World Bunkering - Spring 2011

SPRING 2011

World SPRING 2011

Bunkering

World BUNKERING © DNV/Making Waves

Beating the carbon cap Can better design cut down on emissions? © DNV/Making Waves

l Building optimism in Fujairah l Quantity measurement: the way forward l S&P – market review

THE ONLY OFFICIAL MAGAZINE OF

World

SPRING 2011

Bunkering Publisher: W H Robinson Editor: David Hughes (editor@mar-media.com) Deputy Editor: Lucy Budd (lucy.budd@mar-media.com) from 1st Feburary Sandra Speares (sandra.speares@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 Ltd on behalf of IBIA and is supplied to members as part of their annual membership package.

Published by:

Maritime 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

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ISSN 1367-5018

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

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Editor’s Letter

T

his issue coincides with the IBIA dinner, which has attracted the most attendees ever. This issue of World Bunkering is also noticeably large and packed with information, in some cases on issues we haven’t really looked at before.

That is not true though of Fuel Quantity, something we will always be returning to. This issue looks at the development of Coriolis flow meters. The message seems to be: “Almost there, just a bit more work to do.”

The same could perhaps be said for aspects of the bunker industry in the Indian subcontinent, which we feature. It surely can’t be too long before Hambantota is a familiar name in global bunker industry circles.

Maybe it will be some time, though, before Sri Lanka’s new port will challenge Fujairah as a bunker hub. This issue both previews the upcoming Fujcon conference and surveys the UAE scene.

Our IT feature looks at how enterprise planning systems can help shipowners deal with the complexities of ordering fuel when trading in and out of ECAs. Despite some disappointing results in recent months, the big bunker traders have continued to expand their geographical reach.

We take a look at who’s moved where.

The bunker scene in Northern Europe continues to develop in response to the introduction of tighter regulations, leading both shipowners and port authorities to look at innovative solutions, including the use of LNG. The past three months have been busy ones on the environmental front and we catch up on the situation post-Cancún.

So what are the unusual areas this time, you may ask. Well, we have two articles on important issues for the bunker industry that rarely get an airing: insurance, and sale and purchase. On insurance we take an in-depth look at how the Shipowner’s P&I Club covers most of the Singapore barge fleet. On the bunker barge S&P market we have an article from specialist broker Evgeny Dolgikh.

There is something else special about this issue. It will be the last one for deputy editor, Lucy Budd, who has secured the prestigious post of editor of the Nautical Institute’s journal Seaways. For the next issue well known shipping journalist Sandra Speares joins us as deputy editor. All three of us, however, will be at the IBIA dinner and look forward to seeing many of you there.

David Hughes

World Bunkering Spring 2011

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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 2011

Bunkering 24

33 31

IBIA Reports Editor’s Letter 3 Chairman’s Introduction 7 Chief Executive’s Report 9 Noticeboard 11 New Members 13 Membership Application 16 Interview 18 Industry News 21 Environment 24

Special Features Testing 28 Fuel Quantity 33 Traders 35 Risk Management 41 S&P 44 Software 45 Insurance 46

Geographical Focus North Europe 49 Pakistan 55 India 56 Sri Lanka 57 UAE Preview

59 63

Russian Update

67 41

Legal News Equipment and Services Diary

77 78 92

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www.ciinternationalfuels.com

No. CO232317

REPORTS

Chairman’s Introduction

A

s I write this, it hardly seems possible that a year has gone by since our last IBIA Dinner. Also, it hardly seems possible that once again I am late in meeting the editor’s deadline. For his sake, I hope our next chairman is a little more prompt!

This is my last Introduction to World Bunkering, as chairman – unless somebody isn’t telling me something. As I look back on my year in this role, it is maybe time to reflect on whether or not I have achieved my goals. You may recall that I wanted to make IBIA more visible and more accessible to its membership, and to encourage members to be more vocal and to tell us what they really want. In addition, I was keen to see progress on education and industry qualifications obtainable through IBIA. So how have we done? I have an opinion, of course, but I see matters from only one perspective. It would be interesting to hear what you, the membership, think. I can of course remind you of what has happened in the past year, and – at the risk of appearing boring – will do so.

First of all came the appointment of Charlotte Egan as IBIA’s Events Manager.

Charlotte was primarily responsible for our excellent conference in Connecticut, where for the first time IBIA members were invited to take a role in setting the organisation’s direction on representation in debates at IMO on how to regulate GHG emissions from shipping.

Our Chief Executive, Ian Adams, has become a regular lecturer at conferences worldwide, constantly flying the IBIA flag, as well as attending IMO sessions and steering the publication of our latest booklet, in conjunction with BIMCO, on a guide to

World Bunkering Spring 2011

bunkering for ships’ crews.

On the education front, in Singapore IBIA awarded the first Bunker Cargo Officer Certificates. While we have not yet managed to set up a course for the general bunker industry qualifications in the bunker market per se, this work continues with the appointment in Singapore of Kwok Fook Sing as our new Asian Regional Manager. He has undertaken the job of developing a new educational programme.

So what is missing? As far as I can see, only the input from the membership. IBIA is your organisation. It cannot operate in a vacuum. Be vocal. If you have concerns, problems, or great ideas, let us, the board and the administration, know. This is particularly important in view of the daunting challenges which lie ahead for everybody involved in our industry.

Challenges, after all, are the things that make life interesting. Overcoming them is what makes life rewarding. The international bunker industry has a huge reservoir of talent and experience, much of which is doomed to remain untapped unless optimum use is made of IBIA’s resources and its reputation in the industry. One could think of any number of industries which would love to have an organisation such as IBIA, which represents all their constituent parts, and not just one user group within that industry. Never forget, either, that IBIA has a voice at the highest table, at IMO, where they make the rules by which we must all abide. To forgo the opportunity to have an input into that intergovernmental process would be foolhardy and short-sighted.

As is the case with any industry organisation, IBIA can only be as good as its members. And nothing is more certain than

Mike Ball

the fact that we are going to need our membership to be proactive and cooperative in the years ahead. Consider just some of the challenges which our industry faces. The job of the bunker industry is to keep shipping moving on a global scale, safely, efficiently and cleanly. That means several things, not least the need to continue investing in new technology, new equipment, and new human resources against the background of an attritional economic downturn.

New international, national and regional regulations and legislation are raising the environmental bar for the bunker industry, along with everybody else. We have to be seen to be green, and we have to be seen to be safe, as well as maintaining our economic competitiveness. That won’t be easy, but it is achievable if we put our collective heads together. Remember, too, that some of the decisions which will shape our future have still to be made, and there is yet time to influence the thinking. Let us not waste the opportunity.

Finally, it just remains for me to thank – not only on my behalf, but on behalf of the membership – the board for their continuing unflagging support and enthusiasm, and Ian and the Administration for their professionalism and hard work, which so often goes unnoticed. I would like to thank you, the membership, too. The bunker industry remains a great place in which to work, with good humour generally overcoming any despondency in these difficult times.

I wish Bob Lintott every success when he takes over as chairman in April. I hope he enjoys his year as chairman as much as I have enjoyed mine.

Mike Ball

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Reliable, efficient service in ARA and beyond. quick and timely delivery of a wide range of grades.

We look forward to your enquiries both in and outside the Netherlands.

Office address: De Linie 1, Capelle aan den Ijssel, NL-2905 AX , the Netherlands Post address: PO Box 377, Capelle aan den IJssel, NL-2900 AJ, the Netherlands Tel: 24/7: +31 10 264 27 00 E-mail: Bunkers@lukoil.nl

Chief Executive’s Report

T

his is my first opportunity to wish all our members a Happy New Year and a prosperous 2011! As you will have seen in the annual report, our membership is now greater than ever before and has continued to increase through 2010 into 2011. This means that at the time of writing we have now exceeded 620, and we are still growing!

Our work at both the International Maritime Organization (IMO) and the European Commission (EC) is continuing.

We have submitted a paper at IMO, to the Bulk Liquids and Gases subcommittee (BLG 15), which will be held between 7-11 February. This is our response to the recent meeting of the Marine Environment Protection Committee (MEPC) where there was a submission by Norway and Intertanko regarding the pre-testing of fuel. Details of the paper were circulated to members along with our intervention in October. We will continue to keep our members informed of developments.

During the same week (8-9 February) the European Commission (EC) is holding a consultation on the topic of Greenhouse Gases (GHG). IBIA has been invited to this first meeting and will also attend all future meetings during the consultation period.

The reason for our interest is that the EC favours an Emissions Trading Scheme (ETS) as its solution to emissions. There will be implications for the entire industry, buyers and suppliers alike, and it is important that we are represented. We shall attempt to ensure that the industry does not get into a situation where we have unworkable legislation. IBIA will continue to support a global rather than regional solution in all aspects of legislation; however, it is equally important

World Bunkering Spring 2011

to engage at a regional level. Obviously, by the time you read this, both meetings will have happened so please keep a look out for an update in the IBIA E-Newsletter.

With the increase in membership we are conscious that there will be increased expectations of the Secretariat. This is one of the reasons that the Board agreed earlier last year to the proposal to increase the staffing level. It has not been easy to find the right person so it is, therefore, my great pleasure to welcome Mr Kwok Fook Sing as our full time Regional Manager (Asia).

Many of you will have met Mr Chong Kam Wah, who has previously filled this post on a part-time basis. It is to Kam Wah’s credit that we now feel that we need a full-time member of staff in the Singapore office. By appointing Fook Sing on a full-time basis, we anticipate being able to provide greater support to our members in the Far East and Australasia. Contact details for the office are on the website www.ibia.net.

This year’s Annual Dinner has once again exceeded all expectations. After last year’s record attendance we took the decision to move to a new location. At the time of writing, our numbers have reached an astonishing 965 which represents an increase of 20% on last year! The venue this year, the Grosvenor House, a JW Marriott Hotel, is the biggest and most spectacular venue in London and I hope that all those who attend have a fantastic night. As you will be aware, over the last few years, we have insisted that attendees observe some basic etiquette, which has been well received by the vast majority of the attendees. As the numbers increase this becomes even more important, so hopefully we will have another great night.

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

In the last edition of World Bunkering we announced Barcelona as the location for this year’s Annual Convention. Barcelona is a fantastic city with a lot to offer, and we are positive that you will all be very welcome as our delegates at the 5 star Hotel Rey Carlos I, which will be the venue for the Convention. I truly hope to see as many members as possible. Whilst I realise that there are many different conferences around the world and that our members will have a limited budget for attending events, please do not forget the unique nature of the IBIA Convention and how you benefit as a member when attending. It is the only event where you as members can have a real say and input to your industry. To this end we encourage you to contribute in the first instance, by suggesting topics and/or speakers that you want to hear. The first Convention Committee meeting will be held on Tuesday 22 February at the Naval Club, Hill Street, London. However, many of you will be reading this after that date so please send any suggestions to the Event Manager, Charlotte Egan (charlotte.egan@ibia.net).

Finally, at the AGM on Monday 21 February we will be announcing the results of the Board Elections. Whilst I obviously do not know the results, one thing I do know for certain is that two long-serving Council/ Board members will be standing down with effect from 31 March. Past Chairman Chris Fisher and Past Treasurer Angus Ogilvie have both served IBIA for many years and their contribution has been greatly appreciated.

On behalf of the Association I would like to record our thanks to both of them.

Ian Adams

9

REPORTS

IBIA Noticeboard Benefits to members as at 1 February 2011 THE IBIA COURSES:

free, but the report is offered for sale to non-Members at £50.

One Day Basic Bunkering Course

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

IBIA Guide to Bunker Samplers

Sale price to non-Members £50.

IBIA Annual Report

The 2009/2010 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.

IBIA Guide to Arbitration.

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.

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

IBIA PUBLICATIONS 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 £45.00, £60.00 or £80.00 depending on location.

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

IBIA World Bunkering Magazine – Discounts on Advertising

Discounted advertising rates are available for Members, representing savings of between £600-800 per advertisement, depending on the advertisement size.

Please contact the Advertising Sales Team at Maritime Media London on + 44 (0) 207 385 7766 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

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

Evaluate the Merits of a Bunker Claim

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

IBIA Glossary of Bunker and Lubricating Oil Terminology

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

BOOK OFFERS

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

The publishers say: “Firmly established as the main source of bunker industry contact information, containing more than 800 companies, 2,000 personnel in 75 countries, all cross-referenced by two indices.

First published in May 1993, the ‘Little Black Book’ is published every May and November.”

IBIA Guide to Good Commercial Practice

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

IBIA Logo

IBIA Fuel and Lube Oil Training CD

Free bromide supplied for use by Corporate Members only.

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

IBIA 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

World Bunkering Spring 2011

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REPORTS

Corporate

OLIEHANDEL KLAAS DE BOER BV BUNKER SUPPLIER Michael Schaap Trawlerkade 58 Ijmuiden 1976 CB NETHERLANDS Tel: +312 5 551 3240 Fax: +312 5 551 8207 E-mail: ijmuiden@klaasdeboer.nl EVRASIA BUNKER LTD BUNKER SUPPLIER Mikhail Khokhlov Tonya II Court S.Araouzou & Koumandarias Str. Office 4B Limassol CY 3036 CYPRUS Tel: +357 2 576 0376 Fax: +357 2 534 1803 E-mail: info@evrasiabunker.com INSPECTORATE SERVICE Adrian Mason 2 Perry Road Witham Essex CM8 3TU UNITED KINGDOM Tel: +44 137 653 6820 E-mail: adrian.mason@inspectorate.com

bunkers

New Members

a secure quality service @ Ceuta

VICOLESTAR BUNKER SUPPLIER Raymond Amoasi Ekow Cole P.O. Box AT2110 Achimota Accra 233 GHANA E-mail: info@vicolestar.com

VILMA OIL, MADRID c/ Chile, 10 路 Oficina 236 28290 Las Matas 路 Madrid 路 Spain Phone: +34 916 308 900 bunkers@vilmaoil.com 路 www.vilmaoil.es World Bunkering Spring 2011

13

The safe and secure combination in Africa

24hrs Tel: +277 9523 6000 Email: africa@globalvisionbunkers.com

Global Vision Bunkers (Africa) www.globalvisionbunkers.com

CMS SHIPPING SERVICE Evgeniy Dolgikh Mayakovskogo Str. 16A - 18N St Petersburgh 191014 RUSSIA Tel: +792 1855 2002 Email: snp@cmsshipping.ru ASEAN INTERNATIONAL LIMITED BUNKER TRADER Jalal Shariff P.O. Box 5809 Dafza, 5E A, Suite 824 Dubai 5809 UNITED ARAB EMIRATES Tel: +9715 0628 9018 E-mail: bunkers@asean.ae M.Y. BUNKERS BUNKER BROKER Ian Larke 7 Hill Crest Gardens Evagora Palikaridi St. Agios Tychanos Limassol 4521 CYPRUS Tel: +357 2531 3698 E-mail: mail@mybunkers.com# OVERSEAS PETROLEUM & SHIPPING LLC BUNKER SUPPLIER Hedayat Shamsi P.O. Box 111902 Dubai UNITED ARAB EMIRATES Tel: +971 50 759 3969 E-mail: hedayat@overseaspetroleum.com CANADA STEAMSHIP LINES INC. BUNKER BROKER Kirk Jones 759 Victoria Square Montreal Quebec H2Y 2K3 CANADA Tel: +514 982 3909 E-mail: kjones@cslmtl.com

World Bunkering Spring 2011

AURORA PETROLEUM TRADING & SUPPLY SA BUNKER TRADER Dina Tukhvatulina c/o Aurora Petroleum Logistics Ltd 205 Harbour Yard Chelsea Harbour London SW10 0XD UNITED KINGDOM Tel: +44 20 7351 0967 E-mail: info@aurora-sa.com Corporate ADDITIONAL

A/S Global Risk Management Ltd SERVICE Jette Jorgensen Strandvejen 5 Middelfart 5500 DENMARK Tel: +45 8838 0000 jfj@global-riskmanagement.com individual

John Obudigha SERVICE LENPEC GLOBAL CONCEPT LTD 5 Macauley Street Bonny Island, Rivers State Porthacourt Lagos 234 NIGERIA Tel: +234 80 324 3543 E-mail: lenpec@yahoo.com Jorge Tapies SERVICE GLOBAL ENERGY RISK CONSULTING 9116 Tetterton Avenue Vienna VA 22182 USA Tel: +1610 393 3178 Fax: +1610 393 3178 E-mail: jtapies@globalenergyriskconsulting. com Raymond Amoasi Ekow Cole BUNKER SUPPLIER VICOLESTAR P.O. Box AT 2110 Achimota Accra 233 GHANA Tel: +233 24 661 1353 E-mail: info@vicolestar.com

Yawar Abbas BUNKER SUPPLIER STEADFAST BUNKERING SERVICES 5-C Mezzanine Floor 33rd Tauheed Commercial Area Phase 5, D.H.A. Karachi 75500 PAKISTAN Tel: +0092 33 321 2575 E-mail: abbas@steadfastbunkering.com Tore Larsen BUNKER SUPPLIER BRIGHTOIL PETROLEUM(Singapore) PTE LTD 10 Pasir Panjang Road. #16-01/02 Mapletree Business City 117438 SINGAPORE Tel: +474 840 1385 Email: tore.larsen@bwoil.com Yana Ivanova BUNKER TRADER N/A Flat 1, Alsafa Heights 121 Alumhurst Road Bournemouth Dorset BH4 8HS UK E-mail: yana-D@hotmail.co.uk Emmanuel Mensah BUNKER TRADER SAGE PETROLEUM LTD House No. E17/9 Ablade Road-Kanda Box CT4377, Canontment Accra 4377 GHANA E-mail: emensah@gmail.com Daniel Khong Tee Cuhn BUNKER SUPPLIER CAMERON (Singapore) Pte Ltd 2 Gul Circle Jurong Industrial Estate 629560 SINGAPORE Tel: +65 6 494 7987 E-mail: daniel.khong@c-a-m.com

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REPORTS

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

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

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

• Implement the running of IBIA’s two-day

In the beginning

The board

Environmental

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

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

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

• Corporate membership: open to com-

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

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

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

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

• •

•

•

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

The working groups

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

Education • Run further IBIA Basic Bunkering courses

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

courses.

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

checklists.

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

bunkering procedure.

Technical • Continue to provide answers to technical

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

the members.

Commercial Working Group • Has been responsible for the production

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

Task Forces

IBIA now operates a Task Force system.

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

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

worldwide;

World Bunkering Spring 2011

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

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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

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

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

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

IBAN SWIFTBIC GB£ Sort Code Sterling Account Number Account Name

GB95 CLYD 8260 0410 247 629 CLYD GB2S 82-60-04 1024762 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

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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 2011

17

interview

Get involved!

New IBIA chairman hopes for more member participation Bob Lintott

I

t would be difficult to imagine anybody better prepared than Bob Lintott to take on the role of IBIA chairman. Of the past 43 years Bob has spent only a couple not selling bunkers, and then he was marketing marine lubricants.

A Brit, he lived in several countries as a boy. His father worked for NAAFI, which runs leisure centres, shops and canteens for the UK Armed Forces, and he attended several schools for children of British military folk. Opportunity and a keen sense of selfpreservation, he told World Bunkering, meant he could imitate the regional accents of a good number of county regiments.

On leaving school, Bob joined NAAFI for a brief period and then applied to BP for a position. He joined the marine industry in 1968, working for BP Marine in London. “It was, though, a very different industry back then,” he says. “Selling bunkers for a major in those days was a matter of going to the customers once a year and renewing annual contracts.”

After BP, he became a broker for Seamal Oil for a time and then worked for First Steamship in London, setting up companies to sell BP lubricants in Hong Kong and Taiwan. After that a stint with Harris Marine Services also in London, representing Ceylon Petroleum and Saudi-based Elhawi Shipping, took Bob through to the early eighties.

In 1984 he joined Anglo Soviet Shipping, soon to become Bominflot Ltd, the UK office of the Bominflot Group. Two years later Bob moved to Houston as the company’s US-based VP. In 1995 he moved to New Orleans, still with Bominflot, but in

18

2003 he left them and set up his own New Orleans-based business, in association with ISObunkers. “The business did fine for a couple of years,” Bob says, “and then along came hurricane Katrina, effectively killing shipping on the Mississippi River for a year and with it, the local bunker industry.”

In late 2006, following Katrina, Bob moved to Norfolk, Virginia, to become managing director-trading for ISObunkers, a position he still holds.

So, after 43 years in bunkering, what sort of industry does he see? “An industry often deeply divided between buyers and sellers. When anything goes wrong the two sides can adopt entrenched positions and brickbats can start flying,” Bob replies.

As an illustration, he says: “A sample analysis saying, perhaps, viscosity is somewhat greater than ordered may be regarded by a buyer as ‘off spec’ even in spite of the analysis notes explaining how the fuel may be used without difficulty. It would likely be in everybody’s interests – including the ship operator’s – to consult with his lab and the seller, and use the fuel rather than resorting to confrontation. It might even, perish the thought, prove more thermally efficient!

Reputable suppliers don’t deliberately set out to supply off spec fuel.”

Bob says he hopes IBIA will be able to encourage greater understanding and change attitudes. To help achieve this there needs to be greater representation of shipowners and operators in the association.

So, is this a realistic aspiration? “I hope so,” he says. “Owners have always had members in IBIA. Indeed, Mike Ball my

predecessor is from the owners’ side as were at least two other former chairmen. It is the chartering side where we lack members. I hope more charterers can be persuaded to become involved and contribute towards IBIA’s representation at various international forums. We are the industry’s mouthpiece and I hope charterers and operators will see value in that.”

Bob says that IBIA has worked hard to raise bunkering’s profile, especially through its observer status at IMO. “IBIA’s opinions are listened to these these days and are less likely to be ridden over roughshod,” he says. But he adds: “There is plenty still to be achieved.”

Encouraging members to participate more will be, Bob hopes, the main theme of his time as chairman. He says it was encouraging to see movement on this front at the Connecticut Convention and he hopes there will be more opportunity to poll members’ opinions on a variety of issues. “Participation is key and members who don’t participate needn’t complain if they don’t like the resulting IBIA policy decisions.”

Looking at the state of the industry now, Bob says: “Bunkering is fine, even if the current economy has altered some of the dynamics. It’s shipping that presently is challenged, with too many ships chasing too little cargo.”

And what about the prospect of being IBIA chairman? “Well, it’s different. I think it will be a challenge and I’m quite looking forward to it.”

World Bunkering Spring 2011

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Industry news

Global round-up AFRICA Aegean starts supply in Cape Verde

Aegean Marine Petroleum Network (Aegean) is to launch physical supply operations in Cape Verde, an archipelago of 10 islands located off the coast of Western Africa. The company has also entered a strategic cooperation with Enacol, a local energy company based in Cape Verde, which will provide storage for the venture.

Under the terms of the agreement, Aegean Marine will provide bunkering services from the port of Mindelo on the island of Sao Vicente, and offshore. The port of Mindelo serves as a strategic commercial hub that lies along major cross-Atlantic shipping routes as well as important trade routes between Europe and the Far East via the Cape of Good Hope. Aegean Marine expects to initially deploy one double-hull bunkering tanker to Cape Verde and commence operations by the end of the first quarter of 2011. Enacol will be responsible for providing storage for quality fuel oils and distillates to meet the needs of all major sectors within the international shipping industry.

Aegean’s president, Nikolas Tavlarios, said: “The port of Mindelo provides exciting opportunities for our company as we remain focused on profitably increasing sales volumes. By providing an integrated marine fuel solution throughout this market, which connects critical trade routes between North and South America, Africa and Europe, we expect to increase fleet utilisation and expand our future earnings potential. Importantly, based on our cooperation with Cape Verde’s leading energy company, we will not incur any incremental capital expenditures by launching operations in this new and attractive market. We also expect to achieve operational efficiencies with our existing service centres located in Ghana and Las Palmas.”

AMERICAS OW launches physical supply in Panama

Danish-based global marine fuel supplier and trader OW Bunker has launched physical operations in Panama. The company says the move

World Bunkering Spring 2011

continues its strategy of expanding its physical supply base and ensuring that customers have access to quality products when and where they need them. Following the recent commencement of a physical offering in Uruguay, it also represents OW Bunker’s continued focus on South America, which it sees as a fast-growing economy, and as a critical market for future growth.

OW Bunker has been trading in Panama for several years but is now bringing a state-of-the-art double-hulled barge from its 32-vessel global fleet to support physical operations. The OW Otilia is one of the largest bunker barges operating in Panama with a capacity of 8,000 tonnes. It has a pumping rate of up to 700 cu m and also features flow meters and an electronic cargo control system to monitor quantity.

In addition to providing a full range of fuel from distillates up to IFO 380 cSt, OW says the vessel also has digital onboard blending equipment “so that products can be delivered precisely to required specifications”. Technical management is being undertaken by OW’s European headquarters.

Andrew Huzzard, Branch Manager, OW Bunker Panama, commented: “We have already built a good reputation as a highly experienced, responsible and flexible trading operation in Panama.

The launch of our physical presence will not only further strengthen our offering, but also consolidate our position as one of the leading suppliers in the region. Fundamentally, we know what our customers want, and have the knowledge, experience, product quality and infrastructure to deliver it.”

Götz Lehsten, Vice President, OW Bunker, added: “South America is a critical market, and we are wholly focused on ensuring that we can provide quality products and supply, and developing our physical operations as part of our ongoing commitment to our customers.

It’s a rapidly expanding market, which will see an increase in demand for fuel oil and related services. Based on our knowledge and understanding of the region, combined with our global capabilities to quickly source product as well as our flexibility in pricing, we believe that we are well positioned to meet any demands or challenges that our customers might face.”

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ASIA Singapore tops 40 million tonnes

The total volume of bunkers sold in the Port of Singapore grew 12.3% to reach a record 40.9 million tonnes, compared to 36.4 million tonnes in 2009, according to the latest figures from the Maritime and Port Authority (MPA) of Singapore. This is the first time that bunker sales crossed the 40 million tonnes mark.

An MPA statement says: “The Port of Singapore experienced a positive year in 2010, showing good growth in all areas. Singapore cemented its global leading position in terms of vessel arrival tonnage and bunker sales. Singapore’s container and cargo throughput also improved, reversing the decline seen in 2009. The Singapore Registry of Ships continued to grow and ranks among the top 10 worldwide.”

Vessel arrivals in terms of shipping tonnage reached 1.92billion gt in 2010, an increase of 7.5%. Container ships and tankers were the top contributors, accounting for 32.0% and 29.7% respectively of the total vessel arrival tonnage.

BP Singapore supplied most marine fuel in the port. There was an increase of five bunker suppliers during 2010, a spokesperson told World Bunkering, giving the port a total number of 80 as of the end of 2010.

This all adds to the picture of a continued boom in the country’s bunker industry, reinforced by an upbeat assessment by energy specialist Poten & Partners, which predicted continued expansion and that competition from China would only increase slowly.

The top 20 were: 1 BP Singapore 2 ExxonMobil Asia Pacific 3 SK Energy International 4 Aegean Bunkering 5 Global Energy Trading 6 Chemoil International 7 Sentek Marine & Trading 8 Shell Eastern Trading 9 Singapore Petroleum 10 Searights Marine Services 11 Equatorial Marine Fuel Management Services 12 Transocean Oil 13 Northwest Resource 14 OW Bunker 15 Hai Yin Marine 16 Seven Seas Oil Trading 17 Toyota Tsusho Petroleum 18 Alliance Oil Trading Trading 19 Singamas Petroleum Trading 20 Gas Trade Crowded market in Indonesia

An increase in bunker suppliers at Tanjung Priok, from nine in 2009 to 20 now, has hit operating margins and led to a call for a curb on competition, according to a report in Bisnis Indonesia.

The paper quotes Indonesian Bunker Service Association (APBI) adviser Manuel Moniaga as saying suppliers’ margins at Jakarta’s main port had been hit hard, falling by about 50%. He is quoted as saying: “At the present time there are more than 50 barges supplying bunkers in Priok.”

Mr Moniaga said that while the number of suppliers had increased, the troubled shipping market had not grown.

The APBI has called on state-owned oil giant Pertamina to put a cap on the number of suppliers and also wants the company to improve berthing provision for bunker barges.

World Bunkering Spring 2011

Dan Bunkering has launched a Monaco office

EUROPE Dan Bunkering moves into Monaco

Dan Bunkering is to launch a Monaco-based trading team in early 2011. The team will be headed by Olga Balaban, previously a bunker trader at the company’s head office in Middelfart, Denmark, as Senior Bunker Trader & Sales Manager. Ms Balaban has been with the company for several years, and has extensive expertise within the bunker industry, Dan Bunkering said.

Dan Bunkering plans to appoint more staff to join the Monaco trading team, which is expected to be open for business in February 2011.

COMPANY NEWS New head for Lintec

Lintec Testing Services Ltd has appointed Geoff Jones as Global Fuels Director following what it says is the most successful 12 months in the company’s history. Jones will assume his new role on 1 April with Steve Bee succeeding Geoff Jones as General Manager. Tracy Wardell, an experienced technical manager in the global oil testing industry, has also joined Lintec’s management team as Operations & Key Accounts Manager, the role formerly held by Bee. Geoff Jones says: “Steve Bee’s appointment is designed to help position Lintec for further successful development on an international scale and will allow me to focus on growing Lintec’s global footprint. It is good news for everybody, and particularly for our customers, because it provides the continuity which is essential for growth and improvement.”

Steve Bee, who joined Lintec in 2007, has more than 25 years’ experience of analytical chemistry and business management. He says: “The new roles for Geoff and I will set fresh challenges that can further enhance the development of Lintec in the global market.”

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environment

All eyes on MEPC

This July’s session of the IMO Marine Environment Protection Committee looks like being a crucial step towards keeping greenhouse gas measures under IMO auspices

T

he understandings reached at the United Nations Climate Change Conference (UNCCC - COP 16) in Cancún at the end of last year give the IMO the opportunity to come forward with effective measures to reduce CO2 emissions. This was part of an upbeat assessment by the UN agency’s Secretary-General Efthimios Mitropoulos following COP 16.

He said: “It is now up to IMO to redouble its efforts to make further progress on its work plan, through intensive and meaningful deliberations at the July 2011 session of the Marine Environment Protection Committee. A successful outcome to that session will enable IMO, when the Durban Conference convenes in December 2011 ....to present tangible results demonstrating [IMO] members’ commitment and determination to add the organization’s contribution to the world efforts to combat climate change.”

He said that although the United Nations Climate Change Conference (UNCCC - COP 16) meeting in Cancún did not make specific decisions on the international transport sector, “the indications are that the IMO position and progress has been duly taken into account”.

Mr Mitropoulos said, in an IMO statement, that UNCCC has once again noted the progress made by the IMO on its work plan to limit or reduce the emissions of greenhouse gases from international shipping. IMO was invited to continue informing future conferences and their subsidiary bodies of the Organization’s progress on this issue. This, he said, augurs well for the outcome of next year’s COP 17 in Durban, South Africa.

At Cancún, IMO worked towards two objectives: that the IMO should continue pursuing the reduction or limitation of GHG emissions from international shipping; and making the UNFCCC Parties aware of progress made since the Copenhagen Conference on all three pillars of the IMO’s work plan – technical, operational and market-based measures.

24

Mr Mitropoulos also said that: “To the positives of the outcome of the Conference, as far as IMO is concerned, should be added the suggestion that, within efforts aimed at raising climate change financing through the international transport sector, further work on market-based measures should be taken forward in IMO and the International Civil Aviation Organization.”

EEDI developments

While the IMO continues to work on developing its Energy Efficiency Design Index (EEDI), a row has broken out between the International Chamber of Shipping (ICS) and not-for-profit organisation Carbon War Room (CWR), founded by Virgin boss Sir Richard Branson.

Meanwhile EU-funded research is to investigate how the EEDI can be applied to ferries and other specialised vessels.

CWR has published an online database of efficiency data for 60,000 individual merchant ships, prompting a war of words with the International Chamber of Shipping (ICS). CWR’s intention in publishing the EEDI details of the world fleet on its website is to allow customers to compare the carbon footprint of the ships they are using.

ICS has made clear it has considerable problems with this project and Sir Richard’s claim in an interview with the UK’s Guardian newspaper that ‘the shipping industry was doing pretty well nothing’ about greenhouse gases did not help relations between the two sides. ICS secretary general Peter Hinchliffe complained that the EEDI was being used completely out of context by CWR. CWR said that by the end of 2010, the site had logged over 25,000 visitors, while over 1,500 users had registered to make full use of the online service.

“We’re delighted by the response from the industry, but this is just the beginning,” said CWR’s chief operating officer Peter Boyd.

He said the aim of the new ‘online data hub’ was to enable market

World Bunkering Spring 2011

Photo: Ty Stange - www.wonderfulcopenhagen.com

The 32nd International Bunker Conference

6th – 8th April Copenhagen

Attend the IBC 2011: Fuelling 2021 and beyond – are we halfway there?

IBC is the world's longest-running and most respected bunker conference and this year’s much-anticipated event is focused on what happens after the much debated 0.50% global Sulphur limit in 2020. Time wise, we are half way between the first Emission Control Area and the 2018 fuel availability review, but how far have we actually come?

How will we fuel the industry from 2021 and beyond?

Amongst the exciting topics being covered at IBC 32: • What IS bunkers? Is the definition changing?

• Are Sulphur regulations in the doldrums?

• What are the incentives to be in compliance? Or rather, what are the consequences of being non-compliant?

• IMO to EU to ISO – what are the potential conflicts and how are they being addressed?

• Refinery fuel quality in 2021 – how will it look?

• Which initiatives are available and what choices are there for ship owners to make their existing fleet more efficient?

• What options have we for new buildings?

• Alternative fuels – what are the pros and cons of the different solutions?

• Corporate Social Responsibility - what impact can YOU make?

• What is YOUR impact on the reputation of the bunker industry?

Using all the experience of the previous 31 conferences, with more than 6200 people from 23 countries having previously participated, IBC 32 is the place to be, to meet and network with bunker friends.

Read more about IBC 2011, the happenings, and the available sponsor and exhibition opportunities at www.bunkerconference.com Join the Bunker Professionals group on LinkedIn and The 32nd International Bunker Conference event page on Facebook!

For questions, please contact us at ibc@bi.no

www.bunkerconference.com

environment

??

“It is now up to IMO to redouble its efforts” Efthimios Mitropoulos

participants to more easily factor in vessel efficiency to their decision making.

CWR claims that, by employing methodology and data already available, its website provides a ‘commercially-focused tool, operating independently to, and ahead of, the regulatory pathway’.

Implicitly countering ICS’s objections, Mr Boyd said: “We spent time beforehand talking to various shipping-related stakeholders, and easy, free access to information on vessel efficiency is what they said they most needed to secure the triple win in shipping – reduced fuel burn, costs, and carbon emissions.”

Mr Hinchliffe said that the shipping industry body was concerned that CWR used different formulae from IMO to calculate EEDIs. He also said that there was no transparency for the owner who did not know what data was being used for the calculations.

He added: “We should remember that IMO and the shipping industry are working together to build upon the progress achieved over the past 50 years. The industry’s earnest wish is to have legislation in place following the next IMO Marine Environment Protection Committee meeting this year.”

ICS and its member national shipping associations are firmly against CWR’s project, but it does have the support of a number of big shipping operators, including Heidmar and AP Moller - Maersk.

Jacob Sterling, head of Climate and Environment for Maersk Line gave his support saying: “Transparency on carbon emissions is essential for businesses to make decisions with consideration for the environment. Maersk Line recently became the first shipping line in the world to have its carbon footprint verified by an independent body, vessel by vessel. We have decided to share this data with the Carbon War Room. Now everyone can see clearly how our vessels perform, both our customers and the general public. We welcome the new initiative on shipping transparency, and would encourage other shipping lines to share their data as well.”

Mr Hinchliffe commented: “We should remember that IMO and the shipping industry are working together to build upon the progress achieved over the past 50 years. The industry’s earnest wish is to have legislation in place following the next IMO Marine Environment Protection Committee meeting this year.”

26

Much less controversially, EU-funded research is intended to look at one of the more hotly debated aspects of IMO’s Energy Efficiency Design Index (EEDI). The European Maritime Safety Agency (EMSA) has awarded Deltamarin a contract for a study on tests and trials of the EEDI which will focus on ro-ros and specialist ships.

There has been considerable concern voiced by sections of the shipping industry, and especially by ferry association, Interferry, that the EEDI as so far developed is not appropriate for ferries and some other specialised vessels.

An EMSA statement says: “The main objective of the contract is to provide EMSA with a technical study on the EEDI, in order to refine the EEDI application for certain categories of ro-ro ships (volume and weight carriers) and to identify the potential application of the EEDI or any alternative method to improve energy efficiency of purpose built vessels from a technical and design point of view.”

EMSA says that Deltamarin’s commission includes firstly the refinement of the EEDI formula for ro-ro (volume and weight carriers) and ro-pax vessels. In this context Deltamarin shall assess the current baselines approach for volume and weight carriers and consider the various IMO submissions at previous MEPC. If necessary, a refinement / adjustment of the baselines for the volume and weight carriers shall be proposed. Deltamarin shall also identify possible correction factors to be included in the EEDI formula for ro-ro and ro-pax vessels. In case no correction factor is suitable, Deltamarin shall develop an alternative approach to address energy efficiency for the applicable vessel types, arrange test/trials of the proposed approach, and draw conclusions on its suitability. The study will also include a comparative analysis looking at the GHG emission reduction potential between the current EEDI approach and the potential new proposal.

Deltamarin has also been tasked to develop a framework to address the energy efficiency of purpose built vessels and specialised ships. Based on representative samples establishing baselines for these vessel categories, requirements for any additional correction factors will be identified. The main goal will be to develop methods on how to improve the energy efficiency of these vessels at the design phase.

World Bunkering Spring 2011

environment

‘Green’ options?

While political wrangles over shipping’s response to global warming continue, technological solutions to the problem appear to be coming in thick and fast

A

new report from a European Commission Joint Research Centre (JRC) describes technological solutions and proposes policy options for reducing carbon emissions and air pollution in the shipping sector.

‘Regulating air emissions from ships: the state of the art on methodologies, technologies and policy options’ highlights the uncertainties due to lack of data regarding ships’ emissions. It details the legal and economic/commercial problems associated with any attempt to bring shipping within the EU Emissions Trading System.

The JRC says: “Although maritime transport has the lowest ratio of CO2 emissions per tonne, its GHG emissions are expected to significantly increase from currently around 1 giga-tonne per year, by an estimated 150-200% over the next four decades.”

The study only briefly considers the cooling effects of SOx particles in the atmosphere, which it describes as causing a temporary cooling effect which masks the overall warming effect of greenhouse gases. It notes that this effect appears to be greatest away from the coast.

According to the JRC, technical solutions to reduce fuel consumption, air pollutants and greenhouse gases are readily available and range from better ship design, propulsion and machinery to optimised operation.

Reflecting JRC’s conclusion, the past quarter has seen several promising initiatives. Among these Germanischer Lloyd (GL) subsidiary FutureShip says that it has significantly improved the lines of a design to be used for a series of 9,000 TEU containerships in a joint venture with the Chinese design office, Maric. As a result of the optimisation, a smaller main engine can be installed than originally anticipated. The fuel consumption is reduced by more than 10% and CO2 emissions are cut by more than 90 tonnes per day.

GL’s advanced design is based on the use of conventional bunkers but, even more radically, Norwegian classification society DNV has

World Bunkering Spring 2011

unveiled a new LNG-fuelled crude oil tanker concept that “has a hull shape that removes the need for ballast water and will almost eliminate local air pollution”. DNV says that its concept vessel Triality also recovers hundreds of tonnes of cargo vapours on each voyage and represents a major step towards the new environmental era for the tanker shipping industry.

While many in the bunkering and shipping industries remain sceptical that there will be a mass switch to LNG in the short or medium terms, this option has been receiving a lot of publicity in recent months.

DNV CEO Henrik Madsen, says: “I am convinced that gas will become the dominant fuel for merchant ships. By 2020, the majority of owners will order ships that can operate on liquefied natural gas (LNG).”

Switching the commercial fleet to LNG fuel is certainly a bold proposal but is outdone in that regard by the increasingly serious suggestions that nuclear power should have a role in powering part of the world’s merchant fleet. News came in November that members of a new research consortium, which includes Lloyd’s Register, Enterprises Shipping and Trading, Hyperion Power Generation and BMT Nigel Gee, are to examine the marine applications for small modular reactors (SMRs).

The consortium plans to investigate the practical maritime applications for small modular reactors as commercial tanker owners search for new designs that could deliver safer, cleaner and commercially viable forms of propulsion for the global fleet. It believes nuclear power is technically feasible and has the potential to drastically reduce the CO2 emissions caused by commercial shipping.

“This a very exciting project,” said Lloyd’s Register ceo Richard Sadler. “We believe that as society recognises the limited choices available in the low-carbon, oil-scarce economy – and as land-based nuclear plants become commonplace – we will see nuclear ships on specific trade routes sooner than many people currently anticipate.”

27

testing

A risk management fundamental

Tore Morten Wetterhus

DNVPS head stresses the continued need for fuel testing

D

NV Petroleum Services (DNVPS) marked the 30th anniversary of its launch as a marine residual fuel testing service in January. Its ceo, Tore Morten Wetterhus, used the occasion to stress the importance of testing.

He said: “Fuel quality testing is a risk management fundamental, alerting the shipoperator to potential engine damage that can be caused by consuming bad fuel delivered to the vessel.”

According to the company, the DNV Fuel Quality Testing (FQT) programme is the biggest service of its kind in the shipping industry, with a cumulative volume of over 1.4 million tested fuel samples.

It adds that when DNV Petroleum Services (DNVPS) launched its marine residual fuel testing service on 1 Jan, 1981, shipoperators for the first time were able to scientifically analyse the quality of fuel supplied to their vessels.

Prior to that, the company says, shipoperators were unable to comprehensively predetermine the quality of bunkers to be consumed by their vessels. It notes that this became a serious constraint during the oil crisis in the 1970s when the increased application of ‘deep conversion’, high-yield refining techniques caused residual fuel quality to deteriorate considerably.

In turn, the shipping community saw a drastic increase in damages to fuel pumps, piston rings, cylinder liners and other costly engine parts on board their vessels.

Mr Wetterhus said: “The DNV FQT programme was therefore a significant breakthrough, as shipoperators enrolled in the programme could then detect poor quality bunkers delivered to their vessels and take appropriate actions.”

DNVPS went on to develop and disclose its proprietary test method for determining fuel metals content, including the highly abrasive aluminium and silicon compounds commonly found in heavy residual fuel. This test method became the basis for the IP377

28

procedure adopted by both ASTM and ISO. Bunker regulations have emerged as a key driver of change in recent years. “Regulations such as IMO Marpol Annex VI, SOLAS and the EU Directive 2005/33/EC are making a huge impact in the value chain – from fuel production to bunkering to shipoperation. DNVPS helps shipoperators manage the resulting challenges with our expert advice, training initiatives, and direct intervention through our participation in industry working committees,” Mr Wetterhus said.

He said the test data is also useful for various aspects of fuel performance benchmarking and improvement.

Surveyors – a vital part of the bunker business

World Bunkering Spring 2011

testing

Pre-testing

IBIA and BIMCO submit paper to IMO on a proposal requiring pre-testing of bunkers

T

he following is a considerably edited and abbreviated summary version of a paper submitted jointly by IBIA and BIMCO to the 15th session of IMO’s subcommittee on Bulk Liquids and Gases (BLG), which took place in early February, just after World Bunkering had gone to press.

Norway and Intertanko, in a paper to IMO’s Marine Environment Protection Committee (MEPC), argue that the lack of mandated minimum quality requirements on the fuel supplied to vessels causes preventable risk to the safety of shipping, the environment and the health of seafarers. Their paper puts the case for adopting the quality provisions detailed in ISO 8217 as part of the requirements of MARPOL Annex VI. The issue has been sent to BLG for consideration.

At present the quality of the fuel supplied is regulated on a national basis. In practice, almost all marine fuel ordered and supplied worldwide is contracted to meet the requirements of one of the grades detailed in ISO 8217:2005 and increasingly by its recent replacement, ISO 8217:2010.

IBIA and BIMCO welcome the Norwegian/Intertanko initiative but are concerned that the application of legislation to what has previously been a commercial contractual issue may cause genuine problems in the logistical supply chain by imposing a disproportionate increase in the regulatory and operational burden on ports and ships relative to the anticipated benefits of the proposed legislation.

The ambition of bringing all 23 parameters in the ISO standard together with the additional content of the eight main clauses and 12 annexes may be beyond the scope of a simple addition to MARPOL, especially as some of the provisions of ISO 8217 are incompatible with some of the provisions of the current Annex VI. In other words, to achieve the objective outlined in MEPC 61/4/7 it will be necessary to revise either Annex VI or ISO 8217 2010 or possibly both, and possibly substantially.

An additional potential restriction is that the adoption of ISO 8217 as the overarching control would prevent the use of alternative fuels for ships, which although safe, effective and desirable, do not fall into Clause 1 or Clause 5 of the standard.

World Bunkering Spring 2011

IBIA and BIMCO propose setting up a correspondence group to select those parameters and elements of fuel quality which have the greatest impact on safety, environmental pollution and health and which can be readily quantified and assayed at the delivery location.

These should be assessed on the basis of delivering a genuine improvement in the control of the identified risk and at a cost which does not discriminate against any suppliers.

We believe, ideally, that pre-testing is a valid addition to delivery routines as it will provide increasing transparency in the supply chain.

Consideration must also be given to the potential for contamination of the product subsequent to pre-testing during transportation and storage on board the receiving vessel.

IBIA and BIMCO propose that the correspondence group should make recommendations on the establishment of a pre-testing regime for marine fuel prior to delivery to a vessel after considering the following: • An acceptable routine for pre-testing fuel quality as delivered and assessing the potential for contamination of the product post-testing during transportation and storage on board the receiving vessel.

• The impact of the pre-testing routine on current supply chain logistics in terms of efficiency, cost and effectiveness.

• Stricter enforcement of Regulation 18 of MARPOL Annex VI: in particular the requirement for specific criteria for bunker suppliers’ operational procedures for the delivery of fuel to vessels; registration of bunker suppliers and the availability of such registers.

• Port authorities’ response note of protest the supply of noncompliant fuel and the practical consequences of a ban on blending bunker fuel on board supply barges.

• Establishing a definitive list of parameters which have a direct and measurable impact on the safety of shipping, the environment and the health of seafarers.

• Any possible positive effects of harmonising shore-side and marine specifications for gas oil in respect of parameters such as flash point, with the aim of enhancing and simplifying compliance.

29

A flexible approach?

LUKOIL Benelux B.V.’s Finance Director Oleksandr Butsan and Bunker Desk Manager Trader Marco Bats explain what makes for a successful operation in a highly competitive environment

B

eing part of Russia’s second largest oil major, and the country’s biggest private oil company, certainly helps, says Oleksandr Butsan, but there are other reasons why LUKOIL Benelux B.V. is a successful player in the ARA market.

As a physical supplier in Europe’s No. 1 bunker port, Rotterdam, the company is a product of LUKOIL’s diversification into markets outside Russia. It is also, says Oleksandr, part of the parent group’s policy of expanding into trading, as well as upstream and downstream.

Although there was some recovery, particularly for the liner sector, 2010 was a difficult year for shipping in general. How did LUKOIL Benelux B.V. fare? Oleksandr says: “It was no different for us than for other bunker companies. Last year was difficult but it was a bit better than the previous one. Certainly our situation didn’t deteriorate in 2010 and we managed to keep our market share of around 10-15%.

You can say our performance was consistent with our expectations for the bunker business.”

Just over a year ago LUKOIL Benelux B.V. restructured its ARA operation by closing its Amsterdam office and centralising handling of all the bunker enquiries through one contact point, the Bunker Desk in Rotterdam/Capelle aan den Ijssel. “This has turned out to be a very positive move and is certainly paying off now. We didn’t need two offices and this has been a significant cost saver,” he says.

So how is the company approaching the coming year? The theme seems to be playing smart rather than necessarily bidding for greater volumes and market share. “The important thing is the financial result,” says Oleksandr.

“We will focus on niche transactions bringing higher margins, even though there may not be more volume to capture in that segment of the market. That is not to say though that we will not look to grow volumes at all and certainly we expect significant growth through our new Antwerp operation. We should be licensed as a physical supplier in Antwerp by the end of the first quarter of this year.”

One aspect of the company’s strategy is to refine cooperation with selected large shipping lines. “We are intensifying contacts with specific companies,” says trader Marco Bats. To help boost relation-

30

Ariane

Noordster

World Bunkering Spring 2011

From left to right: Floris Baaima, Junior Bunker Trader/Operator; Marco Bats, Bunker Desk Manager; Oleksandr Butsan, Finance Director; Taco Scheening, Bunker Operator; Ron van der Elst, Bunker Trader

ships with certain lines, LUKOIL Benelux B.V.’s immediate parent company LITASCO SA, based in Geneva, Switzerland, increased the credit lines for a significant number of customers and allowed more flexibility in dealing with new customers.

Marco explains that while the company’s focus is firmly on being a physical supplier in the ARA area, its activities spread to the Baltic, Black and Mediterranean Seas and also to Singapore. Marco says: “We also assist LUKOIL Group’s bunker activities in the northern Russian ports of St Petersburg, Kaliningrad, Vysotsk, Primorsk and Murmansk, where the Group supplies bunkers to a wide variety of shipping companies.”

The company’s core activity though is a highly efficient, flexible physical supply operation in ARA. Oleksandr says: “One of the keys to LUKOIL Benelux B.V.’s success is our own terminal, Service Terminal Rotterdam (STR), to store and blend fuel oils to the required specifications. Having our own terminal, and purchasing almost all of our bunker fuels from our parent company LITASCO SA, gives us a real competitive advantage and also adds greatly to the flexibility of our ARA operation. I think it is becoming increasingly difficult to operate successfully in this market without a storage capability.”

The storage capacity also complements another aspect of LUKOIL Benelux B.V.’s competitive strategy. Marco observes: “This is a highly competitive market. I do not see anybody leaving but there are newcomers. Being part of the LUKOIL Group puts us in a different position to other players in the ARA bunker market. We trade fuel, and selling bunkers is a relatively small portion of the business. Again that gives us great flexibility to respond to the market.”

Oleksandr explains that, since 2005 LUKOIL Benelux B.V. has operated Service Terminal Rotterdam (STR) jointly with its Dutch partner, Burando. He adds: “Phase 2 of STR is under construction now and we hope that it will be completed by the end of the year.

This will increase our storage capacity by almost four times.”

During the past year, the northern European marine fuel market has felt the effects of the 1.0% cap on sulphur in bunkers used within

World Bunkering Spring 2011

the Emission Control Areas (ECAs) and the EU 0.1% cap on fuel used alongside the berth.

Has the increased demand for low-sulphur been a problem?

“No,” says Marco, “but we have certainly seen increased demand for 1.0% sulphur, which now constitutes a large part of our volumes.

Also, though we are not a physical supplier of MGO, we do arrange supplies and have seen increased demand there too.”

Until recently the company supplied a wide range of fuel, down to 120 cSt, 40 cSt and 20 cSt. Now, however, Marco says: “We have stepped back from the lower viscosity fuels because of very limited demand. We now focus on 700, 500, 380 and 180.”

Marco stresses: “In this highly competitive market it is essential to ensure efficient deliveries. We achieve this with a fleet of six timechartered barges ranging from about 1,700 dwt to 6,130 dwt.

This should normally be sufficient, even when our Antwerp supply operation is up and running. However, we always have the option of bringing in extra barges on spot charters to fulfil deliveries when required. Again that adds to the flexibility of the operation.”

Asked what are his priorities for 2011, Oleksandr responds: “Well, there are two tests that we have to pass. One is that we must keep asking ourselves what makes for a successful player in the bunker market. That means we must consider new ideas. That could mean looking closely at the possibility of supply at offshore locations in the Channel/North Sea area.”

The second test continues on a familiar theme. “We must continue to be cost conscious. We need to contain expenditure as much as possible. Centralising our operation in Rotterdam, and dispensing with the office in Amsterdam is a good example of this. We need to keep fixed costs under careful control. That is one reason why there are no plans at present to expand the barge fleet.”

Looking ahead he comments: “The prospects for LUKOIL Benelux B.V. are good if we continue to run a lean, flexible operation that is also innovative and enjoys the global strength of being part of LUKOIL Group.”

31

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Quantity

Gaining acceptance

Coriolis flow meters show great promise for the bunker industry, but some more testing and development work is required, reports David Hughes

L

ast October’s Singapore International Bunkering Conference and Exhibition (Sibcon) provided a good idea of how work on using flow meters in the bunkering industry has gone.

At the event, the Maritime and Port Authority of Singapore (MPA) announced that it will set aside S$1million (US$0.8 million) from the country’s Maritime Innovation & Technology Fund to support research into mass flow metering. That reflected the reports on field trials carried out in Singapore that the delegates heard from Seah Khen Hee, convenor of the country’s Working Group on Mass Flow Metering.

Among the results of the trials so far were: proper sizing and positioning of meter with respect to bunker tanker is important; a good stern trim of the bunker tanker (1.5 to 2.0 metres) helps to reduce the duration of stripping; there should be no stripping of a cargo tank while another cargo tank is being pumped; a metering system also allows the flexibility to deliver the nominated quantity without stripping; good flow rates were experienced in meter deliveries to VLCCs and large containerships; and crew on board found the metering system easy to operate.

It was clear from discussions on the margins of Sibcon that there was a significant amount of scepticism about flow meters, both locally and more widely. Moreover, an article carried in the winter issue of World Bunkering highlighted the fact that opinion is divided in the industry (see Letter to Editor, opposite).

At Sibcon, the issues associated with stripping cropped up frequently in conversations with suppliers. Asked what developments there had been at Endress & Hauser over the past few months regarding flow meters, a spokesman told World Bunkering: “We are still fine-tuning our system for handling stripping phases.”

He also agreed that further testing is still necessary but was relaxed about potential problems concerning calibration, saying: “Once the industry is convinced about the benefits of flow meters, we see this as a relatively simple problem to deal with.”

So how confident is Endress and Hauser that the bunker industry will accept flow meters? “For now we concentrate on providing the best systems for the application. When this is done, time and results will convince.”

World Bunkering Spring 2011

Sir, We read Jon Watson’s article in World Bunkering [Winter 2010; “Coriolis: The New Black”] with great interest this month. As a supplier of Coriolis meters, we want to join in the discussion.

Mr Watson makes a number of excellent points in his article, especially the comment that the success of flow metering would be assured if air were prevented from entering the fluid. We have found that many barges are designed to completely avoid aeration, which allows Coriolis meters to achieve a very high measurement accuracy in the neighbourhood of 0.1%. We also agree that proper sizing of flow meters is critical to ensure good accuracy without adversely affecting pumping capacity.

What we found curious was the idea that the primary motivation to use Coriolis meters in bunkering is immunity to entrained gas. In truth, we consider Coriolis meters a good fit for bunkering because of the direct mass measurement, which is unaffected by temperature, pressure, and composition. This eliminates several sources of uncertainty currently present in the bunkering process.

And while immunity to entrained gas certainly plays a supporting role, equally important is the lack of required maintenance (no moving parts), relative immunity to drastically changing Reynolds numbers (no calibration required on bunker fuel), and high accuracy.

Over the last few years, Emerson has explored the technical and logistical challenges of bunker quantity measurement. We have found that our Coriolis mass flow meters are well-suited to bunkering; however, like in any application, proper installation and operation practices are critical.

This is an area we continue to investigate and test in the field to ensure optimal performance and benefit.

Best Regards, Joel Weinstein, Applications Engineer, Emerson Process Management

33

QUANTITY

Where now?

Douglas Raitt, Lloyd’s Register’s global manager of Fuel Oil Bunkering Advisory Services (FOBAS), gives his view on flow meters

T

he measurement of bunker deliveries has been a constant challenge for suppliers and shipoperators, with discrepancies leading to countless disputes, costing the industry both time and money. Shipping has been relatively slow to adopt new technologies and there is a growing opinion that any tool that could improve the process of bunkering should be thoroughly examined.

Currently, the vast majority of the industry is dependent on manual tank gauging or sounding to determine the quantity of bunkers delivered or received. The tank gauging method involves more manual work and is time-consuming, and cannot be integrated with information communication technologies. The Coriolis flow meter or inertial flow meter is a fuel delivery monitoring system that directly measures mass density and temperature, and can detect entrained gas. Flow meters also have no moving parts and use bi-directional flow measurement either for loading or delivery purposes.

Installing flow meters on barges has the potential to deliver benefits such as increased accuracy, lower maintenance costs, fewer trips to terminals and fewer hook-ups, leading to less spill risk. It also allows for faster turnaround and shorter port stays for ships, which also reduces administrative costs.

Singapore is a leading proponent in implementing standards and technologies that improve the bunkering process. From being the first port to implement bunkering standards such as SS524 and SS600, the push towards flow meters is simply the next step.

Having registered record bunker volumes in 2010 of 40.9 million metric tonnes it would seem that the imposition of standards and controls over bunkering procedures, among other factors, has helped facilitate Singapore’s continued growth as a bunkering port.

At last year’s Sibcon, industry players came out in favour of flow meters, with some saying that the shift towards flow meters was simply a natural progression in measurement integrity and offered transparency to the entire end-to-end bunkering quantity measure process. Others suggested that Coriolis flow meters were more

34

effective than other technologies, such as positive displacement meters, due to their ability to handle entrained air as well as the digital nature of the Coriolis meter, requiring less maintenance than traditional meters.

Despite the development of flow meters, research continues into their viability and the potential problems that can arise. Some suppliers who have installed flow meters on their barges for several years have commented on their experience with the technology. While the flow meters have proven to be very accurate and have a good record of reducing disputes, they are still sensitive towards external stress, vacuum and pressure pulsations, as well as pulsations in the fuel oil that come from gear pumps or engines that are nearby.

There is no doubt that bunker surveyors will have an important role to play as the shift towards mass flow meters continues. Bunker quantity measurement is a highly complex process and as technology improves, a greater level of skills and expertise will be required to maximise the use of new technologies. If the use of flow meters does become widespread, it may bring a reduction in the number of bunker quantity disputes – with bunker surveyors vital in reconciling the different interests between buyers and sellers.

For fuel testing companies like FOBAS, mass flow meters could certainly be an opportunity to aid in more transparency and efficiency when it comes to determining quantity of fuel delivered from barge to receiving ship. Notwithstanding, though, there will still be an ongoing need by shipoperators to test their bunker fuels according to ISO 8217 specifications in order to gain true understanding of the fuel quality received and its operational impact on ship’s machinery.

Furthermore, since mass flow meters do not measure water content, tests by a shore-based laboratory will still be needed to claim for quantity differences based on water content of a fuel.

While the use of flow meters may not eradicate all the problems in bunker quantity measurement, it is certainly a step forward for the industry as it moves towards greater transparency and efficiency.

World Bunkering Spring 2011

Traders

Business as usual?

Bunker trading companies around the world have seen a number of shake-ups, but the main players remain the same

2

010 was in some ways a difficult year for many of the large trading companies, with results, particularly in the third quarter, considerably down from what had been expected.

Despite the changes, though, growth has continued, with several major players setting up new offices which will enable them to expand their global reach.

Chemoil ©

Enter the dragon?

Perhaps the biggest shake-up was Brightoil’s entry onto the Singapore fuel oil trading scene – and the subsequent move of several of BP’s Singapore-based traders to their Chinese rival, prompting a court case which is still ongoing. In November, Brightoil announced that it had secured a $4 billion loan facility from China Development bank.

The deal would provide support for mergers and acquisitions, expansion of its petroleum products trading business, and the purchase of more tankers, the company said – including the expansion of its trading business beyond the existing fuel oil desks. The company has expanded rapidly over the last two years, including setting up bunker trading operations in Rotterdam and Houston, and further expansion in these locations seems likely.

Chemoil acquires OceanConnect

In a move which will both strengthen its own hand and lead to further consolidation within the bunker trading market, Chemoil recently purchased OceanConnect Holdings Marine Fuel Group, which employed 90 brokers in 13 locations around the world.

According to a statement from Chemoil, the acquisition included a significant number of key MFG employees located in London, New York, Tokyo, Korea, and Dubai, handling an annual sales volume of approximately 8.5 million metric tonnes. The deal also includes OCH’s marine fuel business, and its independent online bunker auction portal. According to Mike Bandy, ceo of Chemoil before the takeover: “[The move] will substantially expand Chemoil’s presence in several key markets and strengthen its competitive advantage in providing speedy, cost-effective and highly reliable fuel supplies to shipping operators worldwide.”

World Bunkering Spring 2011

OceanConnect’s ceo Thomas Reilly took over from Mike Bandy as Chemoil ceo. Mr Bandy will remain as chairman and nonindependent director “to ensure a smooth leadership transition”. Mr Reilly was previously vice president for Fuel and Marine Marketing LLC, where he was responsible for bunkering and fuel trading in the Pacific Rim and the Middle East regions.

It was announced at the end of January that Keith Richardson, who was appointed Chemoil’s global business management for marine fuel last year, had left the company. However, Chemoil emphasised that this would not mean any changes to Chemoil’s senior management.

35

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OW Bunker moves into Switzerland

OW Bunker has established a new European bunker trading subsidiary, OW Bunker Trading SA, based in Geneva, Switzerland. The move is intended to further expand trading activities in Northern and Western Europe, the north Atlantic and the Mediterranean.

According to a statement from the company, the move is part of a natural process that sees OW Bunker further enhance its capabilities and presence within the supply chain of the global bunker market.

With its significant physical presence in Northern and Western Europe, the development creates one of the strongest cargo trading divisions within the bunkering industry and reinforces the company’s position as one of the world’s leading organisations in the fuel oil market, OW said.

Jane Dahl Christensen, executive vice president, OW Bunker said: “The establishment of OW Bunker Trading SA further strengthens our existing cargo trading team, building on the significant success that they have already generated to create an operation with significant depth and even more experience. Fundamentally, it signals OW Bunker’s intention to continue its strategic expansion into sectors that present real opportunities, where our industry knowledge and understanding of the global oil markets, as well as our worldwide infrastructure, financial strength and trading expertise can act as a channel for further growth.”

Peninsula opens Japan trading office

Peninsula Petroleum are also looking to expand the geographical base of their operations, having opened a new office in Tokyo in July last year to develop sales in the Japan and South Korean area.

The office is headed by Kazushi Fujisawa, who joined Peninsula from PetroChina, where he was a fuel oil trader. According to Bloomberg, he is targeting bunker sales of some 1 million tonnes per annum across both markets.

World Bunkering Spring 2011

37

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Risk Management

Getting the background

World Bunkering reviews Adam Dupre’s Introduction to Bunker Credit Risk

B

unker credit risk has become an increasingly hot topic over the last few years. Rising bunker prices and difficult economic conditions for the shipping industry have made it ever more important that suppliers are able to use all the information available to them to accurately estimate the terms they can offer to bunker buyers. Often, though, it is not obvious what exactly the risk factors are, or how that information can be used to mitigate them. Adam Dupre’s Introduction to Bunker Credit Risk, part of a series published by Petrospot, sets out to explain the system.

“Credit in the marine fuel sector has unique characteristics that are not found in any other sector,” Dupre says in the introduction, and the first part of the book is dedicated to examining those factors, beginning with the very basics of the way the bunker and shipping industries are organised, including looking at the complex relationship between owner, charterer, manager, and exactly what this means in terms of who is the actual credit party. It goes on to look at the structural risk associated with individual sectors of the shipping market, and with individual countries and current areas of concern, before moving on to look at the tools available for credit risk analysis, the process of actually making decisions, and the implications that these decisions can have on business relationships . While evaluating all the conventional tools available to the industry, and the most effective way of combining them, Dupre also covers less official sources of information, such as the role played by rumour and the effects it can have on the industry. This is typical of the realistic, down-to-earth attitude of the book as a whole.

World Bunkering Spring 2011

In the spirit of covering all eventualities, processes for securitising risk and for handling defaults, including ship arrest and legal procedures, are also covered. Appendices include credit check lists, sample credit reports, and a short bibliography offers guidance for readers who want to take the clear, basic advice offered in the book a stage further.

‘The book defines an approach that depends more on knowledge and good judgement that on the application of mathematical formulae to publicly (or even privately) available data,’ the preface promises. What it provides is a sound, commonsense guide to what can often be immensely complex and murky areas. Clearly set out and divided into sections for easy reference, An Introduction to Bunker Credit Risk is useful both as a general overview of the market, and as a desktop reference for quick information. Although billed as a guide to a comparatively narrow sector of the market, it also acts as a good primer to the shipping industry as a whole. It’s very far from being a dry read, and there are certainly moments that will cause wry recognition from anyone who’s ever tried to get information – let alone money – out of a reluctant client.

‘An Introduction to Bunker Credit Risk is an essential tool for all those responsible for making credit decisions and assessing counterparty risk when buying or selling marine fuels,’ the publishers claim.

They’re not wrong.

41

S&P

Niche Market

Evgeniy Dolgikh of St Petersburg-based specialist bunker sale and purchase broker, CMS Shipping, casts his eye over the bunker barge market

T

he sale and purchase market for bunkering tonnage is very small compared to the market for ocean-going freighters.

For this reason this niche market is out of sight of shipping market analysts and there are no official statistics available on sale and purchase transactions of bunker tonnage.

Moreover, the market boundaries are rather undefined. Small product and chemical tankers switch to the bunker trade and vice versa.

Our educated guess is that some 350-400 sea and river bunker tankers trade worldwide and, some 40-50 tankers and barges involved in the bunker trade change hands globally each year. A number of these transactions are made directly between the sellers and the buyers on the local markets. But most of the sales are made with brokers’ involvement.

Single-hull scrapping

In the past year we have seen increased scrapping of single-hull bunkering tonnage. However, this has not been on the scale that would have been expected in view of the regulations Marpol 13G and 13H. A lot of single-hull bunker tonnage worldwide has been allowed by flag states to operate beyond the phase-out dates in their local waters.

Second-hand sales of single-hull tonnage are very rare. Within the period 2004–09, Nigerian buyers were the biggest buyers of old single-hull tonnage. But now the rules there require double-hull tonnage and the Nigerians are no longer buying any single-hull tonnage. In 2010 we handled a couple of sales of single-hull tonnage at scrap-related prices for further conversion into double-hull.

Conversion

Conversion of single-hull tankers into MARPOL compliant doublehull tonnage has not, however, been a common procedure. In most cases the conversion costs are not justified by the market value of the converted vessel. Moreover, many oil companies and some shipowners buying bunkers for their ships impose age restrictions on the bunker tankers. This means that older units converted into doublehull do not have enough trading life left to pay back the investment

44

in conversion before they will have to leave the trade.

The conversions known to us were done either for bookkeeping reasons (the companies needed to spend cash to diminish their taxable income) or in cases when the cost of buying a double-hull substitute of the same class was too high compared to the conversion cost. The latter was mostly the case with ice-classed bunkering tankers. Substitute double-hull ice-classed tonnage is rarely available and priced high. We know of more than a dozen sisters of the so called 610 project (a series of 55 bunkering tankers of about 3,400 dwt built in Bulgaria between 1982 – 1990) which were converted into doublehull. Two versions of conversion design were developed. One involves the installation of a new double bottom and double sides with the consequent loss of 800 tonnes of cargo carrying capacity. The other increases the depth of the hull by one metre as well as fitting a new double bottom and sides. The latter conversion leads to the loss of only 400 tonnes of cargo carrying capacity.

Newbuild activity

We see little activity in contracting newbuilding bunkering tankers.

That is because of the great number of modern distribution tankers readily available on the second-hand market for sale. Instead of contracting purpose-built bunker tankers, the physical bunker suppliers purchase recently built or newbuilding resale product/chemical tankers and fit them for bunkering. The few known bunker tanker newbuildings are mostly built with IMO class. The extra cost for IMO class on a newbuilding tanker is pretty low, but adds versatility and liquidity to the vessel. Tankers with IMO class can operate on both the bunkering and the distribution markets. The owners might switch them from bunker trade to distribution trade in the periods when there is no suitable employment in the bunker market. When the vessel is put for sale, it attracts interest from both markets.

Perhaps the wider introduction of bunkering standards, along with the introduction of incentives and concessions similar to the ones imposed by the Maritime and Port Authority of Singapore (MPA), would encourage construction of purpose-built bunker tankers. But so far we are not aware of any other administrations that do this.

World Bunkering Spring 2011

sofTware

Keeping the fleet afloat Michael Lolk Larsen of Triple Point Technology looks at the role that IT can play in helping owners predict bunker price and consumption

A

dvances in technology have made shipping the most fuel-efficient and carbon-friendly form of commercial transport available. However, ship owners, operators and charterers have to navigate an intricate, multi-faceted and inter-dependent freight market and are at the mercy of hundreds of events that can impact the cost of transport – and hence profit margins – every day.

One of the hardest events to predict is price volatility for bunker fuel – which accounts for at least 25% of the cost of running a vessel. One factor that will certainly have an effect on costs is the implementation of the new MARPOL Annex VI rules, which are expected to increase the cost of fuel by a further 50% as result of the increased use of low-sulphur distillate fuel. Allowable sulphur content within ECAs will be reduced to just 0.1% in 2015, while outside these ECAs, shipowners will be obliged to reduce the sulphur content of fuel to 0.5%. The IMO rules therefore add to the complexity involved in planning routes effectively, ensuring the right ships make the right journeys and optimise fuel consumption.

The size of the available fleet also has to be borne in mind: too few or too many vessels directly affects prices, which in turn affects freight rates. And finally, trading finance and credit conditions can positively or negatively affect both investment spending and consumer activity.

Managing all these elements – and many more – is critical for successful shipping operations, particularly as prices of fuel, commodities, cargo, credit and vessel hire continue to fluctuate once a ship has embarked on its journey.

This is why shipowners, operators and charterers rely on an optimised ship plan that helps them minimise these risks associated with vessel operations. But in today’s complex market, creating just such an effective ship plan is beyond the ability of a chartering and operations department that is meeting weekly and using spreadsheets to manually match open vessels with potential cargos.

World Bunkering Spring 2011

This approach is slow, unwieldy and unresponsive: it can only anticipate the voyage at hand, and not very well at that. It also omits critical data and ignores the interrelated nature of challenges faced by shippers. Attempting to develop a comprehensive and optimised ship plan solely on vessel-to-cargo match without analysing critical data on best routes against distance and schedules, or without investigating optimised combinations of bunker fuel, low sulphur zones, cargo and load for those routes has a sinking effect on overall margins.

Like all risk management operations, shippers need a realtime system that offers them complete visibility across all freight operations and that can turn vast amounts of static shipping data into actionable information that supports proactive decision-making and improved bottom-line results.

For example, with an intelligent, dynamic system shippers can make scheduling as efficient as possible, reducing partial loads on any given route, and optimizing the established port schedule to minimize ballast and waiting time. Ships can be better positioned for their next journey after discharging to eliminate empty, and thus profitless, journeys. Owners and charterers can easily incorporate information on vessel availability, type and draft restrictions, and keep track of day-to-day operations, arrivals, departures, loading, discharging, bunkering and disbursement accounting in order to maintain up-to-date, real-time voyage information – without having to delve through six separate databases to do so.

What’s more, a dynamic system can integrate information from pilots and captains as the vessel starts on its journey. If unexpected bad weather or adverse currents delay a journey, that information can be incorporated into existing ship plans. The ability to manipulate up-to-the-minute data ensures that estimates for voyage time, route distances, and bunker fuel are accurate – so mitigating the extensive costs as well as the possibility of unnecessary demurrage costs, missed laycans and even lost business.

45

legal news INSURANCE

A reduced liability

Steve Randall

David Hughes takes a look at how liability risks are insured at Singapore

Y

ou might think that insuring sizeable vessels that are filled with heavy fuel oil and move around the crowded waters of the world’s biggest anchorage and bunkering port, just a few cables off environmentally sensitive tourist beaches, is not for the faint hearted. You would be right.

Actually it turns out that The Shipowners’ P&I Club now insures almost 90% of the bunker tankers operating in Singapore. The Club says its is one of the few mutual insurance groups specialising in insuring bunker tankers.

Steve Randall, the club’s general manager & director, Singapore says the mutual liability insurer’s experience is based, in the main, on working with bunker tankers in the port for almost 20 years. He says: “We are now recognised as one of the most knowledgeable players in this field.”

Although it has worked in Singapore for nearly two decades, it was only in 2009 that the Club set up its own office in the port. This was part of its policy to develop representative offices around the world, in order to provide its clients with a 24/7 service in every time zone.

Mr Randall says: “This is a business that suits the Club very well, specialising as it does in insuring vessels generally under 10,000 gt.

Effectively, the Club has grown up and matured with the bunkering operators in the port, who now have one of the most modern, stateof-the-art fleets anywhere in the world.”

About 15 years ago things were very different and, he recalls, the Club gave serious consideration to getting out of the Singapore bunkering business altogether. “At that time,” says Mr Randall, “the port’s bunkering vessels did not have to conform to any particular standards of safety of construction, and were mainly of single-screw, single-hull

46

Singapore’s bunker market has a lot to celebrate

World Bunkering Spring 2011

Insuring bunker barges in these circumstances is no picnic

design. The result was a large number of expensive accidents and resulting losses for the Club as insurers.”

Fortunately, the Maritime & Port Authority of Singapore (MPA) appreciated the need to act effectively to tighten construction and safety requirements for bunkering vessels as the bunker business continued to grow strongly. As a result, Category “A” licensed bunker tankers had to be twin-screw driven, be of double-hull construction, and were required to be provided with bow-thrusters and hydraulic booms to support hoses when connected to the receiving vessel.

At the same time, the MPA introduced a new code of practice for bunker tankers operating in the port.

Mr Randall says: “The improvements were immediate and marked – to such an extent that there was a rapid turn-around in claims within the space of 12 months. Today’s bunker tankers in the Port of Singapore are mostly around 5,000 gt, are more manoeuvrable than their predecessors, and are equipped with larger and more efficient pumps which allow them to deliver fuel to vessels much more quickly. At the same time, the quality and experience of crews has improved significantly.”

He adds though: “Of course, vessel design and regulation is just one element of the risks involved in bunkering: obviously, a vessel

World Bunkering Spring 2011

loaded with oil and carrying out complex manoeuvres in confined and crowded waters, carries with it a certain degree of risk, and if anything does go wrong, then there can be serious consequences in environmental terms.”

In reality accidents resulting in pollution from oil spills are relatively few in Singapore these days; the main problems result from navigational error and occasionally other vessels colliding with bunker tankers. Mr Randall notes: “While the masters of local bunker vessels operate purely in Singapore and are therefore well experienced in the navigational foibles of its waters, the masters of visiting vessels are perhaps less familiar with the harbour, and that is where most of the problems occur.”

He tells World Bunkering it is important to realise that the Club works with the bunker fleet operators to reduce risk as well as insuring its clients against it. He concludes: “Through its loss prevention team the Shipowners Club works with members such as the bunker vessel owners, as well as with bodies such as the MPA, to share best practice and to advise on ways to reduce risk, thus keeping claims and insurance premiums as low as possible. It is very much an insurance partnership.”

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GEoGraphical focus: Northern Europe

Green concerns drive change

The bunker infrastructure in the region is changing in response to low-sulphur regulations.

But even bigger changes could be coming

E

nvironmental concerns remain one of the major issues affecting the bunker market in Northern Europe, with sulphur regulations biting ever tighter, and more and more ports introducing features such as cold-ironing. As mentioned in the last issue of World Bunkering, there are even moves towards setting up an LNG bunker infrastructure, particularly within the Baltic region. At the time of writing, the Danish Maritime Authority (DMA) had just put out a tender for a feasibility study establishing an LNG fuelling infrastructure across the region. In an accompanying statement, the DMA said that the analysis was part of a major project with participation from, among others, the Scandinavian countries and several large companies in the energy sector. The DMA is the coordinating partner of the project. It believes that the introduction of new sulphur limits in 2015 will make LNG an increasingly attractive option for vessels operating in the Baltic on a full-time basis.

The study should have the aim of making LNG a competitive fuel for shipping in the sea areas covered by the project, the DMA said – that is, the Baltic Sea, the North Sea and the English Channel.

It sets out a number of conditions, including: • The decision paper must be relevant for central stakeholders as shipowners, ports, LNG providers, Member States and other states and the EU etc.

• Simultaneously the recommendations from the strategic decision paper must be validated through tests, including a port point of view.

The DMA states that the starting point for the project must be an LNG supply chain, covering the entire process from the reception of LNG and/or liquefaction of natural gas from the gas grid to LNG,

World Bunkering Spring 2011

via storage and distribution of LNG to the use of LNG in ships for propulsion.

Any recommendations must encompass a physical infrastructure for LNG bunkering stations as well as the supporting structure of public regulations, classification rules, and industry standards.

However, the authority does point out that there are considerable problems associated with establishing an infrastructure of the type it lays out, not least the problem that the infrastructure will not evolve if there are no ships to use it, and owners will not order LNG ships if there is nowhere to fuel them.

“The need for an infrastructure of LNG filling stations should be considered against the background that there is a well-established, competitive system for traditional bunker oil without major investment needs. On the other hand, there is no infrastructure of any importance in the LNG field. The establishment of a useable infrastructure requires great investments if it is to cover a major geographical area,” the DMA says.

“At the same time, it is a dilemma that the shipping companies are prepared to invest in LNG operation only if the necessary possibilities of acquiring fuel are available, while the LNG suppliers are prepared to invest only if the shipowners demand LNG. “The work on this dilemma is a key issue of the project.”

Could change be on the cards? As reported in World Bunkering, a number of concept vessels using LNG as fuel have been developed – most recently, DNV’s design for a LNG powered VLCC, Triality, which would, the designers claimed, “almost eliminate local air pollution”.

Concept ships, of course, are rarely built, but even so, Lars Petter Blikom, Segment Director LNG at DNV, was quoted in Bunkerworld in December as saying that: “We have seen big changes in attitudes

49

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World Bunkering Spring 2011

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on the shipowning side [to the use of LNG] in the past six months.”

Owners based in Scandinavia and the Baltic are at the forefront of this change. For example, Norwegian-based Eidesvik Offshore recently ordered its fifth LNG fuelled supply vessel from Kleven Maritime. The company claims the move confirms its position as world leader in the operation of environmentally friendly gas powered supply vessels. A statement says the contract value is about Nkr440 million (US$ 73 million). Eidesvik had already ordered a similar vessel earlier in 2010.

Eidesvik says the vessel will be specially equipped for operations in northern areas and will provide 26 new jobs in the company. It is being built to the VS 489 LNG platform supply vessel (PSV) design and will be 89 metres long and have a beam of 21 metres. The ship will be delivered in autumn 2012.

Eidesvik took delivery of the world’s first gas-powered cargo ship, the Viking Energy, in 2003 and since then has built the gas ships Viking Queen and Viking Lady.

Bunker volumes fell at Rotterdam last year

Rotterdam suffers

However, against all this, day-to-day bunkering activity has to continue, and a number of changes have taken place on the bunker scene. Most noticeable is that, despite a recovery in the box trade and levels of throughput in the port, bunker volumes at Rotterdam have continued to decline, falling for the fourth year in a row.

Total bunker volumes in 2010 fell by 2.23% against 2009, to 11.9 million tonnes. The fall came despite an 11.1% increase in cargo throughput. Including lubricants, total 2010 bunker volumes fell to 11.9 million tonnes in 2010, down from 12.17 million tonnes in 2009.

The figures were slightly down on earlier port projections of sales of 12.08 million tones, showing that recovery of cargo volumes has not had the anticipated effect. Sales of residual fuel have in fact dropped every year since 2006 – well before the shipping crisis hit – when they peaked at 13.1 million tones; a 4% year-on-year decline. Despite this fall, residual fuels accounted for 94.63% of Rotterdam’s total marine fuel sales in 2010. However, there was a huge increase in sales of MGO, which increased by 72% in 2010 to 520,000 tonnes. This increase is countered by a corresponding drop in MDO. Despite this slight fall in volumes, however, Rotterdam remains one of the busiest bunkering ports in the world, and one which is a major focus for companies looking to expand, either organically or through acquisition. In early December, for example, Baltic Oil terminals completed the acquisition of bunker storage business Petroval Bunker International B.V. from Petroval Pte. Limited for $10.8 million – a purchase that was first announced in February 2010. Petroval operates two heated fuel oil tanks, with a total capacity of 120,000 cu m, in Europoort Rotterdam, which it leases from Vopak. Baltic has said that it will take advantage of the acquisition to establish a single management team for all of its trading and terminal activities both in Kaliningrad and Rotterdam.

Brightoil also established a trading office in Rotterdam in 2010, underlining both the continuing significance of the port, and its own ambitions to establish a global presence. While the opening of a similar operation in Singapore was followed by the launch of physical operations in the port, there are as yet no indications that Brightoil intends to follow the same pattern.

OW expands physical operations in Sweden

OW Bunker has launched a new barge in Gothenburg in December, a year after it initially launched physical operations in the port. Vadero Highlander is a double-hulled 1,862-dwt barge, first launched in 2003.

It has a pumping capacity of 350 cu m, and will carry all grades of quality fuel oil products for customers.

According to OW Bunkering, the move shows the company’s commitment to further expansion within Scandinavia. It also strengthens OW Bunker’s strategic relationship with passenger and freight ro-ro operator DFDS. “Fast bunkering is a key focus in shortsea shipping where time and efficiency is critical to success – an area and a market where OW Bunker has real expertise,” OW Bunker said in a statement.

Commenting on the move, Jane Dahl Christensen, executive vice president, OW Bunker, said: “Launching a state-of-the-art, modern vessel and growing our physical operations highlights our commitment to the short-sea shipping market within the region, and the local and global customers operating within Scandinavian waters. As well as a developed supply base, we have a real understanding of the local market, which, combined with our global infrastructure, enables us to provide customers with quick access to quality products wherever and whenever they need them, and importantly, at the right price. The partnership that we have with DFDS is testament to this.”

World Bunkering Spring 2011

53

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GEoGraphical focus: Pakistan

Still waiting for 380

Pakistan possesses a small but vibrant bunkering industry but it suffers from a lack of 380 cSt supplies

P

akistan’s bunker supply industry has experienced some changes to the competitive situation over the past year but hopes in early 2010 that local refineries would soon be producing 380 cSt have not been borne out.

Karachi Port receives about 75% of the entire national trade and thus is the main focus of bunkering activity. It is a deep natural port with 11 km long approach channel. The port can take tankers up to 75,000 dwt and has 30 dry cargo berths, including two container terminals, and three liquid cargo-handling berths. Total monthly volumes at Karachi are believed to be about 8,000 tonnes.

Karachi Port Trust (KPT) has a number of expansion and development projects in hand which are at different stages of planning, tendering and execution. These include refurbishment of Oil Pier-2 and two new container terminals.

Port Qasim is an industrial and multi-purpose port in the Indus Delta some 30 miles southeast of Karachi. It has good transport connections and has been playing an increasingly important part in the country’s economic development. Bunkering takes place at Port Qasim but not during the May-August monsoon season.

Pakistan’s latest port, Gwadar, has just been built on the Baluchistan Coast. It is about 285 miles from Karachi and 75 miles from the Iranian border. Situated at the entrance to the Middle East Gulf, this new port has the potential to become a regional transhipment hub and to become a significant bunker port.

For the time being, however, Pakistani suppliers at all the ports are restricted to selling cSt 180. Adil Sher, Orion Bunkers’ director, international marine sales, says: “As far as IFO 380 cSt is concerned, our refineries are working on it but no-one is producing at the moment. As soon as they introduce the product to the market, we will supply it.”

World Bunkering Spring 2011

Orion Bunkers is the only bunker company in Pakistan with its own storage tanks for IFO, MGO, and MDO, and runs a fleet of seven self-propelled barges, which can carry all grades. It also has a fleet of tanker trucks for supplying at the berth.

Last year, one of Orion’s founders, Muhammad Yousuf, left to establish a separate firm, Ocean Bunkers. Mr Sher comments: “We have good and healthy competition in Pakistan and Orion Bunkers enjoy the lion’s share.”

Mr Yousouf says Ocean Bunkers delivers bunkers using its own self-propelled barges. He confirms that, despite expectations last year, 380 cSt is not available in Pakistan yet.

Looking at the country’s bunker scene he says: “The main challenge which we are facing here is the shortage of power generation, as power generation companies greatly depend on fuel supplied by the local refineries for generating power and due to their huge fuel requirements, sometimes we encounter short supply of fuels from local refineries for bunker supply to our ships. This is because in some cases the local refineries prefer to supply fuel to power generation companies. The second big issue is that some unrealistic parties quote inaccurate offers to the bunker traders.”

Long-established Faisal Marine Oil Services 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. It says it has plans to increase its fleet further.

Among other players in the market, the Pakistan State Oil Company supplies the Pakistan Navy, Maritime Security Agency, Karachi Port Trust, and PNSC, while Bosicor Pakistan Limited (BPL), which operates a coastal refinery about 30 miles from Karachi, also supplies bunkers. Plimsol Bunkering Services (PBS) supplies MDO and MGO to the international market using its fleet of six small barges.

55

GEoGraphical focus: INDIA

Ready for take-off

India has yet to realise its potential as a major bunker supplier, but things are changing

I

ndia has the potential to be a major bunker supplier given the large amount of trade passing through its ports, but total volumes are believed to be less than 1.5 million tonnes a year, though there are no official figures.

Administrative problems have often been blamed for the relatively slow progress made by the country’s bunker sector and for uncompetitive prices compared to direct rivals at Fujairah and Singapore. Ironically, India is a major supplier of bunker cargoes to Singapore. However, there are signs that the country’s bunker sector may be set for a period of significant growth.

Bunker trading and brokering firm Global Fuels and Lubricants says that the market has a lot of potential and has already changed.

The company is optimistic about the future, saying on its website: “There are a lot of major and minor ports besides the new ports being built, such as Gangavaram and Krishnapatnam. Infrastructure development in India is progressing at a rapid pace and thus allowing not only the domestic but the international bunker market to grow by leaps and bounds. On the west coast, Kandla, Mundra, Mumbai and Cochin are major ports with low taxes and attractive prices. Barge deliveries are possible and the prices are attractive On the east coast, Haldia, Kolkatta, Chennai, and Tuticorin are ports with lower pricing and excellent delivery facilities.”

The company currently has eight barges at various ports and is expanding rapidly. Global stresses that quality has never been an issue in India, with the refineries producing to ISO specs and possessing excellent refining capacities. On its own record the company says: “We are proud to say we have not received any quality claims in the past 15 years.“ Major ports like Mumbai, Kandla, Chennai, Haldia, Calcutta and Vizag have barge delivery. For smaller ports, usually it is road truck delivery. However, with the addition of new ports and the increase in total bunkering volumes, the new developments are happening at lightning speed.

Around India’s 3,790 mile-long coast numerous new projects are underway or in the pipeline. In July last year, government-owned

56

Bharat Petroleum Corporation (BPC), India’s second largest oil company, with activities covering refining, storing, marketing and distribution of petroleum products as well as bunkering, commissioned a barge loading facility at its Irimpanam installation on the Chitrapuzha River at Kochi, Kerala state.

In May last year BPC opened its first exclusive international bunkering terminal at the Jawaharlal Nehru Port, Mumbai. These moves are part of a plan to expand its bunkering operation right around India.

In addition to Bharat Petroleum, the country’s two largest refiners, Indian Oil Corporation (IOC), and Hindustan Petroleum Corporation are also involved in bunkering.

Another significant player is Chemoil Adani, which is based at India’s largest private port, Mundra, Gujarat. The company is a 50:50 joint venture between Chemoil, Singapore and Adani Group, India for the supply of bunkers at Indian ports. It is a physical bunker supplier at Gujarat ports, where supply is arranged from the bunkering terminal at Mundra. Supplies to other Indian ports are arranged through Indian state-owned oil companies.

Among other smaller players is Aditya Marine Inc, which provides physical supplies of bunker fuel products in the Eastern coast of India, at Kakinada, Vizag, Ganagavaram, Tuticorin, Chennai, Paradeep and Krishnapatnam. It can supply MGO and IFO. A spokesperson says: “We can supply both at berth concurrent with cargo operations and at anchorage at all of these ports except for Chennai and Tuticorin, where due to tide restrictions only supply at berth is available at the moment.”

Aditya Marine owns a fleet of four barges, of between 250 and 400 tonnes capacity and has another of 360 tonnes capacity under construction. It also runs a fleet of 20 road tankers. A spokesperson told World Bunkering that the company was expanding partly due to rapid growth in India’s offshore industry and consequent demand from supply and support vessels.

World Bunkering Spring 2011

GEoGraphical focus: Sri Lanka

New port, new row The opening of a new port in Hambantota has sparked a debate as the Sri Lanka Ports Authority sets itself up as the monopoly supplier there

T

he recent history of bunkering in Sri Lanka has been of slow and grudging liberalisation, primarily at the main port of Colombo.

Because of their location, Colombo and some other Sri Lankan ports have the potential to be major bunker ports on the main shipping route between the Middle East and Far East. For many years Colombo did indeed fulfil that role. More recently it had been unable to compete effectively with Singapore and other rivals, largely because of its higher prices, which in turn were partly due to lack of local competition.

In 2008, Sri Lanka’s Supreme Court ruled that the 2002 sale of Colombo’s oil storage facility to Lanka Marine Service (LMS) was illegal and ordered the company to vacate premises which houses 12 tanks used for bunkers. That legal move broke an effective monopoly on bunker sales.

Sri Lanka Ports Authority (SLPA) established a subsidiary, JCT Ltd Oil Bank, to run the tank farm as a multi-user facility and the market changed dramatically.

There are eight licensed bunkering companies in Sri Lanka but the market is currently dominated by three players; Lanka Marine Services, Indian Oil Corporation’s Sri Lankan subsidiary, Lanka IOC, and Lanka Maritime Services, all with about the same market shares.

Since 2008, prices have varied but have often been close to or even lower than Singapore’s. Lanka IOC in particular has had a big effect on prices as it has moved aggressively to grow its business. It has at times been accused of predatory pricing but has responded that it buys its supplies through international tenders and that prices fluctuate depending on market conditions.

The big issue in the Sri Lankan bunkering scene is now the SLPA’s determination to be the sole bunker supplier at the massive new port at Hambantota in the south-east corner of the island. The first phase of the 15-year port project was completed last year. The $450 million project, funded by China, is expected to be completed in four phases and will take 15 years for completion.

From the start Hambantota, now formally known as Magampura Mahinda Rajapaksa Port, has been seen as a bunkering centre,

World Bunkering Spring 2011

located much closer to the shipping lanes than Colombo.

However, the SLPA has also made it clear from an early stage that it wants to be the monopoly bunker supplier. At the opening of the port last year, SLPA chairman Priyath Wickrama told a press briefing that bunkering would be the one area not open to foreign investors at the new port of Hambantota. He told Reuters: “We will handle oil bunkering. We don’t want to give it outside. But bulk cargo handling, storage facility, warehouses, transhipment, and all others are open for investments.”

This January, Mr Wickrama said: “We’re hoping to start bunkering by May this year. We’re going to buy four self-propelled barges to start this business.” It is understood that the SLPA has taken this stance as it sees the bunker business as an important way of earning the cash required to repay the Chinese loans.

Unsurprisingly, the Sri Lankan bunker companies are not happy about this and want a share of the action. Lanka Business Online (LBO) reports that the firms argue that increased competition and efficiency will expand the market.

Sri Lanka Shipping has already submitted a proposal to the SLPA to sell ship fuel in Hambantota when it invited investments for industries in the new port, according to LBO. It quotes managing director Mohamed Rezaas saying: “We submitted a proposal to supply bunkers under port services. We’re waiting for a response.”

He added: “People have to go in there and invest and start marketing and offer efficient services at competitive prices to build a market.” similarly, Lanka IOC managing director K R Suresh Kumar is quoted as saying: “We see a lot of potential as it is a strategic location that can attract ocean-going vessels on the East-West shipping route. We’ve conveyed our interest to the authorities and hope everyone will get an opportunity along with the SLPA.” He argued that the SLPA could earn revenue by leasing the bunker fuel storage tanks to the private sector, which can do the marketing and selling. “It is not necessary for the entire marketing of bunkers to be handled by the SLPA. By allowing more players the business can expand,” he said.

57

UAE

Long term optimism

The best that can be said about the UAE market last year is that it was stable but there is still confidence in the long term despite difficult times now

L

ast year was not an easy one for most players in the UAE, and wider Middle East, bunker market. While overall figures are not available, the words most used to describe sales were “flat” or, more positively, “stable” and it is clear that pressure on margins has continued unabated.

In the long run, though, there is considerable optimism surrounding the UAE’s prospects. One indication of this came in October last year when a joint venture between between Fujairah National Group subsidiary Gulf Petrol Supplies and Singapore-based Chemoil, GPSChemoil announced that it had arranged the $90 million financing of phase four of its storage terminal at Fujairah.

Saif Al Salami, managing director of Fujairah National Group and GPSChemoil director, said: “Gulf Petrol Supplies’ ongoing investments in Fujairah, including GPSChemoil storage terminal expansion, are reflective of our confidence and commitment to the Emirate’s growth and strategic importance to the region.”

The storage terminal will increase capacity in Fujairah from its existing 95,000 cubic meters to approximately 675,000 cubic meters. In total, phase four of the facility is expected to cost $130 million when completed in 2012. It will be one of the largest bunker terminals in the Middle East.

Competition intensifies

At present, however, traders and suppliers in the region are having to contend with flat sales and intense competition, both locally and from Singapore, which has been competing strongly on price and, in the opinion of several insiders, has attracted some business away from Fujairah.

Mehran Ghobadian, sales director of BGK Bunkers, says: “We were hoping for much increased growth last year but instead sales were flat. It appears Singapore increased its sales at the expense of the Middle East. It was able to offer lower prices than suppliers here.”

World Bunkering Spring 2011

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Looking ahead he is hoping for a better year. He says: “I am optimistic that while volumes will probably remain stable, margins may be a bit better. We are planning to acquire one more barge to add to our current fleet of five.”

Jalal Shariff, the owner of Dubai-based trader Asean International Limited, said: “Thanks to the UAE’s strategic position demand will continue. How much volumes will grow depends on how fast the country recovers from the financial crisis of the last two years. In 2010 we have seen stable volumes.”

He continues: “Margins for suppliers still remain wafer thin.

Suppliers continue to fight for business against limited demand and to stay in existence continue to accept very low, or even negative, margins. At some stage, if the region does not pick up, possibility of consolidation or some players being unable to continue might occur.

Regarding his own firm, Mr Shariff says: “In 2010 Asean rethought its future strategy and started working on areas where margins remain slightly healthier than others. It also expanded in other countries such as Tanzania, where it complemented the one-stop-shop service to its clients. “With this new approach, we feel that in 2011 we will achieve reasonable growth over the year.”

The big picture

On the overall picture Carsten Ladekjaer, managing director International Bunkering Middle East, says: “Not having access to actual statistics and thereby more detailed and accurate figures, my personal assessment is that the volumes demanded throughout 2010 have been more or less stable compared to 2009. Amongst the local suppliers we did see some shifting in volumes though, and this is still ongoing. We also saw some of the shipoperators who pulled back earlier, post recession, coming back into action in 2010 and this of course is a good sign. The big question remains how will the future look in the coming years.

“Like so many others in this region I tend to believe that this will depend largely on the development in the Asian and Sub Indian

continents as well as of course locally. The latter would, as usual, depend largely on the development in the oil price.”

Mr Ladekjaer says that wafer thin margins and the trend towards consolidation continued throughout 2010, “to some extent”. He adds: “The demand for transport of shipping goods has decreased within the last couple of years in many segments, whereas the supply of tonnage has only increased. This sour cocktail has made many operators, owners and the like look for savings everywhere they can.

As a result there is a more intense fight for every cent to be saved or earned. On the other hand the risk involved in bunker trading has also increased and I believe more and more players in the industry are seeing a need to maintain and secure a minimum of earnings to justify the responsibility they do take on in the industry. In other words that consolidation is still going on and many players are still seeking to find out where to strike the balance between risk taking, tough competition and margin making.

“In terms of the general consolidation within the bunker and lubricant trading market,” he says, “there is no doubt in my mind that the bigger players, such as International Bunkering, should come out stronger than many of the smaller independent players, who do not find themselves on a strong financial platform and who are perhaps not geared in the same way to adjust to the current scenario.”

For International Bunkering, according to its managing director, 2010 has been satisfactory considering the market and the general circumstances at hand. “It looks like we will not be looking back at a record-breaking year this time but we are still quite proud of the team efforts and the good results we did achieve in what I would call a challenging market in a challenging time. As such, I remain optimistic as far as 2011 is concerned. I do believe 2011 will be another year where we shall see further consolidation within both the shipping and bunker industry scene. There are quite a few major players out there who will aim to make it their year and as such I expect it to be quite an interesting and exiting year.”

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World Bunkering Spring 2011

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previews

Fujairah beckons

David Hughes previews the Seventh International Fujairah Bunkering and Fuel Oil Forum

Y

es, it’s nearly that time again. Time to fly into Dubai airport, jump straight into a taxi and head out into the desert, across the Hajjar Mountains and for the everexpanding Indian Ocean emirate, city and port of Fujairah.

Fujcon, or more formally the International Fujairah Bunkering and Fuel Oil Forum, takes place every two years. Its host city has changed a lot since the first Fujcon was held. While Fujairah is nowhere near the size of Dubai, it has grown massively during those years, with numerous tall buildings appearing.

The rapid growth of the city is going hand in hand with similar expansion of port infrastructure. Fujairah’s new investment in storage facilities is set to increase total capacity from its current 3 million plus cubic capacity to 7 million cubic metres by the end of 2012.

The intention is to continue to strengthen the port’s bunkering operation and also to develop Fujairah as a global hub for both oil and product supply. The Abu Dhabi Crude Oil Pipeline project (ADCOP), transporting 1 to 1.5 million barrels per day via a 360 km 48 inch pipeline from Habshan to Fujairah, will include storage for 12 million bbl and three single point mooring buoys for deep-water tank loading. Additionally, the port is currently completing a further 1,500 metres of oil berth, complementing the 840 metres already in operation. A decision on further berths is imminent.

Once again Fujcon’s venue is the award-winning, five star Al Diar Siji hotel where Singapore-based Conference Connection will make sure the event provides an independent platform for the discussion of the industry’s latest trends, opportunities, challenges and regulations.

As ever, the programme is international but has a strong Middle Eastern flavour. The welcome address will be given by Mohammed Saeed Al Kindi, the emirate’s former Minister of Environment and Water. Dr Al Kindi is well known in IBIA circles and was formerly a Council member.

Newly appointed Chemoil Energy ceo Tom Reilly will give the state-of-the-bunker industry address. Mr Reilly is likely to gain the

World Bunkering Spring 2011

conference’s undivided attention as this will be his first speech since taking over the running of the large independent global supplier.

Topically, Chemoil recently announced massive investment in storage facilities in Fujairah.

There will be two keynote speakers: Ali Obaid Al-Yabhouni, general manager of ADNATCO-NGSCO and UAE governor for OPEC, and Fereidun Fesharaki, chairman of FACTS Global Energy Group.

The two days of intense discussion will feature a wide range of speakers, including IBIA chief executive Ian Adams.

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The organisers say the conference will cover the following main topics: • The global oil market and fuel oil/bunker outlook east of Suez • Future storage trends and why Fujairah should be chosen as a storage hub • Latest developments in Fujairah and other global bunkering markets • Updates on bunker trading, pricing and hedging strategies • Revised Marpol Annex VI & NOx technical code and regulations for measurable reductions of GHG emissions from ships • Sulphur emission reduction alternatives: capacity and environmental attributes

World Bunkering Spring 2011

• Marine fuel standards, fuel management and efficiency, fuel

contamination and fuel additives • Scrubbing technology, metering and maximising strategies for

P&I. That is an ambitious programme for a two-day event but there will be time to relax, and to socialise. In fact there are no less than seven social functions associated with Fujcon this year. Breaking the ice will be an opening reception. And then there is the conference dinner, a well-established feature of the conference. Old Fujcon hands will no doubt have fond memories of dinners past.

Oh, there is one more thing that mustn’t be missed; the postconference visit to the port and other offshore installations – a glimpse of one of the world’s main bunkering hubs in action. After all, that is what this gathering is really all about.

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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

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

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News and views A round-up of news from the Russian bunkering sector, provided by Olga Bogacheva

Olga Bogacheva

Growth prospects poor in Primorsk

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il and oil product transhipment in Primorsk port in the first 11 months of 2010 fell by 2.1% against the same period in the previous year to 70,711,500 tons. The port handled some 65.4 million tons of oil, down 4.3% against the previous year and 5,287,500 tons of diesel fuel, according to Marine Port Administration records.

Industry sources do not see any growth potential in Primorsk and expect further reduction of sales due to redistribution of cargo traffic between the new Kozmino port (Far East) and the Rosneftbunker oil terminal (Gunvor oil trader subsidiary) in UstLuga, which is expected to come into operation in February 2011.

A potential merger between Primorsky Merchant Seaport (PMS), which operates all four oil berths in the port, with Novorossiisky Merchant Seaport (NMS) is unlikely to bring any change to Primorsk.

NMS has enquired about a 100% acquisition of PMS. This would give PMS’ owners, Transneft AK, and Summa Capital investment group a controlling stake in the merged company, as they would own 50.1% of NMS on a 50-50 basis. However, no binding documents were signed.

Primorsk is one of the largest oil exporting ports in the Russian Federation. Primorsky Merchant Seaport exports oil which arrives through the Baltic pipeline, while Balttransservice tranships oil products from the product pipeline Kstovo-Yaroslavl-KirishiPrimorsk. In 2009 transhipment reached 79,138,000 tons. Figures for 2010 are expected to be similar.

Primorsk is one of the largest oil exporting ports in the Russian Federation

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UST-Luga port turns into an ocean hub

In October, 2010 the first ocean-going car-carrier to make a port call in Russia arrived at Ust-Luga port. Previously, vessels of this class were unable to call at Russian ports because their draft was too great.

Opening up Ust-Luga to ocean-going vessels will allow shippers to cut transport costs by 7% by calling at the port directly, avoiding calling at transit Baltic ports. From next spring, ocean services to Ust-Luga will become regular, and will not be limited to automobile deliveries. Analysts believe the changes will provide both economic and political benefits.

The Grand Mercury called at Yu-2, Ust-Luga’s multi-purpose transshipping complex (MTC), on 18 October. The vessel arrived from Korea and delivered 3,000 Hyundai automobiles. A second ocean-going car carrier called at the same terminal on 25 November, 2010. Morning Cello arrived from Ulsan, South Korea, and delivered 1,884 Hyundai automobiles.

Although the terminal has been operating since summer 2008, the Grand Mercury was the first vessel of this class to call there.

Negotiations with the shipper lasted for two years before the port call was possible. No other Russian ports can accept ships of this size.

Previously, such large vessels were unloaded in the nearest foreign Baltic ports and the cargoes were then transported to Russia either by feeder vessels or by road and railway.

The Grand Mercury is 200 metres long, and has a cargo capacity of 5,560 cars. The depth at Yu-2 terminal is currently 12 metres, and may be further increased to 16 metres in the southern port area and to 17.5 metres in the northern area. The time necessary for unloading depends on turnover in terminals.

Ocean services are expected to become regular in spring of 2011 when the new logistic scheme is fully developed. At present, the first permanent ocean shipper, who works with a number of well-known car manufacturers, has been confirmed. The terminal is in ongoing negotiations with other potential clients to arrange ocean transportations to Ust-Luga. Ust-Luga Company aims to turn the port into an ocean hub in future.

Maxim Shirokov, Ust-Luga CEO, said: “Ocean carriers calling at Ust-Luga port have demonstrated to shippers around the world that there is an opportunity to improve logistics and cut transportation costs by excluding auxiliary operations in Europe.”

He also said that Russia may now escape having to depend on transhipment from

World Bunkering Spring 2011

neighbouring countries, as there may be a change to existing logistic schemes in which cargoes are delivered to Russia through Baltic countries, and Finland may also change.

Other experts also predict that the development of Ust-Luga port will have a positive effect on the Russian economy. In their opinion, a direct call to Ust-Luga port will reduce transportation expenses by 5-7%. There will also be benefits to the end consumer. Delivery time will be reduced; for example, delivery from Riga port will be cut by a day. This is a first step to export and import independence from neighbouring ports and improved safety of deliveries.

Nina Oding, department head of the Leontjev Centre, recognised for social and economical research, forecasts that the cost and time savings offered by Ust-Luga will lead to turnover at least doubling in the near future. “Ust-Luga port will certainly attract cargo flows from Finnish and St Petersburg ports with its modern technologies and multiple development opportunities. It seems reasonable that ocean carriers will soon deliver containers to Ust-Luga; almost any goods may be transported in containers,” Mrs Oding stated. In her opinion, direct ocean vessel calls to Ust-Luga will solve the problem of hours-long traffic jams at the Russian-Finnish border.

The multi-purpose transhipment complex Yu-2 is intended for rolling cargoes such as automobiles, containers and general cargo, including large and non-standard products. At present, Toyota, Hyundai, Kia and Subaru automobiles are delivered directly to the port.

Ust-Luga recently welcomed its first ocean-going car carrier

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NIZHEGOROD-BUNKER LTD

Your reliable bunker supplier in the Volga basin THE and neighbouring waters offering high-quality ONLY OFFICIAL MAGAZINE OF fuel at flexible prices.

IN PARTNERSHIP WITH ROSNEFT Nizhegorod Bunker Ltd 13/2 Ilyinskaya Street Tel/Fax: 007 831 434 4845 or 007 831 430 9226 E-mail: noilnn@mail.ru Website: www.nizhegorod-bunker.ru

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A major storage upgrade is under way at Kozmino

Drone aircraft monitor environment in Ust-Luga port

The Federal Service for Supervision of Natural Resource Usage of North-West Russia has announced that drone aircraft will be used to monitor the port environment in Ust-Luga.

According to spokesman Vasiliy Fedorov, “The territory of the developing port is enormous. There are coal terminals, sulphur terminals and other transhipment complexes. Considerable labour and time resources would be needed to monitor their influence on the environment. The drones used by our service provide the necessary information quickly and at comparatively low cost”.

Photos received from the drones document the current situation and its dynamics, thus helping to prevent emergencies and preserve the environment.

More storage at Kozmino

Spetsmornefteport Kozmino has commissioned three new storage reservoirs, expanding its oil storage capacity to 500,000 cu m. The acceptance document was signed on 26 October, according to a media spokesman for the port. The new facilities are intended to store additional oil resources from the expansion of the Eastern Siberia – Pacific Ocean pipeline, which has a projected capacity of 30 million tonnes.

All three of the 50,000 tonne capacity storage tanks are equipped with floating covers. The tanks will allow the port to store cargoes for two vessels simultaneously, which will be necessary when the terminal expansion project gets underway.

A number of other projects are under development at other sites in addition to the construction of the new 50,000 tonne reservoirs.

World Bunkering Spring 2011

Earthworks and foundation construction for additional metering stations were performed at coastal and mooring facilities. Tanks for holding accidentally discharged oil and for fire-extinguishing water are under construction at the oil intake station; foundations for a safety bypass and other main and auxiliary facilities have been laid, and the construction of household and office buildings, an analytical laboratory building, and a parking lot for special vehicles is in progress.

By the end of 2011 the second tanker berth should be completed, metering stations at coastal facilities installed, and oil acceptance stations completed; the main pipeline will be connected to these facilities.

Spetsmornefteport Kozmino is a subsidiary of Transneft Oil Transportation Company. It is at the end point of the Eastern Siberia – Pacific Ocean pipeline, which is intended for transhipping oil to modern sea vessels with maximum speed and minimal risk of accidents. The port is projected to serve tankers of between 80,000 – 150,000 dwt from its own oil-loading terminal. The marine terminal at Kozmino started operations in 2009. Its annual capacity is 15 million tonnes of oil, which may be extended to 30 million tonnes. 11,142,000 tonnes of oil were exported during January – September 2010.

Cargo port to move from the centre of St Petersburg

Rosmorport, the federal state owned enterprise, has begun to develop the strategy for Russian port development up till 2030. The plan is expected to include the complete withdrawal of port operations from the centre of Saint Petersburg. The strategy could be approved by Vladimir Putin, Russian Prime Minister, as early as the end of 2011.

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

We operate a double hull barge with segregated tanks for carrying multiple fuel grades.

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

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

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The idea of removing port operations from the centre of St Petersburg has been discussed for decades. But until recently it was assumed that only the handling of the so called ‘dirty cargoes’ would be moved out. Container operations, which are considered environmentally friendly, were expected to stay in place. However, Igor Rusu, general director of Rosmorport, considers this approach to be nonsense: “High-tech oil transhipment is less hazardous than container terminals. The latter are served by thousands of trucks with their emissions poisoning the air.

Authorities will encourage port operators to move their facilities to the city suburbs or to the new ports in Ust-Luga or BronkaLomonosov.

Currently, almost all port territory in St Petersburg (300 hectares) belongs to the city and is leased to port operators for 49 years.

Petersburg Oil Terminal expands storage capacity

St Petersburg Oil Terminal is to install a new 40,000 cu m oil reservoir by summer 2012, bringing the total storage capacity of the terminal to almost 400,000 cu m. The new facility is intended for the storage of either fuel oil or expensive vacuum gas oil. Depending on the market situation in 2012, the facility may be used for either of these products.

Petersburg Oil Terminal is one of the largest Russian oil terminals on the Baltic Sea, providing transhipping and storage services for export products, bunker fuel and fuel oil for St Petersburg power

suppliers. The company also offers oil product quality control services, and the recycling of oily water for vessels making port calls.

During 2010 10.2 million tonnes of oil products (7.4 million tonnes of heavy fuel, 2.8 million tonnes of light fuel) were transhipped at Petersburg Oil Terminal. Financial results were largely unchanged from the level of the preceding year.

Kontur Group diversifies

Kontur Group plans to develop river transportation of oil products from the Volga River to the Baltic, Caspian and Black Seas, and has taken the decision to build an appropriate fleet. In early November 2010, it signed a contract with the Baltic Ship-Building Company for the construction of four non-self-propelled bulk-oil barges. The barges, designed by Marine Engineering Bureau, are intended to transport oil products with a flash point of over 60oC. The vessels are licensed to operate on internal waterways and marine areas in broken ice up to 20 cm thick. They will primarily be push barges, although they can also operate as towed barges. The 6,300 dwt barges are classed by the Russian River Register and are 108 metres long by 16.6 metres in the beam. The barge will be equipped with double-hulls surrounding 12 tanks.

Lukoil provides gas oil in Constanta

Lukoil has expanded the range of fuels it provides in Constanta, Romania. The company carried out its first gas oil bunkering operation in the country in November 2010. CMA CGM Hollandia, AGAT and ULLA SCAN vessels were provided with gas oil delivered by the bunker barge Navi (previously Unicom Energy), which was bought and repaired by Lukoil-Bulgaria Bunker.

Sales double for Infotech Flex

Moving containers in St Petersburg

World Bunkering Spring 2011

In 2010, Infotech Flex saw sales up by 1.8 times against 2009. However, preliminary analysis showed that bunkering equipment sales remained at the level of 2009. Supplies of equipment to oil transhipping companies significantly increased. This growth is the result of planned modernisation and construction of new transhipping complexes.

Demand for hose lines for pumping oil products during delivery of goods to the Northern Territories grew significantly.

Infotech Flex expanded its product line and offered flat-fold polyurethane hoses for transportation of oil products and chemicals.

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AMKOIL LTD P a r t o f A M K G r o u p o f C o mp a n i e s

Amkoil Ltd 86 Podgornaya Street Office 413 Murmansk Russia 183038 Tel/Fax: 007 (8152) 287828 Tel/Fax: 007 (8152) 287337 Tel/Fax: 007 (8152) 286028 E-mail: amkoil@mail.ru

Your bunker supplier in the port of Murmansk and other ports of Murmansk region.

We supply: • bunker fuel • all types of petrol • fuel oil M-100 • fuel IFO-380, IFO-180, IFO-30

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New bunker barge for Istanbul

Monopoly row at Novorossiysk

Gokdeniz, a new double-hulled bunkering vessel owned by Lukoil Bunker, started operations in Istanbul port and Izmitsky Harbour on 9 December, 2010, delivering fuel oil and gas oil to the Ocean Winner.

The bunkering vessel can deliver 900 tonnes of fuel and 130 tonnes of gas oil simultaneously.

The new barge brings Lukoil Bunker’s Istanbul-based fleet to three mixed bunker barges, delivering fuel oil and gasoil, and four vessels supplying gasoil only. Lukoil Bunker currently supplies between 13,000 and 15,000 tonnes of fuel per month in Istanbul and Izmitsky and intends to expand its operations to other Turkish ports.

Russian Port News reports that a 4,250 teu container ship operated by major international container liner operator ZIM had difficulty docking at the port of Novorossiysk. NCSP Fleet, which provides 95% of all towing services at the port refused to provide a tug to moor the ship, Yuri Karapuzov, General Director of ZIM Russia, was quoted as saying.

He explained that the ship was heading for the berths 17-18 of OJSC Novorossiysk Commercial Sea Port for unloading. The master requested NCSP Fleet’s dispatcher to provide tugs, but received a negative answer without explanation. As there was no alternative to NCSP Fleet, the vessel had to anchor off Novorossiysk port and wait until the next morning to request tugs.

Mr. Karapuzov added the boxship was going to purchase bunker fuel from the Trans Oil Service, which is not part of NCSP Fleet.

NCSP Fleet is one of the largest private marine barge and tug companies in Russia and also supplies bunkers and a number of other port services. It currently operates a fleet of 68 vessels including 27 tugs, seven bunker barges, a specialised fire-fighting vessel, a fleet of small passenger boats and supply vessels and other specialised ships.

NCSP Fleet provides 95% of towing and mooring services at the port of Novorossiysk.

Tovra starts work in Murmansk

The double-hulled bunker barge Tovra has begun operations for the Murmansk subsidiary of Lukoil-Bunker. The barge will deliver light fuel and fuel oil in Murmansk. The tanker is equipped with two pumps with capacities of 150 cubic metres/hour and 40 cubic metres/hour, respectively.

Lukoil delivers fuel for Navy

The Kaliningrad branch of Lukoil-Bunker delivered 80 tonnes of light fuel to the Russian navy frigate Gepard in Baltiisk. The fuel was delivered by the Ramala tanker. Lukoil will continue to supply fuel to the Navy in future.

The port of Novorossiysk

World Bunkering Spring 2011

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legal news

Legal Eagle

Our regular round-up of news and events from the legal side

Cosco Busan settlement with Californian fishermen

T

he Maritime Advocate reports that observers of the costs of oil pollution have another piece of the pricing jigsaw with the news that the 2007 spill has resulted in a settlement with local fishermen around San Francisco Bay of some of $6 million in damages.

The container ship spilled roughly 53,000 gallons of residual fuel oill into the bay on 7 Nov, 2007, after it struck a fender around one of the Bay Bridge’s towers and cut a 212-foot gash in the ship’s hull. About 120 fishermen launched a class action for losses suffered as a result of the spill, which affected some 26 miles of shoreline and killed over 2,000 birds. The ship hit the San Francisco-Oakland Bay Bridge and ruptured a bunker tank. The pilot was jailed for 10 months for environmental offences while Fleet Management was fined $10 million for various offences relating to the navigation of the vessels and of obstructing the US Coast Guard investigation.

The local fishermen filed a series of class action suits against the owners and operators of the container ship in both federal court in San Francisco and in San Francisco Superior Court. Lawsuits were brought against both Fleet Management and the ship’s owner, Regal Stone Ltd. of Hong Kong.

Both lawsuits claimed fishermen suffered “profound” economic damage from the oil contamination and sought certification as class actions on behalf of all commercial operations that catch fish in and near San Francisco Bay. A settlement was recently reached to pay Bay Area commercial herring, halibut and other finfish fishermen $3.65 million for longterm damages claims in addition to monies previously recovered, according to an attorney for the fishermen. About 120 commercial finfish fishermen will split the $3.65 million settlement.

The fishermen’s lawyer, Stuart Gross, is quoted as saying: “They fought us hard but ultimately came to the table and agreed to a very fair and adequate settlement.”

World Bunkering Spring 2011

A National Transportation Safety Board report concluded that the accident, which happened in thick fog, was due to poor decisions by the pilot, who was found to have been medically unfit, and the ship’s master and bridge team, and to poor communications on the bridge.

US Customs withdraws Jones Act Offshore Rulemaking

US law firm Blank Rome has issued an advisory bulletin which describes a continuing uncertainty in the operations of offshore operators, and which could potentially affect suppliers offering offshore bunkering services.

On 15 November, 2010, US Customs and Border Protection (CBP) withdrew an Advance Notice of Proposed Rulemaking (ANPRM) regarding the transportation of merchandise and equipment by foreign-flag vessels engaged in the support of Outer Continental Shelf activities. The ANPRM was under review by the Office of Management and Budget (OMB) when it was withdrawn prior to publication in the Federal Register. This would appear to mean that most of CBP’s OCS-related rulings issued over the last 30 years remain valid as precedent, subject to CBP review on a case-by-case basis when it considers new requests for rulings by industry for future projects. Owners, operators, charterers and other parties that have an interest in offshore operations potentially involving the use of non-coastwise-qualified vessels and the transportation of merchandise and/or carriage of equipment should confer with counsel and CBP with regard to seeking offshore Jones Act rulings for future projects, the firm advises.

The bulletin is available in full at: www.blankrome.com/siteFiles/Maritime1210-11.pdf

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EQUIPMENT AND SERVICES

Equipment and services What’s new, what’s useful, what’s changed?

Wartsila scrubber for Containerships

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innish-based companies Containerships and Wärtsilä have signed a turnkey contract that will see Wärtsilä’s scrubber technology installed on one of Containerships’ vessels by the end of this year.

According to a press release from the two companies, the technology will move Containerships a long way towards matching the 2015 SECA requirements. Use of the scrubber will mean the test vessel, M/V Containerships VII will meet the strict regulations by the end of 2011.

Wärtsilä is the first manufacturer to have been awarded a marine scrubber certificate by the classification societies Det Norske Veritas and Germanischer Lloyd. The scrubber installation consists of a scrubbing unit including control and monitoring systems and ancillary equipment which cleans the exhaust gas from the vessel’s main engine. Scrubbers efficiently reduce exhaust gas emissions such as sulphur oxides and particulates, and also nitrogen oxides, slightly.

The scrubber works with fresh water in a closed-loop system in which sulphur oxides are neutralised with caustic soda. A small amount of scrubbing water is constantly extracted and fed into treatment units on board where the contaminants are removed and pumped into vessels existing sludge tank. Contaminants are always disposed of at reception facilities in port. Clean effluents are discharged overboard, in accordance with IMO rules. The scrubber can also be operated in so-called zero discharge mode where clean effluents are fed into a holding tank.

“The Wärtsilä fresh water scrubber technology will meet both environmental and commercial requirements for our operations. We see it as a clear advantage that Wärtsilä, with its long experience in emissions abatement technology, delivers the scrubber solution,” says Sigurjon Markusson, CEO, Containerships Ltd Oy. Kittiwake acquires Procal

Monitoring technology company, Kittiwake Developments, has bought Procal, a manufacturer of in-situ, multi-component continuous emissions monitoring systems (CEMS).

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Chris Leigh-Jones, director, Kittiwake Developments said: “There are clear synergies between the two businesses. Like Kittiwake, Procal’s customers span the globe and rely upon products for market-leading testing and analysis solutions across a multitude of different applications. There is no doubt that Procal’s analysers offer clear advantages over alternative solutions within an expanding and ever-vital market place for reliable emissions monitoring.”

According to a company statement the newly-named Kittiwake Procal can supply CEMS for a very wide range of applications, spanning power generation, marine and offshore, cement, incineration, refineries, paper and pulp, steel, nitric acid and fertilisers. Complying with international standards including EN14181 and US EPA 40 cfr Parts 60 & 75 for the measurement of NO, NO2, SO2, CO, CO2, H2O, the in-situ analysers monitor and measure emissions accurately and reliably. This contrasts dramatically with the high maintenance requirements of extractive CEM systems that can incur additional costs to ownership.

Mr Leigh-Jones added: “When I came across Procal while seeking sulphur oxide (SOx) emissions data from a passenger ferry, their CEMS was the only one that provided accurate measurements and proved rugged enough to withstand the environmental challenge.

You might say, we liked it so much we bought the company!”

Kittiwake says that the in-situ design brings further cost savings as installation is minimal compared with extractive systems, translating into lower tubing and cabling costs, particularly if other analysers form part of the emissions system. The flexibility of the Kittiwake Procal CEMS enables an integrated system capable of receiving data from other instruments, which typically measure parameters such as oxygen, opacity/dust and velocity. In addition to displaying, data logging and retransmitting, the Kittiwake Procal system can use this data to correct the readings to normalised levels.

Chris Daw, Kittiwake Procal MD, said: “The Procal business is 25 years old in December, and this new alliance with Kittiwake provides a solid platform for growth going forward. Our new, bolstered infrastructure provides the scope to capitalise upon increasing

World Bunkering Spring 2011

market opportunities, and we remain committed to an ambitious development programme, which will result in a range of advanced CEMS to meet future market and legislative demands worldwide.”

Kittiwake Developments says that, despite the challenging financial climate, it has achieved approaching 10% growth on last year.

The acquisition follows the launch of ThrusterSCAN, a new product for the offshore marketplace, and the appointment of a new CEO for its US operations. Kittiwake says it continues to explore various expansion strategies to achieve ambitious growth plans, with further significant announcements expected in early 2011.

New partnership develops hybrid propulsion

Electronic Power Design Inc (EPD) and Siemens Industry Inc Drive Technologies have formed a “solutions partnership” for Siemens ELFA R hybrid propulsion systems. Siemens recently released its newly designed ELFA hybrid propulsion system, which is claimed to offer considerably enhanced fuel consumption, range, redundancy, and manoeuvrability.

A statement says: “The Siemens ELFA successfully closes the gap between large merchant vessels and small recreational and commercial crafts traditionally powered by mechanical propulsion solutions.

The standardised plug and operate solution further reduces the time/effort required for installation and integration into the vessel.

Siemens Hybrid Control Software enables realisation and control of different operational modes on a vessel: diesel electric mode, pure electric mode and hybrid mode “ “EPD continues to demonstrate its technological competency for Siemens products, being a Solutions Partner for almost 20 years,” said John Norwood, EPD’s Vice President of Business Development.

“EPD has maintained an excellent relationship with Siemens and has continued to provide the technological and specific applications expertise utilising Siemens products worldwide.”

EPD plans to integrate the ELFA system components with engines, gearboxes, the vessel control system and stored energy devices as needed, and tailored for the customer’s application. EPD will also be responsible for system engineering, service, programming and implementation of Siemens Industry ELFA R propulsion system.

EPD is recognised worldwide for its innovative electric power control systems and systems integration for the marine, drilling, power-

distribution, petrochemical, steel, paper, plastics, and solar and wind energy sectors. EPD is a leader in designing and servicing all type of commercial electrical equipment with an emphasis on total power system integration and automation.

Castrol, Maersk to offer engineer training

Castrol Marine says it has appointed Maersk Training as a global nonexclusive distributor of Castrol Academy, a module-based training course designed to help marine engineers develop a broad range of skills “to move the industry forwards”.

Ther Castrol Academy training package, which includes printed course materials and DVDs, will be redistributed by Maersk Training.

This will enable Castrol Marine to take advantage of Maersk Training’s established global infrastructure to promote Castrol Academy in order to deliver engineering expertise to new and existing customers of both companies.

The agreement also encompasses the promotion of Maersk Training courses to Castrol customers. The Danish-based learning provider has, over the past three decades, built a broad portfolio of courses specifically developed for the maritime, offshore and wind-power industries. Through this agreement Castrol customers will receive a 10% discount when booking a Maersk Training course.

Castrol Academy was developed in direct response to an industrywide problem: a recent survey by the Institute of Engineering and Technology revealed that 55% of those polled reported problems recruiting experienced, well-trained technical ship crews.

Albert Chan, Global Offer Director for Castrol Marine, said: “Lack of skilled marine officers is pushing up operating costs and holding back the development of fleets. Castrol Academy was created to help address increasing fears of crew shortages while providing a source of added value to customers such as improving efficiencies.”

Mr Chan added: “We are very excited to work with Maersk Training, which is leading the industry in marine training programmes.

This deal will enable Castrol Academy to reach a broader audience, demonstrating the added value of working with Castrol as lubricants supplier by providing access to the wide-ranging courses of Maersk Training and helping to close the skills gap threatening the industry.

It will also complement Maersk Training’s training portfolio, making this an excellent partnership for both companies.”

Expanded training can help move the industry forward

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Company News

Baltic Fuel Company Ltd

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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. There are 31 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

World Bunkering Winter 2010

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 2010, including fuel oil and low-sulphur diesel fuel.

Bunkering units of the Baltic Fuel Company Ltd are members of the Russian Association of Marine and River Bunker Suppliers, SaintPetersburg 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.

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 Website: www.balticfuel.ru

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Company News

LUKOIL Benelux B.V. set to strengthen its presence in ARA in 2011

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UKOIL Benelux B.V. is a prominent and reliable physical supplier of bunker fuels in the ARA region (Amsterdam-RotterdamAntwerp). We are supported by the logistic and financial strengths of our parent company LITASCO SA in Geneva, Switzerland.

LUKOIL Benelux B.V. is part of the Russian oil major, LUKOIL, which also has widescale operations outside of Russia.

Our clientele varies from the well-known large and medium shipping lines to other physical suppliers and trading companies.

In the last couple of years our company has had a market share of 10-15% in its home market of the Rotterdam and Amsterdam ports. In June 2010 the Credit Risk Management Committee of LITASCO SA approved a strategy for further growth of our bunker trade in ARA, increased credit lines for a significant number of our customers, and allowed more flexibility in dealing with new customers. This step clearly shows that LITASCO SA and LUKOIL Benelux B.V. have adapted themselves very well to the post-crisis situation in the bunker industry and feel comfortable to explore new market opportunities. However, we continue to closely monitor the situation in the market and are ready to implement necessary changes in order to be able to successfully face any new challenges and sustain the growth of our business.

In July 2010 LUKOIL Benelux B.V. made a decision to close its Amsterdam office and centralise handling of all the bunker enquiries through one contact point, Bunker Desk in Rotterdam (Cappelle aan den Ijssel). The formal closing of our Amsterdam office took place at the end of July 2010. This step has proved very successful and has helped our company to optimise its operations. Since then, LUKOIL Benelux B.V. has been serving its clientele more quickly and efficiently.

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, and other locations in ARA. We are also planning to receive a bunker license for fully-fledged operations in Antwerp by the end of Q1 2011. 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 two years LUKOIL Benelux B.V. has also been successfully targeting the Russian northern ports of St Petersburg, Kaliningrad, Vysotsk, Primorsk and Murmansk, supplying bunker fuels to a wide variety of shipping companies.

Since 2005, LUKOIL Benelux B.V. and our partner Burando have been jointly operating Service Terminal Rotterdam (STR), which enables LUKOIL Benelux B.V. to store and blend fuel oils to 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 by the end of 1H 2012. 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 still relatively

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slack demand in the post-crisis market environment. Due to this competitive advantage, LUKOIL Benelux B.V. is in a position to design and implement flexible delivery strategies.

As a supplier of a wide range of grades, we receive bunker enquiries and provide quotations for the products IFO 700, 600, 500, 380, 240, 180, 120, 80, 60, 40, 30, 20 cst, MDO DMB and MGO. We can also 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 six time-chartered barges with deadweight ranging from about 1,700 mt to 6,130 MT. Provided by FTS Hofftrans, the barge operating company of our partner Burando, they are all double-hulled barges, including several very new ones with greater bunkering capabilities.

Should we require a greater capacity, we have the option of hiring other barges for spot deliveries in the range from about 1,700 mt up to 9,200 mt with both FTS Hofftrans and alternative reliable transport companies in the ports of Rotterdam, Amsterdam and Antwerp.

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.

Our contact information: 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

World Bunkering Spring 2011

Company News

AMKOil Ltd

Gazpromneft Marine Bunker

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ounded on 25 May 2004, the AMK Group of Companies is one of the biggest on Kolskiy Peninsula. The main activity of the AMK Group is the trade and transportation of the following oil products: • bunker fuel • all types of petrol • fuel oil M-100 • IFO-380, IFO-180, IFO-30 The AMK Group consists of several companies involved in different types of activities, such as bunkering, road transportation of oil products, utilisation of mixed oil waste and bilge water, and the use of a shipping and receiving platform. All companies within the group are licensed to conduct the above mentioned activities.

One of the company’s main activities is the bunkering of foreign and Russian vessels in the port of Murmansk and other ports within the Murmansk region, as well as neighbouring shipping areas. The AMK Group of Companies’ fleet consists of the following tankers: Jamrat, Shalim, Olkhovets, Dnepr, and Don, allowing the transportation of all types of oil products and bilge water up to 300 tonnes, as well as up 3,300 tonnes of heavy oil products and bunker fuel. The tankers are capable of bunkering 20 miles offshore as well as travelling to foreign ports to provide their services. All the ships are staffed with experienced personnel who have at least five years’ experience of working on these classes of vessel.

The AMK Group of Companies’ transport hub consists of eight units of equipment, namely four petrol tank trucks with capacity ranging from eight to 23 cu m, and four fuel oil trucks with capacity ranging from 15 to 23 cu m. The trucks are used for the transportation of bunker fuel, and all types of petrol and fuel oil in Murmansk, the Murmansk region and the Republic of Karelia. The company has its own overhaul and maintenance facility based within the Murmansk Sea Fish Port, which it uses for servicing its own machinery, as well as providing maintenance services for other companies.

All the drivers are licensed to drive dangerous cargo vehicles and the depot mechanics are all highly qualified in their specialist areas.

The various operations of the AMK Group of Companies are supported by a highly professional team of lawyers. The company is open for cooperation in the transportation and trade of oil products, and welcomes mutually beneficial partnerships.

Alexander Koltunov, Director Roman Moliboga, Commercial Director Maksim Vorobyov, Technical Director Anton Smolin, Head of Bunkering Mob: 007 9113090999 86 Podgornaya Street, Office 413 Murmansk, Russia 183038 Tel/Fax: 007 (8152) 287828 Tel/Fax: 007 (8152) 287337 Tel/Fax: 007 (8152) 286028 E-mail: amkoil@mail.ru

World Bunkering Spring 2011

stablished in 2007, Gazpromneft Marine Bunker, a bunker subsidiary of JSC Gazprom Neft, supplies oil products for vessels in the ports of Russia. The company is one of the leading suppliers in the Russian bunker market, with an expected turnover of almost 1,500,000 mt by the end of 2010.

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. In addition, Gazpromneft Marine Bunker is preparing to enter some marine ports in the North-West Europe and in the Black Sea. 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. Currently, the company operates in the major Russian ports of St Petersburg, Kaliningrad, Ust-luga, Primorsk, Arkhangelsk, Murmansk, Vladivostok, Nakhodka, Vanino, Kavkaz, Novorossiysk, Tuapse, Yaroslavl, Kazan, Volgograd, Astrakhan, Rostov-on-Don, and Azov.

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

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

The well-organised 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 a 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 cruise vessels in future navigation periods.

Gazpromneft Marine Bunker, a subsidiary of one of the biggest corporations in Russia, Gazprom Neft, is a state-owned company and is focused on improving its operating and economic performance, minimising costs and raising its capitalisation.

Our team of bunker traders and logistic operators are determined to become, and remain, your long-term reliable partner, thorough their 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 83

Company News

Aditya Marine Inc

Portugal fuel stop

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ditya Marine Inc provides physical supplies of bunker fuel products on the east coast of India, namely Kakinada, Vizag (Visakhapatnam), Ganagavaram, Chennai and Krishnapatnam.

In all the ports we can supply both at berth, concurrent with cargo operations, or at anchorage. Depending on the quantity, bunkers may be supplied both by barge and trucks. Aditya Marine owns a fleet of barges and several trucks, which, unlike many physical suppliers in the area, gives independence and complete control over the delivery process. We carefully monitor the supply and keep our customers well informed of the supply progress, 24/7.

Our main activity over the past 11 years has been the supply of high quality bunker fuel, at competitive prices. We are able to keep our rates stable and offer credit terms, as well as timely and safe bunkering services, 24 hours a day, seven days a week.

All our staff are highly experienced in customs clearance and agency services, and we have a strong reputation for reliability.

Aditya Marine has opened a new branch in Dubai, Aditya Fuels LLC, and started physical supply in January 2011, providing a full range of bunker fuels. The company supplies bunkers in Ajman, Mina Saqr and Sharjah Hamriyah ports, Ras al-Khaimah port, and Khorffakan, where we have our own FO and MGO bunkering trucks.

Additionally, we have an office in London, which caters for the needs of our customers based in Europe.

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 outer anchorage, something which we hope to address in the not-too-distant future.

With Aditya Marine, you can be confident you will get the highest quality of service, and we are ready to welcome new business.

Aditya Marine N.V Rambabu #41-1-35, Rangayyanaidu Street Kakinada- 533 007, INDIA Tel : 91-884-2366717, 2366718 Fax : 91-884-2366716 E-mail : adioil@rediffmail.com Aditya Marine Sakunthala Apartments 2nd Floor, B-Beach Road Visakhapatnam Tel : 91-891-2562336 Fax : 91-891-2562440 Mrs. A.SASIKALA (UK) www.Adioiluk@Gmail.Com Mob : +44 7825152973 Aditya Fuels LLC (DUBAI) Mr B Sunil Kumar E-mail: Bandisunilkumar@gmail.com Mob : +971 555042872

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

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

The company’s bunkering products fulfil the ISO 8217: 2010 specification in all grades. To help achieve customers’ targets on the environment, the company can supply low-sulphur fuels at several ports; Lisbon is the main port for low-sulphur fuel.

Petrogal optimises its logistical resources and storage to provide high-quality services and products, and can also supply a large variety of marine distillates.

As the main bunker supplier in Portugal, Petrogal provides a bunker service using two barges with capacities of 5,800 tonnes and 3,000 tonnes. The 5,800 dwt double-hull barge, Bahia Tres, began operations in 2010 to support the company’s business in Sines and Setúbal ports. Being fully aware of the importance of safety and protecting the environment, our barges are equipped with anti-pollution measures as well as being covered by European Maritime Safety Agency regulations in the Atlantic Ocean and Mediterranean Sea. Always aware that the customer’s main concern is cost, Petrogal offers competitive prices without compromising product or service quality. Visiting Portugal and being supplied by Petrogal Bunkering will always be a good decision for regular customers, used to working with a professional team.

As the only refiner in Portugal Petrogal operates two refineries at 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 are responsible for 80% of national crude oil product storage.

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

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

World Bunkering Spring 2011

Company News

ORION BUNKERS

Baltic Bunkering Company

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rion Bunkers provides the shipping community with quality controlled fuel products in conformity with international recognised standards, and using in-house facilities. The company provides round the clock reliable and effective bunkering services. We believe that the fuel industry relies greatly on people and companies that consistently offer a reasonable, accurate and efficient service; in a short space of time Orion Bunkers has earned the greater confidence of the shipping community.

Our main business is supply of marine fuel to foreign ships/vessels berthed at Karachi Port and Bin Qasim Port, and on anchorage.

We have vast experience of supplying following grades to a variety of vessels: IFO 180 cSt (RME 180)/MDO (DMB)/MGO (DMA)/Lubricants Our major suppliers include: Attock Petroleum Ltd/Pakistan State Oil/Byco Petroleum Pakistan Ltd/Hascol Petroleum Ltd

International Standards

All our products meet with the ISO-8217: 2005 standard and comply with MARPOL annexes, paying high attention to safety and environment protection.

Orion Bunkers is not only capable of meeting all its customer specific requirements but satisfies them with its quality service and specialised equipment. Orion Bunkers is fully equipped and has the maximum pumping rate in Pakistan.

What makes Orion Bunkers stand out above other Pakistan bunker suppliers?

Offshore tanks: Orion Bunkers is the only bunker company in Pakistan who has its own offshore tanks for storage of oil, having the capacity to store IFO, MGO, and MDO. Tank lorry fleet: Orion Bunkers has the advantage of owning a fully fledged tank lorry fleet, which no other company has in Pakistan.

Self Propelled Barges: Orion Bunkers has the largest fleet of bunker barges. We have 07 self propelled barges, which can carry all grades of fuel (IFO 180 cSt, MDO and MGO).

Furthermore, we have experienced and dedicated expert workforce committed to establishing long-term relationships with all of our customers by providing value-added services. We guarantee a reliable service with minimum operational cost.

Our workforce is nurtured through staff training and Human Resource Development to provide a level of service tailored to fulfill your needs.

Our expertise has led to Orion Bunkers becoming YOUR TRUSTED PARTNER FOR QUALITY BUNKERS IN PAKISTAN.

Orion Bunkers (Supplier) Karachi Pakistan Tel: +9221 32858055-56 / Fax: +9221 32858057 E-mail: orionkhi@cyber.net.pk Web: www.orionkhi.com.pk

World Bunkering Spring 2011

ver the last 15 years the company has succeeded in creating a reliable and high quality bunkering service and has became one the leading players of St Petersburg bunker market.

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

Our high quality bunker fuels also include 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 ISO 8217:2010 (E). The process of quality control starts before the purchase of fuel. We only buy fuels from refineries which can prove the quality of their product over a long period. We have introduced additional quality control at the barge loading stage of operations.

Our bunker barges Alana (3,500 mt) and Viland (3,000 mt) are equipped with express laboratories to test every supply of bunkers before delivering it to our clients.

Quality is the milestone of our business and is guaranteed on a daily basis by the work of our highly skilled specialists. Baltic Bunkering Company is approved for ISO 9001 Quality System Certificate by Det Norske Veritas. Additionally, we are members of the International Bunker Industry Association (IBIA).

Furthermore, we pay special attention to the ecological aspects of our bunkering activity. In our practice we strictly follow and observe all existing standards and rules prescribed for petroleum 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 conform to ISO 8217:2010 (E) plus later amendments; • our own bunker fleet; • prompt delivery of all bunker services; • fuel deliveries conform to Regulations 14 (1) or (4) and 18 (1) of MARPOL 73/78, Annex VI, and Annex 1, as well as Annex 2 of SOLAS Regulation VI/5-1 (MSDS).

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 www.bunkering.spb.ru Sales department: Tanya 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

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Company News

Unicom Bunkering SA

Vilma Oil S.L. Madrid

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nicom Bunkering SA, becomes Unicom Holding SA’s bunkering division in Romania Unicom Holding entered the Romanian bunkering market in 1999, by setting up a distinct department to handle this business.

Since then, we have developed rapidly and gained the knowledge and experience to become the undisputed leading bunker supplier in Romania.

From 2005 to December 2010, we acted as an independent company, Unicom Bunkering, as part of Unicom Group. Following a merger by absorption, we are now re-established as the bunkering department of the acquiring company, Unicom Holding.

We continually strive to become more effective and competitive within the market, which is paramount in these uncertain times so that we can provide our customers with the best bunkering services.

We bunker at the Romanian Black Sea ports of Constanta, Agigea, Midia, and Mangalia, and also at the Romanian Danube River ports of Galati, Tulcea,Braila, and Drobeta Turnu Severin.

At the maritime ports we deliver a full range of high-sulphur fuel oil products, from IFO-30 to IFO-380, as well as low and high-sulphur distillates. The fuel oil can be delivered to ships by barge, while the gas oil can be supplied either by barge or by trucks. The barge deliveries are made mostly by our M/T Unicom 3. We also own the oil barge Deltaoil, but it is used mainly as a storage unit, which gives us an increased flexibility when dealing with various bunker orders in a short time.

At the Danube River ports, we supply only low-sulphur gas oil, ex-pipe, using our barge Unicom 1 or by trucks.

All the oil products we deliver are compliant with the ISO 8217:2005 specifications and are of high quality as we only purchase from the refineries that have consistently proved the quality of their product. All the bunker deliveries are managed professionally by an experienced staff, in full accordance with the relevant legal provisions in force.

Our bunker traders are available 24-hours a day and ready to put their experience, expertise and knowledge at your service, gladly helping you with any bunker or lubricant oil enquiry you may have at the above ports.

The first-class service we provide, coupled with the competitive prices we offer, make us one of the most reliable choices for you to consider whenever you need to supply bunkers to your vessels sailing in any area under our coverage.

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 multinational team and the confidence placed in it by its partners, customers and the financial community, the business of Vilma Oil has a record of continuous growth.

Over the last two years Vilma Oil successfully established its position as a key physical 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 meet the needs of its customers and in line with its commitment to development, Vilma Oil expanded its bunker delivery service by introducing from January 2010 a modern doublehull 3,700 cu m capacity bunker vessel for supplies at the designated anchorage within the port limits of Ceuta North Bay. Optimising the ex-wharf & anchorage delivery facilities to meet the varying customer requirements, Vilma provides RMG380, RMG380 low sulphur, RME180, RME180 low sulphur and DMA 0.1%, meeting ISO8217 specifications.

Combining the exclusive utilisation of 83,500 cu m 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

Tel: +40 21 233 27 70/Fax: +40 21 233 27 69 General e-mail: office.bunkering@unicom-group.ro Website: unicom-group/bunkering Mr. Bogdan BURGUI – Bunker Sales Manager Mob: +40 741 383 412 E-mail: bogdan.burgui@unicom-group.ro Mr. Marc BOBEICO – Bunker Sales Manager Mob: +40 741 362 023 E-mail: marc.bobeico@unicom-group.ro

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World Bunkering Spring 2011

Company News

Nizhegorod Bunker Ltd runs successful river bunkering business

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izhegorod Bunker Ltd specialises in quality bunkering services to vessels working in the area of Volzhskiy and its neighbouring basin. The company’s fleet consists of shallow-draft tankers with the capacity of 300 tonnes and automotive bunkering vessels with 600 and 1,500 Vladimir Nikiforov, tonnes capacity, whilst its total tonnage of General Director, bunkering fleet amounts to 7,000 tonnes.It Nizhegorod Bunker also has a non-propelled oil station.

Ltd The company is an official representative of the Russian oil giant, OJSC Rosneft. Its current strategy of development aims at increasing its presence on the North-West bunkering market. “The main advantage of our company which, in my opinion, should attract partnerships from the shipping companies, is that we provide bunkering services at the two key bunkering spots – in Rybinsk and, most importantly, in Sheksna,” says Andrei Losev, Nizhegorod Bunker Ltd’s general director, Commercial Director, Vladimir Nikiforov. “As the ships follow the Nizhegorod Bunker Volga-Baltic route they require quality fuel, Ltd and this is exactly what our company will supply them with”.

For all its years in the bunkering business, Nizhegorod Bunker has never received a single claim regarding the quality of bunker it provides. During the last navigation period, the company supplied more than 40,000 tonnes of high quality fuel to its customers. “It is very important to supply top quality bunker to shipowners as it affects the vessel’s engine and other important mechanisms and thus prolongs its operation life,” says Nikiforov. “This is why the quality of bunker fuel is the main priority for Nizhegorod-Bunker Ltd”.

The company has the potential, and explores opportunities, for expanding its business. Nizhegorod Bunker Ltd is ready to go beyond its current area of service (limited at the moment to Samara) to deliver quality bunker to vessels requiring refuelling further down the river Volga. The company can provide 24-hour supply of high standard fuel in that area.

We always welcome new enquiries for our services and partnership proposals.

Nizhegorod Bunker Ltd 13/2, Ilyinskaya Street Nizhniy Novgorod Russia 603109 Office Tel/Fax: 007 831 434 4845 E-mail: noilnn@mail.ru Website: www.nizhegorod-bunker.ru

World Bunkering Spring 2011

Tsetan Company Limited

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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.

For the past couple of years Tsetan has strengtnened its’ position on the market and has gained a reputation of reliable bunker supplier.

Even in the current economical climate, when the demand for fuel has decreased in the Primorsk Krai area, the company has managed to increase the volumes of bunker supply which at the end of year 2010 constitued 70 000 tons. In addition to this Tsetan has expanded the range of clients.

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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Company News

Scadar Ltd

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cadar Ltd is the oldest physical supplier at the port of Murmansk, established since 1998. For almost 13 years our business portfolio has covered activities in the shipping industries and offshore bunker supplies to drilling platforms and special vessels working in the North of Russia. Our experienced team is happy to provide our customers with competitive pricing, trade credit availability, logistical support, and fuel quality control. We are fully certified for international standard ISO-9001 to ensure safety in all bunkering procedures. Our company is environmentally friendly and all our tankers are fitted with an advanced clean-up system.

Scadar Ltd has enjoyed long-terms relations with most of Russia’s oil major companies such as Lukoil, Rosneft and Gazpromneft, from whom we receive stable supplies throughout the year. With development the of Stockman, our shipping activities have rapidly grown in the port of Murmansk; in order to meet new requirements we have future plans to expand our tanker fleet.

Our aim is to benefit our clients and help them to achieve more nautical miles per spent dollar.

Scadar Ltd Tel: +7 8152 596 170 Fax: +7 8152 596179 E-mail: scadar@scadar.com Website: www.scadar.com Vladislav Boyarskiy Managing Director Tel: +7 8152 596 173 E-mail: vb@scadar.com Boris Makarov Manager Trading Department Tel: +7 8152 596 171 E-mail: bm@scadar.com Irina Parhomenko Senior Trader Tel: +7 8152 596 171 E-mail: ip@scadar.com

Oil Marketing & Trading International (Europe) SA

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e are pleased to announce that as of 12 August 2010, Oil Marketing and Trading International (Europe) SA will be marketing and supplying marine fuels at Cueta, Spain anchorage.

This is part of our company’s strategy to extend our services to our worldwide customers at alternative ports, and we believe Cueta is a good alternative to frequently congested Gibraltar and Algecira ports.

We shall be supplying all grades of fuel oil (ranging from 10 cSt to 380 cSt) both high and low-sulphur as well as MGO conforming to international ISO standards.

A 2002 built double-hull bunker barge of 3,420dwt is already at the anchorage of Cueta and ready to assist with your enquiries.

We wish to thank you in advance for your support and assure you that OMTI is committed to offering a first class bunkering service in Cueta, as in Fujairah, with a high emphasis on trouble-free deliveries, high fuel and MGO quality, and on time deliveries at the most competitive prices.

Greek Office: Mr Tassos Lathouras Sales Manager Mobile: +30 6956 303 131 Tel: +30 210 96 09 860 Fax: +30 210 96 09 861 E-mail: bunkers@oil-marketing.com Dubai Office: Mrs Anastasia Fafoutaki Bunker Trader Office 2001, Saba Tower 1, Jumeirah Lakes Towers, Dubai, United Arab Emirates Mobile: +971 50 4842269 Tel: +971 44350500 Fax: +971 44350505 E-mail: bunkers@oil-marketing.com

Olga Sudova Logistic Department Tel: +7 8152 596171 E-mail: os@scadar.com

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Company News

NoreqFender AS

N

oreqFender AS is a specialised supplier of marine fendering products to the maritime industry.

The market for pneumatic fenders has increased tremendously during the last couple of years with shipowners realising the advantages of pneumatic fenders over fixed fenders. In 2002 the latest ISO standard 17357 was launched in order to ensure the high quality needed for safe berthing during ship-to-ship or ship-to-port operations. OCIMF (Oil Companies International Marine Forum) strongly recommends the use of ISO certified Pneumatic Fenders while performing ship-to ship operations involving bunkering or the discharging of oil or gas.

We deliver pneumatic fenders made to fully protect your vessel during bunkering operations. Our fenders are manufactured and tested in compliance with ISO 17357:2002, which is the only standard that ensures you high quality.

NoreqFender is headquartered in Norway, but we have a global presence with a large network of agents. In Rotterdam we hold one of the world’s largest stocks of pneumatic fenders and we are ready to ship to any worldwide destination at short notice.

NoreqFender is part of the Noreq Group and together we have many years of experience in the maritime industry. Noreq AS specialises in the development and manufacturing of lifesaving products such as lifeboats, rescue boats and davits. Noreq constantly works with new ways of improving lifesaving equipment at sea. This means better access for our customers to safer, more user-friendly and cost-efficient products. Through offices in Norway, Singapore, Houston, Rio and a worldwide sales network we can offer high quality products and services – wherever you are. With the acquisition of Acta in November 2010, Noreq also entered the ship and offshore crane industry. For more information visit www.noreq.no and www. noreqacta.dk.

In addition to pneumatic fenders, NoreqFender offers fender davits. The NFD series is scaled to fit the most common fender sizes and the davit is based on the same success formula as Noreq NPD series.

We firmly believe the NFD davit is an excellent alternative for clients looking for a reliable and easy launch and storage arrangement. As a client of Noreq you always know that you will be offered high quality products and services – on time.

World Bunkering SUMMER 2011 issue Oil Majors In the aftermath of the Deepwater Horizon disaster the pressure is on the oil companies to make risk reduction their top priority. Will this make any difference to the way they view the bunker industry?

Fuel Management With 380 cSt forecast to be around the $600 a tonne mark by the end of the year, fuel savings measures are high on the agenda for many shipowners. We look at what is on offer.

Surveyors Bunker prices are forecast to continue their upward trend.

Ensuring ordered quantities are actually delivered, and within specification, is likely to become even more important to owners.

That is where surveyors come in and we ask how bunker survey companies are faring around the globe.

Geographical Focus – South East Asia Singapore has had another stellar year in 2010 and we look at the omens for the future. Can the good times continue to roll?

Also, what is going on in the rest of the region?

Regional Focus – Australia 2009 was a thin year for Australia’s bunker suppliers but there was some optimism at the beginning of 2010 that recovery was on its way. Was the upbeat sentiment justified? World Bunkering looks at what happened last year and the prospects for this.

Port Focus – Turkish Ports There are those who say the chance to really capitalise on Turkey’s unique strategic location was missed some years ago.

Nevertheless, Turkish suppliers sold some 1.5 million tonnes of bunkers in 2009. Was 2010 a good year for them?

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

Pictorial Review IBIA Annual Dinner – London, UK

Conference Preview

For more information visit www.noreqfender.no

Istanbul Bunker Conference – Istanbul, Turkey

Conference Reviews FUJCON – Fujairah, UAE NoreqFender AS P.O.Box 144, 5480 Husnes Norway E-mail: noreq@noreqfender.no

World Bunkering Spring 2011

International Bunker Conference – Copenhagen, Denmark

Regular Features Industry News, Environment, Testing, Risk Management, Legal News, Equipment and Services.

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Let’S keeP thingS SiMPLe Volatile prices, uncertain delivery, and unreliable quality can quickly complicate your fuelling requirements. Across the world, our professionals are guided by a simple promise: to deliver quality fuels on time and in full – every time. For that additional assurance, our global team of customer service professionals and risk management experts are always at your disposal. At Shell, we work to keep bunkering simple for you. As it should be.

Shell Marine Products

A/S DAN BUNKERING LIMITED

M/S ADITYA MARINE

ADDAX BUNKERING SERVICES

NIZHEGOROD BUNKER LTD.

AEGEAN MARINE PETROLEUM S.A.

NOREQFENDER AS

ALBA PETROLEUM LTD

OIL MARKETING & TRADING INTERNATIONAL LLC

AMKOIL CO. LTD.

OILCHART INTERNATIONAL N.V.

ARKAS HOLDING

ORION BUNKERS

BALTIC BUNKERING COMPANY

PENINSULA PETROLEUM LTD.

BALTIC FUEL COMPANY

PETROLEOS DE PORTUGAL S.A.

BGK BUNKERS

PLATTS

C.I. INTERNATIONAL FUELS LTDA

ROSNEFT MARINE UK LTD. RUSSIAN ASSOCIATION OF MARINE & RIVER BUNKER SUPPLIERS SAUDI SHIPPING & MARITIME SERVICES COMPANY LTD.

CEPSA MARINE FUELS S.A COCKETT MARINE OIL LTD CUROIL NV

SCADAR LTD.

ENDRESS & HAUSER FLOWTEC AG

SEARIGHTS MARITIME SERVICES PTE LTD.

EVRASIA BUNKER LTD

STENA OIL AB

GAZPROMNEFT MARINE BUNKER LTD

TRUMF BUNKER A/S

INVER ENERGY LTD

TSETAN CO. LTD.

LUKOIL BENELUX B.V.

UNICOM BUNKERING LTD.

LUKOIL BUNKER LTD

VILMA OIL SLw

LUKOIL BUNKER ITALY S.R.L.

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 February

14 April

IBIA AGM London, UK

Platts European Bunker Fuel Rotterdam, Netherlands www.europeanbunker.platts.com

www.ibia.net

2-3 March The Piraeus Bunker Course Piraeus, Greece www.bunkerspot.com/ eventsdetail.asp?id=12871

21-23 March CMA Shipping 2011 Stamford, USA

Bunkerworld Conference Athens, Greece www.bunkerworld.com/ events/2011/bunkerworld-conference/

9-13 May www.shipping2011.com

22-24 March FUJCON Fujairah, UAE

4-6 May

Oxford Bunker Course Oxford, UK www.petrospot.com/events

9-13 May www.cconnection.org

6-8 April

Bunkerexperience 2011 Rotterdam, Netherlands www.bunkerexperience.com

The 32nd International Bunker Conference Copenhagen www.bunkerconference.com

23-27 May

12-14 April

Maritime Week Americas Cartagena, Colombia www.petrospot.com/events

SeaAsia 2011 Singapore

www.sea-asia.com

1-3 June Turkish Bunker Conference Istanbul, Turkey www.istanbulbunkerconference.com

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ENErGY of GROWTH • High quality ISO 8217-2005 bunker fuel • Quality control from oil refinery plant to end user • Flexible prices • Main sea ports of service: St. Petersburg, Primorsk, Arkhangelsk, Ust-Luga, Kaliningrad, Murmansk, Vladivostok, Nakhodka, Vanino, Novorossiysk, Tuapse, Kavkaz • Main river ports of service: St. Petersburg, Yaroslavl, Nizhni-Novgorod, Kazan, Samara, Volgogard, Astrahan, Rostov-on-Don, Azov

GAZPROMNEFT MARINE BUNKER Ltd Saint Petersburg Office: Vasiliyevskiy Island, 3rd line, 62A, Saint-Petersburg, Russia, 199178 Tel: +7 (812) 449 4970 Fax: +7 (812) 449 4971 E-mail: bunkers@spb.gazprom-neft.ru

Main Office: 14, Krzhyzhanovskogo street, Building 3, Moscow, Russia, 117218, Tel: +7 (495) 213 04 36 Fax: +7 (495) 213 04 37 E-mail: marinebunker@gazprom-neft.ru