been riding high on a burgeoning economic wave found themselves with liabilities rather in excess of their assets. In turn, banks were often reluctant to finance these deficits. Share values fell and the less fortunate within this group went to the wall. For the first time in a long time, owning “older” ships became a positive factor. Mortgages, if indeed there were any on these older vessels, would be significantly lower and infinitely more manageable in the face of dramatically reduced freight rates occasioned by the “new” economic climate.

Companies with recent and expensive charters, new ships or ships yet to be delivered now faced charter fees and mortgages which vastly exceeded the potential income from freight receipts. There was now strong competition from companies which had been able to take advantage of new, much lower charter rates. The new economic climate had delivered some quite severe blows.

Singapore bucks the trend

Caution pays off

A buoyant freight market in which many shipoperators had sought to maximise cargo had led to some operators purchasing bunkers for their vessels in smaller quantities and more frequently. Suddenly, with

Many companies for whom extensive credit facilities had previously been readily available from physical suppliers now found their credit being scrutinised and, in many cases, restricted. For traders, there

World Bunkering Spring 2010

37

appeared a sudden avalanche of opportunity to trade fuel to companies which had largely eschewed them previously, preferring as they did to deal only with physical suppliers. For the unwary, this bounty could and, in some cases, did become a minefield deserving of very careful navigation. For the more cautious, though, understanding their potential clients’ current financial status became crucial. Credit reporting agencies saw a sudden upturn in demand for their services as suppliers, and traders sought to keep close tabs on the financial wellbeing of customers new and old. Many credit managers were enjoying their day in the sun, empowered as some became with the ability to condone or scupper a bunker transaction. Undoubtedly, this caused traders with incomes based upon volumes of business transacted a degree of concern.

On the bright side

The news, however, was not all bad. Traders are, after all, a resourceful bunch. As the values associated with shipping fell, so too did the value of oil and along with that, the value of financial risk associated with bunkers. With physical suppliers exercising greater control over credit exposures, canny traders were able to utilise the credit lines afforded them by suppliers and provide a valuable service as a credit facilitator to shipoperators who found their regular suppliers unwilling to maintain their credit lines at former levels. This opportunity has helped traders to maintain their position and stature in difficult times. Traders who are, by their very nature, ubiquitous and well able to obtain and provide bunker knowledge and expertise have also been able to respond to the needs of clients exploring unfamiliar and possibly cheaper bunker opportunities.

A conservative approach

Major bunker trader Dan-Bunkering takes a cautious line when it comes to risk. Managing director Henrik Zederkof says: “DanBunkering is in general conservative when offering credit to clients. Our attitude has always been that we do our utmost to support customers who have been supporting Dan-Bunkering in both good and less good times.

“In relation to suppliers,” he continues, “Dan-Bunkering benefits from being a very strong financial company with a long history in the business. For that reason, we have not experienced extended problems in the last one to two years in relation to our worldwide partners, eg physical suppliers, barge companies etc.”

Established in 1981, Dan-Bunkering’s core business is worldwide bunker trading, although it also arranges supplies of lubricants and other related products and services for vessels world-wide. As well as its head office in Middelfart, Denmark, the company also has offices in Copenhagen, Shanghai, Kaliningrad and Singapore.

Dan-Bunkering says that its presence on the global market enables it to supply clients with the right quality at competitive prices at the agreed place and time at more than 2,800 bunker locations around the world.

Better safe than shocked What impact can rising oil prices have on your business? With us you can fix the price and avoid unpleasant surprises.

Your safe haven - www.dan-bunkering.com

38

World Bunkering Spring 2010

Risk Management

Reporting on risk

Adam Dupré

Adam Dupré, managing director of Ocean Intelligence Pte Ltd, on what credit risk means for bunker companies, and how to assess it

R

isk is not necessarily negative, but it is real and needs to be managed. You might say it highlights a watershed point up to which activity is likely to be successful and beyond which it is may be dangerous. It highlights the point in the consideration of any transaction where the possibility of failure is too high to justify proceeding. Low risk is still risk, but it is positive and justifies proceeding, whereas high risk may not justify proceeding.

Risk management is the skill/art/science of assessing where on the line from low to high risk any particular customer or deal sits, and of making the right decision as many times as possible. The closer to the line you can get, the more likely you are to do more and more successful business. If your risk assessment procedures do not generate clear assessments, then you need to err on the side of caution, and may miss opportunities. If you have sophisticated risk analysis systems that you can trust, you can work much closer to the wire, with the opportunities for higher rewards that this kind of business can bring. The nub of the matter is how accurate are your means of assessing risk?

instinct, credit analysis in bunkers is more of a skilled art than an automated science. There can be no credit assessment or scoring system in the bunker sector where data fed in one end automatically delivers a sure fire credit recommendation that can be trusted and acted upon.

However, in working towards the decision whether to give credit or not, there are a number of tools available to the bunker credit manager. These run from personally gathering and assessing all possible data to reach a decision, through to simply passing all or some of the risk to someone else by insuring it – and anywhere in between.

There are all the usual tools of the credit manager – interviewing the customer, asking for financial accounts, checking with competitors for previous trading experience, and of course referring to your own previous experience with the customer. There is also another tool available to the bunker credit manager which is special to this industry and which can be, if used properly, a very helpful support to the credit management function. This tool is the bunker credit report, which is different from any other credit report because of the nature of the shipping markets and the needs of the bunker credit management function.

The toolkit

The most crucial risk in today’s markets, to which all bunker traders and suppliers are exposed, is counterparty credit risk: the risk that your customer may delay payment or default.

The larger bunker trading companies have sophisticated systems to analyse counterparty credit risk, while the smaller companies take a more intuitive approach. But, whether done by system or by

World Bunkering Spring 2010

Why is shipping different?

There are particular obstacles to knowing your customer in the shipping sector, and thus being able to analyse credit risk.

In the first place, shipping companies take every advantage possible of the peculiar status of their assets – they can choose anywhere in the world to register them and naturally choose the most tax

39

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Risk Management

efficient and the ones that offer the opportunity of least disclosure of corporate and business data to outsiders. And they will set up separate legal vehicles to own each asset. That means their structure is usually complex and opaque. From a legal perspective, a typical shipping company is more like a group of independent operators working in unison than like a single operating legal entity like ExxonMobil, or Microsoft, or Ford. A bunker supplier needs to know exactly to whom he is delivering – not least because this will be crucial to any recovery procedures if there is a payment issue. There will normally be a single, agency/management company representing the group, but this will rarely have assets and the supplier must understand the structure of the business and his counterparty within it.

The second issue is that since a shipping company is made up of a number of asset holding entities registered in offshore nondisclosure domiciles, there are no consolidated accounts. In fact there are often no accounts at all!

A third question is whether the potential customer pays its bills.

The problem with calling your competitors for references is that they may be reluctant to be truthful about a good customer for fear of losing them, so it is not always easy to tell if a reference is accurate.

The shipping industry is getting hotter and hotter as a place to be. Every month that goes by without a major collapse means the likelihood of a serious collapse is that much closer. To stand the best chance of minimising potential loss, you need to have the most sensitive awareness of the markets and of the players in them that you possibly can. So how can a specialist marine credit report clarify these issues?

Understanding the fleet

Take the first issue, the opaque structure of a shipping business with every ship owned by a different off-shore company. A number of sources list the ships trading in a particular fleet, but the credit report attempts to present more than a list. It should give an idea of the organic structure of the fleet – how it has been built up over time – and thus provide insights into the character, abilities and professionalism of the owner. A tightly run fleet of modern product tankers with a good mix of long-term and spot work with top-class shippers is likely to be a better prospect for a bunker supplier than an owner whose tonnage is old and badly maintained and only intermittently employed by second or third tier shippers.

A good marine credit report will point out the implications of the fleet and its structure and will also set it in the context of the prevailing market – given today’s freight rates and the particular balance of supply and demand, how will this fleet be doing today? Is it concentrated into one sector so that business will suffer if that sector is down? Or is it operating across a few markets where the principal is

World Bunkering Spring 2010

experienced and well connected, so likely to get the pick of whatever business is available as well as spread its own risk?

Assessing financial viability

The second point a marine credit report will address is how to assess the financial viability of a shipping company in the absence of consolidated accounts. The credit reporting companies get the information from the same place that the accountants who work for the business get it – generating the P&L from the trading results of the fleet, and the costs of running the ships, and the balance sheet from the asset values against likely finance cost, and debtors against creditors.

The credit companies know the freight rates for the particular vessel types and trading routes where the fleet works. They will have an idea of roughly how much the vessels have been working. On the balance sheet side, they will know what similar ships cost when the vessels were purchased and they know how long a mortgage usually runs. So from this it is possible to generate an approximate set of consolidated accounts.

The crucial question

Finally, the third point. Will the company actually pay up on day 30?

The credit reporting companies are in a slightly better position than the supplier here. We are able to speak to a wide variety of suppliers to get references – and we’ll call charterers and other suppliers too. If you call enough people who supply a company you start to see a pattern. You can adjust for and discount major distorting factors and, setting all the references against the market context and trading history of the business, you can estimate what the real position is likely to be and make a pretty good guess whether payment will be forthcoming. It is not certain, but it is a good guide.

A good credit report will provide an insight into the structure, finances, management style, trading patterns, asset base, historical payments performance, known recent events and market and other factors that might impact on a potential customer. Used in conjunction with the supplier’s own knowledge, a credit report can allow a greater depth and breadth of insight to allow a finer commercial decision to be made.

The point of credit risk analysis is to let you give credit with as much confidence as possible and thus maximise revenues. The trick is to do as much business with a particular account as possible before pulling out. You don’t want to be the last person standing when the music stops. In today’s market it would be dangerous for a bunker trader or supplier to take any other attitude; the stakes are just too high.

Ocean Intelligence is a specialist marine credit reporting company.

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risk management

Singapore launches bunker derivatives – but physical hedging “will be key” Bunker hedging to form key part of owners’ strategy, says OW

S

ingapore Exchange (SGX) has announced that it will start trading its new Fuel Oil 380-cSt futures contract (FO 380 Contract) on 22 February 2010. “The new contract provides our global participants an attractive price discovery and hedging product. This launch is timely and will bolster Singapore’s position as a commodities trading and clearing gateway,” said Magnus Bocker, Chief Executive Officer of SGX. The new contract is based on IFO 380, with physical delivery via FOB or inter-tank transfer at Exchange-designated Singapore oil installations. The minimum tradable contract size is 100 metric tonnes per lot and the minimum deliverable size is 2,000 metric tonnes or 20 lots. Market markers and liquidity providers will be available for this contract. The trading session for the new contract has been specially extended to allow shipping companies, bunker suppliers and oil trading companies an efficient and transparent pricing mechanism for the Singapore fuel oil market from Asia open to Europe close. Trading runs from Singapore time 9.30am to 6.30pm followed by 7.30pm to 1.00am. According to Lam Yi Young, Chief Executive of the Singapore MPA, “SGX’s fuel oil futures contract will encourage greater participation in Singapore’s marine fuel market from both local and international shipping and bunkering communities. This complements Singapore’s position as a top bunkering port and is in line with MPA’s effort to develop a conducive and progressive environment for the bunkering industry.”

While the new contract offers another option for financial hedging, it is the adoption of physical hedging as an instrument for managing risk that will play a key part of risk management strategies in 2010 and beyond. Speaking at Platts Managing Oil and Energy

World Bunkering Spring 2010

Risk Conference Morten Dehn, general manager, OW Bunker, Risk Managemant said: “The physical hedging of bunker fuel purchases enables customers to buy products on a forward basis, and is a definitive and easily auditable hedging instrument that provides cost stability. Following the economic downturn, we are now operating in a new era of responsibility, where companies have to exercise an appropriate level of conservatism. They must caution themselves against unnecessary risk taking, even if the appetite for risk returns as the markets begin to recover. Physical hedging provides this stability as part of a comprehensive risk management strategy that incorporates a mix of tools and instruments.”

He argued that physical hedging allows customers to fix and lock in the price of bunker fuel in a specific port where they know they will be purchasing products, while still being able to lift in any port in the world, and maintain the use of the contract.

Mr Dehn also stressed that the key to an effective risk management strategy is ensuring that it is embedded into the infrastructure of an organisation – its corporate and financial processes and the day-to-day operations of the business.

He added: “There has to be a planned and formulaic approach to risk management and the implementation of an holistic strategy that becomes a way of corporate life. There must be a clear understanding of a company’s risk exposure, its appetite for risk as well as its motives for managing risk. And most importantly, any risk management strategy must incorporate a variety of tools, instruments and analytical processes that provide balance and stability against the increasing elements of risk that organisations now face, from basis and time risk, to volume, and especially counterparty risk.”

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Cleaning up bunker fuels.

But at what cost?

William Bathurst Managing Editor Platts Marine Alert & Ellie Weir, Editor Platts Bunkers

A

s Environmental pressure grows on the oil industry due to their role in carbon emissions, so the shipping industry, which was exempt from the Kyoto protocol on cutting carbon emissions, has come under increasing scrutiny to catch up with other more strictly regulated

industries.

Airlines have responded to this pressure and promised to cut annual carbon dioxide emissions of 650 million tonnes by 50% by 2050. That amount of emitted greenhouse gas is half that produced by the global shipping industry so the need for emissions and sulphur limiting legislation is evident within the marine industry.

What is still unclear is how an industry that has been massively hit by the global economic slowdown, will cope with the costs associated with cleaner and thus more expensive fuels. This report will analyse the implications of this legislation on the industry and any solutions there may be for the industry’s survival.

Implications of the MARPOL legislation

Firstly, the most pressing implication for those in the industry is the higher price associated with the switch to cleaner fuels as they are of course more expensive to produce.

The largest cost for an operator is their bunker costs. When bunkers are $200/mt, ships will move at higher speeds but when prices double and ship values are halved or worse, ships will steam at economical speeds to burn less bunkers, saving out of pocket expenses.

If a ship that can do 18 knots on 33 mt of intermediate bunker fuel per day slows to 15 knots, they will burn only 25 mt/day and will also take 20% longer to get to where the ship is going.

Consequently, if the ship saves 8 mt a day with bunkers at $400/ mt they save $3,200/day, so with a timecharter value of a ship at $20,000/day, 20% of that is $4,000/day, meaning it would not pay to slow-steam.

However, if the timecharter value of the ship was $10,000/day, then the extra time would cost $2,000/day and the bunker costs they saved would still be $3,200/day, meaning $1,200/day savings. Then it does pay to slow-steam.

The practice has been in use for over a year on several tanker routes already but the global economic slowdown combined with

44

over-ordering, particularly in the tanker markets, has caused a tonnage demand/supply imbalance. When tankers take longer to complete their journeys they are out of the spot market for longer, which can help lend some support to the market.

In the tanker spot market however, it is the charterers’ decision to allow slow-steaming and owners must seek their approval for this to take place. Nevertheless, slow-steaming had been cited by tanker sources as providing an ongoing relief from the overcapacity in the market.

With ever cleaner fuels increasingly costing high amounts, the practice of slow-steaming will become more and more prevalent, sources in the tanker market believe particularly if the low-sulphur premiums seen in the past re-emerge once the global economies pick up.

The graph shows the premium for low sulphur 1.5% 380 cSt bunker over high-sulphur 380 in the port of Rotterdam over the last two years. This peaked at $100/mt in 2008 although was typically around $35-40/mt that year. A slow-down in demand in 2009 brought that back down to $15-20/mt.

Source: Platts

The greater expense is not of course restricted to marine fuel oil with lower sulphur distillates also being stronger. Platts began assessments of marine gas oil in the same port at the beginning of this year and the current premium over marine diesel oil shows that the cost to shippers of the switch to the former fuel was a premium of $20-40/mt. This of course varies according to market conditions

World Bunkering Spring 2010

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and in spite of tankers storing huge quantities of gas oil off the coasts of Europe. Admittedly, however, this gas oil needs to be blended to marine specifications.

Another implication, with particular regard to the January legislation, is enforcement. The legislation itself states that fuel changeovers must be recorded in ships’ logbooks, a process which many sources have questioned and only time will tell how successful this method of self regulation will be.

As EU ports realised that ships’ distillate use will move entirely from marine diesel oil to marine gas oil due to the sulphur cap, they saw demand for diesel fall away from the middle of 2009.

Although some traders feel that the better supplied gas oil market may actually lead to prices for gas oil coming down. “More demand will gain influence of the price, but I do not think the prices will go up massively, because on the MGO side we have a lot more [supply] competition,” one trader said.

“As vessels have to use gas oil 0.1% in port from the new year and many vessels are starting to run on gas oil [so there’s] not a lot of demand, one has to stop buying, the sellers are stopping to put it on the market and so we have had to get rid of our dmb barges,” one trading source in Rotterdam said.

However, while many traders and suppliers saw the buying patterns for distillates shift well in advance of the EU legislation, changes to storage had not been so successfully migrated.

“We have enough barges for MGO but tank storage is tight for the moment in all parts of Hamburg. We need storage tanks and this will be a problem, because for now we have a lot of tanks for fuel or MDO but not for MGO. So we have to clean tanks etc, which costs a lot of money,” a source in Hamburg commented.

As the new legislation comes into force and sulphur levels are cut further and further, the bunker industry and shipowners are already

World Bunkering Spring 2010

Europe: +44 20 7176 6111 North America: +1800 PLATTS 8 (toll-free) or +1 212 904 3070 (direct) Asia: +65 6532 2800 Or Visit: www.platts.com Or Email: support@platts.com

looking at their options to meet the new requirements. However, the biggest concern is what the increased pricing will do to the balance sheets of an industry already suffering from the global economic downturn and in many sectors a heavy order-book.

The price of ship fuel is going to become and an ever more important consideration.

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45

QUantity

Stena Oil has been using flowmeters for 15 years

Meters go mainstream

The demise of the measuring tape as a means of determining what’s in the tanks is well under way

T

he bunker metering business has come a long way since the first trial Coriolis meters were installed in 2007. BP carried out initial trials using the Foxboro Coriolis meter in Singapore. In the same year, a Coriolis meter manufactured by Endress & Hauser was installed on the Super Star Virgo, also in Singapore. The system was welcomed enthusiastically by the shipowner, which said that the system had performed beyond their expectations. “It helps us to achieve better efficiency and avoid any more disputes with our bunker suppliers,” said the ship’s chief engineer at the time.

The first mainstream adoption of onboard fuel metering by a shipowner came just over a year ago, when Maersk made headlines by announcing that Coriolis flow meters would be introduced on some 50 vessels in its fleet, which were to be fitted with fuel metering systems provided by Emerson, in order to cut down on short deliveries. The aim was, ultimately, to install flow meters across the entire fleet. “We would like all suppliers to have flow meters on their barges, but we don’t see that happening for a long time, if ever,” said Maersk’s business development manager, Claus Moller Peterson.

It may indeed be a long time before all suppliers have flow meters, but some have already begun to install meter systems, both for their own convenience and to provide principals with a further guarantee of quality and quantity. In the US, for example, Buffalo Marine Service, based in Houston, announced in July that it would be installing Nautical Control Solutions FuelTrax measurement system, which it said would provide real-time measurement of bunker fuel deliveries irrespective of product type, viscosity, or temperature.

46

The first bunker delivery using the system was made in Houston August 2009 – somewhat ironically, to the Maersk Wyoming; 1,500 tonnes of MGO 500 was delivered, with accuracy measured to less than 0.1%, between the barge and the ship. Accuracy was verified by Maersk Wyoming’s own in-line mass flow meter.

“FuelTrax pays vast dividends for our customers. They are provided with real-time bunker delivery tickets from an extremely accurate metering system. This removes any doubts on who received what. The precise measurement in barrels and metric tons, topnotch record keeping, and ease of operation complements Buffalo Marine’s goal of exceeding our customers’ expectations,” said Pat Studdert, president of Buffalo Marine.

“We are very pleased to announce Buffalo as our first bunker system customer,” said Anthony George, CEO of NCS. “We expect that, as bunkering accuracy increases across the industry, quantity disputes will decrease around the globe. It’s a win-win situation for the bunker suppliers and vessel owners.”

However, this is by no means the first use of flow meters by a bunker company. Stena Oil has had flow meters fitted on all its barges for the last 15 years. As a result, says bunker manager Fredrik Laliberté, Stena has had hardly any quantity disputes in this time, and those that there have been are very easy to settle. It is “a bit strange,” he says, that the rest of the industry has not taken to flow meters.

“The metering system works well, and always has – it allows you to be very transparent.”

World Bunkering Spring 2010

Measurement

More efficient measuring could increase bunkering capacity in Singapore

Entering a new era

Seah Khen Hee, Chairman of the Technical Committee on Bunkering, Spring Singapore, explained to the IBIA Convention why new measuring technology could be so significant for the bunker industry. David Hughes reports

S

peaking at the IBIA Convention on the theme Quantity Determination – Towards an Industry Stakeholders’ Standard, Seah Khen Hee gave delegates an insight on how important new measuring technologies could prove to be.

Mr Seah has been a well-known figure in the the Singapore scene going way back to the days of the old Port of Singapore Authority. He is now Chairman of the Technical Committee on Bunkering, Spring Singapore (the Standards, Productivity and Innovation Board) and has been at the centre of recent developments on measuring.

Mr Seah recalled that previously in Singapore the measurement of supplies has been based on company-based delivery procedures.

There was no uniform practice and problematic deliveries were common. An industry standard was needed and that came in the form of the Singapore Bunkering Procedure (SBP). Under the Technical Committee for Bunkering, Singapore standards were developed: SS600 (CP60 and CP77) and SS524.

While the situation is much improved, the current tank gauging method of measuring deliveries has limitations. For example, many tasks are performed manually, there is need for considerable documentation, the process is time consuming and the results of manual tank gauging cannot be integrated with info-comm technologies. In addition, cost pressures helped prompt a recognition of a need for new technology in quantity determination.

Mass flow metering has emerged as the way forward. It directly measures mass, density and temperature and can achieve high accuracy. It also has the same calibration for a range of liquid flow conditions and has bi-directional flow measurement, eg loading, delivery.

In addition, this technology can detect entrained gas and measure in two-phase flow conditions. The equipment has no moving parts and, crucially, can be integrated with info-comm technologies.

World Bunkering Spring 2010

The new technology offers the prospect of an increase, in Singapore’s case, in port bunkering of up to twice current volumes, allowing the bunker industry to grow further within the existing physical constraints. This can be achieved through raised efficiency and productivity, leading to faster bunker turnarounds and shorter port stay. That in turn could mean more cargo, bunkers, surveys, jobs, storage, and trading at the same time as reduced administrative processes and costs. “Singapore and all stakeholders benefit,” claimed Mr Seah.

Mass flow metering is now available to the shipping industry.

Mr Seah mentioned the BP/Invensys trials in Singapore, Endress & Hauser’s mass flow meter installed on a Star Cruises vessel and the Emerson/Exxon/Maersk trials in Europe. He noted Maersk is installing mass flow meters on its fleet of vessels.

Mr Seah noted there had been some concerns on accuracy and entrained gas. He said the important thing was to minimise entrained gas at source, but even when gas was present, 0.5% accuracy in delivery was achieved. He said that as the industry was now approaching the implementation stage it had to decide between tank gauging and mass flow metering. He suggested a new pricing model and incentives could assist the introduction of this new technology.

Since the Convention, Mr Seah told World Bunkering that a working group on the introduction of mass flow metering has been meeting regularly. He said: “Much work still lies ahead, although there is good progress so far.”

It could be a few months yet before Singapore decides exactly how to proceed with mass flow metering but clearly the era of manual tank sounding is drawing to a close.

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Efficient measurement of bunker quantities Now possible with Coriolis Meters Introduction

In the past few years, more and more attention has been given to the measuring of bunker fuel quantities. This has driven the industry to develop new improvements to the traditional manual tape measurement of tank levels.

Because of its inherent advantages over level based volume systems, the attention has been focused on the principle of Corioliseffect direct mass measurement.

Coriolis meters are already widely recognised for their outstanding performance and unbeatable high reliability and availability.

They are now used as the principle of choice for all industries and throughout the world – both for process control and for custody transfer applications in single-phase flow.

As a manufacturer of Coriolis Flow Meters and complete metering packages, Endress + Hauser have developed a total solution based on valuable inputs from the stakeholders in the whole process of bunkering. Endress + Hauser draws on its large experience of custody transfer applications in the traditional oil industry. Furthermore, Endress + Hauser are a member of the Committee led by the Marine Port Authorities in Singapore, where all stakeholders are working on a common standard for bunker metering.

• It has to slow down to a lower oscillation velocity v2 (in order to

move with same angular velocity ω) • Because the mass particle is inert, it presses against the pipe wall

when being decelerated • The pressure against the pipe wall points upwards and therefore

the pipe movement is accelerated.

Fc

B A

v1 m

Z1

v2 m

m

Fc

v

Z2

y

A B

t

The principle of Coriolis

In Coriolis meters, a meter tube is brought into oscillation with angular velocity ω (omega). The combination of this oscillation and the movement of the fluid through the pipe lead to an additional force on the measuring tube, the so-called Coriolis force.

Let us have a look at the inlet piping section at the moment when the pipe moves to the top: • The mass particle has an oscillation velocity v1 • The mass must then be accelerated to a higher oscillation velocity v2 (in order to move with the same angular velocity ω) • Because the mass particle is inert, it presses against the pipe wall when being accelerated • The pressure against the pipe wall points downwards and therefore slows the pipe movement down.

Now let us look at the outlet piping section: • The mass particle has an oscillation velocity v1

48

If the oscillation of the measuring tube(s) is picked-up at the inlet and the outlet, the signals will be in phase as long as there is NO mass flow. The increasing mass flow will generate a proportional Coriolis force, which in fact will influence the oscillation due to either dampening or acceleration of the tube motion. The two signals will show an increasing phase shift that is proportional to the mass flow.

A very clear video animation and explanation of the principle of Coriolis mass flow meters, can be found on www.endress.com or on YouTube (Search Coriolis + Endress).

Experiences so far

The first mass flow meter from Endress + Hauser for bunkering use was installed on Star Cruises, Super Star Virgo in Singapore in 2007.

The first test gave a clear picture of the complexity of solving this special flow application. Due to the amount of air entrained during

World Bunkering Spring 2010

start up, ‘tank stripping’ and even normal operation, the first meter readings of this two-phase flow were not as impressive as expected.

There are several possible solutions to this problem, but following discussions with the ship’s Chief Engineer, in this application a large capacity air eliminator was installed before the meter in order to create the best possible measuring conditions.

This amendment completely solved the problem, and the Super Star Virgo successfully meters its fuel bunkering every Friday in Singapore port.

Testimonial from Star Cruises

“During our weekly bunkering, the metering system performance (accuracy and repeatability) has been beyond our expectations. It helps us to achieve better efficiency and avoid any more disputes with our bunker suppliers. We are today very satisfied with the decision we took to engage Endress + Hauser as our partner in this project. We would recommend anyone looking for correct bunker figures to approach Endress + Hauser for installation of a bunker mass flow meter.”

Chief Engineer Kenneth Olsson

On the cruise ship Super Star Virgo, the space in the engine room presented the opportunity to install the large capacity air eliminator – this may not be possible for all similar installations.

Therefore Endress + Hauser have developed a system that is able to operate without installation of an air eliminator.

The philosophy and success of the system is based on two key factors: Initial calibration is essential to any metering application.

Endress + Hauser have invested a significant amount in facilities and skill in this area and are considered by many to be leaders in this field.

When it comes to the flow metering of high viscosity fluids such as HFO, published research shows that to achieve acceptable accuracy the Coriolis meter should be calibrated on a fluid similar to that which the meter is intended for, as requested by OIML. Furthermore it has been proven that the adjustment needed is individually depending on the single meter under calibration.

Endress + Hauser perform these calibrations at a purpose built internationally approved facility near Marseille, France, on multiple oil grades.

Secondly, to improve the metering conditions and hold single phase flow conditions for as long as possible during the bunker process, a pressure maintaining valve may be installed downstream of the meter.

In the periods where this is not possible (eg during tank-stripping and ‘ramp-up’ of the pumps) algorithms in a supervisory computer calculate the quantity of oil passing through the meter based on various diagnostic meter parameters. For best overall performance, these periods should be kept to a minimum.

World Bunkering Spring 2010

The Coriolis meter acts as a very sensitive sensor, with an ability to monitor itself for entrained air. If this is the case, the system will raise an alarm so that the proper measures can be taken to resolve the issue.

After bunkering completion, the system delivers a ‘Bunker Verification Report’ similar to the manual Bunker Reports used today.

An additional advantage of this system is that it is possible to see all data collected during the bunker process in order to easily visualise any abnormalities.

This gives all involved parties access to a full historical data log of events, in the case of disputes.

Since all data from a bunkering are available in data format it is possible to transfer this electronically to any ERP system – for example this could allow immediate invoicing of the customer. It also offers barge owners improved opportunities for logistic optimisation since they can now monitor real-time online quantities delivered/ received from all barges.

In 2009 Maersk Oil Trading purchased 10 systems from Endress + Hauser which are currently under installation and test. The first test results are currently being evaluated but indicate that the system will meet the challenges with minor mechanical changes in the installations.

Endress + Hauser company profile

Endress + Hauser is a global leader in measurement instrumentation, services and solutions for industrial process engineering. With over 8,400 employees worldwide, the Group generates annual net sales of more than E1.2 billion.

Company-owned sales centres and a network of partners guarantee competent worldwide support. Production centres in 11 countries meet customers’ needs and requirements quickly and effectively. As a successful family-owned business, Endress + Hauser is set for continued independence and self-reliance in the future.

Endress + Hauser provides sensors, instruments, systems and services for level, flow, pressure and temperature measurement as well as liquid analysis and data acquisition. The company supports customers with solutions and services in automation engineering, logistics and information technology. Our products set standards in quality and technology.

Customers are primarily from the chemical/petrochemical, food & beverage, water/wastewater, life science, oil & gas, power & energy, renewable energies, primaries & metal, pulp & paper and shipbuilding industries. Endress + Hauser supports its customers to optimise their process engineering procedures while taking into consideration reliability, safety, economic efficiency and environmental protection.

Founded in 1953 by Georg H Endress (1924-2008) and Ludwig Hauser (1895-1975), Endress + Hauser have been solely owned by the Endress family since 1975. The company group, headed by Klaus Endress since 1995, has developed from being a specialist in level measurement to a provider of complete solutions for industrial measuring technology and automation, with constant expansion into new territories and markets.

For further information, please contact Jens Fuglsang Industry Manager Oil & Gas/Marine Tel: +45 24 46 90 22 E-mail: jens.fuglsang@dk.endress.com

49

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All change Consolidation hits the ARA market

Volumes down in Rotterdam – but gas oil on the up

While Rotterdam retains its position as the second busiest bunkering port in the world, sales figures for 2009 show that the world shipping slowdown has had a considerable effect on bunker demand. Sales of bunkers in Rotterdam fell by 6%, from almost 13 to 12.2 million tonnes. This still reflects a moderate success for the bunker sector under the circumstances, given that cargo throughput was down by 8.5% over the same period. In total, 302,607 tonnes of gas oil, 11,732,038 tonnes of fuel oil, 22,715 tonnes of diesel oil and 110,232 tonnes of lubricating oil were bunkered. That resulted in total sales of 12,167,592 tonnes. The number of bunker deliveries fell slightly, from 21,864 to 20,748.

A port of Rotterdam spokesman said that the decline was “due to the credit crisis”.

The bunkering of gas oil rose last year in Rotterdam by about 20%, from 252,414 tonnes to 302,607 tonnes. Sales rose considerably at the end of 2009 ahead of the 0.1% sulphur limit for oceangoing vessels which berth for more than two hours, imposed by the European Union, which came into force on 1 January 2010.

Ownership shake-up as Aegean acquires Verbeke

Aegean Marine Petroleum Network announced at the beinning of January that it is to acquire ARA-based physical suppliers Verbeke Bunkering. The acquisition, which is the largest since Aegean went public three years ago, is scheduled to close by the end of the first quarter of 2010. According to reports in Lloyds List, the transaction price is in the region of $40 million. The acquisition was preceded by Aegean’s announcement in December of a $100 million credit facility from BNP Paribas, which Aegean president Nikolas Tavlarios said at the time would allow the company to take advantage of opportunities for consolidation. Aegean subequently announced the issue of a further 3.9 million shares.

Verbeke Bunkering covers the entire ARA region, including key ports surrounding the main ARA complex, including Ghent, Zeebruges, Flushing, Terneuzen, and Sluiskil. Sales volumes for the

World Bunkering Spring 2010

year ending 31 December 2009 are expected to be approximately 3.5 million tonnes. The company provides bunkering services in port to a diverse group of shipoperators as well as marine fuel traders, brokers and other users. Verbeke focuses on purchasing quality marine fuels from refineries and major oil producers, and providing same-day sales and delivery services to customers. Verbeke Bunkering operates a total of 18 bunkering vessels, of which nine are owned and nine are chartered-in. Two of the nine owned vessels are joint ventures in which Verbeke holds a minority stake. Aegean has agreed to purchase the nine owned bunkering vessels and assume the contracts for the nine vessels chartered-in by Verbeke. Aegean will assume the contract for a bunkering tanker newbuilding, of which Verbeke holds a 50% stake, scheduled to be delivered in 2010.

According to Mr Tavlarios, “Verbeke represents our largest acquisition to date, positioning Aegean well to significantly increase future sales volumes and strengthen the company’s global brand recognition. Based on its extensive operating history and strong reputation for high-quality service, Verbeke has built a leading market position in the ARA region. We intend to capitalise on the favourable growth prospects in the world’s second largest bunkering market and meet the demand for our comprehensive marine fuel services. In addition to establishing a strategic presence in this important region with considerable ship traffic, we expect to realise meaningful operating synergies with our Belgium-based subsidiary, Bunkers at Sea, which Aegean acquired in 2007”.

Verbeke will operate as a wholly-owned subsidiary of Aegean and maintain its headquarters located near Antwerp. Verbeke will continue to be led by its Chief Executive Officer, Tony Vertommen.

Commenting on the announcement, Mr. Vertommen said: “By joining Aegean’s premier global network, we expect to expand our opportunities for long-term growth and strengthen our leading position in our core markets.”

Aegean is also extending its reach in the UK, having committed its new 5,500 dwt bunker tanker Paxoi to its UK operation.

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REGIONAL focus – INDIA SUBCONTINENT

Building up bunkering in India

Basheer Ahmed Sayeed

Basheer Ahmed Sayeed, Chief Executive Officer of ChemoilAdani, gives his views on the country’s marine fuel market and reports on the first year of a joint venture aimed at expanding the Indian bunker sector

T

here is no doubt there are a number of major challenges that will need to be overcome for bunkering to shift from a “potential industry for growth” to a mature industry in India. But the signs are encouraging.

India has a coastline that stretches 7515km with 12 state-owned major ports, four intermediate ports and 183 minor ports. Mundra has emerged as the major port for shipping trade in India. For international shipoperators that pass through the Arabian Sea and Indian Ocean region, being able to regularly use Indian ports for bunkering would significantly increase the development of the industry in India and provide them with a strategic and accessible location to access bunker fuel.

The tax issue

While sales volumes are a long way off those of Singapore, Rotterdam or Fujairah, there is no doubt that tax free or low taxed bunker sales would mean very competitive bunker prices and subsequently many more vessels would be berthing at Indian ports. Encouragingly, there were comments at the recent Bunker Asia Conference in Singapore suggesting that the Indian government was beginning to take a keen interest in the development of the country’s bunker market, with talk of further tax exemptions for international vessels. Introducing tax reductions, developing the port infrastructure and offering consistently competitive fuel prices would provide the added boost to enable strong growth of bunkering in India.

World Bunkering Spring 2010

At the moment, the taxation situation varies from state to state, and is not managed centrally via government. Taxation – specifically value added tax – differs depending on the state, and the type and grade of bunker fuel. While higher tax rates almost certainly lead to higher bunker prices in Indian ports at the moment, the talk of tax exemptions by government is gaining some momentum.

However, while fuel prices are improving and getting more competitive against other international ports, these prices are still open to fluctuations on a daily basis.

Improving the infrastructure

Some of the recent developments that have been taking place include the introduction of more high capacity barges; 380 cSt fuel is now available at all major Indian ports; fuels complying with ISO8217:2005 and Marpol Annex VI; and the once conventional method of supply by truck is being replaced slowly by world-class infrastructure incorporating pipeline, barge and onshore storage capacity. The availability of support services for ship supplies, such as spares, also continues to get better.

ChemoilAdani

It has been just over 12 months since Chemoil joined forces with Adani Enterprises to form the joint venture ChemoilAdani, and already encouraging in-roads have been made by the new venture as the company leads the development of the Indian bunkering market.

53

This joint venture has been successful from the beginning because it leverages the right mix of competencies and world-class capabilities from both Chemoil and Adani. Chemoil with its expertise in sourcing and delivering marine fuel utilising its global integrated supply chain; and Adani with its in-depth local market knowledge, proficiency in developing port infrastructure and distribution capability.

After starting operations at Mundra port in Gujarat state in March last year, monthly sales volumes of 50,000 tonnes were quickly achieved. There was expansion in 2009 into other Gujarat ports such as Kandla, Sikka, Jamnager, and Navlakhiand Bedi. ChemoilAdani has also been supplying the port of Mumbai in the western state of Maharashtra for the past six months as well as Chennai port in the Tamil Nadu state.

There is further expansion for ChemoilAdani on the horizon for our Indian operations, with an increase of our onshore storage capacity at Mundra port to 120,000 metric tonnes and the addition of a 3,000 dwt double-hull bunker tanker in 2010.

The new terminal facility – part of an upgrade program to develop infrastructure and expand storage capacity by the Adani

54

Group at Mundra port – will be leased to ChemoilAdani. The terminal is expected to be completed and operational by January 2011. The new modern and fully automated terminal will operate as an exclusive bunkering facility.The total volume storage capacity of 120,000 tonnes will made up of 12 storage tanks – 4 x 15,000; 4 x 10,000; and 4 x 5,000. There will be a pumping capacity of up to 1000 mt/hr for bunkering, for loading cargo into vessels up to 2,000 mt/h, and with a receiving capacity of 2,000 mt/h. These will be faster pumping rates than are currently available at the existing 90,000 metric tonne terminal at Mundra port. This new facility will enable ChemoilAdani to be even more competitive in the bunkering marketplace with fuel pricing, as the company will be able to take advantage of faster terminal turnaround rates, improved reliability of fuel delivery and better manage its overall operational costs.

ChemoilAdani has quickly established itself as the largest supplier of marine fuels in Gujarat as well as the largest supplier operating in the Indian market today.

World Bunkering Spring 2010

REGIONAL focus: PAKISTAN

Waiting for 380

The downturn has provided some additional opportunities to Pakistan’s bunker suppliers but an inability to supply 380 cSt still holds the industry back, reports David Hughes

P

ressure on shipping lines struggling to fill their ships means that they are more likely now to bunker to capacity where prices are lower, says Orion Bunker’s founder partner Muhammad Yousuf. “That is good for us,” he told World Bunkering.

Orion has only been operating for six years but has become a major player with a fleet of six modern barges. The company operates in a small but competitive bunker scene with a number of suppliers active. One source puts total monthly volumes at Karachi at around 8,000 tonnes.

Pakistan’s bunker supply industry has grown significantly in recent years and is becoming more competitive and attractive to internationally trading vessels using, primarily, Pakistan’s rapidly growing principal port of Karachi. Bunkering also takes place at Bin Qasim but not during the May-August monsoon season. The new Gwadar port, some 280 miles west of Karachi, is now operational and should generate significant bunker business. Meanwhile, Karachi Port has expanded significantly over the past decade and is set for further major developments.

Recently a detailed feasibility study for deepening of the port’s main channel recommended dredging to 13.5 metres to allow vessels of up to 12 metres draught to use the the port at all tides.

Karachi International Container Terminal, operated by Hong Kongbased Hutchison Port Holdings (HPH) has expanded in phases over the years. Annual capacity has increased to 700,000 TEU while berths have been deepened to accept 14 metre draught containerships.

There is, however, widespread agreement that the market could be much bigger if suppliers could offer 380 cSt fuel. This has been a source of debate for years but in recent months it seemed deliveries were about to be offered. Oil refiner Bosicor Pakistan Limited (BPL) was reportedly planning to blend 380 cSt for the international bunker market. At present the country’s refineries produce only 180 cSt and MGO. Last year Faisal Marine Oil Services said it expected to start supplying 380 cSt in November but a company spokesman said that the

World Bunkering Spring 2010

plan had been delayed by difficulties obtaining a licence Another firm, Steadfast Bunkering Services, brought in a newbuilding bunker tanker, the Falcon, in the expectation of delivering 380 cSt. Orion’s Mr Yousuf confirmed to World Bunkering, however, that as of late January, no Pakistani companies were in a position to offer 380 cSt, contrary to some reports.

Meanwhile, his company is weathering the economic storm by being able to compete on price and service with the other main regional bunker ports. Mr Yousuf says the crisis has not changed his company’s attitude towards extending credit as it is always focused on reputable companies. He says: “You cannot open credit for just anybody.”

He claims that his company has been able to overcome another general problem facing the Pakistani bunker industry – periodic supply shortages. He says: “Orion Bunkers has exclusive access to an onshore storage facility, ensuring continuity of supplies even when there is a general shortage of bunkers in Pakistani ports.”

Asked whether low-sulphur bunkers were available in Pakistan he says that they are and that there is no problem meeting demand.

So far switching from single to double-hull barges has not become an issue. Although Orion is considering bringing in a double-hull at some stage, it has no definite plans to do so yet.

Among other players in the market, the Pakistan State Oil Company supplies the Pakistan Navy, Maritime Security Agency, Karachi Port Trust, PNSC, while Bosicor Pakistan Limited (BPL), which operates a coastal refinery about 30 miles from Karachi, also supplies bunkers.

Faisal was established in 1966 and supplies 180 cSt and MDO and MGO at Karachi and Bin Qasim. The company operates a fleet of six barges, including the recently acquired 1,500 dumb barge Fillgo VI. Faisal says it has plans to increase its fleet further.

Plimsol Bunkering Services (PBS) has also started supplying MDO and MGO to the international market using its fleet of six small barges.

55

Port focus: UAE

Competition intensifies

The global recession is being felt in Fujairah, as elsewhere, but that hasn’t deterred new players from entering the market, as David Hughes reports

A

year ago, the tone of presentations at the Fujairah Bunkering and Fuel Oil Forum (Fujcon) was optimistic despite the onset of the worldwide economic crisis.

One year on, that optimism by and large seems to have been borne out. The effects of the downturn in the economy were, however, still visible, and last year saw a subdued pace with few announcements of new projects and a degree of trimming of costs by operators.

blending facilities are also still being expanded.

Looking at how the Fujairah market has performed since the onset of the global recession, George Gaviotis, director of UAEbased Oil Marketing & Trading International says that volumes dropped initially, but have now returned to normal. “But,” he adds, “the major impact is on the margins, which have been in negative territory for a long time with no sign of improvement.”

Changing lift patterns

Tanker take remains high

At Fujcon the point was made strongly that the majority of the bunker stems in Fujairah are lifted by tankers which are the least hit by the world economy slowdown. The the theory was that while the shipping industry had to contend with fewer cargoes, crude oil had to flow out of the Middle East Gulf and therefore tankers had to take bunkers at Fujairah. That has been largely borne out by experience, though with the qualification that supplies have been increasing in the Strait of Hormuz, an alternative to Fujairah’s anchorage.

Fujairah ranks among the world’s top three world bunkering ports, with about 24 million tonnes a year being handled. The port’s expansion programme continued through the past year. An additional 840 metres of dedicated oil tanker quays with a draft of 18 metres are due to become operational in 2010. Storage and fuel

World Bunkering Spring 2010

The competitive situation has, however, changed. Mr Gaviotis says: “The addition of three bunker suppliers in the past year or so has impacted negatively on the margins.”

Until recently most reports from the region spoke of minimum demand for low-sulphur fuel but he notes: “In the last two to three months there has been an increase in demand for low sulphur MGO but demand is not great yet. We are currently contemplating adding low-sulphur MGO the list of products we supply and we shall do so slowly.”

So can any demand for low sulphur be met in the Middle East?

He is cautious. “MGO (at 500) is available but fuel oil is harder to blend down to low-sulphur levels without bringing the viscosity way down. Then the question is: who will pay for the quality give-away?”

Mr Gaviotis agrees with the suggestion that owners are tending to bunker to capacity where prices are lower. “Correct,” he says,

57

MARINE FUELS IN UAE

“and it will continue to be so till freight rates increase to the extent that time is the only concern. But also remember, bunkering to capacity means bigger credit exposure at current price levels, which few suppliers can afford to give.”

Tightening credit

On that topic, World Bunkering asked, has his company’s policy on credit altered in the current circumstances? He says: “It has absolutely changed. When owners are earning big money nobody worries about payment. Even traditional big shipowners have liquidity issues nowadays. Credit lines have shrunk while oil prices are increasing, making everybody worry as to how much is too much.”

As a result, he says, his company has become more cautious but it has not been practical to take other steps to secure or insure credit risk. “But we have reduced credit lines,” he says, “and are reviewing them more often. Potential insurance cover premiums have increased and in conjunction with diminishing margins it becomes uneconomical to insure the receivables.”

He notes one change in the market which is not good news for suppliers. He says: “The major change is the shifting of bunker grade from 180 cSt to 380 cSt and the reduction in the consumption of MGO. Modern ships burn primarily 380 and older ships burning 180 cSt are being scrapped, decreasing the demand for 180 cSt, which has been more profitable to supply.”

58

Mr Gaviotis sums up by saying: “Price is paramount. I see margins becoming hair thin in 2010. Let’s hope 2011 is better.”

The deciding factor

The emphasis on price is echoed by Mehran Ghobadian, BGK Bunkers’ sales and marketing director. BGK’s operation, which includes a Dubai office, is mainly aimed at making supplies in the Strait of Hormuz. He says: “Price is the deciding factor. I would say the main factor these days seems to be the cash flow of the buyers.

I have seen very reputable and cash-rich companies who continue to lift to maximum capacity when prices are good enough and on the other hand those who will lift the minimum required and more frequently in order to overcome cashflow problems. Most will try to lift just as much as they need for the voyage except a few who are more cost conscious rather than cashflow conscious.”

He says that increased credit risk is an issue but adds: “Making more and more credit checks and obtaining updates, seeking market feedback rather than listening to rumours, and approaching companies with strong financial backgrounds has led to a very good year for us without even one single bad debt.”

He notes: “As a fast growing supplier who is offering best quality product as well as service, our clients increased by almost 180% during 2009. This is mainly bunker-only call business off the Strait of Hormuz. There are no calling costs or additional/hidden charges to pay There is no congestion at the anchorage, which provides a

World Bunkering Spring 2010

PORT focus: UAE

Fujairah retains a strong bunkering business

World Bunkering Spring 2010

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BGK BUNKERS COVERS ALL NORTH PERSIAN GULF WITH NEW LOCATIONS Iraq

• Asaluyeh • Bandar Imam Khomeini • Mahshahr • Bandar Abbas • Larak B BGK Bunkers is now adding tthree new bunkering locations sserving the ports of Asaluyeh, Bandar Imam Khomeini (BIK) B aand Mahshahr at the north end of the Persian Gulf, providing a convenient service for vessels calling these ports.

Bandar-e Mahshahr Bandar Imam Khomeini

Kuwait

Iran

Persian Gulf Bandar Asaluyeh Bandar Abbas Jazireh-ye Hormuz

Strait of Hormuz

Jazireh-ye Larak

Saudi Arabia United Arab Emirates

Oman

These new locations complement the company’s existing services at Bandar Abbas and near Hormuz & Larak islands in the Straits of Hormuz.

Thanks to the company’s direct access to the Bandar Abbas refinery and dedicated physical resources BGK Bunkers can offer best in class service and excellent product at very competitive prices - probably the best in the Middle East.

sales@bgk-bunkers.com • www.bgk-bunkers.com

very safe area for vessels to manoeuvre and anchor in 50 metres of water only.”

“Our sales have increased significantly due to the above factors,” says Mr Ghobadian, “and we are well above 200,000 tonnes per month right now. By adding a newly acquired 5,000 tonner to our fleet we are heading for even higher figures in 2010.”

Looking ahead, Mr Ghobadian says: “I see very good potential in the region. I have already noticed signs of improvement. We at least are preparing ourselves for another successful year with a minimum 35% growth in sales.”

Adapting to the situation

Looking at the UAE market, Carsten Ladekjaer, director of International Bunkering (Middle East), says: “Generally I do not have the impression that there have been any remarkable changes in the Fujairah market within the last few months. In my view the biggest changes were felt right after the credit crunch set into the Middle East market during the last half of 2008 and into the first quarter of 2009. Since then most suppliers have adapted to the situation and trimmed their organisations and operations according to the new world.”

He notes: “Demand for low-sulphur fuel is still limited in our part of the world. This of course is primarily caused by the

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geographical distance to the SECA areas. Meanwhile, we do see sporadic inquiries and most of the time they can be met, since some of our suppliers do keep a limited stock available – naturally with noticeable price premiums. I am convinced that suppliers in the region will increase the outflow of low-sulphur fuel to meet demand as and when the need arises. However, there needs to be a higher level of demand before suppliers will go ‘full scale’ on low-sulphur fuel oil.”

Single hull ban

One development that could possibly boost deliveries in the Strait of Hormuz at Fujairah’s expense is the ban on single-hull tankers in UAE ports that was due to come into effect at the beginning of January. Fujairah’s harbour master, Tamer Masoud, was quoted as saying: “No single-hull ships will be allowed in the port or anchorage from January 1.”

According to the Bloomberg news agency, about three-quarters of all single-hulled VLCCs have called at Fujairah in the past year. It is thought that less than 100 single-hull VLCCs are still operational.

In the medium term these vessels will disappear from the scene and Fujairah will continue to benefit from its unique location. There are regional competitors but few can see Fujairah doing anything other than continue to dominate regional bunker sales.

World Bunkering Spring 2010

Russian update

News and views

Olga Bogacheva

Olga Bogacheva provides a round-up of the latest R

bunkering news from Russia

Competition Council begins work in Russia

The Russian Federal Antimonopoly Service (RFAS) created an Expert Council for developing competition in the oil and oil products market on 12 October 2009. Anatoliy Golomolzin, deputy chief of RFAS, became the head of the Council. The Council consists of representatives from the federal and regional authorities, oil and oil products operators, scientific organisations, unions and public organisations, and independent experts.

The first Council meeting was held on 9 December 2009. The main issue was the development of an open trade in oil products in the Russian Federation. Participants stated that the current market situation results from market monopolisation and non-transparent pricing.

The Russian oil and oil products market is an oligopoly. Verticallyintegrated oil companies (VIOCs) occupy the major share in all market segments: field production and oil processing, storage, wholesale, small-scale wholesale and retail trade. Processing facilities are inaccessible for independent market operators; their offer of oil and oil products is small.

Oil and oil product pricing in the domestic market is nontransparent because VIOCs apply special transfer prices among their group members. VIOCs may transfer profit generation into any market segment (processing – wholesale – small-scale wholesale – retailing) thus applying pricing pressure on independent market operators in any market segment.

It is well-recognised that oil companies have resisted open trade development during the last 10 years. This issue was constantly frozen at all stages, including ministerial level. However, efforts

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made by the government and RFAS brought some results; during January-October 2009 the amount of oil and oil products sold on the exchanges and via electronic trade reached 5,420,000 tonnes.

All meeting participants agreed on the necessity of open trade on the oil product market and positively estimated the influence of this mechanism on the market pricing process.

In 2010 the Expert Council will consider the rules of equal access to oil and oil products transport services, work out a set of measures to ensure the development of competition on the oil and oil product market, and continue to discuss other important issues.

PORT NEWS Lukoil and Rosmorport to develop marine ports and bunkering services

Lukoil and Rosmorport FGUP have signed an agreement to cooperate on developing and organising towage and bunkering services.

Lukoil and Rosmorport will perform technical and economic assessments for the development, reconstruction, modernisation and operation of transhipment complexes in Russian marine ports.

They will also look at developing other port and coastal facilities.

The companies will also cooperate on oil-spill prevention and clean-up, including building and operating specialised clean-up vessels for use beyond marine ports, oil and gas terminals, prevention and collection of accidental oil spills.

Rosmorport navigation pilots will provide preferential escort services to Lukoil vessels. Lukoil-Bunker will provide bunkering services to Rosmorport vessels in Russia and abroad under separate contracts.

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Russian update

“Lukoil considers waterborne transport as one of the most important instruments to ensure reliable supply of customers with oil and oil products. Its significance grows while new fields are developed and operated. Thus, our cooperation with Rosmorport is a long-term project to improve the safety of energy resources deliveries,” said Vagit Alekperov, Lukoil president.

IMO voluntary port audit completed

IMO experts completed a voluntary audit of Russian ports on 7 October 2009. Vitaliy Kluev, deputy director of State Policies in Marine and River Transport Department, Russian Ministry of Transport, said that the international experts’ opinion about the port industry was very positive. The media also quoted Hemming Hindborg, Denmark, who emphasised that he “couldn’t find this high preparation level” in port inspections he had carried out at ports in other countries.

Deep-water port for Kaliningrad Gulf?

City authorities are looking at transferring port activities out of Kaliningrad to the Balga peninsula. The idea emerged after Vladimir Putin, Russian prime minister, visited the Kaliningrad region in October 2009. Igor Levitin, Russian minister of transport, and a member of the governmental delegation, suggested that local stevedores consider this opportunity. City authorities claim the city’s environmental situation and its attractiveness as a tourist centre is affected by the current condition of the trade and fishery ports and the adjacent oil terminal, storage facilities and plants. Those facilities occupy a large area which is very attractive from a city development point of view.

The new port on the Balga Peninsula promises significant advantages: it will be designed to accommodate large vessels including ocean-going container carriers. Construction of several terminals is projected, including container and oil terminals. A technical design specification for construction is currently under way; detailed terminal specialisation and storage facilities are under consideration.

The estimated investment is 263 billion rubles, 75 billion of which will come from the national budget.

Ust-Luga oil handling terminal design launched

AK Transneft has begun the design process for facilities for unloading, storage and transhipment of oil products in Ust-Luga marine port (Leningrad region).

The facilities are supposed to be built on the eastern beach of Luga Bay in the Finnish Gulf, to the north of Habalovka River. The

World Bunkering Spring 2010

terminal will accept oil from BTS-2 pipeline, which has been under construction since July 2009. Total investment is estimated as 95 billion rubles.

The first stage of the oil terminal is expected to start operations at the end of 2012. Annual capacity at this stage may reach 30 million tonnes with further expansion to 38 million tonnes in December 2013. The terminal berth will be able to handle vessels of up to 100,000 dwt.

ORDERS & DELIVERIES Sovkomflot and TNK-BP consider joint construction of tanker fleet

Sovkomflot and TNK-BP have formed a joint working group to perform a feasibility study of construction of self-propelling tankers, barges and tow-boats at Russian shipping yards. The vessels would transport oil products on the Volga River. According to a TNK-BP media representative: “The working group agreed to consider various ways of construction of long length barges and tow-boats to work out an efficient programme of optimisation for the existing river transportation model, which may contribute to development of national ship-building”.

TNK-BP was founded in 2003 and is currently one of the world‘s largest private oil companies. The company’s production fields are located in West and East Siberia and Volga-Urals region. TNK-BP owns five refineries in Russia and Ukraine, a retail network of 1,400 petrol stations under BP and TNK brands.

Sovkomflot is a large shipping company, a world leader among oil and gas carriers and operates all over the world; it has representative offices, subsidiaries and crewing offices in Moscow, St Petersburg, Novorossiysk, Vladivostok, Odessa, Madrid, London and Limassol.

Ice-class tow-boat is launched in St Petersburg

Nevskaya Zastava, an ice-class tug designed by Engineering ShipBuilding Centre OAO was launched by the Almaz shipyard in St Petersburg. The tug is intended for collection of spilled oil products in the St Petersburg area, for icebreaking duties near Neva water intake facilities, for fire fighting, including fires on vessels with high freeboards, and for clearing channels through ice. The vessel, which cost some 387 million rubles, will be operated by PILARN, the state company for prevention of accidental oil spills. It has a length of 41m, width 11.6m, board height 5.2m and a total engine capacity of 3,600 W.

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Bunkering in the southern ports of Primorskiy Krai: Vostochny Vladivostok Nakhodka Slavyanka Zarubino

132, Verhne-Morskaya str.

Nakhodka 692917 Primorskiy Krai Russia Tel/Fax: +7 4236 629626 Tel/Fax: +7 4236 697060 Tel/Fax: +7 4236 645852 E-mail: tsetan@yandex.ru

Russian update

Russia builds for Haugland Tankers

Tatnefteproduct-Bunker to expand

Haugland Tankers, a subsdiary of Bergen Tankers, placed orders for two bunkering vessels with Nevsky shipbuilding and repair yard.

The first vessel, Oslo-Tank, a 850 dwt coastal bunkering tanker, was launched on 22 October 2009. Another vessel Bergen-Tank, is in the final stage of construction at Nevsky shipbuilding and repair yard.

The tankers were designed by Skipskonsulent AS design bureau (Bergen, Norway) to Bureau Veritas class and are to fly the Norwegian flag. The vessel is intended for transportation and bunkering of light and heavy oil products with flash point over 600C.

TNP Bunker (a member of Tatnefteproduct group) is looking to buy a tank barge during the winter navigation season 2009-10. The company is also considering expanding its existing oil storage facility and reconfiguring it for bunkering. The modernisation and repair of two bunkering vessels Vyatka17 and Sborschik-2 are also included in the company’s programme.

New tanker for Kaliningrad

The bunker tanker Tarnika has been supplying IFO 380 at Kaliningrad for Lukoil since October 2009. Tarnika provided bunkering services to seven tankers at the oil terminal during one month. Total delivery exceeded 1,000 tonnes of IFO 380 fuel.

COMPANY NEWS

Infotech Flex reports 2009 growth

St Petersburg-based equipment suppliers Infotech Flex says its preliminary results show good growth. Despite a shrinking bunker services market in 2009, sales of bunkering hoses grew by 2.5 times against 2008, and the number of new customers increased by 11%.

Igor Stepanenko, general director of Infotech Flex, said: “The financial crisis had a negative impact on world ports; bunkering services significantly shrank in Russia but supplies of high quality products increased. The major reason is the growing responsibility of bunkering companies for ecological and technological safety. They select more reliable and serviceable equipment.”

Transit to distribute SK diesel in Far East

Transit-DV Trading House has become the exclusive distributor of SK Energy’s diesel oil in the Far East of Russia. SK Energy, based in Korea, is a world leader in diesel oil production. It occupies about 50% of the world market of base oil. Transit-DV Trading House had already delivered a batch of SK oil to Russia for a company located in Kamchatka in July, 2009.

FESCO reduces fuel consumption

Far-East Marine Shipping Company (lead company of FESCO Transport Group) has successfully introduced a new fuel consumption monitoring system providing significant fuel savings. The new fuel consumption monitoring system was installed on the Krasnogvardeets, a cargo vessel trading to Magadan.

The monitoring system demonstrated that fuel consumption on that route can be reduced by 15%, to 22 tonnes/day, without changes in the schedule. New norms were applied to three other similar vessels providing liner services in the Far East in April.

Altogether 440 tonnes of fuel were saved during seven months, from April to October 2009, (sea and lay-days were taken into account) due to new timecharter norms acceptance. The company looks forward to expanding its positive experience with the monitoring technology to other FEMSC vessels.

Transit – OV extends diesel availability in the Far East

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GAZPROMNEFT MARINE BUNKER LTD The power of creation • H igh quality ISO 82172005 bunker fuel • F lexible prices • Q uality control from oil refinery plant to end user

• Main

sea ports of service: St. Petersburg, Primorsk, Ust-Luga, Kaliningrad, Murmansk, Vladivostok, Nakhodka, Posyet, Vostochniy, Novorossiysk • M ain river ports of service: Rostov-on-Don, Moscow, Yaroslavl, Azov, Kazan

Vasilyevskiy Island, 3rd line, 62A, St Petersburg, Russia, 199178 Tel: +7 (812) 449 4970 Fax: +7 (812) 449 4971 E-mail: bunkers@spb.gazprom-neft.ru

Russian update

Opportunities for change

Olga Bogacheva

Olga Bogacheva reports on developments in the bunker market in the Russian Far East

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here are no official statistics on bunkering fuel sales in the Russian Far East. This is the single market where rouble sales occupy a significant share, about 200,000 tonnes annually.

The Far East bunkering market may be divided into five major regions: Primorje, Habarovsky Kray, Sakhalin, Kamchatka, and the high seas where fishing vessels take bunkers.

Primorje

According to various sources there are some 30-40 bunkering companies operating in the six ports in the Primorje region. These are Vladivostok, Nahodka, Vostochny, Slavyanka, Posjet, and Zarubino. • Vladivostok

Following the introduction of restrictive custom tariffs for used cars and a Federal Customs order on declaration of scrap metal in Petropavlovsk-Kamchatsky port (Vladivostok used to tranship about half of all scrap metal exported from the region) the port lost 50% of its transhipment revenues. Though bunkering occupied only about 10% of the total Primorje market, this still represents a significant loss due to the reduction in the total amount of port calls. Small bunkering companies that provided the major share of bunkering services to the vessels carrying used cars are seriously suffering from reduced demand.

In January 2009, a Federal Customs order that fish products from international waters must go through Russian ports for declaration procedure came into force. This has caused a certain increase in port calls in Vladivostok, meaning that fishery demand for bunkering

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fuel has also increased (previously, fishing vessels often headed to Asian ports). But the financial position of many fishing companies remains unstable. Only two to three large fishing holdings (NBAMP, Rybkolhoz Ogni Vostoka, and Preobrazhenskaya Base of Trawler Fleet) can still be relied on to make timely payments. Despite this, fishing companies cover up to 30% of light fuel demand.

The container terminal at Vladivostok Marine Trading Port (VMTP) has put new facilities in operation despite the crisis. Many container carriers prefer to order bunker fuel in Russia. The average purchase is 50 tonnes of light fuel and 300 tonnes of heavy fuel per ship monthly, which totals up to 5,000 tonnes per month. Far East Shipping Company (FESCO), the largest Russian bunker customer in the Far East, operates steadily ordering 3,000-5,000 tonnes of fuel every 10 days.

The following petroleum storage bases and oil terminals offer bunkering services at Vladivostok port: Oil-loading terminal of Vladivostok Marine Trading Port. The terminal has an annual capacity of 0.5 million tonnes of oil products.

The complex consists of 150 metre berth and beach fuel tanks, capacity 22,000 tonnes. The berth depth allows provision of services to tankers with dead weight tonnage up to 10,000 tonnes and keel depth 8.5 m. The terminal provides bunkering services and oil products conditioning for domestic market and for export purposes.

Transhipment complex for light and heavy oil products owned by Alians-Primorsknefteproduct Vladivostok branch. Coastal petroleum storage base offers supplies to local gas stations, marine transhipment and light and heavy bunkering services. The total capacity of the storage tanks is 160,000 cu m. Three oil-loading piers can handle

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up to 20,000 tonne stems to tankers of up to 10 metres draft. Annual transhipment output exceeds 1.5 million tonnes of oil products.

There are also two other shore storage bases owned by Niko-Oil and Vladivostok Fishing Port.

• Nakhodka

Major cargoes at Nakhodka are timber, exported oil products, sea products and containers. The trading port managed by Evraz Group operates at 30% of its capacity. Container throughput is developing rapidly; a new liner service came into operation in June, and two other liner services are imminent.

Nakhodka has the largest oil terminal at the Far East, owned

by Rosneft-Nahodka-Nefteproduct. The total storage capacity is 400,000 tonnes. There are berths with depth up to 11.5 m for tankers with deadweight up to 50-100,000 tonnes. Monthly bunker sales are 50 ,000-80,000 tonnes. Bunkering is offered in the package with the main cargo handling services, Rosneftbunker being the single supplier.

The Transbunker oil terminal was built in 2004. It consists of storage tanks owned (18,000 cu m) and leased (5,000 cu m) by the company; 14 heated tanks supplied by rail; a berth for tankers and bunkering vessels, deadweight up to 10,000 tonnes; pump station, capacity 400 cu m/hour; an automatic blending plant, capacity 400 cu m/hour.

The facility is completely autonomous and equipped with modern discharge, filling and blending machines. The estimated annual terminal capacity is 500,000 tonnes of bunkering fuel.

There are also two other beach storage bases owned by trading and fishing ports.

Rosneft’s development program envisages construction of a new refinery near the end point of the Eastern Siberia–Pacific Ocean pipeline and an expansion of oil products storage capacity.

• Vostochny

Coal and container terminals are still the key infrastructure in Vostochny. New container handling lines are being put in operation, and turnover is growing. The coal terminal regularly increases its production programme. The average deadweight of vessels under service is 60,000-150,000 tonnes. Monthly bunker consumption is 30,000-50,000 tonnes.

World Bunkering Spring 2010

Three coastal fuel storage facilities are in operation, located at the Vostochny oil terminal, the coal terminal and the container terminal.

There are several major players on the Primorje market. Pavino delivers oil products produced by Gazpromneft Marine Bunker and several Siberian mini-refineries. Pavino owns three vessels and operates from all terminals in Primorje. The majority of clients are Japanese, Korean and Chinese shipping companies.

• Nahodkaportbunker

Offers oil products produced by Rosneftbunker. It also operates directly with shipowners under agent agreement. The company owns five vessels and operates from Rosneft-Nahodkanefteproduct terminal. The majority of clients are Singapore, Korean and Chinese brokers and shipping companies from Nahodka and Vladivostok ports.

Daxin Petroleum Pte , which purchased the Fortuna-1 tanker last summer, uses leased terminals. Clients are Japanese, Korean, Chinese shipping companies, Singapore, Korean, and Chinese brokers.

Transoilbunker Holding (OilTransbunker, Mortransbunker, Ufa Oil Group plus 5-6 other legal entities) owns five vessels and has contracted all Primorje terminals for transhipment. Clients include FESCO, shipping companies from Primorje, and fishing companies from Sakhalin and Kamchatka.

Nayada owns two vessels and has concluded storage contracts with all Primorje terminals. The majority of its clients are Singapore, Korean, Chinese brokers and shipping companies from Nahodka and Vladivostok ports.

Marinebusiness DV recently concluded direct contracts for the purchase of oil products with Gazpromneft Marine Bunker, AliansBunker and Rosneftbunker. The company owns two vessels and has signed long-term transhipment contracts with all Primorje terminals.

The majority of clients are Singapore, Korean, and Chinese brokers and shipping companies from Nahodka and Vladivostok ports.

Tranzit DV Trading House signed contracts with Gazpromneft Marine Bunker and Alians-Bunker. The company owns one port bunkering vessel and five tankers (not used for bunkering services) and a beach petroleum storage base in Slavjanka port (Vostokbunker).

The total sales of bunkering fuel in Primorje ports for hard currency reached 85,000 tonnes in September 2009.

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Habarovsky Kray

Major ports in the region are Vanino, Sovetskaya Gavan, and Muchke.

Stevedoring companies Vaninsky Marine Trading Port and Transbunker handled about 10 million tonnes of goods in Vanino port in 2008. Timber accounted for about 20% of turnover (previously 30-40%). The major share in freight turnover is occupied by oil products (Transbunker) reaching 3.5 million tonnes. Imported aluminium makes up slightly above one million tonnes, and alumina – the same quantity.

Major bunker customers are foreign vessels calling the port and vessels owned by Sakhalin shipping company operating on the Vanino–Holmsk route.

Bunkering companies are Transbunker, Marinebusiness, GavanBunker. Transbunker has approximately 70% of the market, Marinebusiness has 20%, and GavanBunker 10%. Usually fuel prices in this region are higher than in Primorje. This is caused by the small number of sellers and clear segmentation of customers. Each seller provides service within its sector, conflicts of interests are rare, and thus, price wars are excluded. The foreign vessels calling at Muchke port are an exception. This market sector emerged recently and each seller strives to occupy this niche.

Sakhalin

Holmsk and Korsakov ports The majority of fuel oil consumers are housing and public utility services, fishing companies and Sakhalin1-2-3 projects.

Kamchatka

Petrovsky and Kamchatsky ports Two of Russia’s vertically integrated oil companies, Rosneft and Gazpromneft, entered the Far East bunkering market at the end of 2007. Alexey Okhotnikov, bunker sales manager of Marinebusiness Ltd, commented on this progress: “Serious changes occurred on the market. Firstly, the availability of resources is different. Previously, bunkering companies purchased oil products ex-works through bids.

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Now you can buy fuel from VIOC directly from beach storage facilities. Thus, turnover has increased and business is simplified.

“Currency bunkering”, ie fuel selling and purchase for hard currency, also changed. Those rare companies dealing with VIOC in hard currency no longer have problems with VAT reimbursement because suppliers are responsible for it now. However, it is practically impossible for small companies to conclude direct contracts with Rosneft or Gazpromneft Marine Bunker. Only direct contracts with Alians are available for them. VAT reimbursement has became more complicated in the area recently because less taxes are collected in Russia.

Profitability has dropped during the last two years, and the market has become more competitive. End customers wishing to cut expenses have introduced bidding for the purchase of oil products.

Large foreign brokers have concluded direct contracts with VIOCs and don’t need local services any more.

Before 2009 “currency bunkering fuel” was supplied under terms which stipulated 30 days credit. At present, respite for payment is feasible only for large bunkering companies and only for well-known clients. Generally sales with 14 days credit are considered reasonable now. Companies operating vessels on regular services prefer inexpensive fuel with a short payment delay. Others, especially the trawler fleet, have no other choice than to agree to higher prices if 30-45 days credit is critical for them. Probably the real cause is the crisis, shortage of working capital and cheap credits.

Availability of resources is also reduced. Before VIOCs appeared in the market independent bunkering companies could buy oil products from almost any refinery. Now only Alians is ready to supply small companies. Selling procedures at Rosneft and Gazprom are very complicated and bureaucratized. Thus, demand for production of independent Siberian refineries offering fuel at almost 300 rub/t discount against VIOC’s prices significantly grew. Alexey Okhotnikov claimed that these manufacturers cover the local demand for lowsulphur fuel oil. Consumption of this fuel is not high in the Far East.

Japanese companies buy about 2,000-3,000 tonnes monthly.

World Bunkering Spring 2010

preview

Reaching out

Three very different events offer delegates the chance to catch up with the latest developments in the oil and bunkering industries – and with each other

IP Week

London’s IP Week 2010 will bring together oil and gas experts to discuss the impact of the financial downturn on the industry, the twin challenges of economics and environment and the positive advances that have been made with technology, innovation and future leadership.

A range of events – not least the IBIA annual dinner – offers the opportunity to attend exhibitions and seminars, catch up with old contacts and make new ones throughout the week.

The week begins with a one-day conference on “Fuelling the economy”, held at One Great George Street, Westminster. This year’s conference will explore the impact of the economic downturn, but will also look at the future for the sector, the relationship between national and international oil companies and the future investment in people. An opening night drinks reception will be held at the House of Commons from 5-7 pm, but by that time, many of

the bunker industry attendees will be heading for IBIA’s own Annual Dinner at the Hilton on Park Lane.

Tuesday’s events include a closer look at some of the fastest developing markets and regions in the oil sector. Three sessions running simultaneously between 8pm and 12pm offer delegates a choice of “Russia and the CIS – an update,” “Africa explored”, and “Focus on the Middle East”. All three events take place at One Great George Street. These are followed by the main networking event of the week – for the non-bunkering sector, at least – the IP Week Lunch, held at the Dorchester. The afternoon offers a choice of two sessions looking to the future: “Looking beyond the downturn” at the Dorchester and “Assuring sustainability through effective asset management” at One Great George Street.

IP Week officially concludes on Wednesday with the Energy Price conference and an update on the upstream sector, both all-day events held at One Great George Street.

The IBIA dinner is one of the highlights of IP week

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Stockholm

IBC Stockholm

Oil Products Forum

As usual, the IBC conference offers two days of presentations and discussion on the most important issues in the bunker industry, presented by leading figures in the field. This year’s event, titled “Mission (Im)Possible� is focused on fuelling marine transportation into the future and on legislation and regulations challenging the bunker industry. How is legislation impacting marine transportation?

What are the changes, and what is driving them? And last, but not least, what is the most cost effective way going forward?

More than 200 people from 125 companies in 23 countries participated at IBC 2009. With a strong attendance anticipated also in 2010, the conference provides an ideal networking opportunity for businesses and organisations working within the bunker sector and beyond.

The Oil Products Forum (OPF 2010) is being launched alongside the 18th Annual Middle East Petroleum and Gas Conference (MPGC 2010), during Middle East Oil and Gas Week. The event looks at market realities and future trends for the full spectrum of oil products, with specific track focus on gasoline, diesel, fuel oil and kero-jet.

OPF 2010 will provide an overview of key product supply, demand, pricing and storage trends in the global and Middle East fuels market, with the objective of evaluating the commercial opportunities as a result of shifting product balances in gasoline, diesel, fuel oil and kero-jet. Discussion will cover the possible impact of second generation biofuels on the products market, and address the conflicting regulatory environment in advanced global markets in the EU and the US. This event is expected to draw producers, refiners and traders, as well as those setting policies for fuel mix, alternate and clean fuels.

It should be of interest to supporting organisations specialising in financing, storage, and marine transportation.

Kuwait

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legal news

Legal eagle

Douglas Lindsay reports from the Ship Arrest Conference

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ll of a sudden the ship arrest conference is fashionable again. After a few years where the Informa Lloyd’s Ship Arrest conference became a modest and clubby affair, this year saw 50-odd delegates from many countries and many different parts of the shipping industry convene for a close look at the current state of ship arrest around the world at the Informa Lloyd’s Ship arrest conference on 7-8 December. Given the current state of shipping markets there seems little doubt that people expect more, perhaps much more, such activity. Once again 2010 is expected to be a very rough year indeed.

The demise of Rule B attachments was a major topic, and it was noted that Rule B had by no means gone away. But Rule B remains a dynamic and fast-moving area in New York and there will be many more surprises before it settles down again. As addressed by Michael Frevola of Holland & Knight’s New York office in his presentation, The Federal Court of Appeals in New York, in the Jaldhi decision, held that it must follow New York law but failed to address the most recent New York State Appeals Court decision on the issue. How this issue plays out in subsequent cases remains to be seen.

As Rule B recedes for the moment, a new US judgment has appeared with the capacity to make life very difficult for debtors in New York, whether or not they have actual property there. Brought to the conference’s attention by Michael Frevola, this is the ‘Koehler’ judgement enforcement decision by the New York Court of Appeals, which provides that a garnishee bank (or other entity, such as a party owing money to the judgment-debtor) located in New York can be ordered to turn over property of a debtor with a US presence, even when that property is not located in the US. This has enormous potential, and is not limited to marine cases. Enforcement of arbitration awards elsewhere, when they can be converted to US enforcement, are an obvious example.

The conference provided somewhat of a world tour of arrest jurisdictions, some good and some less so. Gibraltar, highlighted

World Bunkering Spring 2010

by Christian Hernandez of Isolas, is as accommodating, quick and effective as ever, but much the same can be said of most common law jurisdictions. Holland, introduced again by Haco van der Houven van Oordt, of now renamed AKD, remains a helpful place to arrest and sell ships even if the auction process is strange to common law practitioners. South Africa’s associated ship provisions, introduced

by Tony Norton of Garlicke & Bousfield, are as helpful as ever and it appears the country is a busy place for ship arrest and sale. Courtesy of its geographic location and helpful laws, it seems likely to remain so. Then there is a descending order of convenience around the world. France remains good for the arrest, at least from Monday to Friday, but the follow-up can be slow. Scandinavia varies, with Finland somewhat more difficult. China, as highlighted by Kevin Cooper of Ince & Co, is more modern than might be expected and not bad but can be uncertain, and as for Mexico, introduced by Omar Olvera Monroy, it sounds like a place to be kept clear of – in ship arrest terms, anyway. The UK’s freezing orders were discussed by David Semark of Quadrant Chambers, and for those of us who have used them in the past, the range of complications sounded more formidable than might have seemed at the time. But where there is a genuine fear that assets may be disposed of or moved out of the country, the remedy can be quick and effective. By no means least in the packed two-day session, Bob Toney of National Maritime Services looked at the practical issues around ship arrest – managing ship and crew affairs, maintaining the condition and value of assets, insurance cover etc. And the factors a foreclosing bank has to consider: flag, ownership, value, is the arrest worth it, other claims (remembering that not all jurisdictions rank the mortgage first) the general suitability of any jurisdiction for the arresting party’s purposes. Which was what the conference was about and illuminated so well.

This article first appeared in the Maritime Advocate Online.

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Equipment and services

Equipment and services

A round-up of news for the bunker industry – what’s new, what’s useful, what’s changed?

Monitoring system keeps track of emissions

While carbon credits and emission trading schemes (ETS) remain a source of dissension, one issue among the many that have yet to be solved is the question of accurately calculating emissions. One speaker at the recent International Chamber of Shipping conference suggested that carbon credits might be measured according to the amount of fuel purchased. While this solution would be simple to apply, it would ignore the effects of emission reduction technology such as scrubbers. However, US-based W R Systems is developing an emissions monitoring system that will allow vessels worldwide to continuously monitor pollutants and readily report findings to regulatory agencies and inspectors. If a carbon trading system is introduced, a system of this kind could be a key part of the scheme’s success. In addition, it could play an important role in helping ships prove that they comply with increasingly strict restrictions within ECAs and areas such as the southern US, where stricter emission limits apply.

The CEMS analyses and records nitrogen oxides (NOx), sulphur oxides (SOx), and carbon dioxide (CO2), as well as particulate matter (PM). GPS interface data tracks actual vessel position to support regulatory requirements in ECA zones. A successful land test of the CEMS system was carried out in August 2009, with an at-sea analysis of the CEMS on a Maersk vessel scheduled for September (results not available at time of writing). Certification of the system by the American Bureau of Shipping (ABS) is projected for February 2010, with product release expected in spring 2010.

According to W R Systems, CEMS is the first technology integration of its kind, providing automated analysis and data recordings from multiple smokestacks and boilers. By contrast, current technology for emissions monitoring compliance ranges from annual engine inspections to the reading of smokestacks and boilers, one at a time, using a portable device bolted to the source for a single-time measurement.

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“CEMS is the only system on the market that can continuously monitor and analyse the combination of multiple smokestack emissions,” says Dave Edwards, senior vice-president and director of W R Systems’ Engineering Services Division. “It can provide real-time and historical data for the length of a voyage and can provide information needed to ensure vessel emissions are within compliance when ships are entering and leaving ECA zones. Its data points can also assist with the management of fuel consumption and changeover operations from heavy fuel oil to low-sulphur fuel oil to support emissions reductions and environmental initiatives.

“With the CEMS, a vessel manager, in minutes, can provide an inspector or port regulatory authority with an already formatted emissions report that gives real-time, GPS-stamped data,” Edwards says. “Development of the CEMS has been market driven. We’re providing the maritime industry with a highly accurate, very reliable, and cost-effective solution to the challenges coming from new regulations that begin [in the US] on 1 July 2010.”

LR highlights fuel switch safety

Lloyd’s Register has issued a guidance note on maintaining boiler safety and availability when using low-sulphur fuels, in particular gas oil fuels. The note warns that: • Boiler and fuel system manufacturers should be consulted for fuel switching guidance and to confirm that the boiler, combustion control systems and associated fuel system components, such as pumps, are suitable for the intended types of fuel.

• The furnace purge process must be functioning correctly. It is essential that the whole of the furnace space is fully purged before relighting any fires.

• Burners, in general, and tips, in particular, must be appropriate to each type of fuel to be used.

• The spark igniters (or equivalent) must be correctly functioning and positioned so as to readily ignite the fuel spray on start up.

World Bunkering Spring 2010

• All boiler flame detection and related safety systems must be

•

•

•

•

• •

operating correctly. In the case of flame detectors, they must be correctly positioned to pick out the particular flame pattern which is encountered with the types of fuel to be used.

Manual and automated combustion control system functions should be checked as necessary to ensure they are operating correctly and reliably.

Due to their searching nature, the use of gas oil fuels in systems which have generally previously operated with HFO can result in seepage of fuel from pipe flanges, equipment seams and other fittings.

To ensure the minimum quantity of carbon deposition material within the combustion and uptake spaces, soot blowers should be operated at the latest possible opportunity before entry into coastal and port waters.

The boilers, burner and fuel oil system, including the relevant automatic controls, should be reviewed by means of a HAZOP workshop, through which the action points for the operators and manufacturers can be identified.

Oil fuel burning arrangements must be in accordance with the Rules of the relevant classification society.

All modifications to main and auxiliary boilers and associated fuel supply and control systems must be appraised by the vessel’s classification society in order to ensure that class is maintained.

New H2S Analyser

SetaAnalytics has developed a new unique, advanced technology, H2S analyser to determine the potential amount of entrained hydrogen sulphide (H2S) that could be released by a fuel. The H2S Analyser fully complies with the IP 570 method and has also been designed for use with fuels and associated feedstocks.

The H2S Analyser uses advanced integrated analytical sensor technology which removes operator subjectivity and gives reliable, rapid and precise measurements. The instrument offers a cost effective solution for H2S measurement involving no expensive chemicals or the need for analytical test preparations by a trained laboratory technician. Its fast repeat measurement capability offers a much improved means of assessing required remediation treatment of feedstock components and off-spec fuel products. Existing tests take up to two to three hours and require a trained chemist to perform them.

In addition, the new analyser is unique in that it measures the H2S in the fuel and hence is a much better indicator of the potential release of H2S in a specific fuel. Alternative vapour space measurements do not quantify the risk.

Parlevliet & Van der Plas B.V. to test towing kite

Parlevliet & Van der Plas B.V., one of the largest European fishing companies, has purchased one of SkySails towing kite systems, to be installed on the ROS-171 trawler Maartje Theadora. “We are looking forward to significant fuel savings by using the SkySails system, particularly during extended transfer runs to the African coast and in the South Pacific, not to mention the potential savings during actual fishing operations,” says ceo Diederik Parlevliet, “while at the same time enabling us to reduce enormous amounts of CO2 emissions and make a big contribution to safeguarding the climate.”

At 141 metres in length, Maartje Theadora is Germany’s largest fishing vessel and is operated by the Sassnitz-based Westbank Hochseefischerei GmbH, a member of the Parlevliet & Van der Plas Group. The ship has two MaK main engines that produce a total of 8,640 kW of power. The vessel will be fitted with a 160m² SkySails propulsion system like those already in use on cargo ships.

Parlevliet & Van der Plas and the systems manufacturer SkySails will be evaluating if and in what way the wind propulsion system needs to be modified for use on fishing vessels as part of a pilot project funded by the European Fisheries Fund (EFF) and the German state of Mecklenburg-Western Pomerania.

Supplier award for Lintec

Lintec Testing Services has been recognised as Supplier of the Year 2009 by Incentra a/l, the Oslo-headquartered shipowners’ procurement organisation whose members include the owners and operators of approximately 670 ships and offshore rigs, plus 130 confirmed newbuildings.

Lintec General Manager Geoff Jones says: “We are very proud to have achieved the highest score in the Incentra supplier evaluation, and it is gratifying to see that the high level of service we offer is recognised by Incentra members. These, after all, are the people who really matter, who see at first hand how well our bunker fuel analysis service operates.”

Production of low-sulphur fuel will be a priority

World Bunkering Spring 2010

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Company News

Rosneft

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he bunkering business of Rosneft, the largest oil company in Russia, incorporates two subsidiary companies – RN Bunker and Rosneft Marine – integrated as part of the parent company structure. Rosneft coordinates fuel deliveries for bunkering operations from the company refineries and offers transhipment, storage, production and storage capacity at the company’s own terminals in Nakhodka, Tuapse and Arkhangelsk. RN Bunker ensures logistics and manufacture (blending) of bunker fuel, rents and charters the bunkering tanker vessels, performs trading operations in the domestic market and arranges fuel deliveries to foreign shipowners. The company operates in strict compliance with all bunkering regulations and rules; the products delivered match ISO 8217:2005 standard. Opening of the company representative offices in Nakhodka, Arkhangelsk, Tuapse and St. Petersburg and, later, in other cities will facilitate rapid physical deliveries to the customers onboard, ensuring the fuel quality control and a personal presence during sampling and measurements.

Rosneft Marine is the company established for the purpose of Rosneft bunkering business development abroad. The company’s areas of activity include offshore bunkering in the Baltic and Mediterranean Seas and in the Far East, as well as fuel deliveries to the fishing fleet both in the Pacific and the Atlantic. Rosneft started the bunkering business development programme in 2007. Currently the company delivers a wide range of petroleum products (IFO-380 cSt HS/LS, IFO-180 cSt, MGO, MDO), owns and operates 12 petroleum products delivery and reception terminals and 36 bunkering tankers. The company ensures its presence in the key regions in the three oceans and nine seas. Monthly volume of deliveries exceeds 100,000-130,000 tonnes.

World Bunkering Spring 2010

Rosneft applies the highest standards of governance to all its bunkering services, and implements the accounting systems for the actual fuel movement, storage and issue to the bunkering tankers, providing monitoring across the entire logistics operation, and thus ensuring the rapid processing of orders from inquiry to BDR. The company business development strategy assumes building the company’s own tanker fleet. Feasibility studies for 2,500 to 7,000 dwt tanker designs are underway. All vessels will be built in compliance with MG MARPOL 73/78 requirements, ISGOTT regulations as well as the international and national guidelines and rules.

Vertical dispatch and coordination of all infrastructural elements of Rosneft bunkering business provides the synergy that the company will use to optimise business processes and achieve the following set goals: • To be integrated into the global bunkering market, soon to exceed 400 million metric tonnes per year (mmty); • To increase the attractiveness of the Russian ports; • To ensure a stable and regular products sales market, independent of seasonal priorities; • To increase sales efficiency through retail.

Rosneft plans to constantly increase the volumes of bunkering sales and to expand and maintain its marine and river bunkering presence to 25-33% in the various regions, as well as to reinforce its position in the global market. These projections are based on the rapid growth of the Russian transport infrastructure, with the upgrade of port facilities and construction of new terminals resulting in the increase of general and transit cargo transhipment and the number of port calls in the Russian ports. Another factor, in addition to expansion of cargo turnover through the Russian ports, that would influence the bunkering volumes, would be the high quality of fuel and services, replacement of the outdated bunkering fleet and many other things to make the Russian market more attractive.

The strategy of Rosneft bunkering business development assumes the increase of bunkering sales to 3-5 mmty by 2010, and by 2020, when the overall Russian bunkering market achieves 50-60 mmty, the company plans to sell the order of 15-16 mmt of fuel.

RN-Bunker LTD 115054, Dubininskaya Str. 31 A Moscow, Russia Tel: +7 (495) 777 4601 Fax: +7 (495) 231 4010 E-mail: rnbunker@rosneft.ru Website: www.rosneft.com Additional address: 117152, Zagorodnoe Route, bld.1, office 1001 Tel: +7 (495) 755 5243

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Company News

LUKOIL BENELUX B.V. set to sustain strong presence in ARA

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UKOIL Benelux B.V. is a prominent and reliable physical supplier of bunker fuels in the ARA region (Amsterdam-RotterdamAntwerp). We are supported by the logistic and financial strengths of the parent company LITASCO S.A. in Geneva, Switzerland. LUKOIL Benelux B.V. is part of the Russian oil major LUKOIL, which also has wide-scale operations outside of Russia.

Our clientele varies from the well-known large and medium shipping lines to other physical suppliers and the smaller niche companies from different sectors. In the last couple of years LUKOIL Benelux B.V. has had a market share of 10-15% in our home market of the Rotterdam and Amsterdam ports. Since September 2009 LUKOIL Benelux B.V. has supplied bunker fuels to the Belgian port of Antwerp from the refinery TRN (Total Raffinaderij Nederland) in Flushing, where the LUKOIL Group purchased a 45% stake this year.

We are also planning to receive a bunker licence for our operations in Antwerp at the beginning of 2010. In addition to the ARA region, we are also active in the Baltic Sea, Black Sea and Mediterranean Sea. Our company is planning to get on firm footing with its bunker supplies in a number of the European ports. In the last 2 years LUKOIL Benelux B.V. has also been successfully targeting the Russian northern ports of St. Petersburg, Kaliningrad, Vysotsk, Primorsk and Murmansk, supplying bunker fuels to a wide variety of shipping companies.

Since 2005 LUKOIL Benelux B.V. and our partner Burando have been jointly operating Service Terminal Rotterdam, which enables LUKOIL Benelux B.V. to store and blend fuel oils to necessary specifications. Currently new storage tanks are being constructed at STR, which will significantly increase total storage capacity of the terminal.

The new tanks are expected to become operational in the first half of 2011. Having our own terminal and purchasing almost all of our bunker fuels from our parent company LITASCO gives us a competitive advantage in the saturated market with slack demand. Due to this competitive advantage LUKOIL Benelux B.V. is in a position to design and implement flexible delivery strategies.

LUKOIL Benelux B.V. expects to continue to flexibly develop its bunkering activities despite the recent financial crisis. We are closely monitoring the situation in the market and are ready to implement necessary changes to sustain the growth of our business. As an example, our Amsterdam office has been focusing on the specific niche markets such as the fishing industry and deliveries by trucks all over the Netherlands.

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As a supplier of a wide range of grades, we receive bunker enquiries and provide quotations for the products IFO 700, 600, 500, 380, 240, 180, 120, 80, 60, 40, 30, 20 cst, MDO DMB and MGO. We can also make other products available upon your request. In order to ensure quick and timely deliveries of our products to sea-going vessels or to other physical suppliers, we currently have a fleet of 7 time chartered barges with deadweight ranging from about 686 MT to 6,310 MT. They include several new double-hull barges with greater bunkering capabilities, provided for us by FTS Hofftrans, the barge operating company of our partner Burando. Should we require a greater capacity, we have the option of hiring other barges for spot deliveries in the range from 500 MT up to 9,200 MT with alternative reliable transport companies in the ports of Rotterdam and Amsterdam.

Our team of bunker traders and operators has all it takes to become and remain your reliable partner: experience, expertise and thorough knowledge of the bunker markets. They are friendly and available for your enquiries 24 hours per any day. LUKOIL Benelux B.V. will gladly look into your enquiries for the regions where we have been actively operating, as well as for any other regions in the world.

We look forward to your bunker enquiries and hope to do business with you soon.

Benelux B.V. Main office (Rotterdam area) Office address: De Linie 1, Capelle aan den IJssel, NL-2905 AX, The Netherlands Post address: PO Box 377, Capelle aan den IJssel, NL-2900 AJ, The Netherlands Tel: +31 10 264 27 00 E-mail: Bunkers@lukoil.nl Amsterdam office Office/Post address: Le Mairekade 77, Amsterdam, NL-1013 CB, The Netherlands Tel: +31 20 684 42 99 E-mail: Bunkers@lukoil.nl

World Bunkering Spring 2010

Company News

Portugal fuel stop

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

Petrogal provides its customers with a professional bunkers team, high-quality fuels and services, and the highest safety standards in all bunkers activity.

The company’s bunkering products fulfil the ISO 8217: 2005 specification in all grades. To help achieve customers’ targets on the environment, the company can supply low-sulphur fuels at several ports. The port of Lisbon is the main port for low-sulphur fuel.

Petrogal optimises the logistics resources and storage to provide high-quality services and products. We can also supply a large quantity of marine distillates.

Petrogal it is the main bunker supplier in Portugal, providing a bunker service using two barges with capacities of 2,300 tonnes and 3,000 tonnes each.

A 2,300 dwt double-hull barge, Onyx began operations in 2009 to support the company’s business in Lisbon port.

Galp Marine is well aware of the importance of safety and protecting the environment. The 3,000 dwt double-hull barge is equipped with anti-pollution measurers and is covered by European Maritime Safety Agency regulations in the Atlantic Ocean and Mediterranean Sea. Aware that the customer’s main concern is product cost, Petrogal offers competitive prices without compromising product or service quality. Visiting Lisbon and being supplied by Petrogal Bunkering will always be a good decision for customers used to working with a professional team.

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

We have a leading position in the Portuguese market, as we own the four largest Portuguese tank farms and 80% of national crude oil products storage.

Our two refineries in Portugal together represent 100% and 20% of Portuguese and Iberian refining capacity, respectively, and collectively account for 88% of Portugal’s annual domestic petroleum product requirements. We have invested approximately €240 million in the last five years to upgrade and improve the efficiency of our refineries (€158 million for Sines and €82 million for Oporto).

LUKOIL BULGARIA BUNKER COMPANY

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UKOIL Bulgaria Bunker LTD was established in 2008 and within only one year became the major physical bunker supplier in Bulgaria, providing a full range of bunker fuels. The company supplies bunkers in Varna, Bourgas and in the main Danube river ports – Rousse, Vidin and Lom. We have two of our own bunkering tankers and another three under our operation, one of which is used as a bunker barge on Danube River.

The company’s team, well-educated and professionally experienced, is ready to provide you with high quality services in the all above mentioned ports. We offer all grades of products, including gas oil and IFO with viscosity from 30 cSt up to 380 cSt. Although a new player, LUKOIL Bulgaria Bunker has became a leader in bunker sales in Bulgaria, providing a high quality and flexible service.

We are reliable.

We are “Lukoil” team.

LUKOIL Bulgaria Bunker LTD Head office Bunker inquiries 42 Todor Alexandrov Blvd.

Tel: +359 2 9174383 1303 Sofia Tel: +359 2 9174315 Tel: +359 2 9174121 E-mail: rdimitrova@lukoil-bunker.bg Fax: +359 2 9174395 dkalinov@lukoil-bunker.bg sales@lukoil-bunker.bg Bourgas office 6 Khan Krum Str. 8000 Bourgas Tel: +359 56 900700 Fax: +359 56 897709

For further information contact: Galp Energia SA Tel: +3512 1724 0637/654 Fax: +3512 1724 2957 E-mail: bunkers@galpenergia.com Website: www.galpenergia.com

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Company News

NEFTEHIM Ltd

Tsetan Company Limited

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EFTEHIM Ltd was founded in November 2000 in the city of Vyborg, as an oil trading company, and within a very short period of time we got our first orders of oil trading business from the north-west region of Russia.

In 2002 we extended our activities to provide bunkering services in the port of St. Petersburg and the river Neva.

Because of the excellent business relations with the major Russian oil companies, as well as the independent oil producers, we have the opportunity to be very flexible in the market and always offer the best prices to our clients.

Thanks to these wide and stable relations we always have the full range of residual products, our marine gas oil is in compliance with the latest international industry standards.

Our company has access to a fleet of five different barging companies, and it is a common occurrence that within four hours after receiving an urgent telephone request we are able to supply bunker fuel to the vessel.

We have taken reasonable steps for our company’s growth. Now we have our own bunker-barge Severanka that has nine separate cargo tanks with a total capacity of 1,600 tons (including MGO 230 tons) that enables us to supply different types of fuel. Moreover Severanka has blending equipment on board to provide various fuel products.

Quality control is a question of great importance to us, so before the bunker delivery to the vessel we often engage a surveyor to test our fuel.

In choosing our company you will always find outstanding levels of service, quality and efficiency.

NEFTEHIM Ltd. Office 602 Bolshoy Avenue V.O. 80 St.Petersburg 199900 Russia Tel: +7(812) 332 2363 Tel/Fax: +7(812) 332 2364 E-mail: main@nh-bunkering.ru Website: www.nh-bunkering.ru

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setan Company Limited provides customers with services in bunkering, transportation and trade of oil products. A young and dynamically growing company, Tsetan entered the bunkering market in 2003. At the early stage of its activity Tsetan operated one bunkering barge in the port of Nakhodka. At present the company owns three bunkering tankers, the first of which was purchased in 2003 and the other two in 2005 and 2008 respectively.

Recently the a newly purchased Japanese made double-hull bunkering vessel Tsetan has been put into service, which will increase transportation and bunkering services in the ports of South Primorye. The total deadweight of Tsetan’s fleet is 5,000 tonnes, and the company’s annual cargo turnover is 50,000 tonnes. The scope of the bunkering services provided by the company covers all the ports of Southern Primorye, namely Nakhodka, Vostochny, Vladivostok, Slavyanka, Zarubino.

The main supplier of the oil products for the company is Khabarovsk Oil Refinery (Khabarovskiy NPZ). The oil products are transported in cisterns by rail and then transhipped via the oil transhipments terminals of Nakhodka, Vostochny and Vladivostok.

The company aims to maintain the high profile, international image of a professional supplier of quality bunker fuel to its clients.

We value our clients and take a good care of their bunkering needs.

We always welcome new clients and are permanently ready to offer our services.

Tsetan Company Limited.

132, Verhne-Morskaya str.

Nakhodka 692917 Primorskiy Krai Russia Tel/Fax: +7 4236 629626 Tel/Fax: +7 4236 697060 Tel/Fax: +7 4236 645852 E-mail: tsetan@yandex.ru

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World Bunkering Spring 2010

Company News

Gazpromneft Marine Bunker

cea Co. ltd

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A

stablished in 2007, Gazpromneft Marine Bunker, a bunker subsidiary of JSC Gazprom Neft, executes the supply of oil products for vessels to the ports of Russia. The company is one of the leading suppliers in the Russian bunker market with an expected turnover of almost 1,000,000 mt by the end of 2008.

The company provides a guaranteed, efficient, all year round supply, with high quality ISO8217-2005 compliant fuels including marine fuels and distillates.

Gazpromneft Marine Bunker’s strategy focuses on operations in the Russian North-West region, the Far East, the Black Sea region and the Russian Rivers.

Gazprom Neft’s main oil refineries are situated in the Moscow, Yaroslavl and Omsk areas. This range of locations makes it possible to cover nearly all the ports in Russia. Nowadays, the company operates in the major Russian ports of St. Petersburg, Primorsk, Kaliningrad, Murmansk, Vladivostok, Nakhodka, Novorossiysk and Rostov.

The company is now investing heavily in building a developed infrastructure including terminals in the main Russian ports and a bunkering fleet in order to form an advanced diversified proprietary network of distribution and logistics. The highly integrated logistic network “from the refinery to the bunker tanks” will lead to cost minimisation and a much faster service in general.

One of the unique selling proposals of the Company is the permanent availability of low-sulphur products, which are received directly from the Omsk refinery. This factor is of crucial importance especially for the North West region, with main ports in St. Petersburg and Kaliningrad, where the content of sulphur in the oil is highly restricted by MARPOL VI legislation. The Omsk refinery is one of the few production sites in Russia that can produce fuels with low-sulphur content.

The well-organized proprietary logistic network makes it possible to conclude and support long-term wide scale contracts directly with the shipowners and the main world broker companies focusing on flexible pricing system. Gazpromneft Marine Bunker has an excellent two-year experience of furnishing cruise vessel contracts with Royal Caribbean International and Carnival Cruise Lines and we are looking forward to increasing our selling volumes for the cruise vessels in future navigation periods.

Gazpromneft Marine Bunker is a subsidiary of one of the biggest corporations in Russia, Gazprom Neft and is a state-owned company.

The company is focused on improving its operating and economic performance, minimising costs and raising its capitalisation.

Our team of bunker traders and logistic operators are challenged to become, and remain, your long-term reliable partner, thorough knowledge of bunker markets, experience, competence and efficient, friendly service.

Vasilyevskiy Island, 3rd line, 62A, St Petersburg, Russia, 199178 Tel: +7 (812) 449 49 70 Fax: +7 (812) 449 49 71 E-mail: bunkers@spb.gazprom-neft.ru

World Bunkering Spring 2010

lthough founded in 2007, CEA Co. Ltd. can be considered an experienced bunker market player and a quality services provider due to its staff having more than 10 years’ experience in the professional vessel bunkering business.

The core activity of the company is wholesale trade in oil products and ship bunkering in the Russian Far East region, covering all major ports as well as the Sea of Japan and the Ohotsk Sea. The key strategic task of the company is to supply clients with quality products. The quality control system applied by the company ensures high standards from the manufacturer to the end user. One of our key performance indicators is obtaining the highest quality of product, and this is guaranteed by the everyday working practices of the company’s experienced staff. Our affordable, competitive prices are based on direct supply from the product manufacturers.

The company policy is based on three major factors: Quality, Quantity and Price, all of which allow CEA Co. Ltd to offer clients value for money.

Another strategic goal of the company is to ensure the most efficient business with maximum environmental safety. Environmental and safety issues are paramount within our company; the following measures are taken to ensure environmental safety: • All activities carried out by the company are in compliance with Russian legislation and international norms and standards; • We ensure full control and monitoring of environmental safety norms of our suppliers (bunker fleet, technical management, recourses etc), and their compliance with Russian and international standards.

Additionally CEA Co. Ltd. has made a decision to develop the company within the Government Concept of Sea Fleet Development of the Russian Federation. In the first instance it means fleet renewal.

The company currently operates two tankers built in 1990 and 1993 respectively, and there are plans to buy a tanker built in 2004 which only proves that the company is moving in the right direction along the tendencies of world shipping. Secondly, the company implements a strict control over the quality and ecological safety of the shipping operations. The problem of double-hull vessels, which is one of the big issues in the Russian Federation these days, is being successfully overcome in CEA Co. Ltd. The company’s fleet has been certified by the inspecting and surveying organisation as one complying with Russian and international standards of shipping.

Quality products, competitive prices, experienced personnel, environmental and social policy, and a high degree of responsibility to the client make CEA Co. Ltd. a transparent and accessible company, open to mutually beneficial cooperation.

Mr. Eugeniy Moroz General Director, CEA Co. Ltd. CEA Ltd 8/1B, Fokina Street, PO BOX 91/45, Vladivostok Primorskiy Krai, Russia 690091 Tel: 007 (4232) 40-64-91 007 (4232) 52 36 93 Fax: 007 (4232) 40 66 98 E-mail: cea_bunker@hotbox.ru Website: www.cea-bunker.com

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Company News

C-FUELS AMERICA INC.

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-FUELS AMERICA INC. is a physical supplier and worldwide trader of bunker fuels and marine lubricants, delivering IFO 180, 380, MGO, MDO and an array of branded lubricants.

C-Fuels America is the newest entity of the Caribbean Fuels group of companies, handling all commercial activities out of Miami.

Sister company, Carotrad Sarl, manages logistics out of the French Caribbean and French Guiana (South America). Currently a physical supplier of bunkers in the East Caribbean, they plan on expanding into new markets over the coming months. The company’s successful worldwide trading activities can be attributed to the vast network of suppliers spanning the globe and a small but efficient staff of traders experienced in serving all vessels types (cargo vessels, navy, yachts, tankers etc).

Perhaps one of the best kept secrets in the Caribbean, C-Fuels offers unmatched regional expertise, quality service and competitive prices. The company has found that much of its business is derived from other traders and brokers who lack the local knowledge the group has fastidiously obtained over its 10 years of service. But since the relocation of its headquarters from Guadeloupe in the Caribbean to Miami, Florida, the secret has been spreading rapidly.

The trend of internal growth and rapid international expansion that C-Fuels experienced in 2009 has carried over into 2010. With plans in the works for a fleet of supply tankers in the Caribbean and even more physical locations in the Americas, C-Fuels is lining up to become a major player. When asked about the company’s strategy for 2010, Caribbean Fuels’ President Denis Beauvarlet replies: “We wish to deliver convenience and competitive prices to our customers at even more ports. Our main goal is to offset high fuel prices in countries like the Dominican Republic and Haiti , which significantly increase operational costs for shippers.”

The company enjoys taking calculated risks as part of its growth strategy. One such tactic is to provide lines of credit to shipping companies with less than stellar marks in their credit reports. A balance of risk and security is achieved through the use of financial tools which cover the financial burden of supporting otherwise risky companies. With credit becoming an increasingly difficult commodity to come by these days, C-Fuels hopes to lend some reprieve to shippers struggling in this market.

255 Alhambra Circle, Suite 680 Coral Gables FL, 33134 (USA) Tel: +1-305-461-2050 Fax: +1-305-461-2060 E-mail: bunkers@c-fuels-usa.com Website: www.C-FUELS-USA.com

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Orion Bunkers Karachi Pakistan Your reliable bunker supplier in Pakistani ports

Pakistan’s shipping industry, and consequently also its bunker sector, has grown significantly in recent years. Its ports are vital to its overseas trade and the maritime sector has created substantial local employment.

Orion Bunkers, Karachi, owned by Pakistan Group, are proud to announce that they can supply efficient bunker deliveries to all types of vessels at Pakistan’s main gateways of Port Karachi and Port Bin Qasim and at anchorages. Orion Bunkers can, however, deliver fuel products to even the most isolated Pakistani ports.

The company provides round-the-clock reliable and cost effective bunkering services at competitive prices.

Orion Bunkers provides the shipping community with qualitycontrolled fuel products in conformity with international recognised standards such as ISO 8217 2005, and its fleet of six bunker barges comply with Marpol.

The founder of Orion Bunkers, Muhammad Yousuf, joined the international bunkering world in 1994, working successfully with international bunker buyers, when Orion Bunkers was established, now. He is currently Director, International Marine Sales and applies his vast experience to controlling the Bunker Trading / Marketing Department.

Orion Bunkers have a vast experience of supplying fuel to different types of vessel. We can provide the following grades: • IFO 125 cSt / IFO 180 cSt RME 180 • MDO DMB • MGO DMA We have reinforced our presence in the bunkering market by acquiring our own fleet of modern bunker barges and related equipment. Our fleet currently comprises: • ORION I 998 m (built 2006) • ORION II 1,051 m (built 2007) • ORION III 1,083 m (built 2008) • ORION IV 1,072 m (built 2008) • ORION V 252 m • ORION VI 834 A (built 2009) In addition, Orion Bunkers has exclusive access to an onshore storage facility, ensuring continuity of supplies even when there is a general shortage of bunkers in Pakistani ports.

We believe that the fuel industry relies greatly on its people and companies that consistently offer a reasonable, accurate and efficient service will quickly earn the confidence of the shipping community.

This is the case with Orion Bunkers, which is now firmly established as the major player in the Pakistani market.

If you have any enquiries or require further information, please do not hesitate to contact us; also visit our website: www.orionkhi.com.pk Orion Bunkers (Supplier) Karachi Pakistan Tel: +92 21 3285 8055-6 Fax: +92 21 3285 8057 Mob: +92 333 2344610 E-mail: orionkhi@cyer.net.pk Yahoo id: orionkhi

World Bunkering Spring 2010

Company News

Oiltrade Marine Ltd

O

f the main possible bunkering spots in the Mediterranean, Istanbul port is undoubtedly the best situated. Roughly 50,000 vessels pass the Turkish Straits every year, and approximately one-third of them lift bunkers at roads. The procedure of passing the Straits itself indirectly encourages the local bunker market to grow. As a rule, ships have to wait at roads for their passage turn for quite a time, that allows shipowners to make use of it, lifting bunkers and other supplies. Regrettably, local bunkering is allowed only from the Marmara Seaside , otherwise, bunker companies would have had an opportunity to supply vessels waiting for their passage turn at the northbound side as well. In our opinion, that chance would have enhanced the volume of bunkering significantly.

Economical crisis has seriously affected the shipping sector as every other commercial sphere. The slow-but-sure slackening demand for sea transportation in the Black Sea Mediterranean area has already taken place, freight rates dropped to the extent that prevents shipowners from fixing the vessels for further unprofitable voyages and rather leave them laid-up.

Despite the fact that fuel prices have dropped, cutting the number of stemmed vessels does not allow the local market sales level to stay at the same level. Local bunker companies endeavour not only to keep up the demand, but also to enhance market shares compared to other ports.

At the moment there is no bunker company in the Black Sea region strong enough to compete with Istanbul capacity in the variety of offered IFO grades and MGO with sulphur content range from 0.1% up to 1%. Turkish bunker companies provide their customers 100% guarantee of supply of required quality as well as necessary volume. The vast majority of Russian ports’ suppliers are unable to offer IFO or MGO with maximum 0.1% sulphur content.

Their local custom restrictions often do not allow the provision of fuel deliveries to vessels unless being alongside, that impedes, local sales volume the growth of. In winter bunkering is heavily impeded by the ice situation in Black Sea and Azov ports, as well as at Kerch Straits and Ust-Dunaysk.

Due to territorial development of SECA zone, there is growing demand for MGO with max sulphur content 0.1%. Recently the difference between MGO with sulphur max 0.1% and 0.2% has shrunk, therefore most middle-size tonnage vessels working between Black Sea and European ports prefer to order bunkers with lower-sulphur content.

Traditionally, the most serious competitive ports are considered to be Pireaus and Malta due to usually lower prices in comparison with Istanbul. However, local suppliers can definitely be proud of the high quality of the product, constant availability and excellent level of operation.

Baltic Fuel Company Ltd enters Saint-Petersburg bunker market

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ontur Spb Ltd and JSC Perspective – two large independent companies working in the port of Saint-Petersburg – merged in July 2008. These two companies have for many years traditionally occupied a large segment of the dynamically growing bunkering market in the sea port of Saint-Petersburg and the Leningrad region.

The Baltic Fuel Company Ltd. was created to manage the assets of the two merged companies and act as a bunker supplying and trading company for both Russian and international markets.

Since its formation the company has achieved success in creating a reliable and high-quality bunkering service meeting all European standards and clients’ requirements. The newly formed Baltic Fuel Company owes its success to goal-orientated teamwork of experienced professionals and is now, rightfully, one of the leaders of the Saint-Petersburg bunker market.

The newly formed holding also includes other companies providing the additional infrastructure required for bunkering operations.

They are a transportation company, a towage company and a sea emergency and rescue formation. The cargo turnover of the company for the six months of operation in 2008 was 270,000 tonnes of oil products. The company’s activity is based on its own logistics and infrastructure. Baltic Fuel Company Ltd owns fully licensed and certified bunker tankers with a total capacity of 11,500 tonnes. There are 15 vessels in company’s ownership. In addition to bunkering activity the company provides transhipment and export of oil products.

Baltic Fuel Company Ltd cooperates with the NK Rosneft bunkering department on contract bunkering services in the port of Saint-Petersburg. A wide range of ecological services for the vessels accounts for a very important segment of the company’s activity.

The company has a separate quality-control department to guarantee the highest quality of oil products. A certified fuel-testing laboratory monitors the movement of oil products at all stages.

All types of fuel supplied by the company are compliant with ISO8217 2005, including fuel oil and low-sulphur diesel fuel. All the departments belonging to the holding are certified by Det Norske VERITAS (DNV) according to the quality control and management ISO9001-200. Bunkering units of the Baltic Fuel Company Ltd are members of the Russian Association of Marine and River Bunker Suppliers, Saint-Petersburg Oil Club and are listed on the Register of the Bunkering Companies at Inter-Agency Commission for Oil Products transhipment in Saint-Petersburg and the Leningrad region.

Olga Kovaleva Bunker Sales Manager Tel: + 90 212 352 24 40 Fax: +90 212 352 24 50 E-mail: bunker@oiltrade.net World Bunkering Spring 2010

The Baltic Fuel Company Ltd 13, Dubrovskaya Street Saint-Petersburg Tel: +7 (812) 438 12 80 Fax: +8 (812) 490 58 15 E-mail: info@gwbunker.spb.ru 83

Company News

Bunker company TransOilBunker Co Ltd

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unker company TransOilBunker Co., Ltd. was established following a merger of several companies in order to improve provision of services to fleets in the ports of the Far East (Vladivostok, Nakhodka, Olga, Posiet, Slavyanka, Zarubino, Sovetskaya Gavan and Vostochnyi). An expansion into the Seas of Okhotsk and Japan is planned in the near future.

We have been in the bunkering market of the Russian Far East since 1995 and have about 10 per cent of the market share. Average monthly volume of supply of both light and heavy fuel is increasing with a current capacity of 120,000 to 200,000mt. We have five tankers with tonnage of 500 to 1,600mt, one of which is equipped with a mechanical fuel blender.

This year, the company bought the specialised tanker Ukhta, which can process up to 270 cubic metres per day and up to 39,000 annually. Such processing is waste-free: water and oil produced after processing are used for the vessel – oil for boilers and as an ingredient for asphalt – thus making a positive environmental impact, and giving us a significant commercial advantage over our competitors.

We also have plans to buy another tanker with a significant range and large volume of fuel, allowing bunkering and fuel transporting beyond the ports of the Far East.

Our fleet meets all international requirements for both navigation and ecological safety, and is equipped with state-of-the-art satellite communication, operated by our team of highly experienced specialists. We have a personal and professional approach to dealing with customer requirements; our team consistently meets and exceeds expectations. Bunker company TransOilBunker Co., Ltd. values professionalism and reliability and has developed an excellent reputation among companies in Japan, China and Korea. In order to supply both light and heavy fuel our company leases oil tanks on the main oil stations in Vladivostok, Bolshoi Kamen and Nakhodka. The Company has developed solutions to current problems; in future it plans to expand bunker and transport fuel services into the ports of South East Asia. We are located in the city of Vladivostok, one of the biggest centres in the far east of Russia.

Adoil Petroleum

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doil Petroleum, the only licensed independent bunker supplier in Aden, was founded at the beginning of 2009, commencing its operation in July of that year. The company is built on the dedication and experience of its team, particularly Nick Koutsoumbos, its representative in Greece, with his 30 years in the shipping and bunker markets in London.

As the bunker market is aware, before Adoil started operating there, the port of Aden was a ‘subject to enquiry’ port. Now, however, its biggest concern is managing the fresh demand flooding in from vessels seeking bunkers, who know Adoil is a name they can trust.

Adoil has a bold vision and is committed to revitalising Aden, a port which has always held great potential with its quality resources and proximity to main shipping routes. Combined with easy access to the bunker wharf, high-rate supply ex-pipe and a fast turnaround, Aden also offers a level of efficiency, reliability and convenience to match any bunkering port in the world.

Our record speaks for itself. During the seven months Adoil has been in operation, neither the office in Greece nor that in Aden, at the heart of our operations, has received a single complaint from our customers concerning either the quality of our products, or the service we provide to our customers.

Adoil’s plans for the future are to turn Aden into one of the major bunkering hubs in this part of the world, providing regular supplies, good quality products and high standards of service. All this while also maintaining competitive prices, not only matching those of other bunkering ports in the region, but at times offering even lower, as occurred recently.

Our expectation is that demand will outstrip what we had initially anticipated. In order to facilitate this, the deployment of a barge will be necessary for supplies at the outer anchorage, something which we hope to address in the not too distant future.

In conclusion, may we suggest to the bunker market that whenever looking to lift bunkers in the region, it may be worth also checking out our price levels for comparison, as there is a strong possibility that you may be pleasantly surprised.

Bunkering company TransOilBunker Co., Ltd 53 of., st. Aleutskaya 11 Vladivostok, 690001, Russia

Telephone: 007 (4232) 642-448 007 (4232) 642-449 Mobile: 007 914 704 2856 E-mail: bktob2006@yandex.ru Website: www.transoilbunker.org

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c/o its Representative N. Koutsoumbos 40, Leof. Varis, TK 16673, Voula/Athens, Greece Tel: +30 210 965 9144 Fax: +30 210 895 9913 Mobile: +30 6937 30 8868 E-mail: adoil@otenet.gr

World Bunkering Spring 2010

Company News

Baltic Bunkering Company

Vilma Oil S.L., Madrid

B

V

altic Bunkering Company was founded in August 1995. For nearly 15 years the company has succeeded in creating a reliable and high-quality bunkering service and become one the leading players in St. Petersburg bunker market.

Backed by a strategic alliance with Petersburg Oil Terminal (POT) (www.oilterminal.ru), the biggest oil storage facility in northwest Russia, as well as with oil trading company PNT-GSM, Baltic Bunkering Company has always very good availability of the full range of high-quality fuel products.

We supply high-quality bunker fuels, including low-sulphur products. All the fuels are transhipped through POT and are closely monitored and controlled in POT’s laboratory to ensure that they meet ISO8217:2005 (E). The process of quality control starts before purchase of fuel. We regularly buy fuels only from refineries which have proved the quality of their product over long period.

We have introduced additional quality control at the barge loading operations. Our bunker barges “Viking” (2 500 mt) and “Viland” (3 000 mt) are equipped with express laboratories to test every lot of bunkers before supplying it to our clients.

Quality is the milestone of our business and is guaranteed by the daily work of skilled specialists.

In October 2001 we received our ISO 9001 Quality System Certificate following an audit by Det Norske Veritas. Baltic Bunkering Company is the first bunker company in St. Petersburg to be approved for the certificate.

Baltic Bunkering Company is paying special attention to the ecological aspects of bunkering activity. In our practice we strictly follow and observe all existing standards and rules prescribed for the petroleum transhipping operations and prevention of leakage of oil products.

Among our competitive advantages are: • Full range of fuel oil products available, from IFO-30 to IFO-600; • LSFO always available; • All products are in conformity with ISO8217:2005 plus later amendments; • Own bunker fleet; • Prompt delivery of all bunker services; • Fuel deliveries are in conformity with Regulations 14 (1) or (4) and 18 (1) of MARPOL 73/78, Annex VI.

ilma Oil, with its head office in Madrid, was founded in 1996 by a group of experienced professionals in the field of international oil trading. In recent years it has traded in excess of 27 million tonnes of petroleum products in over 20 countries. The company has participated in the development of terminals in Bilbao, Poti & Tuapse, while currently involved in a new oil storage facility project in Algeciras.

As a result of the performance of its multi national team and the confidence placed in it by its partners, customers and the financial community, Vilma Oil has a record of continuous growth.

Over the last two years Vilma Oil successfully established its position as a key prime supplier of marine fuels at the Spanish port of Ceuta for ex-pipe/ex-wharf deliveries, increasing the port’s overall bunker volumes at this strategic location for vessel supplies in the Strait of Gibraltar.

In order to further meet the needs of its customers and in line with its commitment to development, Vilma Oil has expanded its bunker delivery service through the recent introduction of a modern double-hull 3,700m3 capacity bunker vessel for supplies at the designated anchorage within the port limits of Ceuta´s North Bay. Optimising the ex-wharf and anchorage delivery facilities to meet the varying customer requirements, Vilma provides RMG380, RMG380 low sulphur, RME180, RME180 low sulphur and DMA 0.1%, meeting the ISO8217:2005 specifications.

Combining the exclusive utilisation of 83,500m3 oil storage facilities at the port with its long-standing international trading and operational skills, Vilma continues to expand its vision of providing enhanced customer focused activities, based on core fundamentals of “secure quality services”.

Calle Chile, 10, Oficina 236, 28290 Las Matas, Madrid Tel: +34 91 630 8900 Fax: +34 91 630 8901 E-mail: Bunkers@Vilmaoil.com Website: www.Vilmaoil.es

For more information please contact us at: 48, Stachek Prospect 198097 St-Petersburg Russia Tel: +7 812 320 82 00 Fax: +7 812 325 45 33 E-mail: bbc@bunkering.spb.ru Website: www.bunkering.spb.ru Sales department: Tatiana Sorokina, mobile: +7 921 905 70 63, E-mail: tanya@bunkering.spb.ru Olga Gershun, mobile: +7 921 965 87 83, E-mail: olga@bunkering.spb.ru

World Bunkering Spring 2010

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A/S DAN BUNKERING

ENDRESS & HAUSER AS

ORION BUNKERS

ADDAX BUNKERING SERVICES

GAZPROMNEFT MARINE BUNKER LTD

PENINSULA PETROLEUM LTD

ADOIL PETROLEUM SA

INTERNATIONAL BUNKERING (MIDDLE EAST)

PETROLEOS DE PORTUGAL

ALBA PETROLEUM LTD

KPI BRIDGE OIL ALLIANCE

PLATTS

ARKAS BUNKERING & TRADING SA

LUKOIL BENELUX BV

ROSNEFT-RN-BUNKER LTD

ASPECT ENTERPRISE SOLUTIONS LTD

LUKOIL-BULGARIA BUNKER LTD

SAUDI SHIPPING & MARITIME SERVICES CO LTD

BALTIC BUNKERING CO

MAMIDOIL-JETOIL INC

SEARIGHTS MARITIME SERVICES PTE LTD

BUNKER FUEL COMPANY LTD

MARITIME BUNKERING LTD

SOLARC INC

BGK BUNKERS

NEFTEHIM LTD

TRANSOIL BUNKER

BI NORWEIGIAN SCHOOL OF MANAGEMENT

OCEAN ENERGY SAM

TSETAN CO LTD

C-FUELS AMERICA INC

OIL MARKETING & TRADING INTERNATIONAL

VILMA OIL SL

C.I. INTERNATIONAL FUELS LTDA

OILCHART INTERNATIONAL NV

CEA BUNKER PTE LTD

OILTRADE MARINE LTD

For more information on these companies and to view this publication online using the innovative Page-Turning technology, visit:

www.worldbunkering.com

DiARY

Looking ahead 22-23 February

17-19 March

Managing and avoiding bunker claims London, UK www.lloydsmaritimeacademy.com/bunkerclaims maritimecustserve@informa.com

Aracon 2010 Rotterdam, Netherlands 222.aracon2010.com events@petrospot.com

25-26 February

31 March - 1 April

Bunker fuel blending - Technology and economics Singapore info@ccgroupevents.com www.cconnection.org

Bunkering disputes Singapore info@ccgroupevents.com www.cconnection.org

1-2 March Platts European Oil Storage Budapest, Hungary www.platts.com stacey_knox@platts.com

3-5 March Piraeus Bunker Course Piraeus, Greece www.petrospot.com/events events@petrospot.com

9-10 March UKSpill 10 seminar London, UK www.oceanologyinternational.com info@ukspill.org

World Bunkering Winter 2009

14-15 April Platts European Bunker Fuel Rotterdam, Netherlands www.platts.com stacey_knox@platts.com

28-30 April IBC 2010 Stockholm, Sweden www.bi.no ibc@bi.no

28-29 April Oil Products Forum Middle East Kuwait info@ccgroupevents.com www.cconnection.org

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Company News

Arkas Bunkering invites you to Istanbul

A

rkas Bunkering is an Arkas company that began operating in the marine fuel sector at the beginning of 2006. Arkas, with its 43 companies, currently operates in many different fields, including logistics services that integrate sea, land, rail and air transportation, agency services, ship operations, port operations, bunkering, automotive, insurance services, information systems and cruise tourism.

Thanks to the strategic links it has established with international partners, Arkas Bunkering offers safe and quick bunkering services for any kind of vessel in many ports around the world, especially the Mediterranean and Black Seas. Arkas Bunkering applies management and operational principles with the goal of ensuring the productive use of fuels in seagoing vessels, since this is one of the largest expenses for overseas shipping companies. The company carries out operations with a professional staff and provides special training to the crew on its barges.

Arkas Bunkering has 17,000 cbm of storage at Solventas. In 2010, the company will make significant improvements to the loading and storage processes, which will improve operational performance as part of their ongoing commitment to total customer satisfaction.

There are five barges in operation with up to 300 mt/h pumping capacity. The largest of these bunkering tankers, the 1,646 dwt, double-hull M/T Urla 1, is owned by Arkas Bunkering, as is the 1,107 dwt M/T Bornova. The two vessels are named after districts in the company’s home town of Izmir. The remaining three barges are chartered. Arkas Bunkering will continue to expand its barge fleet with double-hull barges.

Arkas Bunkering always emphasizes customer satisfaction, and in 2009 the company completed its work on ISO 9001 certification, which specifies the standards that must be implemented to establish a Quality Management System that will increase customer satisfaction. By earning its ISO certification, the company proved that it has top quality service. Arkas Bunkering operates with the goal of providing high quality, dependable fuel to its customers. The company supplies fuel that complies with ISO 8217:2005 standards, which have been established for marine fuels. It is also carrying out various tests outside of these criteria. Arkas Bunkering takes out liability insurance to protect customers from any problem that may arise from quality of bunker fuel. The company primarily operates in Istanbul and Izmit, which are in the Marmara Region, but it has established a goal of expanding its operations in Iskenderun and Izmir, which are in the Mediterranean and Aegean Seas, respectively.

The company invites its customers to Istanbul, where they can learn about the company’s processes, terminal facilities and watch the operation in person.

World Bunkering summer issue

Oil Majors

While the inconclusive Copenhagen conference may have put CO2 emission issues in abeyance for a while, environmental issues still dominate the agenda. We ask the majors what they see as the main environmental challenges they are facing relating to bunkers, and what are they doing about it.

Fuel Management

Huge volatility in bunker prices and an economic downturn mean that owners are increasingly interested in fuel management regimes. We look at what is out there.

Surveyors

Many owners would not dream of taking bunkers, except under the supervision of a surveyor. But will this change as reliable, automated quantity measurement systems become the norm?

Mediterranean

Our annual Mediterranean survey looks at the main bunkering centres, notes recent developments and asks what the next 12 months has in store.

Black Sea

This complex region is also an important one for bunkering. We take a look at what is happening in the region’s major ports.

Australia

Major developments have been taking place in Australia’s ports – but has the same been true for the bunker industry?

IBIA Annual Dinner

We present a pictorial review of one of the highlights of the bunker industry calendar. If you were there you may well be in the frame. If you weren’t, book early for next year!

Previews & Reviews

You may not have been at the International Bunker Conference in Stockholm but our editorial team has it covered. Also, we look forward to what Posidonia has to offer.

Russian update

Our regular update of news and views from the Russian bunker industry.

Regulars and news

Including our regular environmental, technical, legal and operational updates.

Equipment & services www.arkasbunker.com arkasbunker@arkasbunker.com Istanbul office : +90 212 3375381 Izmir office : +90 232 4110034

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A round up of news for the bunker industry.

Diary dates

All future dates for industry events.

World Bunkering Spring 2010

GLOBAL BUNKER SUPPLIERS AND TRADERS

Peninsula Petroleum is a major physical bunker and lubricant supplier operating from the ports of Gibraltar, Ceuta, the Canary Islands, Panama, Piraeus and Singapore. As a physical supplier and a worldwide trader with annual sales in excess of 4,000,000 tonnes, we have the resources and capabilities to guarantee the highest quality products and first-class customer care at all times.

With offices in London, Gibraltar, Geneva, Piraeus, Dubai, Singapore, Shanghai and Montevideo our highly skilled staff, which includes more than 15 nationalities, is ideally placed to make the most of their vast experience and expertise. Available 24 hours a day, 7 days a week, 365 days a year, we provide professional, cost-effective ways of meeting marine fuel needs, swiftly and efficiently – anywhere in the world.

LONDON

GIBRALTAR

GeNevA

GReeCe

Tel: +44 (0) 207 766 3999

Tel: +350 200 52641

Tel: +41 22 322 9600

Tel: +30 210 4287800-1

DUBAI

SINGAPORe

ShANGhAI

MONTevIDeO

Tel: +971-4-343 2813

Tel: +65 6238 6621

Tel: +86 21 5386 8866

Tel: +598-2-9163458

WWW.PeNINSULAPeTROLeUM.COM bunkers@peninsulapetroleum.com