World Bunkering - Spring 2012

World

Spring 2012

Spring 2012

Bunkering

World BUNKERING

How much sulphur?

Tough times in Pakistan

l Ferry sector's eca woes l Indian suppliers expand l Consolidation looms for traders

THE ONLY OFFICIAL MAGAZINE OF

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L Editor’s Letter David Hughes

ate last year many in the industry were saying that 2011 had been tough but 2012 could be much worse. It certainly looks as if they could prove to be right. The world economy and the shipping industry have got off to a bad start. Actually 2011 had a bad finish, a bulk carrier, the Vinalines Queen sank with the loss of all 23 crew in the South China Sea on Christmas Day. Then, after a deceptively calm few days, Friday the 13th of January reminded us all that the EU’s economic crisis has not been solved, and perhaps it cannot be. The same unlucky day also proved that, at sea, disaster can strike when we least expect it, as the Costa Concordia struck a reef off the tiny Italian island of Giglio and eventually capsized, with the loss of over 30 lives. So far there have been few implications for the bunker industry other than that the salvor’s first priority is to remove the 2,000 tonnes or so of residual fuel oil in the ship’s bunker tanks, and the threat of serious pollution to the Tuscany coastline.

As long as those bunkers are emptied without mishap the bunker industry is unlikely to figure that prominently in the numerous enquiries, reports and recommendations that are bound to follow this casualty.

Meanwhile, this issue of World Bunkering is very much a forward-looking one in several ways. Both the Chairman, Bob Lintott and the Acting Chief Executive Trevor Harrison, use their introductions to ponder what sort of Association you, its members, want.

Our Environment feature is also about the future, the future of the planet. We report on the outcome of the United Nations Climate Change Conference (COP17) in Durban late last year. Somewhat surprisingly there was a positive outcome, in the form of a commitment to negotiate a global treaty on reducing emissions by 2015, which would lead to all countries working to cut greenhouse gas emissions by 2020. Behind-the-scenes activity between now and late November, when COP18 takes place in Qatar, may be crucial in determining the implications for shipping, and thus bunkering.

The Fuel Quantity feature focuses on flowmeters, which still seem to be more something for the future rather than right now. Nevertheless flowmeters are becoming more widespread. We are still waiting to see how their use will fit into the procedures of the biggest bunkering port, Singapore.

This issue’s Interview is with someone who has considerable fears for the future of his sector of the shipping industry. Johan Roos, executive director of EU and IMO affairs for the ferry industry trade association, Interferry, speaks to our deputy editor Sandra Speares.

He worries that the ferry industry will not be able to meet the 2015 deadline for the introduction of low-sulphur fuels.

Traders have been central to the bunker business for a long time. But what sort of future do they have? Will they still play the vital role that they currently do? Times are tough and there could be consolidation.

On the horizon are some events which really do merit a place in your diary: Asia Pacific Maritime and the International Bunker Conference – take a look at our Previews.

There is plenty more subject matter in this issue, but I have to confine myself to this one page. Right at the back, and still on the theme of things to come, is the Next Issue page, a taster of articles that will appear in the Summer edition. Please take this as an open invitation to send in comments and/or information on any of these subjects.

In the meantime I look forward to seeing as many members as possible at the IBIA Dinner on Monday 20 February.

Best wishes

David Hughes

World Bunkering Autumn 2011

3

World

Spring 2012

Bunkering Publisher: W H Robinson Editor: David Hughes (editor@mar-media.com) Deputy Editor: 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) Designer: Justin Ives (www.justindesign.co.uk)

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

THE ONLY OFFICIAL MAGAZINE OF

ISSN 1367-5018

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

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

Visit online, with Page-Turning technology at

www.worldbunkering.com

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

World

Spring 2012

Bunkering 31

31 42

IBIA Reports Editor’s Letter 3 Chairman’s Introduction 9 Chief Executive’s Report 11 Noticeboard 12 New Members 14 Membership Application 16 Industry News 19

Environment Testing Fuel Quantity Fuel Availabilty Risk Management Interview Traders

Special Features 27 33 37 42 46 48 51

Geographical Focus Northern Europe 43 India 55 Pakistan 57 Maldives 59 UAE 61 Russian Update

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Legal News Equipment and Services

75 76

Preview: Asia Pacific Maritime 78 Preview: International Bunker Conference 79

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Diary

REPORTS

Chairman’s Introduction

T

his will be my last contribution to our organisation’s excellent periodical as Chairman of IBIA. I’ve little doubt this will please our esteemed editor David Hughes for I have perpetuated a tradition inherited from my predecessor Mike Ball.

To David’s undoubted chagrin, I’ve failed consistently to meet copy deadlines. My apologies to David and my thanks for his patience; I leave it to my worthy successor Nigel Draffin to decide whether to continue in this dilatory manner or break the mould.

The Board and the Secretariat have had an interesting and eventful year. Our Annual Dinner in February was the largest event ever to be hosted by IBIA and, in November, our Annual Convention in Barcelona was the best attended of our conventions to date. Our thanks to everyone involved have already been copiously expressed.

In the middle of the year, our Chief Executive of ten years, Ian Adams, resigned.

Ian has since formed his own company and the Board wishes him well in his new endeavour. His work on behalf of IBIA was a significant factor in the development of our organisation. We have also much appreciated Trevor Harrison’s agreement temporarily to fill Ian’s vacated position as Acting Chief Executive on a part-time basis while the Board seeks a suitable replacement. Trevor juggles his responsibilities on behalf of the Secretariat with his already full portfolio of activities as a maritime arbitrator and mediator.

Meanwhile, and to provide support to Trevor in his part time role, the Board has become far more involved and active. In

World Bunkering Spring 2012

addition to our scheduled Board meetings during the year, we now have regular discussions either by telephone conference or with peer-to-peer computer video calls.

This has proven to be very productive. As you know, your Board represents an excellent cross section of our industry and is truly geographically diverse. Our formal conferences together with frequent scheduled and ad-hoc discussions have enabled us to react more efficiently and more productively.

You will see from the Acting Chief Executive’s Report that the ‘Voice of IBIA’ is frequently heard and even more frequently requested. Your Board and Secretariat are very conscious of the value of the IBIA brand.

As a high-quality organisation, IBIA does not accept every invitation to speak, neither do we support every event that seeks our endorsement. We could, nonetheless, easily justify employing a person full time solely to present papers and represent IBIA’s position at conferences, seminars and other industry events. However, with the diversity of the Board and with Members’ willingness to participate, we have frequently been able to fit the person to the task and more fully represent the multifaceted nature of our organisation. The ‘Faces of IBIA’ are mostly Board members at present but there is always plenty of room to expand our resource of available speakers. If you would like to become involved and feel you are suitably qualified, please let us know; we would love to hear from you.

As 2012 unfolds, we will be addressing the practicality and use of marine fuels with lower sulphur content and new emission

Bob Lintott

control areas (ECAs) in which marine fuels with yet lower sulphur requirements are mandated. The largest of the new ECAs will be that around the United States and Canada where demand for compliant distillate fuels will be easily met from domestic production in both USA and Canada. The USA was initially slow to respond to increasing demand for residual fuels with lower sulphur levels for use on the high seas but supplies of fuels compliant with the 3.50% eventually became readily available. By August 2012, only fuels with a maximum of 1.00% sulphur will be permissible for consumption by vessels within the North American ECA; and then there’s California....

The jury is still out on the environmental impact of changing fuels and burning the various additives that are now available to increase the lubricity of distillates and compensate for the very low sulphur levels now available. The negative enviro-impact of lead as an anti-knock additive in gasoline is now history as a result of a global legislative ban; let us all wish that the good intent of this more recent legislation is surpassed by its environmental advantage.

Finally, I’d like to thank my fellow Board members and the members of our Secretariat for their support, their wisdom, their patience and their humour. It has been an honour to be Chairman of IBIA and I wish Nigel Draffin well as our next Chairman.

Stay engaged; keep in touch. Your Board needs YOU! Bob Lintott

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Oil Marketing & Trading International (Europe) SA MARINE FUELS

in UAE in CEUTA - Spain

and now

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

14 Tzavela Str., 166 74, Glyfada ATHENS, GREECE Tel: 0030 210 96 09 860 Fax: 0030 210 96 09 861 E-mail: ceuta@oil-marketing.com

TELEX: (0510) 94078550 OMTI G

8 Eu Tong Sen Street, #18-83 The Central 059818, SINGAPORE Tel: 0065 6222 4028 Fax:0065 6222 4027 E-mail: singapore@oil-marketing.com

W E B : W W W. O I L - M A R K E T I N G . CO M

Acting Chief Executive’s Report

I

n the five months since I assumed the part-time role of Acting Chief Executive I have had an excellent opportunity of seeing from within what a well run and effective organisation IBIA has become as it celebrates its 20th anniversary. However, no organisation can stand still without slowly losing its effectiveness and its energy.

With this in mind, the Board has been discussing our organisational structure and has asked me, as Acting Chief Executive, to identify the various options for the future. I will be taking this forward over the next few weeks and would be delighted to receive your comments and suggestions.

The Board

The present composition of the Board, with 11 elected non-executive directors and a nonvoting chief executive has proven itself to be a workable and effective decision-making body, with all Board members taking an active part in formal and informal meetings and telephone and e-mail discussions.

The Chairman

Part of the structure agreed at the 2008 convention in Cape Town was a threeyear cycle of Vice-Chairman, Chairman and Immediate Past Chairman. Competing concerns have been expressed about this arrangement. On the one hand it provides a rolling cycle of continuity over successive three-year periods; on the other hand, is one year in the chair sufficient time for a chairman to make their mark? The Board’s view is that the vice-chairman, chairman, immediate past chairman cycle works well and presents a good opportunity for distributing roles and responsibilities. The

World Bunkering Spring 2012

other compelling factor is that a threeyear cycle is likely to be tolerated by most employers whilst a longer cycle would be regarded as an unacceptable commitment.

Perhaps more needs to be done to maximise each chairman’s effectiveness during their time in the three sequential offices?

Trevor Harrison, Acting Chief Executive Tel: +44(0) 23 8022 6555 Fax: +44(0) 23 8022 1777

Is this the best arrangement? Could and should the role of the chief executive be split into administrative, technical and commercial roles, not necessarily all fulltime but with each position occupied by a specialist, all reporting to the chairman?

Suggestions

The voice of IBIA

Who should be the principal figurehead and spokesman for IBIA, the Chairman or the Chief Executive? Should it be an employee or an elected officer? Who is better qualified, better informed, and better able to present the Association’s point of view? Should the chairman be a largely symbolic head of the organisation, like a constitutional head of state, leaving the management and operation of the business to the chief executive or should he be actively engaged on a regular basis with IBIA’s activities? If the latter, should the chairman be rewarded financially by way of a stipend or honorarium as recompense for a workload that could easily occupy the equivalent of one full day per week? These are difficult but interesting possibilities and you, the members, should have your say.

The Chief Executive

How should the Secretariat be organised?

The present structure of responsibility is shaped something like an hourglass; the chief executive representing the secretariat below reports to the chairman who represents the elected board above.

Under the chief executive is a marketing manager and an administrator in Southampton and a regional manager in Singapore, a total of four full-time positions.

There is no perfect answer to meeting IBIA’s needs and, to some extent, those needs must take account of the available resources, both in terms of suitable candidates to fill the roles and, equally important, the funds required to pay them. For this reason, the most pressing task for the existing Secretariat is to grow the membership beyond the present level of 650; the more members, the more authoritative becomes IBIA’s voice and the more resources we have available to promote the interests of those members and the bunker industry as a whole.

At the top of the 2012 IBIA calendar are the words “Your eyes, your ears, your voice...

IBIA ... where the Bunker Industry comes together.” It is more than just a slogan, it is a reiteration of a commitment that we are an organisation that is in close touch with its members and listens carefully to what all of you say. Your help in suggesting the best way forward at the start of the next 20 years therefore matters; it matters to the Board and to the Secretariat. The next few months are a great opportunity to make far-reaching decisions that can influence the structure and function of IBIA for many years to come; we really do want to hear from you.

Trevor Harrison Acting Chief Executive and Elected Board Member

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REPORTS

IBIA noticeboard Benefits to members as at 1 February 2012

THE IBIA COURSES:

IBIA Guide to Avoiding and Resolving Bunker Disputes

One Day Basic Bunkering Course

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

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

IBIA Annual Report

The 2010/2011 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 Bunker Samplers Advanced Courses

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

IBIA PUBLICATIONS IBIA World Bunkering Magazine – free copies for Members of IBIA

Please note that non-Members are requested to subscribe to the magazine at a cost of £45, £60 or £80 depending on location. Up to 20 additional free copies of the magazine are offered to buyer Members of IBIA for forwarding to their vessels.

IBIA World Bunkering Magazine – discounts on advertising

Discounted advertising rates are available for 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) 20 7386 6100.

Sale price to non-Members £50.

IBIA Guide to Arbitration

A loose leaf book giving Arbitration procedures in thirteen countries written by lawyers. This is now available free to IBIA Members. Non-Members may purchase at a price of £50 plus postage.

BOOK OFFERS

Informa Group is offering IBIA Members a discount of 10% on the following publication. Please order, adding your IBIA Membership number, from Customer Services at Informa Group.

Tel +44 (0)1206 772 223 Fax +44 (0)1206 772 771 E-mail professional.enquiries@informa.com

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 Logo

Free bromide supplied for use by Corporate Members only.

IBIA Glossary of Bunker and Lubricating Oil Terminology

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

IBIA Guide to Good Commercial Practice

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

IBIA Fuel and Lube Oil Training Memory Stick

Available upon request.

IBIA List of Members

If your details are not correct then please let the IBIA Administration know at ibia@ ibia.net. This publication is only available to Members.

12

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.

World Bunkering Spring 2012

WEST & EAST AFRICA ATLANTIC/INDIAN OCEAN CANARY ISLANDS GERMANY GREECE WORLDWIDE TRADING

CONQUERING NEW HEIGHTS OF BUSINESS PERFORMANCE

Addax Bunkering Services AN AFFILIATE OF THE ADDAX AND ORYX GROUP

12, rue Michel-Servet P.O. Box 404 1211 Geneva 12 Switzerland Tel. No: (41-58) 702 90 40 Fax No: (41-58) 702 91 40 E-mail: abs@aogltd.com Website: www.addax-oryx.com

WORKING SOLUTIONS FOR ALL YOUR BUNKERING NEEDS

New Members Corporate

ElbOil Gmbh

Bunker Trader Harro Booth Poststrasse 25 Hamburg 20354 Germany E-mail: trading@elboil.com

Ocean Marine Services Ltd Bunker Supplier Alex Polidano 69 Triq Patri Felijcan Bilocca Marsa MRS1229 Malta E-mail: info@oceanandsky.com

Malik Supply A/S Bunker Trader Steen Moller Skibbrogade 5, 3 Aalborg DK-9000 Denmark E-mail: info@malik.dk

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UFS United Fuel Services GmbH & Co. KG Buyer Holger Pommer Konsul-Smit-Str. 8F Bremen 28217 Germany E-mail: pandc@ufuels.com

CORPORATE ADDITIONAL

Ocean Intelligence

Services Vernon Jayanathan 1st Floor, 4 Clarence Road Windsor SL4 5AD UK E-mail: vernon.jayanathan@oceanintelligence.com

individual

Ricardo Moragado

Bunker Trader Navex Travessa do Alecrim Nยบ1 - 3ยบ Andar Lisbon 1200-019 Portugal E-mail: ricardo.morgado@navex.pt

Shahid Abrar Siddiqui

Service Marine Services Company Ltd 6th Floor, Bamehri Centre Mina Road Jeddah 21432 Saudi Arabia E-mail: shahid@mscl-marser.com

World Bunkering Spring 2012

Erik Holladay

Service Intertek 801 Travis Street Suite 1500 Houston TX 77002 USA E-mail: erik.holladay@intertek.com

Bryan Bittner

Buyer Eagle Shipping International (USA) LLC Suite 1405 Madison Avenue New York 10020 USA E-mail: bbittner@eagleships.com

David St. Amand

Service Navigistics Consulting 1740 Mass Avenue Boxborough Massachusetts 1719 USA E-mail: navigistics@aol.com

David Marenco Mondul Bunker Broker Colcharbro Limitada Cra 38 No 74 336 Piso 2 Barranquilla 8001000 Colombia E-mail: info@colcharbro.com

Aces Ang

Bunker Trader UBT 8 Shenton Way #49-01 68811 Singapore E-mail: aces@ubt.com.sg

Ilja Krivoshein

Bunker Supplier Starbunker OY Suur-Patarei 3-1 Tallinn 10415 Estonia E-mail: info@starbunker.ee

Kelvin Yeo

Bunker Trader KPI Bridge Oil Singapore Pte Ltd 1 Raffles Place #41-02 OUB Centre 48616 Singapore E-mail: kelvin_yeo@hotmail.com

Rob Leventhal

Service Oiltest Marine Services 67 Walnut Avenue Clark New Jersey 07066-1640 USA E-mail: rleventhal@oiltest.com

World Bunkering Spring 2012

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REPORTS

The International Bunker Industry Association Ltd The Aims of the Association • To provide an international forum to

• •

•

•

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

In the beginning

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-to-

16

day 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 companies 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.

ing groups and committees that report to the Board. Areas covered have included: • Education • Safety • Technical • Environmental • Commercial • Dispute Resolution • Blending The Board and the Secretariat welcome expressions of interest from members to participate in the activities of working groups and committees, and invite suggestions and proposals for further areas of engagement and research.

The board

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.

Working Groups and Committees

IBIA is an association dedicated to its membership and strives to reflect members’ wishes and react to their needs. This is achieved in part by the formation of work-

World Bunkering Spring 2012

Membership application

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

Corporate members must give the name of the individual contact.

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Please indicate the type of membership being applied for: Individual Member £110 Free (please state reason)

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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.

Reliable, efficient service in ARA and beyond Quick and timely delivery of a wide range of grades Our contact information: Office address: Wilhelminakade 85, Building “De Maastoren�, 36th floor, 3072 AP Rotterdam, the Netherlands Post address: PO Box 24065, 3007 DB Rotterdam, the Netherlands Tel. 24/7: +31 10 264 27 00 E-mail: Bunkers@lukoil.nl

Industry news

Global round-up Shipping’s “Deepwater Horizon moment”

A leading maritime lawyer has warned that the shipping industry may soon face its “Deepwater Horizon moment” in the event of a mega containership casualty. He was speaking against the background of a number of recent cases where bunker fuels spills have added to the environmental impact.

Speaking at a Maritime London function in January, Holman Fenwick Willan partner Andrew Chamberlain said that the consequences of a serious incident involving one of the larger containerships “may well result in a complete change in the accepted liability regimes and even the traditionally accepted insurance arrangements for such large vessels”.

Recent high profile containership casualties have involved relatively small vessels capable of carrying up to 4,688 containers (MSC Napoli). The Rena, which broke up off the coast of New Zealand, had a capacity of 3,352 containers. By comparison, Mr Chamberlain noted, the largest vessels sailing today are carrying over 15,000 boxes.

He told the audience of salvors, insurers, shipowners and other maritime professionals that in the event of the loss of the largest class of containership, the epic scale of the incident would mean that the salvage industry would struggle to deal with the removal of the containers and wreckage. He warned that the salvage industry had limited and ageing resources, was increasingly risk averse and today consisted of only around four or five companies with a genuine global capability.

He added: “The industry is facing the perfect storm. We have a global recession, high cargo values (relative to ship values), ever larger and untested ships, environmental concerns and increasing public and government awareness of the impact of shipping incidents. Since the Napoli in 2007 any marine casualty is much more likely to be on the front page of every newspaper.”

Bimco opposes regional regulation

In a new paper, Reflections 2012, Bimco emphasises the need for regulation to be maintained on a global basis, and calls for practical and pragmatic moves on environmental rules. The shipping industry

World Bunkering Spring 2012

body reiterates its demand for a global perspective to prevail, with international ratification of important conventions and a rejection of regional alternatives.

On the environment, Bimco says the further development of the Energy Efficiency Design Index for new ships is a “significant key to international progress on atmospheric emissions”. It adds: “The organisation once again expresses its scepticism on regional initiatives which would tend to cloud the issues and provide impossible complexities for internationally trading ships.”

FAL hit by US sanctions

Major Middle Eastern bunker supplier FAL Oil Company Limited (FAL) is among three companies hit by US sanctions against Iran. US Secretary of State Hillary Clinton imposed sanctions on China-based Zhuhai Zhenrong Company, Singapore-based Kuo Oil and FAL for conducting business with Iran’s energy sector.

The US says that FAL provided over $70 million (m) in refined petroleum to Iran over multiple shipments in late 2010, with individual deliveries worth significantly more than the $1m threshold under US law and the total value of the transactions well above the $5m threshold for sanctionable activities within a 12-month period.

Under the sanctions imposed by Mrs Clinton, all three companies are barred from receiving US export licences, US Export Import Bank financing, and loans over $10m from US financial institutions.

A statement notes: “These sanctions apply only to the sanctioned companies, and not to their governments or countries.”

Singapore volumes continue to rise

The total volume of bunkers sold at Singapore grew 5.6% to 43.2 million tonnes in 2011, according to advance estimates announced by transport minister Lui Tuck Yew at the Singapore Maritime Foundation (SMF) New Year cocktail reception. All of the four port indicators showed record levels and Singapore maintained its global leading position in terms of bunker sales and annual vessel arrival tonnage. Arrival tonnage crossed the two billion gross tonnage mark for the first time in 2011.

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A Maritime and Port Authority of Singapore statement said: “As a leading International Maritime Centre, Singapore continues to attract a diverse range of maritime businesses to establish operations here. Singapore is now home to more than 120 international shipping groups. The maritime cluster employs more than 170,000 people and contributes some 7% to Singapore’s Gross Domestic Product. The Singapore Registry of Ships also continued to grow and rank among the top 10 worldwide.”

Six Singapore-registered ships, which have met the conditions of MPA’s Green Ship Programme, were presented with Green Ship certificates at the SMF reception. Started in July 2011 as part of the Maritime Singapore Green Initiative, the Green Ship Programme is targeted at Singapore-flagged ships that adopt energy efficient ship designs that reduce fuel consumption and carbon dioxide emissions.

Singapore-flagged ships that go beyond the requirements of IMO’s Energy Efficiency Design Index will enjoy a 50% reduction of Initial Registration Fees (IRF) and a 20% rebate on Annual Tonnage Tax (ATT) payable.

Turkey follows EU in-port sulphur capability

Turkish authorities have followed the EU countries in imposing strict sulphur limits on vessels in port. From 1 January ships have had to use fuel with a maximum sulphur content of 0.1% following a ruling for vessels at berth in Turkish ports and transiting its inland waterways.

“This is a significant move by the Turkish authorities and is much more restrictive than current sulphur regulations,” says Steffen Kortegaard, technical director of OW Bunker. The global bunker supplier has highlighted the potential safety issues that shipowners and operators will face in Turkish waters when new local sulphur legislation comes into force.

The ruling states that “marine fuels whose sulphur content exceeds 0.1% by mass cannot be used as of 01.01.2012 in the inland vessels and in the vessels on the quay”. The new regulations appeared initially to mean that 0.1% sulphur content gas oil must be used by vessels calling at Turkish ports between the end of the sea passage and the commencement of the sea passage including in port anchorage areas.

However, according to the Turk Loydu newsletter, changeover alongside is permitted in line with the EU Directive requirements and that the requirement for low-sulphur fuel need not apply when a ship is in the port for less than two hours. The new regulation will not apply to vessels transiting the Bosporus or Dardanelles, even if they anchor, providing the vessel maintains transit status. Passenger vessels with domestic liner permits, such as ferries, ro-ro and sea buses were required to consume 1.5% sulphur content IFO from 1 January.

Aegean supplies at Fnideq

Global bunker supplier Aegean Marine Petroleum has started bunkering operations at Fnideq Anchorage, North Morocco. Aegean already supplied at Gibraltar and Tanger Med on the North African Coast at the Western entrance to the Strait of Gibraltar.

Fnideq Anchorage is situated just 20 miles south of Gibraltar’s Eastern anchorage, a few miles to the south of the Spanish enclave of Ceuta. The company says that all grades of marine fuel oil - high and low sulphur and MGO – are available at Fnideq and ISO8217/2010 specifications are guaranteed. Offers are quoted on a delivered basis including barging.

Malaysian security initiative

The Johor Bunkering Services Association (J-Bunker), which was set up last year, is cooperating with the Malaysian Maritime Enforcement

World Bunkering Spring 2012

Agency (MMEA) in the new Eyes and Ears at Sea programme aimed at strengthening security in the country’s waters.

According to a report in the New Straits Times it is also aimed at providing a solid relationship within the maritime community and providing a medium to channel information at sea.

MMEA director-general Datuk Amdan Kurish said the initiative would get associations, vessel owners, government agencies, the private sector and fishermen to be the “eyes and ears” for the agency. He said: “This is the first time such a programme is being initiated. It is hoped that it will be a channel to create a safe maritime zone in Malaysia, especially in the waters off south Johor.”

LNG could fuel lakers

The Great Lakes Maritime Research Institute (GLMRI) is to study the potential for converting steam powered Great Lakes bulk carriers to operate on LNG. The research will be part of a wider programme under a five-year cooperative agreement with the US Department of Transportation, Maritime Administration (MARAD), to address environmental issues that face shipping and marine transportation.

GLMRI is a consortium of the University of Wisconsin-Superior and the University of Minnesota-Duluth. GLMRI studies funded by MARAD will address maritime commerce on the Great Lakes.

MARAD, in partnership with industry, has directed that during the first year GLMRI research the feasibility of converting the existing steam-powered vessels to using natural gas, either compressed (CNG) or liquefied (LNG), as their primary fuel source. The GLMRI researchers will cooperate with EU counterparts studying the conversion vessels operating in the Baltic and other emission control areas to using natural gas as a primary fuel.

Volumes up at Rotterdam

Bunker volumes at the Port of Rotterdam increased from 11.9 million (m) tonnes in 2010 to 12.2m tonnes last year. The Port says that the increase was entirely attributable to heavy fuel oil, which increased from 11.3m tonnes to 11.6m tonnes. The volume of marine gas oil sold remained at about 500,000 tonnes. Last year’s figure was still well below the 2006 peak of 13.1m tonnes At around 12,000 the number of bunker stems remained the same and about three-quarters of them were for containerships’ total quantity of bunkered fuel oil. The increase in volumes was due, the Port says, to the average size of containerships increasing, and needing more bunkers, despite widespread slow steaming which was having a dampening effect on bunker consumption.

Cargo throughput in the Port of Rotterdam increased by 0.8% in 2011 to 433m tonnes; 3m tonnes more than the previous record year, 2010.

Hans Smits, Port of Rotterdam Authority ceo said: “We are recording growth for the ninth time in ten years, in spite of the disappointing economy and the fall in growth of throughput since November in the port. This demonstrates the importance of ongoing investment in capacity and new activities, such as the storage of LNG and the production of bioethanol.

“The largest growth areas were transshipment of containers, coal and agribulk. Throughput in the port is strongly connected to developments in relevant world trade and German industrial production. On the basis of this, we expect to maintain the current level next year. In the second half of the year, I expect that we will have put the European confidence crisis behind us. Businesses and the Port Authority will continue investing in such things as Maasvlakte 2, container and tank terminals, because we also expect reasonable growth as from 2013”.

21

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Industry news

DNV: “Most newbuilds to be LNG-powered by 2020”

Norwegian-based classification society Det Norske Veritas (DNV) says that it expects the majority of new ships to use LNG as fuel, especially short-sea ships operating in emission control areas such as the waters of Belgium.

DNV notes: “Signs of recognition of this growing market have been seen right across Northern Europe. Norway has so far been the frontrunner, but late October contracts were signed in Brunsbüttel in Germany too where a decision was made to offer bunkering of LNG in the Elbehafen.”

Currently, there are 22 LNG-fuelled ships in operation, all classed

by DNV. In addition DNV has 18 signed newbuilding contracts and three ships scheduled to be converted for LNG fuel.

“Shipowners are working hard to meet the increasingly strict emissions requirements of the Baltic and North Seas and ports are now responding as the popularity of LNG is becoming apparent,” says Torgeir Sterri, DNV regional manager for central Europe.

DNV claims that burning LNG as fuel reduces SOx and particulate emissions by 100%, NOx emissions by approximately 90% and CO² emissions by approximately 20% compared to heavy fuel oil use.

The classification society acknowledges that a functional and standardised bunkering infrastructure is a prerequisite for the

widespread use of LNG in shipping globally and it heads the ISO working group tasked with the development of internationally agreed guidelines.

The classification society has won a contract with the Flemish government to undertake a feasibility study for the provision of LNG bunkering facilities at the ports of Antwerp, Zeebrugge and Ghent in Belgium.

The work will consist of a market survey, a risk and safety analysis, and modelling of the logistics, legal and regulatory requirements needed to establish a LNG bunkering infrastructure at the ports.

Hazard identification and quantitative risk analysis are key components of DNV’s service and this scope of work covers not only people at the port but the wider community and natural environment.

“The Flemish ports authorities are optimistic about the potential for safe and efficient LNG bunkering operations and DNV’s multidisciplinary analysis will help them move forward confidently,” says Mohamed Houari, DNV head of solutions for central Europe.

DNV has been involved in several projects for LNG import terminals in Europe including Rotterdam’s Gate terminal and has also contributed to A feasibility study for an LNG filling station infrastructure and test of recommendations published in October 2011 by the Danish Maritime Authority.

LNG terminal in the Port of Rotterdam

World Bunkering Spring 2012

23

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environment

Increasing energy efficiency Technical developments as well as IMO initiatives look set to deliver significant improvements in energy efficiency.

A

n IMO-commissioned study into the impact of mandatory energy efficiency measures for international shipping shows that their implementation will lead to significant reductions of greenhouse gas emissions from ships, specifically reductions of carbon dioxide (CO2), resulting from enhanced fuel efficiency.

The study found that, by 2020, the measures should cut CO2 emissions by an average of 151.5 million tonnes a year. By 2030 that figure will have increased to an average of 330 million tonnes annually. IMO notes: “CO2 reduction measures will result in a significant reduction in fuel consumption, leading to a significant saving in fuel costs to the shipping industry.”

Amendments to the International Convention on the Prevention of Pollution from Ships (MARPOL), Annex VI Regulations for the prevention of air pollution from ships, add a new chapter on Regulations on energy efficiency for ships. The regulations will apply to all ships of 400 gross tonnage and above and are expected to enter into force on 1 January 2013.

This new chapter makes mandatory the Energy Efficiency Design Index (EEDI) for new ships, which, in essence, requires new ships to be designed to be more energy efficient (and thereby release less greenhouse gases). The regulations are non-prescriptive: as long as the required energy-efficiency level is attained, ship designers and builders are free to use the most cost-efficient solution or solutions for each particular ship.

World Bunkering Spring 2012

The new regulations also make mandatory a Ship Energy Efficiency Management Plan (SEEMP) for all ships. This is a plan which sets out, for an individual ship, how energy savings can be made. There are a variety of options to improve efficiency – speed optimisation, weather routeing and hull maintenance, for example – and the best package of measures for a ship to improve efficiency differs to a great extent depending upon ship type, cargo, route and other factors. The new regulations make such a ship-specific plan mandatory thereby encouraging the shipping industry to review its practices in a systematic way to find the best balance.

Compared with Business as Usual, the average annual reductions in CO2 emissions and fuel consumed are estimated between 13% and 23% by 2020 and 2030 respectively.

Meanwhile, work has been proceeding at IMO on both EEDI and SEEMP. The Working Group on Energy Efficiency Measures for Ships met in January to look at improving the guidelines on the method of calculating the EEDI for new ships and at the development of SEEMP. It hopes that the Marine Environment Protection Committee (MEPC), meeting from 27 Feburary to 2 March this year, will be in a position to adopt amendments to MARPOL.

27

The 33rd International Bunker Conference

Photo: VisitOslo/F.W.Foto

18th – 20th April Oslo

Attend the IBC 2012: Increasing complexity – how to adapt “Increasing complexity – how to adapt” is the question raised for The 33rd International Bunker Conference.

The starting point for IBC 2012 is the paradigm shi over recent years from the Seven Sisters to Traders and Independent Suppliers - the differences in the responsibilities and the physical supply chain, combined with the regulations and high bunker costs have given increased challenges related to bunkers for not only the purchasers, owners, charterers and operators, but the whole bunker supply chain.

The agenda will focus on: • • • • •

Production Supply Chain Operation Regulation Nomination to Arbitration

Using all the experience of the previous 32 conferences, with more than 6400 people from 23 countries having previously participated, IBC 2012 is the place to be, to meet and network with bunker friends.

Read more about IBC 2012, the happenings, and the available sponsor and exhibition opportunities at www.bunkerconference.com Join the Bunker Professionals group on LinkedIn and The International Bunker Conference event page on Facebook!

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

www.bunkerconference.com

environment (continued)

T

he Aquila, first in a new series of 57,000 dwt supramax bulk carrier designs optimised to burn less fuel oil, has been delivered to Delphin by China’s Jiangsu Hantong shipyard. Lloyd’s Register (LR) verified a 14% reduction in fuel consumption following changes to the standard design.

LR says that the efficiency improvements have been achieved by carrying out a number of straightforward – but effective – changes including: de-rating the main engine, a new propeller design which has been optimised for the de-rated engine, and fitting a mewis duct.

The daily main engine consumption at a speed of 14 knots at ballast draft, which would have been about 29.4 tonnes, is now about 26 tonnes and the daily main engine consumption at a speed of 13.5 knots at design draft, which would have been about 29.8 tonnes daily, is now about 26.3 tonnes. The engine’s output has been reduced by nearly 1,000 kW to 8,500 kW. Ship designer SDARI said that the structure of this new type BC57K has been “optimised, satisfying the latest requirements in the Common Structural Rules for bulk carriers, especially to accommodate the severe strength requirement of steel coils. The new ship will be able to load about 54,000 tonnes of steel coils during one voyage with little increase of light weight”. The company added that the vessel also meets the requirements of EEDI-Phase I.”

The delivery of MV Aquila: Left to right: Mr Zhuang Tian, LR surveyor in charge at Nantong; Master of the Aquila, Capt Yuriy Gotovkin; Mr Tae-Bok Kwak, LR project manager and Mr Xiaofeng Yang, LR site office team leader

World Bunkering Spring 2012

29

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environment

Green Fund? How much?

The recent Climate Change Conference could have far-reaching implications for the shipping industry.

S

omewhat against expectations, the United Nations Climate Change Conference (COP17) in Durban, South Africa, resulted in a commitment to negotiate a global treaty on reducing emissions by 2015, which would lead to all countries working to cut greenhouse gas emissions by 2020.

COP17 agreed to establish a ‘Green Climate Fund’ to help mitigation and adaptation projects in developing countries. The fund is expected to receive about $100bn a year by 2020. The details of how this will be financed have still to be decided but there was significant support for the idea that some of this funding should be raised from international shipping, probably through the market based measures (MBMs) that are being developed by the International Maritime Organisation (IMO). A figure of $25bn was widely quoted as shipping’s potential contribution.

After the meeting, which finished in early December, IMO said it would continue its work on MBMs. IMO summed up progress saying: “As anticipated, the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), serving also as the meeting of the Parties to the Kyoto Protocol, focused more on rallying political will for action to reduce greenhouse gas emissions (in particular, the issue of the second commitment period for emission reductions under the Kyoto Protocol and the establishment and making operational of the Green Climate Fund (GCF), as decided under the Cancún Agreements of 2010), rather than on pushing ahead with the preparation and adoption of a legally binding instrument to that effect.”

World Bunkering understands that working groups are being formed to develop plans to establish the GCF and these will involve consideration of shipping’s possible contribution.

IMO said that, as far as sectoral approaches are concerned, including international maritime transportation, the Conference noted the progress made by IMO in adopting, in July 2011, regulations on energy efficiency for ships under MARPOL Annex VI, as part of its three-pillar work plan to limit or reduce the emission of greenhouse gases from international shipping, as well as the Organisation’s continuing work on MBMs. Putting a positive spin on a negative, IMO said: “Although the question of what action needed to be taken on sectoral approaches was discussed at length, there was no suggestion that the reduction or limitation of greenhouse gas emissions from international shipping should not continue

World Bunkering Spring 2012

to be for IMO to consider and act upon. Indeed, IMO was invited to continue informing future Conferences and their subsidiary bodies of the Organisation’s further progress on this issue.”

Commenting on the outcome of the Durban conference, the then IMO secretary-general Efthimios Mitropoulos said: “By adopting the Durban Platform, the Conference has once again moved forward several items on its agenda, achieved further commitments under the Kyoto Protocol, agreed a process leading to a new legally binding instrument and put in place mechanisms to give effect to the high-priority issues emerging from last year’s Cancún Agreements, including those related to technology, adaptation and climate finance.”

Mr Mitropoulos, who retired at the end of December, added: “IMO should continue, through next year’s two sessions of the Marine Environment Protection Committee, its work to progress its debate on market based measures so that it can, through meaningful and inclusive negotiations, bring its action plan on climate change to a completion in a reasonably short time. Such an outcome will enable the Organisation to present further tangible results to next year’s UN Conference on Climate Change, scheduled to reconvene in Qatar in December 2012, thus demonstrating its members’ and the shipping industry’s continued commitment and determination to add IMO’s contribution to the world efforts to combat climate change.”

In the run-up to the Durban conference the International Chamber of Shipping (ICS) joined forces at COP17 with Oxfam and WWF to push the case for IMO to have “clear guidance on continuing its work on reducing shipping emissions through the development of MBMs”.

They did not quite achieve that. ICS did not issue a statement on it at the Durban conference but World Bunkering understands that the shipowners’ body was fairly happy with the outcome.

MBMs are controversial amongst shipowners and ICS was stressing to its members that it had emphasised to UNFCCC delegates that shipping is not a “cash cow” and that any financial contribution that it might be required to make should be proportionate to its share of the world’s total emissions.

The next UNFCCC will held in Qatar in December this year. By then attention could well be focusing on just how much shipping will be expected to contribute.

31

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testing

Damage prevention

Steve Bee

Lintec and Intertek are using their new Shipcare Marine Services initiative to offer a wider range of services as Sandra Speares reports.

L

intec Testing Services has for some years been owned by the Intertek organisation but last year the two companies came up with a joint initiative, Shipcare Marine Services to combine the services that Lintec and Intertek provide.

Key components include fuel delivery and quantity, bunker quantity survey reports, fuel quality testing with regard to heavy fuel oil and distillates, and issues surrounding lube oil performance tying in with the oil condition monitoring side of the equation.

Steve Bee, general manager for Lintec Testing Services, says that Lintec continues to be operated as a legal entity in its own right, but since the beginning of November last year there has been a focus on the services that Intertek provided to the marine industry and that Lintec provided. “Whilst Lintec’s core business has been fuel quality testing, Intertek has a wide geographical coverage for quantity surveys and is also involved in oil condition monitoring. We felt that these services could appeal to shipowners and managers and effectively we could operate a wider range of services to our client base.”

“Through Shipcare we are able to offer a wider geographical coverage to the wider Intertek network and a wider range of services led by fuel quality testing, bunker quality surveys and oil condition monitoring,“ Mr Bee explains. Under the Shipcare regime, he still acts as general manager for Lintec but he also has a wider global remit on fuel quality testing while the other main services are BQS and OCM. Microbial and ballast water testing are also included under the Shipcare banner.

All of the coordination of Shipcare work is through the Lintec main office in Darlington in the UK. There is a three centre model for testing in Houston, the UK and Singapore to cover the three main

World Bunkering Spring 2012

time zones. “Ideally what we want to do is coordinate the majority of the samples through that three centre model”.

However there are occasional samples that have to be tested in Shanghai and that is a service offered to clients. This service came about because of changes in legislation in China before the Beijing Olympics with regard to the movement of fuel samples. Since then the company has been testing in Shanghai, but most of the samples are testing through the three centres.

As far as testing is concerned the company’s work is driven by demands on its clients, including new legislation. “We see the service that we provide as a damage prevention service in terms of the care of the vessel, the health and safety of the crew and the welfare of the environment. You have got those three main drivers as a remit for the testing service.”

Environmental legislation coming from, among other bodies, the IMO obviously impacts on the company’s clients and the service it provides to its clients. These include reductions in sulphur levels and the impact that they will have not only from the environmental perspective but on engine performance and the performance of the fuel itself.

“It is almost like a two pronged effect, you have the effect on the environment but also engineering impacts with regard to the daily operation of a vessel. I would say they are the two main areas of concern to the client and consequently to us as a testing house providing advice and information to the client on how to handle such types of fuel.”

More and more fuels are being blended and with the whole blending process there is potential for contaminants to enter the fuel stream, he says. “We are certainly seeing issues on that side and

33

Testing for contamination: fuel blending can introduce unwanted chemicals

more and more issues with regard to chemical contamination of fuel, once again probably due to the blending processes that have to be introduced to hit certain parameters within the fuel.”

The drive to lower sulphur content is one example. Suppliers, he says are “becoming very experienced at hitting the sulphur limits” however, there is always the possibility that elements may be introduced that are not conducive to engine performance and fuel performance, he says. While cat fines is one issue arising out of the refining process, chemical contamination he cites includes styrene, dicyclopentadiene (DCPD), chlorinated compounds and other potential hazards to the environment. It tends to be in set areas of the world that the company sees certain chemical contents within a fuel, Mr Bee says. There might be a spike in one part of the world which then subsides to appear elsewhere. Sulphur, cat fines and more exotic contaminants like styrene and DCPD also appear.

It is difficult to pinpoint if there are certain parts of the world that produce particular problems. Mr Bee says that if the company detects repeat high levels of particular species in the fuel, they will alert their clients to this. High levels of contamination have been seen in the ARA region and the Baltic he says. In China there may be a higher water content or cat fine issues in African ports. “It varies across the world, you couldn’t pinpoint any specific contaminant in any specific area.”

The source of the crude has an effect on the components within the fuel and what the supplier was required to supply will play a part.

From 1 January, 2012, global sulphur content dropped to 3.5% which put extra stress on suppliers to provide fuel at that level. Testing

34

companies obviously have to be aware of the changes and adapt to them.

Mr Bee says he believes suppliers are hitting the necessary targets. When the first emission control area came into operation he said there was a spike in off-spec fuel, but after that suppliers seemed to be good at supplying fuel at the percentage required. The relevant price differential is obviously going to affect purchasing patterns but on the whole, Mr Bee says, although off-spec fuel may be seen from time to time, if legislation drives people down a certain route they are going to have to do it, come what may.

Other recent initiatives in the testing arena include a project by Maersk and the US Navy involving algae-based biofuel on the containership Maersk Kalmar, announced in December last year. Advantages of testing on Maersk Kalmar are that the 300m containership has a dedicated auxiliary test engine, which reduces the risks of testing, and its fuels system has special biofuel blending equipment and separate tanks. The biofuels test is the first collaboration between Maersk and the US Navy’s Naval Sea Systems Command (NAVSEA).

During its month-long, 6,500 nautical mile voyage from Bremerhaven, Germany to Pipavav, India, the ship used 30 tonnes of biofuel. Engineers and crew onboard tested blends ranging from 7% to 100%. The team also analysed emissions data on NOx (nitrogen oxides), SOx (sulphur oxides), CO² and particulate matter from the fuel use, along with effects on power efficiency and engine wear and tear.

“We expect to identify an optimal blend of distillate and biofuel that will meet the more stringent requirements of the International Maritime Organisation’s forthcoming emissions regulations,” said David Anderson, Maersk Line Limited’s technical representative for the project.

“The test is part of a journey to spur innovation in fuel R&D, diversify the fuel supply and improve environmental performance. It is a long-term goal Maersk shares with the Navy,” he adds.

Fuel testing is one of the issues raised in a suite of new clauses relating to bunkering by Bimco relating to time charter parties.

The bunker suite provides clauses covering matters relating to delivery and redelivery of bunkers; bunkering operations; sampling; fuel testing programmes; and ECA trading, all of which are matters that are frequently absent from or insufficient in many standard time charter parties, the organisation has said. “Many older time charter forms contain bunker clauses covering the fundamental principles under the charter, but simply do not contemplate today’s situation where vessels are required to carry and use several grades of fuel and where sampling and testing regimes are an integral part of the process.”

The bunker clause relating to fuel testing says that “there is no strict obligation on owners to participate in fuel testing programmes, although Bimco believes it to be a good and prudent practice.

However, if owners do participate in such programmes then they may wish to incorporate this Clause into their time charters”.

If the owners have the fuel tested at their expense and it is found not to comply with the agreed specification then the charterers have the right to seek a second opinion from another testing laboratory, mutually agreed by the parties. If the second laboratory confirms the sample of fuel to be off-spec then the charterers are to pay for the analysis, otherwise the owners must foot the bill. Both owners and charterers have to agree on the laboratory that will give the second opinion, in order to avoid disputes.

World Bunkering Spring 2012

testing

Worrying results Rob Leventhal, vice president sales and marketing for Oiltest Marine Services, warns that ship’s staff may not know the real sulphur content of fuel.

A

regulatory marathon was begun on 1 January 2012, as the maritime community approached the starting line towards a new era in sulphur emission standards. A marathon indeed, as vessel operators must adapt and react to the very long course ahead in order to reach the finish line. What must the participants do to ensure that this is a race they can finish?

While it may seem straightforward to simply ask fuel vendors to reduce sulphur levels from 4.5% to 3.5% and then to 1% and below, is that all there is to it? No, as changing the sulphur limits means that there are both legal and operational issues to consider. As in any race, the right preparation is needed so that vessel operators can ensure a formula for success.

One of the most important aspects in getting to the finish line is having the confidence that the fuel onboard is within prescribed guidelines; currently, at or below the 3.5% global cap.

Basis Marpol Annex VI, Regulation 14.1, the Bunker Delivery Note (BDN) must show the fuel’s sulphur content, and be accompanied by a representative sample of the fuel oil received. This sample is to be signed and sealed, by both the supplier’s representative and the master or officer in charge of the bunkering operation. All well and good so far, however, we asked the question, how accurate is this sulphur information?

Oiltest Marine Services reviewed all of the submitted Heavy Fuel Oil (HFO) samples (excluding any low-sulphur products), received in 2011, and compared the sulphur content stated on the BDN against our laboratory findings. The results are sobering. Significant discrepancy was found on both ends of the spectrum. Fully 23.4% of all samples showed laboratory levels for sulphur being 0.2% or more higher than the stated sulphur level. Conversely, almost 11.7% of all samples showed laboratory levels of 0.2% lower than stated.

Combined, we have over one-third of all stated sulphur levels with significant variances from the laboratory results.

These findings have implications from both a technical and

World Bunkering Spring 2012

regulatory aspect. Technically, a vessel may select the type and amount of cylinder lubricant based on the known fuel sulphur content, but if this is chosen based on erroneous data, cost and operational issues may ensue. From a regulatory standpoint, a vessel may believe it is following the Marpol standard but may be unknowingly using a fuel that does not comply.

Clearly it is critical for the vessel to know the actual sulphur content of its fuel. Only then may a vessel be truly in compliance.

Further, knowing the true sulphur value may allow other appropriate actions to be taken as necessary, such as blending fuels onboard the vessel to comply within even lower sulphur regulations in emission control areas.

Because of the upcoming dates for further sulphur reductions along with unknown future regulations, it is now more critical than ever that a vessel’s owners and operators know the true levels of sulphur in their fuels by testing with an accredited laboratory. This is the vital preparation step needed to ensure that all of us get to the finish line and the reward of reduced emissions.

DNV Petroleum Services study

DNVPS has also drawn attention to the problem of high sulphur levels in heavy fuel oil. Samples of stems in the first week of January showed that 6.5% of the samples worldwide exceed the new IMO global sulphur limit of 3.5% m/m.

The survey excluded low-sulphur fuel. DNVPS said that the most significant was at Rotterdam where 57% of the samples contained sulphur above 3.5%.

By the second week of January the percentage of noncompliant samples had dropped to 3.3% worldwide but ARA remained the area with the highest percentage of samples being supplied with sulphur concentration above 3.5% – Rotterdam 28%, Amsterdam 16% and Antwerp 4% – although compared to the previous week Rotterdam had seen an improvement.

35

FUEL QUANTITY

Getting there slowly The use of flowmeters is growing worldwide but the industry is still waiting for official guidance on their use.

B

ack in September last year it looked as though Singapore’s Standards, Productivity and Innovation Board (SPRING) would be announcing significant progress on the use of flowmeters by the end of 2011, with the certifying of a tanker to use flowmeters to verify quantity delivered.

As of late January this year nothing further had been said, although Seah Khen Hee, chairman of SPRING’s Technical Committee for Bunkering, made it clear then that further study on flowmeter use would still be necessary.

He was quoted as saying: “The most important thing that I want to say is that we are investigating this very thoroughly, carefully and in a lot of detail, as there is just very little actual operating experience in a real bunkering situation on a bunker tanker. We have to understand all the little things that can influence or need to be taken care of when you need to derive a bunker metering procedure.”

Mr Seah added: “The scale and complexity involved in using flowmeters is not a case like a water meter where you tag it on, run it and that’s it. There is a lot more to it.”

An industry source told World Bunkering that he was not surprised the process was taking longer than hoped because using flowmeters was not as straightforward as many had expected. He said: “The flowmeter manufacturers are not used to having to measure empty to empty. Trapped slugs of air are a problem.”

Nevertheless use of flowmeters, by both suppliers and owners, is growing. Recently Georgian bunker supplier JSC Wissol Petroleum Georgia has announced that it had installed Emerson flowmeters on board its 1,620 dwt bunker delivery vessel Wissol Bunkering. The company, which supplies MGO, said: The digital flowmeters show actual temperature, density, kilogrammes and litres during the entire bunkering procedure. The data is then transferred electronically to port and customs authorities.”

Among owners, AP Moller-Maersk has been particularly keen to use the technology. Joshua Low, the group’s head of global bunker fuel and derivative trading told World Bunkering: “Maersk Line has purchased about 50 Coriolis mass flowmeters. Some of these have been installed while others are still work in progress.”

Colin Cheeseman, international product manager for the

World Bunkering Spring 2012

manufacturer Krohne said: “The key to developing the bunkering market is transparency between all stakeholders, which includes us, the meter specialists. We need to be more open about the issues that arise when introducing direct measurement for bunker transfers, therefore we need to assist the industry in supporting the development of workable solutions.”

He told World Bunkering: “Krohne is quietly gaining experience of these issues by continuously developing our product range and evaluating instruments suitable for bunkering. Additionally, we are preparing guidelines for installation, system design and operation to provide reliable and repeatable measurement.”

Mr Cheeseman concluded: “As a specialist product manager dedicated to mass flow, I am keen to develop the solutions for our technology. However there is no perfect measurement principle, all have limitations and constraints, therefore any finalised industry standard need not be exclusive to one metering technology, in fact it would be detrimental for all involved if this were to occur.”

A different approach While the bunker industry’s attention has been focused on increasing quantity measurement by using Coriolis and other flowmeters, Japanese shipping group Mitsui OSK Lines (MOL) and engineering firm Musashino Co have developed an alternative solution which it claims overcomes the cappuccino effect caused by entrained air.

The two companies say they have jointly developed the world’s first portable bunker tank level gauge. It is claimed to reduce the workload needed to measure a ship’s fuel level during bunkering and enables more accurate measurement. This, they say, will reduce the crew’s workload, and help prevent incidents such as fuel spills from overfilling.

According to MOL, with the new liquid-level gauge, the pressure sensor, which is suspended into the fuel tank, senses changes in liquid-level pressure and detects the fuel level in the tank quickly and accurately. Several tanks can be monitored on the ship’s computer at the same time.

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Direct measurement of bunkering transfers using mass flowmeters Practical considerations Introduction

The bunkering industry and ship operators have been exploring the possibilities of using mass flowmeter technology for direct measurement of bunkering transfers with a number of trial projects that have emphasised some important areas for on-going development. Mass flowmeter technology has gained acceptance, developing rapidly over the past 30 years. However larger lines sizes are a recent innovation and have introduced a number of new applications for the meter manufacturers to understand, one of which is bunkering.

Typically Coriolis type mass flowmeters, used for bunkering are very bulky, have a large footprint and require expensive installation and support. During the development phase of the OPTIMASS 2000, KROHNE conducted extensive research to ensure the specifications met the needs of industry users. It became clear during this phase that size and weight were of concern to customers, particularly for marine installations where space above and below decks is at a premium.

The ideal meter would simulate a section of pipeline. KROHNE took up this challenge and used its proven technology and experience with straight tube mass flowmeter design to develop large-sized straight tube meters.

for loading and total consumption measurement.

Mass flowmeters are being considered as part of a standard for direct bunker transfer measurement. Once such a standard is accepted then the transparency of the bunkering process will improve. Time will also be saved in tank dipping measurement, reducing the overall total time of a bunkering cycle for the ship operators, the bunkering agents and barge operators.

The plan for a global taxation on marine fuel oils will also force change to transparency of measurement and drive a fiscal metering philosophy similar to other industries where direct measurement and traceability of the transaction are paramount.

Standards and approvals

The accuracy of mass flowmeters in ideal conditions is second to none, with traceable measurement errors of better than 0.1% of measured value. However in industrial and bunkering applications ideal conditions cannot always be achieved, particularly during the start and end of loading where the pipelines are only partially full.

The international standard OIML R117-1 for Dynamic measuring systems for liquids other than water is a commonly used global standard for custody transfer systems for both distillates and residual fuel oils.

This standard makes provision for viscous fluids and provides clear guidance on pump and pipework systems and the consideration of entrained gas.

Direct measuring systems generally do not measure accurately when partially full or with entrained gas. However the standard considers accuracy for a minimum measured quantity. The time when air is seen in the system, during the initial system fill time and emptying the bunkering tank, is comparatively short compared to the overall transfer time so that accuracy can be maintained over the whole bunkering cycle.

Fig.1 OPTIMASS 2000 designed to simulate a pipe section

Installation

The KROHNE OPTIMASS range of mass flowmeters is unique in the direct measurement of bunker fuels. Other measurement methods, including some mass flowmeter designs, require significant compensation algorithms to overcome the effects of marine fuel oil viscosity changing with temperature and also require additional pressure sensing to correct for process pressure variations.

The installation of any metering system should be carefully considered.

Installation needs to consider both the environment and the process requirements to optimise the performance.

Mass flowmeters have a number of significant advantages, particularly when installed in the confines of a ship. Many measuring systems require significant straight pipe lengths before and after the meter to ensure consistent measurement. Mass flowmeters do not require these straight lengths and therefore naturally require less installation space.

As has already been said, OPTIMASS straight tube meters look similar to a piece of pipe section so offer significant installation advantages over a bent tube design.

The patented straight tube design with the rigid outer cylinder transmits vibration from the operating environment away from the measurement section of the instrument. Mass flowmeters are themselves resonant systems in the measuring section so isolation of both mechanical and operating frequency are essential in the harsh operating environment of a ship. The OPTIMASS range is designed to operate at high frequencies. This is not the case for many bent tube

Why use mass flowmeters?

Mass flowmeters have significant advantages over other flow measurement methods. The mass flowmeter is a truly multiple measurement device, directly measuring mass flow, liquid density and process temperature independently of each other. Mass flow and density combine to calculate volume flow if required. The direct measurement method monitors these values throughout the bunkering process and can be used as a first stage quality check of the fuel oil being transferred.

An additional advantage of mass flowmeters is that they are bi-directional measuring devices, so the meter can have dual use on board bunkering vessels for loading as well as offloading, and on the operator’s ship

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World Bunkering Spring 2012

meters, which can be running at frequencies below 100 hertz, which is close to vibrations seen in the marine sector.

The process

Mass flowmeters create a pressure drop; straight tube meters have the advantage of a shorter measuring section without any bends. KROHNE has also focused a lot of effort on the transition section from the flanged pipe to split the flow cleanly into the two measuring tubes. The patented KROHNE design for the OPTIMASS 2000 is proven to reduce the pressure drop across the whole instrument by 30%.

Fig.2 Patented flow splitter – reducing pressure drop by up to 30%

The ambient temperature and the transfer temperature of the fuel can also vary. Most mass flowmeters incorporate a temperature sensor that is used for internal correction within the meter, but this only compensates for process temperature. What if the ambient temperature varies? The KROHNE solution incorporates strain gauges to compensate for ambient temperature effects and enhances process temperature correction. This ensures that bunkering transactions are repeatable in winter and summer.

Large line size meters have an issue when it comes to operating pressure, mass flowmeters require a comparatively thin wall tube to operate and this can make the meters pressure sensitive. This is because pressure changes affect the characteristics of the vibrating measuring system. This is made worse for bent tube meters where, additionally, the bent tube distorts, ever so slightly, adding further to the performance changes – this is known as the Bourdon effect. The only solution is to add a separate pressure sensor into the system to compensate but this adds to the error budget of the system.

Fig.3 Explanation of the Bourdon effect

The OPTIMASS 2000 overcomes these issues, firstly with the straight tube design and secondly using strain gauges to compensate for pressure effects directly in the meter without requiring additional pressure sensors.

As already mentioned, process temperature affects the viscosity of the fuel oil. In theory, mass flow measurement is independent of viscosity, but in practice the design of the vibrating system and the bent tube loop can result in viscosity effects. At certain operating conditions of flow rate, pressure and viscosity, reverse flow may occur around the bends of a mass flowmeter similar to the flow in a river

World Bunkering Spring 2012

around a bend. On the inside of the river bend you can get upstream flow close to the river bank. Mass flowmeters are extremely sensitive and although this reverse flow is detectable, it is extremely difficult to compensate for.

The straight tube design and the optimised flow splitter virtually eliminate viscosity effects and the design of KROHNE mass flowmeters has repeatedly proven to be independent of viscosity in field applications.

However, optimising the installation to achieve the best performance for bunkering should not be ignored even with the advantages highlighted above.

Install the meter low in the system preferably below decks in a location which ensures that during the majority of the bunkering cycle the meter is full of product.

To minimise the filling time and improve repeatability of the filling and draining of the meter, mount the meter vertically. Again the straight tube design fills and drains more repeatedly than a bent tube profile.

The location and system design should ensure that during the bunkering cycle, back pressure is maintained on the meter so that any degasing of the fuel oil occurs elsewhere in the system and not in the meter. A flow restriction downstream of the mass flowmeter will assist in this. Also ensure that, if parts of the system operate below atmospheric pressure, air cannot be drawn in to the system through joints or hose connections.

The other area that needs to be clarified to ensure direct measurement is adopted in the bunkering industry, is verification of meter performance. In other industries master meters or “proving” are commonplace but require designing into the meter system.

Master meters or proving stations need to be available to conduct this verification on board and needs to be used during at least part of a bunkering cycle.

Economic benefits

The economic benefit of bunkering using direct measurement is to the advantage of all stakeholders.

The transparency of the process ensures the ship operator pays for what fuel mass is actually transferred, similar to filling your car at the petrol station, with the added advantage of the first stage quality check.

Bunkering agents and the barge operators who adopt the technology, or commercially agree to use the customers’ readings, are less likely to be engaged in bunkering disputes. Additionally the time spent for all parties during the bunkering cycle in tank dipping is a cost not only to the bunkering agent and barge operator but also to the ship owner.

The port authorities gain by the increased turnover of ships through the port and therefore better use of the ever limited port space for bunkering.

The issues around direct measurement of bunker fuels are still being resolved and continue to require the engagement of meter manufacturers, ship operators, port authorities, bunker agents and barge operators along with regulators.

KROHNE is confident that it has developed a successful range of meters for the bunkering industry and continues to work with customers to enhance this portfolio of products in bunkering and allied sectors such as fuel consumption measurement and lube oil monitoring. KROHNE’s marine systems division, KROHNE Skarpenord, has developed in parallel EcoMATE®, a portfolio including fuel consumption and bunkering monitoring.

For further information, please contact Colin Cheeseman Product Manager – Mass Flow Tel: +44 (0)1933 408528 c.cheeseman@krohne.com

39

GAZPROMNEFT MARINE BUNKER Ltd.

Energy of Growth • High quality ISO 8217-2010 bunker fuel • Quality control from oil refinery plant to end user • Flexible prices • Main Sea Ports of operations: Saint-Petersburg, Kaliningrad, Murmansk, Archangelsk, Primorsk, Ust-Liga,Novorossisk, Tuapse, Port Kavkaz, Taman, Nakhodka, Vladivostok, Vostochnyi, Kozmino and Sakhalin island • Main River Ports of operations: Moscow, Yaroslavl, Kazan, Samara, Volgograd, Rostov-on-Don, Astrakhan, Azov, Ust-Kut, Nizhniy Novgorod • International ports: Tallin, Riga, Klaipeda, Rostok, Konstanca

AVAILABILITY

Scary scenario

The ferry industry and the wider shipping industry are becoming worried about fuel availability and cost after 2015, as Sandra Speares reports.

T

he International Maritime Organisation (IMO) has agreed to a study on fuel availability prior to 2020, when a global sulphur cap of 0.5% is due to come into effect.

This study should be finalised by 2018, when a decision will be made whether to go ahead, or push it back to 2025. “What we understand from the industry is that unless someone really starts moving, the likelihood of those quantities of 0.5% being available in 2020 is very, very low,” Interferry executive director of EU and IMO affairs Johan Roos says.

“We see no reason whatsoever for the IMO not to proceed with that study now,” the ferry industry representative maintains. While Mr Roos says that Interferry is not overly concerned about pushing the 0.5% study forward, the association wishes to see the 2015 0.1% position included.

Mr Roos maintains that it is “careless” not to do this. The fact that the working methods, criteria and processes of the group that will do the study in 2018 have already been defined is a question of “smoke and mirrors” as far as Mr Roos is concerned, and, he suggests, is a means for those IMO member states opposed to bringing forward the study to provide something, rather than addressing industry concerns.

He believes that it would be a good idea for the review to be carried out by an independent body. “The problem we have is that the refining industry and the oil industry, for perfectly good reasons, are not very happy to sit in a group of ship operators or flag states and disclose their investment plans.”

He contends that an independent study would prevent a situation where those contributing to the work were at the same time trying to defend their own positions.

The immediate issue, he says, is not to have the study for 2020 put forward, but to have a study on availability for 2015.

The argument that has been put to Interferry is that there is

42

ample supply of diesel fuel in the world and, therefore, there was no need to worry, he says. As a European, he differs from this opinion.

“Europe is very, very short of diesel today, we import something like 50 million tonnes a year and with the 2015 emission control areas we will need another 25 million tonnes.” Quite a lot of imports come from the US, he says, which will have to retain supplies to satisfy needs in its own ECA, “so the net deficit of diesel in Europe is going to be very large.”

According to Mr Roos it is less a question of a significant shortage in diesel supplies but more one of a significant increase in costs, especially in a supply/demand situation where the industry has “nothing to bargain with” and will have to pay up. Russia, India and China seem likely sources of supply in the absence of any significant increased capacity coming on stream in Europe. As a result, he says it will be a question of “net export of currency from Europe to other parts of the world”.

Interferry has not attempted to put a figure on cost increases.

However figures being quoted for the cost of implementing measures in the ECAs are around E5 billion for Europe, based on current consumption and expected fuel prices in 2015. That figure, Mr Roos says, could rise to E6 billion as a result of increases in diesel prices.

The big issue, he says, will be the change in fuel quality.

The International Chamber of Shipping (ICS) is also advocating the moving forward of the fuel availability review, and the issue is set to be discussed again at the next meeting of the IMO’s Marine Environment Protection Committee at the end of February.

According to ICS secretary general Peter Hinchliffe: “The impact of the revised Annex VI promises to be so great in requiring all ships in international trade to switch to distillate that the demand and availability of suitable compliant fuel must be explored. This availability study must look into current and future availability and impact on other fuel markets that may be affected.”

World Bunkering Spring 2012

GEoGraphical focus: northERN europe

Deadlines approaching The implications of impending environmental legislation are of increasing concern to Northern Europe’s bunker industry, as Sandra Speares reports.

A

s deadlines for reducing sulphur content loom ever closer, there have been a number of initiatives in Northern Europe in recent months aimed at tackling the green issue as far as bunkers are concerned, as well as dealing with the high cost of bunkers.

A survey produced by the Seafarers International Research Centre at Cardiff University in December examined the effectiveness of international regulation on pollution controls, based on interviews with industry stakeholders, as well as inspection data supplied by the UK’s Maritime and Coastguard Agency and the Swedish authorities.

According to the report, laboratory test evidence of compliance with the regulations on sulphur content is “fragmentary”. It maintained that: “In the first quarter of 2011, 18% of samples, collected in Western Europe and the Baltic and sent to one large commercial lab testing agency, proved to have non-compliant sulphur levels. Most of these samples were only marginally off-spec, and there were considerable local differences, with only 7% of Rotterdam samples being off-spec. Test results on 149 samples collected by the

World Bunkering Spring 2012

Swedish Maritime Administration (partly quasi randomly and partly during Port-State inspections) showed only 4% were non-compliant (allowing for a margin of error of +/- 0.05%). Overall, the available test evidence is insufficient to estimate compliance levels across the ECAs as a whole.”

According to Total Marine Fuels in Paris, the management of bunker fuel has become a key issue in the short term for shipowners and charterers in view of the high (and widely fluctuating) price of fuels, and – in the medium and longer term – because of upcoming legislation regarding emissions controls.

These considerations affect the requirements of different customers in different ways. Generally, it can be said that owners and operators are looking for more competitive prices, obtained by tougher negotiations and better optimisation between bunkering ports. More sophisticated pricing formulae (fixed forward pricing, for example) are also called for to enable operators to limit their exposure to price fluctuations by using hedging techniques.

Total says that, apart from more efficient procurement of fuels,

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BUNKERING & WORLD WIDE TRADING

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Gasoil DMA 0.86 max 0.1%.

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customers have implemented energy efficiency measures, such as slow steaming or re-routeing, which contribute to savings on bunker costs, reduce ship operating costs and prepare the way for future regulations on CO2 emissions.

All sectors of the market have implemented these or similar measures, but in particular containerships and tankers, which are going through a particularly hard time at present, and to which Total is a major supplier.

Shipowners are now also demanding cleaner and cheaper fuels, such as LNG, for example, to replace standard residual fuels. Total is a potential supplier of such fuels, and a major producer of these and other marine products. The LNG option, however, is principally for new ships because the cost and technical feasibility of using it makes it difficult to envisage for existing ships.

Green bunkering is the message from the Swedish port of Gothenburg which, together with the Swedish Shipowners’ Association and the industry as a whole, put forward a proposal to the Swedish Transport Agency for green bunkering in Swedish waters. As Gothenburg is a major bunkering hub, with 1.5 million to 2 million tonnes of fuel supplied to vessels each year, clearly leakage of bunker fuel is a major concern.

The initiative means that bunker operators must have equipment in place to deal with potential oil spills, carry out regular pressure tests on hoses and have special training. National rules on bunkering are being drawn up by the Swedish Transport Agency.

According to Joel Smith, senior manager operations at Gothenburg: “Thanks to the rules, bunkering has become safer and (sulphur dioxide) emissions have in effect ceased completely. We, the Swedish Shipowners’ Association and the bunkering industry, feel that the port guidelines for green bunkering ought to be applied on a national level.”

The Port of Gothenburg introduced the rules for green bunkering in 1999. Mr Smith states that it is too early to say when they can be applied nationally. “It is our hope that a new law will be passed as soon be possible.”

Meanwhile, although the Viking Line Group’s sales were up during the first three quarters of last year, fuel expenses rose by 25.1% to E46.4 million (37.1% for the same period in 2010), due to higher fuel prices.

Fuel prices have pushed many companies to consider alternative fuels and a retrofitting project took place recently of the GL classed Bit Viking to LNG fuel. The ship is chartered to Statoil for use down the Norwegian Coast.

The project was the first-ever conversion of a vessel in service

to LNG. As a result, the Bit Viking now qualifies for lower nitrous oxide(NOx) emission taxes under the Norwegian Government’s NOx fund scheme.

Norway’s Fjord Line is also planning a dual fuel LNG upgrade within a year of two newbuilds being delivered in late 2012. Ingvald Fardal, president and ceo of Fjord Line told the Interferry conference in Barcelona last September that: “Where we operate is the strictest control area in the world and it’s going to get even tighter. We know that switching from HFO to distillate is going to cost a lot of money and we are not attracted to the scrubber option, so LNG seems a very good alternative.”

OW Bunker has launched a new German brand following the merger of two Wrist Group companies – Wrist Bunker Supply and Wrist World Wide Trading – OW Bunker Germany. “The new brand provides scale to the business, as one of the largest bunker suppliers in Germany, and capitalises on the global credibility, capabilities and infrastructure of OW Bunker, which has a reputation worldwide as a leading marine fuel supply organisation,” comments Götz Lehsten, executive vice president of OW Bunker.

“In these tough economic times, customers want to work with suppliers that have the financial strength and stability, as well as quality products and services, to help them develop the best and most viable fuel procurement solutions that meet the specific demands of their businesses. The OW Bunker brand carries this credibility”.

Boris Gronenberg will head OW Bunker Germany’s worldwide trading division, and physical supply will come under the remit of physical division vice president Jan Christensen, who joined the company in January 2012 from Maersk Oil, where he was head of its fuel trading operation.

Meanwhile Neste Oil officially opened Europe’s largest renewable diesel refinery in Rotterdam last December. The refinery started its operations last September.

It produces premium-quality NExBTL renewable diesel, which is the cleanest and highest-quality renewable diesel on the market, outperforming traditional biodiesels and even the best fossil diesels.

Neste Oil’s refinery in Rotterdam has an annual production capacity of 800,000 tonnes or 1 billion litres of renewable diesel and cost around E670 million to build.

The company is involved in developing technologies and processes for growing microalgae on an industrial scale as a raw material for use in fuel, food and chemical production. Neste Oil is also planning a pilot plant to produce waste-based microbial oil at its Porvoo refinery. It will be the first pilot plant in Europe designed to produce microbial oil for use in manufacturing renewable fuel from waste-based raw materials.

Cimil

World Bunkering Spring 2012

45

risk management

Not a pretty picture 2012 looks like being a tough year for shipping and, as owners struggle, risk is increasing.

H

igh bunker prices have been a source of major concern to shipping companies as far as risk management is concerned, but there is “some good news” according to James Walters, who heads the investigations team at Gray Page, although ship arrests are likely to increase.

“Prices are coming down a little bit and that helps reduce exposures although obviously the numbers are still huge in comparison to what they have been in the past. There is doom and gloom out there in general terms, most people are expecting a lot of problems this year.”

Mr Walters says that Gray Page sees the broad spectrum of what is going on across all the shipping segments and “it is not pretty in any of the market segments and a lot of that is to do with the huge cost of bunkers”. Increases are of the order of 70% over the last 10 years and this makes things painful, as well as “chewing up such a large proportion of the operating costs of the ship”.

Arrests for non-payment of bunkers are likely to increase during the company year. Early January saw United Bunkering & Trading (HK) file a complaint against Hong Kong Chain Glory Shipping in the US courts.

Mr Walters says that cash flow is becoming so strained for owners that they are also facing problems with non-payment of crew wages. Gray Page has been looking into a number of cases of this. “What cargo owner wants his cargo on board a ship where the crew has not been paid? They are not exactly going to be in the best frame of mind for looking after it, which at the moment has a value far in excess of the value of these heavily depreciating assets.”

This problem is, generally speaking, always going to be one that affects the lower tier owners and ones that bought tonnage at the wrong time. “We are faced with multiple owners who purchased ships right at the height of the market and, of course, they are now facing a market where the earnings are a quarter of what they were

46

expecting to receive and they still have huge bank debt to service.”

Gray Page has been looking at some of the mortgage repayment schedules on some ships and, Mr Walters says, that they are “out of all proportion to the earnings of the ship”. For example, some of the Beluga ships had interest payments of 15% on mortgages which were 90% of the ship’s value. Interest payments alone, he says would be of the order of $20,000 per day. “If ships are earning $10,000 per day and take $8,000 per day to operate it doesn’t take a rocket scientist to see there is a huge gap.”

Having said that, Mr Walters says that it does no good to talk the market down and “at the end of the day there is a still a hell of a lot of cargo being carried round the world and a lot of business being done in some parts of the world”. So much hinges on China, and if construction slows down there then demands for certain imports will slow accordingly.

The number of bunker disputes is liable to rise, Mr Walters believes. “The easiest way of easing cash flow for an owner is if he has a slight concern about bunkers and can hold back payment of that bunker stem for as long as possible and sit on that cash, then he will do so. You are going to get spurious bunker claims arising on a frequent basis. It is a standard tactic for holding on to your cash as long as you can. It is cash flow that enables the survival of a company. Without cash the company would not be able to function.” Obviously, he says, there will be genuine bunker disputes as well because with the cost of bunkers at current levels “it is very easy for unscrupulous suppliers to enter the market seeking to boost volumes by putting some pretty nasty stuff in”.

This is not going to be an issue with large traders but perhaps with smaller ones that are struggling, he says. Profit margins have been significantly eroded by the rise in values of the actual commodity “because they are still getting the same percentage fee, or where it is a brokerage deal at so much per tonne”. In these

World Bunkering Spring 2012

Shipowners who bought at the height of the market are only earning a quarter of what they expected to

cases deals are so much bigger value-wise but one is still getting a minimal return.

Although credit terms were cut down when the crisis first started, Mr Walters says he hasn’t seen terms cut from 30 days.

“I’m not sure that is such an issue as it was back in 2008. My own experience is that it is still 30 days. You are getting a lot more cash in advance or load over load deals where you are looking to reduce exposure. That is certainly a pattern that we see.”

There are a number of cases where charterers have not paid for bunkers and bunker traders have had to proceed against the owners for payment: “I am aware of several cases like that,” Mr Walters says, “but it is always a last resort.”

Vessel tracking and fraud investigation are part of the Gray Page services. When seeking information from bunker traders, Mr Walters says that Gray Page is normally seeking to identify what account name is being used to purchase bunkers for ships or signs of payment performance problems with the company. “What we are seeing at the moment is a rapid increase in the use of different company names to what is appearing in the charterparty.

“Essentially the issue is to protect the bunker asset as a separate entity. In certain jurisdictions, assets, even if the companies were

World Bunkering Spring 2012

part of the same group, could be ring fenced,” he says. Part of what Gray Page does is to establish whether different companies can be connected in order to enable the pursuit of assets, in the same way as one might pursue the connections between a single purpose plate company and the management company. Common directors, addresses and the like would have to be proved.

How easy the bunker arrest may be depends on the jurisdiction, as in countries like Brazil and Turkey, counter-security has to be posted, which makes the process much more expensive. Arrestfriendly jurisdictions include the US, Belgium, France and South Africa as well as India and Nigeria.

Sage Petroleum Ghana recent selected Aspect Enterprise Solutions to manage its petroleum products trading and risk operations in West Africa. According to Emmanuel Egyei-Mensah, ceo of Sage “We chose AspectCTRM to manage and support our activities. It gives us real-time insight into all aspects of our business including stocks, logistics, finance, profitability and risk exposure.

Our philosophy is to actively identify risks, obtain information about the risks and manage them effectively. That is our culture, which runs through everything we do.” Aspect has also sold risk management software solutions to Singapore-based Chemoil.

47

interview

Mission impossible

Johan Roos

Sandra Speares talks to Johan Roos,

executive director of EU and IMO affairs for ferry industry trade association Interferry.

I

nterferry has been outspoken in its concerns that the ferry industry will not be able to meet the 2015 deadline for the introduction of low-sulphur fuels.

Interferry described the task of meeting the 2015 deadline as “mission impossible” in a statement released in December, after the association conducted a feasibility study on scrubbing technology, considered to be one way of meeting the 0.1% sulphur limits.

Johan Roos explains that, in approaching the issue of ferries, as opposed to other forms of transport, Interferry’s study on the use of scrubbers on ships raised a number of issues that, while they might be applicable across the shipping industry, were particularly pertinent as far as ferries were concerned, because they were going head to head with land-based transport.

“Any structural changes to the shipping industry will affect us differently to those that are not in competition with road transport.” Other segments, he suggests, will be able to absorb the additional costs and if the scrubbing technology does not work “then it doesn’t work”.

This, he says is not a position that the ferry industry can take.

Suggestions that the ferry industry should adopt LNG or scrubbing technology are not necessarily viable options.

On top of that there are certain particularities; if one compares a bulk carrier, for example, with a ferry, a bulk carrier is able to fit equipment more easily. Passenger vessels face more difficulties.

The new Interferry feasibility study, covering 108 vessels from six leading operators, reveals that scrubbers would not be technically or financially viable for 60% of the existing fleet. Furthermore, trial

48

installations among association members have shown that it will not be possible to have scrubbers in operation in time for 2015 for the other 40%.

Another alternative that is being actively considered by the industry is the use of LNG as fuel. Concerns have been raised about its use on passenger vessels, notably in terms of storage, and proximity of storage tanks to passenger and crew accommodation.

Mr Roos says it is necessary to be careful not to suggest that LNG is inherently less safe than other forms of fuel. “This change of fuel, as with any major change, needs to be done in a safe manner. I am confident that LNG can be used in a safe manner”. Of course, he adds, the relevant rules and regulations have to be put in place, but there is no need to discard LNG as being unsafe “it is just a matter of finding the systems”.

Mr Roos says he is less concerned about the potential for using LNG on newbuildings, but more for its use on existing tonnage. He says that retrofitting for LNG on existing ferries is not an option.

However, he says, there has been one recent example of retrofitting a tanker to take LNG, that of the conversion of the GL class Bit Viking. As a result of the conversion, the Bit Viking is now qualified for lower NOx emission taxes under the Norwegian Government’s NOx fund scheme.

The Bit Viking has a twin screw propulsion system with redundancy including double engine rooms, propellers and steering gear. The ship’s six cylinder Wärtsilä 46 engines were converted by the engine manufacturer into 50 duel fuel engines and the ship has two newly installed 500 cubic metre LNG storage tanks. The ship also utilises

World Bunkering Spring 2012

The GL class Bit Viking has been retrofitted to take LNG

Wärtsilä’s new LNGPac system, which enables the safe and convenient onboard storage of LNG. The two 500 cubic metre LNG storage tanks are mounted on the deck to facilitate bunkering operations and permit the bunkering of LNG at a rate of 430 cubic metres per hour. The storage tanks provide the vessel with 12 days of autonomous operation at 80% load, with the option to switch to marine gas oil if an extended range is required. When visiting EU ports, which have a 0.1% limit on sulphur emissions, the vessel operates on gas.

While Mr Roos says that retrofitting for LNG is “perfectly feasible”, costs are prohibitive. The more complex the ship, the higher the costs will be, he believes. The costs are so high that if more is paid for the installation than running the ship using diesel fuel “it’s a no go”, Mr Roos says.

Interferry has been arguing that, despite the ferry industry’s efforts to develop alternative technologies and feasible alternative fuels, abatement technologies and financial support will not be available or sufficient enough to avoid a modal shift from sea to road.

Alternatives like the use of abatement technology or LNG, were considered as elements of a toolbox of measures proposed by the European Commission, including financial assistance.

Interferry participated at a meeting in Helsinki where the trade association says “it became obvious that current funding support programmes are only allowed for new ships or new routes and not for the ‘real problem’ of safeguarding existing fleets and the routes they already service – offloading millions of trucks from the European road network every year”.

Mr Roos believes that since the European Commission realised the implications of 2015 it has been trying to find a means of keeping the regulation while trying to avoid some of its possible consequences. Mr Roos said that Interferry managed to challenge the contents of the toolbox, and maintains that the toolbox is empty.

One question is whether those country states that voted for a 0.1% sulphur limit understood the financial and commercial implications. According to Mr Roos, activity in the current emission control areas (ECAs) has reduced environmental impact by 65% and in 2020 all the world will go to 0.5% sulphur.

“That has to be a massive improvement” which he says will take away most of shipping’s problems with relation to sulphur emissions. He suggests the best option is to give ECAs more time to adapt and keep the current 1% sulphur level in place until moving to 0.5% in 2020.

The marginal benefit of making the change as far as ECAs are

World Bunkering Spring 2012

concerned is “very, very small” he says. Member states voted for the 0.5% initiative, Mr Roos says. “Who really makes the decision to take five billion euros a year out of the shipping industry and ship it off to refineries far away.

To me it is not clear.”

Mr Roos agrees with comment from other industry sources that regulation is not necessarily being considered in a holistic way, and therefore improvements in emission performance in some areas may be offset with poorer performance in other areas. All of the proposals have merit, Mr Roos says, but cannot be looked at in isolation without considering the overall impact.

Another issue, he says, is that of the longevity of investments. He points to the truck industry which produced several new generations of trucks over a 25-year period. What the shipping industry is being asked to achieve is to make similar reductions over a greatly reduced period, he states. This is a position that he finds “unbearable”.

While the EU is providing some funding for newbuildings, is there any chance that funding will be provided for retrofitting existing tonnage? Mr Roos says that he finds it strange that the EU has focused its efforts on operators, putting in new routes to offload the road network while doing nothing for existing route networks, which will be hard hit in 2015. “Basically what they are saying is that you will have to liquidate your current assets, go bankrupt and come back to us for money to set them up again”.

The EU response as far as state aid for shipbuilding is concerned has been slow, he says.

Any impression that offering state aid or funding newbuildings would be a panacea is naive, he says. But “at the end of the day you can have an operation that cannot sustain the cost of 0.1%, then that operation cannot, by default, sustain the cost of having new ships.

That is why you are concerned with 0.1% to begin with. If you had an operation that could sustain the cost of a newbuild, you wouldn’t be that concerned about 0.1%”. What it boils down to, he says, is support for the existing ship network.

Size and weight are just two of the problems that need to be considered as far as scrubbing technology is concerned, and obviously this is a problem that can be designed into newbuildings, but would need massive modifications on existing tonnage.

The study with European ferries identified five parameters to consider when deciding whether scrubbers could be fitted: • Vessel age and the consequent commercial viability of making a massive technical investment; • Stability reserves taking into account the weight of scrubber units and how high up the funnel they would be fitted; • Deadweight reserves and the resulting impact on cargo capacity; • Casing – because many ferries have very limited void in the ideal funnel casing location and would therefore need special scrubber casing that reduces cargo capacity; • Whether or not Selective Catalytic Reduction (SCR) technology was already fitted to reduce NOx emissions – if so, retrofitting wet exhaust scrubbers would be more challenging as these cool gases to below 100oC. According to Mr Roos, each of these parameters on their own may very well be solvable. What operators were asked to do was to take a holistic view of what the combined effect of the parameters would be. Obviously operators with old vessels would not be keen to spend a lot of money on them. The top limit age-wise was typically about 20 years, he said. The majority of the disqualifications in the survey were because of the age of the vessel.

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ADDAX BUNKERING SERVICES

M/S ADITYA MARINE

AEGEAN MARINE PETROLEUM

NAKHODKA-PORTBUNKER CO. LTD.

ALBA PETROLEUM LIMITED

NEFTEHIM-BUNKER JSC

ARKAS HOLDING

OIL MARKETING & TRADING INTERNATIONAL.

ASEAN INTERNATIONAL LIMITED

OLIEHANDEL KLAAS DE BOER B.V.

ASMIRA PETROL LTD

ORION BUNKERS

BALTIC FUEL COMPANY

OU STARBUNKER

BALTIC BUNKERING COMPANY

OVERSEAS PETROLEUM & SHIPPING LLC

BI NORWEGIAN SCHOOL OF MANAGEMENT

PENINSULA PETROLEUM LTD

C.I INTERNATIONAL FUELS LTDA

PETROLEOS DE PORTUGAL

CEPSA MARINE FUELS S.A.

ROSNEFT MARINE LTD

CUROIL NV

SCADAR LTD

EXXONMOBIL MARINE FUELS

SEARIGHTS MARITIME SERVICES PRIVATE LTD.

EKOTEK LTD

SSMSCL-TRANSHIP

FAISAL MARINE OIL SERVICES PRIVATE LIMITED

SUNRISE MALDIVES PRIVATE LIMITED

GAZPROMNEFT MARINE BUNKER LTD

TRANSOILBUNKER CO. LTD.

INTERCONTINENTAL BUNKERING (ROTTERDAM) B.V.

TRANZIT DV

INTERTEK COMMODITIES

VILMA OIL S.L.

KPI BRIDGE OIL LTD

YUG BUNKER SERVICE LTD.

KROHNE LIMITED

YUG BUNKER SERVICE LTD.

LUKOIL BENELUX B.V.

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

www.worldbunkering.com

TRADERS

Still playing a vital role

Carsten K Ladekjaer

As some shipping companies struggle to survive, how are bunker traders faring?

B

unker traders have played an important role in the global bunker business since the seventies but, World Bunkering has been asking, is this changing?

The managing director and ceo of International Bunkering Middle East DMCC, Carsten K Ladekjaer responded: “The role of the bunker trader has not changed as such in my view. It has rather become even more vital to the industry than ever before. We are still adding the same value to the market as before only now the need for us has increased. As I have mentioned on previous occasions we feel that our business partners have become more appreciative of having us around, and of course we are very pleased with this.”

So how can traders cope with increased counterparty risk as more large shipping companies get into financial trouble? Mr Ladekjaer replied: “This literally seems to be the multi-million dollar question these days. Unfortunately we cannot rely entirely on good old-fashioned luck. The route description to steer through these challenging times for a bunker trading company contains a proper fine-tuned credit management system being in place, a wealth of market experience amongst the people making the credit decisions, an ocean of up-to-date information on what’s going on and what’s not, access to sufficient financing, and finally a fully motivated and professional team of employees.

All of the above is required in order to sort the good deals from the sour ones and still it’s not an easy task.”

As pressure on margins continues will there be consolidation in the market, with fewer traders? He said: “Surely this will be the result of the current market situation. Those armoured to weather the storm may come out winners and those who are not may have to close shop or at least scale down their activities. The term

World Bunkering Spring 2012

‘counterparty risk’ has been taken to a whole different level these days and everyone is watching everyone. International Bunkering is blessed by being a financially very strong counterparty. This means that our business partners have great trust in us. Others less fortunate may not be able to benefit from the advantages this provides and as a result they may lose market share.”

He added: “We continue our strategy of growing at a controlled and natural pace, which goes in-line with the general increase in demand from our increasing number of valued clients. We have therefore opened a liaison office in Mumbai and more recently International Bunkering Pte Ltd in Singapore was established. As such our focus is now on growing our business via those new units as well as the office in Dubai. Having said this, I would like to stress that with a multicultural staff from around the globe our focus remains to serve clients from all over the world with bunkers and lubricants all over the world.”

On whether more consolidation is likely, Asean International chief operating officer Zain Jamal commented: “In order to achieve their given targets, traders appear to be making trades on significantly lower margins without even considering the finance consequences or the risk factor components of the associated shipping company involved. To avoid this, traders in today’s times must be well-versed in market trends and have extensive historic evidence on counterparties to avoid financial default on payments. If this scenario continues, in the UAE it is certain that many trading houses may face the threat of failure, targeting the same clientele and causing more frequent consolidation of market share by geographic area, to minimise costs.”

As well as being an oil company and refiner, Spanish-based Cepsa trades its products directly to customers from all over the

51

LONDON SEATTLE

ISTANBUL

NEW YORK MIAMI

SINGAPORE

VALPARAISO

40 YEARS – A SINCERE THANK YOU!

KPI Bridge Oil was established in 1971 as one of the first true marine fuel broking houses in the Americas.

Today, we celebrate our 40th anniversary as one of the largest bunker broking and trading houses in the world. We would not be what we are today without solid long term support from our customers and suppliers worldwide. We would like to take this opportunity to thank all our business partners for their invaluable support over the years.

As we continue our ambitious and exciting development strategy for KPI Bridge Oil, we look forward to assisting the international shipping community with its global bunkering and lubricant needs in the years to come!

ISTANBUL

LONDON

MIAMI

NEW YORK

SEATTLE

SINGAPORE

VALPARAISO

world and to all sectors, at the main Spanish ports, Gibraltar and Panama. As a supplier, Cepsa sells as well to traders at those ports.

World Bunkering asked what difference the 3.5% sulphur cap would make to traders. A spokesperson said: “The new limit implies that for some refiners to manufacture this quality the crude slate has to be altered. Sometimes this is not profitable, and therefore the overall availability can diminish somewhat.

World Bunkering Spring 2012

For Cepsa, as a refiner, there have been no complications at all, since its refineries are configured to distillate sweeter crudes and we can offer 3.5% quality fuels without any problem. Regarding imports, in our areas we have not encountered major differences in the overall situation.”

So how concerned is Cepsa about the prospect of the 0.1% cap in 2015? The answer was: “Cepsa will be ready for this milestone as it has enough production capacity to service the demand if it remains at levels similar to those we see today for 1% sulphur.

World Bunkering asked: “How can traders cope with increased counterparty risk as more large shipping companies get into financial trouble?”

According to Cepsa the principles are “few and clear: a good credit assessment, complying with the credit limits derived from the assessment and continuous monitoring of each client’s position”.

“But in practice,” the Cepsa spokesperson conceded, “in the present situation any credit assessment is subject to be surpassed by the stark reality, or the assessment might be such that only limited sales might be carried out within its limits. Therefore, not only is best practice paramount, but the financial capacity to cope with defaults will be necessary, and some players might not be able either to cope with those defaults, or to apply limits allowing a minimum level of sales.”

So will there be consolidation in the market, with fewer traders, as pressure on margins continues?

“Most probably. We can imagine scenarios where small and medium-sized traders will join to put together resources and become more competitive, or simply to avoid disappearing.”

And is the role of the trader changing? Cepsa thinks so. “In some cases we see traders that are already developing activities as consultants and/or brokers. Also, it is becoming more and more frequent that big traders act as financiers for their customers.”

While not consolidation in the real sense of the word, global supplier and trader of marine fuel, OW Bunker, has recently launched a new unified German brand, OW Bunker Germany. The move follows the merger of Wrist Bunker Supply and Wrist Worldwide Trading, companies within the Wrist Group, OW Bunker’s parent company. OW says that the new entity will incorporate the two distinct trading and physical supply divisions under one brand, capitalising on OW’s global market-leading position.

“The new brand provides scale to the business, as one of the largest bunker suppliers in Germany, and capitalises on the global credibility, capabilities and infrastructure of OW Bunker, which has a reputation worldwide as a leading marine fuel supply organisation,” said its executive vice president, Götz Lehsten.

“In these tough economic times, customers want to work with suppliers that have the financial strength and stability, as well as quality products and services to help them develop the best and most viable fuel procurement solutions that meet the specific demands of their businesses. The OW Bunker brand carries this credibility,” continued Mr Lehsten.

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GEoGraphical focus: INDIA

On the move

India still has some way to go to realise its potential as a major bunker supplier, but progress is being made.

I

ndia’s total bunker volumes are believed to be less than two million tonnes a year but there are signs that the country’s marine fuel industry is now on the move.

Modest & Parsons India has been active in the bunker industry for over 20 years and is a physical supplier in Mumbai and Chennai, owning a fleet of five bunker barges.

The company’s general manager Mohin Jassal commented: “Over the years the country has witnessed robust growth in the bunker industry. Private enterprises have helped a great deal in increasing the volumes transacting through the ports of India.

Although the volumes passing through are in no comparison to other major ports around the world, the products coming out of the refineries are of a high quality and this advantage adds to the consistent growth of the bunker industry in India.”

The company expects to “see another year of growth in 2012 as the industry matures and new players find their presence here, consequently there is increasingly aggressive marketing from local and multinational suppliers and traders alike”. It points to government projections showing a 9% increase in GDP for the fiscal year 20122013 and to announcements that some states are debating the issues of VAT reductions, and in some cases exemptions, for bonded bunkers. Modest & Parsons believes the moves could considerably boost the competitiveness of Indian bunker prices and should encourage more vessels to bunker at Indian ports.

On the new MARPOL requirement to limit the sulphur content in marine fuel to 3.5%, Mr Jassal said that the Indian refineries were expected to be compliant by the first quarter of 2012.

“In all,” he added, “the prospects for the Indian bunker industry are poised for another year of steady growth despite its somewhat slow infrastructural developments.”

Modest & Parsons India itself, although starting out as a barge operator, has progressed to become a preferred bunker supplier, one of the biggest in Mumbai, as well as a physical supplier in Mumbai and Chennai. Mr Jassal confirmed: “We are ISO certified and vetted by the Indian Register of Shipping, enabling us to extend our bunkering services across India.”

World Bunkering Spring 2012

He added: “Our organisational competencies are derived from our understanding of supply operations, vessel requirements, port-specific intricacies and effective and timely coordination with product suppliers, shipping agents, road transporters and regulatory authorities.”

Looking ahead Mr Jassal noted: “Modest & Parsons’ trading arm actively focuses on developing bunker movements in Chennai, Mormugao (Goa), Tuticorin and the ports of the state of West Bengal. Taking into account the steadily increasing volumes of bunkers throughput at Indian ports, and by the encouraging growth signs for the future, Modest & Parsons will deploy in its fleet this year another barge with a capacity of 1,500 to 2,000 tonnes double hull, double bottom, ocean-going, in order to offer the market a more wider and economical choice. This strategic move from the management’s side emphasises a strong belief and faith in the Indian bunker industry.”

In January Dubai-based International Bunkering Middle East DMCC opened a liaison office in Mumbai, India. Country head, Capt Virendra N Mishra said: “It is estimated that about 1.8 million tonnes of bunkers are sold in India annually. This number is likely to increase in the coming years. The traffic at Indian ports is rising and the infrastructure is also improving.”

The company’s managing director, Carsten K Ladekjaer, said that “we believe in India as an important future market for us”. He continued: “Of course India’s shipowners, operators, charterers, etc also have their challenges these days as freight markets are depressed worldwide. However, at International Bunkering we are of the opinion that, with the right product and market knowledge, sufficient access to finances and by adapting continuously to market changes, we can still gain market shares in this big nation whilst serving customers on one of their most vital needs, bunkering.”

Also in January, a major Indian oil, gas and chemicals marketing and distribution company, Aegis Logistics, launched a marine products division offering an “extensive range of bunker fuels, marine lubricants and technical services at various ports.”

The company’s president, business development, Rajiv Chohan, said: “We are delighted to leverage our unique strength of extensive

55

tankages across many ports to offer world-class fuels and bunkers to the shipping industry, which takes care of their main concerns around quality, safety and timely delivery that is so critical to this industry.”

Aegis president SO Malhotra, added: “India is poised to grow in the bunker market given that there has been rationalisation of duty structure by governments, and we at Aegis Group will ensure a ‘winwin’ situation with our customers. We are here not just to compete but also to contribute to this industry and develop the market.”

In addition GAC India has been expanding, opening an office in Pipavav “to cater to the needs of the growing number of vessels calling at the port and principals using it as a base for operations in the Mumbai High oil field, off the country’s west coast”.

GAC now has 27 offices in 22 locations across India. Primarily a bulk cargo port, Pipavav has diversified with the addition of a container terminal handling exports from Delhi and North India, and the LPG Terminal serving the Mumbai High oil field.

Administrative problems have often been blamed for the relatively slow progress made by the country’s bunker sector and for uncompetitive prices compared to its direct rivals at Fujairah and Singapore. India is actually a major supplier of bunker cargoes to Singapore, which makes its lack of progress in the bunkering market all the more striking.

56

At a recent conference in Singapore several players in the Indian market complained that taxation on bunkers imposed at most Indian ports puts it at a distinct disadvantage to competitors like Singapore.

Chemoil Adani Pte Ltd chief executive Basheer Ahmed Sayed was quoted as saying that Singapore sources a significant amount of bunker from India and sells it at a lower price. He asked: “How do they do that?” Answering his question he said: “It is because they have removed taxes on bunkers, which make it cheap.” He noted that China’s bunker industry started to grow after taxes had been removed.

Chemoil Adani is a 50:50 joint venture between Chemoil, Singapore and Adani Group India. It is a physical bunker supplier with a fleet of five barges 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.

State-owned Bharat Petroleum and the country’s two largest refiners, Indian Oil Corporation and Hindustan Petroleum Corporation, are also involved in bunkering.

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, Gangavaram, Tuticorin, Chennai, Paradeep and Krishnapatnam. Aditya owns a fleet of five barges, of between 250 and 400 tonnes capacity and also runs a fleet of 20 road tankers.

World Bunkering Spring 2012

GEoGraphical focus: PAKISTAN

A difficult year

Pakistan’s bunker industry suffered declining volumes in 2011.

P

akistan’s bunker supply industry has experienced a tough year. Not only has the general economic situation worsened, but hopes that local refineries would soon be able to produce 380 cSt have yet again been dashed.

Karachi Port handles about 75% of the entire national trade and thus is the main focus of bunkering activity. It is a deep natural port with an 11-kilometre-long approach channel that can take tankers up to 75,000 dwt, plus it has 30 dry cargo berths, including two container terminals, and three liquid cargo-handling berths.

It is understood that about 2,400 vessels call at Karachi Port, and 1,300 at Bin Qasim annually, however approximately only 25% of these vessels take bunkers in Pakistan.

According to a major player in the local market, Faisal Oils, there are several reasons why relatively few ships bunker in Pakistan. Partly this is due to restrictive government controls on petroleum products and their exports and other bureaucratic “red tape”. But a limited infrastructure and inefficient logistics, also hold the industry back, as does the continuing non-availability of 380 cSt. Faisal Oils says that, through to the first quarter of 2011, total bunker volumes had been running at about 16,000 tonnes of IFO, 1,500 tonnes of MGO, and 300 tonnes of MDO per month. Faisal Oils had a 41% share of the market. From the second quarter of 2011, however, the bunker market saw a significant decline particularly in the international sales.

The volumes dropped significantly to about 5,000 tonnes of IFO, 600-700 tonnes of MGO and about 100 tonnes of MDO per month.

The number of ship calls also declined. Karachi had 12% less vessels in 2011 and Bin Qasim 4%.

A spokesperson for Faisal Oils said: “The reasons are multidimensional. Wobbling international economics, rising fuel prices; energy crisis and other challenges being faced by Pakistan, and intermittent non-availability of products particularly near the [Pakistan national] price-change dates, in our opinion, have contributed in this decline in the market. Faisal Oils has tried to adjust to this shrinking market by focusing on local projects and local

World Bunkering Spring 2012

demands such as the rental power ship project, and different current as well as future dredging projects at both ports.”

For Faisal Oils, the non-availability of 380 cSt has been particularly frustrating. The company says: “We imported a tanker in 2009 and collaborated with a local oil marketing company to supply 380 cSt. We supplied about 7,000 tonnes of 380 cSt in the first half of 2010.

However, the marketing company’s costings made 380 cSt more expensive than 180 cSt and they were not able to produce it on many occasions in the time frame we outlined, thus making it difficult for us to supply on time. Later on they began facing many technical issues at the refinery and at the management level, causing a discontinuation of the product. Currently this oil company is facing many challenges and we do not see 380 cSt available in the near future.”

Among other suppliers, Orion Bunkers is the only one with its own storage tanks for IFO, MGO, and MDO. It operates 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.

In 2010 one of Orion’s founders, Muhammad Yousuf, left to establish a separate firm, Ocean Bunkers. An Ocean Bunkers spokesperson told World Bunkering that Ocean Bunkers had within a short time achieved a “leading position” in the country’s bunker market.

The Ocean Bunkers spokesperson added that the company had strengthened its team with the “important addition” of Fauzia Naz as finance controller.

The spokesperson continued: “We have been growing day by day since our inception and more and more customers are coming to us and enjoying our unmatched, timely and hassle-free bunkering services at Karachi Port and Port Bin Qasim. This proves the greater confidence that our international bunkering community has in us and this has resulted in us operating four of our own self-propelled oil barges.” He added that Ocean Bunkers was in the process of adding two more barges to its fleet. One of these is already under construction and should be launched within three to four months.

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Posidonia 4-8 June 2012, Metropolitan Expo, Athens Greece

A unique blend of business and social interactions at the heart of Shipping Be part of the great Posidonia experience at a state of the art new venue

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GEoGraphical focus: MAldives

Still waiting The Maldives has unrealised potential

I

deally placed close to the main East-West sea lanes across the Indian Ocean, it is not hard to see why the Maldives could become an important bunker centre. Ships using the One and a Half Degree and Eight Degree Channels, need make only small diversions to take on fuel at anchorages off the islands.

With a population of just 370,000, tourism is the main economic activity, representing 28% of GDP and over 60% of foreign exchange income. In the decade up to 2009, government policy was to liberalise the economy and, with booming tourism, real GDP grew at more than 7.5%. However, the small state’s economy started to falter in 2007-08.

In recent months there has also been political uncertainty, as the government has become locked in a battle with the judiciary.

The local bunker industry has mainly been supplying domestic vessels, super yachts and cruise ships, as well as visiting warships.

Port agency and bunker supplier Antrac is a major player in the area, importing, storing and physically supplying MGO/MDO using its own barges and pipelines.

Another supplier with major plans is Fuel Supplies Maldives, a joint venture between State Trading Organisation and the Maldives National Oil Company (MNOC). MNOC has plans for a 6 million cu m onshore oil terminal. About a quarter of the terminal’s capacity could be used for bunkers.

Sunrise Maldives supplies MGO at the anchorages and alongside the berth and also supplies lubricants.

In 2010 another Maldives-based supplier, Aaru, announced that it planned to bring into service a new, very small barge to add to its existing fleet of six. The latest addition has a capacity of 65 tonnes.

Leading Bunker Broker in Maldives Sunrise Maldives Private Limited

SunR ise

02-02 STO Trade Centre | Orchid Magu | Male' | Maldives Tel: +(960) 332 5212 | +(960) 333 3832 | Fax: +(960) 331 7024 E-mail: info@sunrisemaldives.com | www.sunrisemaldives.com

World Bunkering Spring 2012

We Supply Low Sulphur Marine Gasoil (MGO) and all kinds of lubricants at the anchorage or at berth.

59

GEoGraphical focus: UAE

Changing times The make-up of the UAE bunkering market is changing against a backdrop of increased economic and political uncertainty, and thin margins.

W

hile tensions rise around the Strait of Hormuz and the global economy appears to, once again, be faltering, there is still plenty of optimism in the UAE and Saudi Arabia.

One major project that illustrates this optimism but also reduces potential risk associated with shipping oil from inside the Gulf is the Abu Dhabi Crude Oil Pipeline, running to Fujairah, which is expected to be operational by June. The pipeline should be able to deliver up to 1.5 million barrels of crude oil a day.

The project should also boost Fujairah’s bunker market with large crude oil carriers taking on stems prior to loading.

Meanwhile it has been reported that Fujairah’s state-owned Fujairah Petroleum Company (FPC) has bought a 12% share of Gulf Petrochem Group’s 412,000m³ storage terminal project in the emirate. The terminal is expected to be completed next year.

International Bunkering Middle East’s managing director Carsten K Ladekjaer told World Bunkering: “The bunker scene within the Middle East in general is going through a phase of transition at present. Some players are scaling down or even withdrawing from the market while others have gained market share and are consolidating their position within the region. We belong to the latter group. Being based in Dubai, we of course feel that the Middle East is an important market for us. However, International Bunkering is a growing company and with more offices opened abroad lately we are currently increasing our market shares globally.

Underlining the UAE’s prominent position in the global bunker industry, GAC Bunker Fuels, part of global shipping, logistics and marine services provider GAC, is to relocate the headquarters of its worldwide bunker fuel services to Dubai, under the new name, GAC Bunker Fuels Ltd. The move is slated to take place in August 2012.

World Bunkering Spring 2012

A company statement says: “The move is driven by the benefits of Dubai as a shipping location, the opportunity to maximise the synergies between GAC’s bunker business with its strong shipagency business in the Middle East and a strategic decision to more closely integrate GAC Bunker Fuels within the GAC Group, which also has its corporate headquarters in Dubai.”

Christer Sjödoff, group vice president, GAC Solutions, explained: “Co-locating our bunker business alongside GAC Group’s corporate headquarters in Dubai will allow us to exploit the full scope of services offered by the group for the benefit of our bunker fuel customers and better synergise the comprehensive package of shipping services that we are uniquely well placed to deliver to vessel owners and operators. In addition, Dubai has great strengths as a strategic hub between Europe, Africa and Asia for international business.”

Global trader and supplier OW Bunker recently announced that it is strengthening its Fujairah desk with the appointment of Sahar Zarghamian as a bunker trader. Ms Zarghamian is rejoining OW Bunker Middle East, where she started her career as a bunker trader before moving on to work as a derivatives trader.

Jesper Jervild, OW Bunker’s regional manager for the Middle East and South Africa, said: “Strategically, Fujairah is a very important area of operation, as one of the world’s top three bunkering hubs and a rapidly expanding port. Having highly-trained staff with a forensic knowledge of local operations, and important local business relationships is critically important to our continued success.”

In another increase in capacity, Shell Marine Products began supplying marine fuels at Jebel Ali Port last year. Shell says that it is currently the only global integrated energy company that has set up operations there. “The strategic location of Jebel Ali Port, a fastgrowing container port, puts Shell in an excellent position to support

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liners operating in the Middle East,” said Richard Jory, general manager, Shell Markets Middle East Limited in Dubai.

Shell acquired several storage oil tanks adjacent to one of the main terminals at Jebel Ali Port, as well as setting up a high-capacity bunker barge to deliver fuels and services that meet international barging standards to customers. The 8,000-tonne barge, which was previously deployed in Singapore, is one of the first vessels to use mass flowmeters in the Middle East.

Zain Jamal, chief operating officer of Dubai-based Asean International points out that the UAE has been, among many things, a centre point of trade and business in recent times within the Middle East. He says: “During its 40 years of independence UAE has undoubtedly made its name in world markets, including particularly now in the ever-changing bunkering industry sector.”

He notes that since the onset of the global economic crisis and the various recent political upheavals, business in the regional bunker market has stagnated. He says that the well-established players in the UAE “still reminisce of the boom volumes of 2008”. However, not all suppliers look to the past and the dynamic ones have adjusted while others just ride the storm.

He notes too that most ships sailing into the Middle East Gulf, from large containerships to small supply tug boats, call at UAE ports for bunkers. He says that this has been helped by the increasing efficiency local physical suppliers are committing.

Asean International this year celebrates 20 years in the bunker market. It is currently a physical supplier in UAE ports, making

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deliveries by road and sea. Mr Jamal says; “The simultaneous role play of physical suppliers and worldwide traders has provided us with substantial market share and ever-growing network spread in different continents.”

Recently Asean has expanded its bunkering activities to Dar-EsSalaam, in Tanzania, becoming one of the very few suppliers in the eastern region of Africa. Mr Jamal says: “2012 holds good prospects for the Asean Group which is constantly on the brink of expansion.

As always, we continue to seek to uphold the efficiency of our practices and provide a sense of comfort for our clients. We are simultaneously focusing on our strategic growth objectives and the inherent value we can share with our business partners.”

Late last year there had been widespread doubts about the ability of Middle East suppliers to comply with the new IMO 3.5% sulphur cap. However reports from testing agencies appear to show this change has caused few problems.

Mr Ladekjaer of International Bunkering Middle East says: “We have addressed this subject with our most important supply partners and they have all assured us that they do not foresee any problems in relation to sourcing 3.5% sulphur products at this stage. This also goes hand in hand with our actual experience, namely that we have yet to be turned down on those requirements by our suppliers.”

Similarly Mr Jamal says that all UAE suppliers complied with the new limit during the last quarter of 2011.

World Bunkering Spring 2012

russian update

Russian news and views

Olga Bogacheva

A round-up of developments in the bunkering scene by Olga Bogacheva.

Heavy oil production to shrink as Lukoil invests

Lukoil’s strategic development programme for 2012-2021, agreed by the company’s board in December, has allocated $24bn to be invested in processing and marketing. Of this, $20bn will be spent on modernising Russian refineries which will see heavy fuel production drop sharply.

The modernisation will bring the oil conversion ratio up to 92-95% and means that production of heavy fuel in Russia will reduce by 2.5 times. Vice-president Vladimir Nekrasov recently described the coming three years as “an investment peak” in technology, with $3bn being spent annually. In an interview with the RIA News Agency he emphasised that this modernisation will start immediately.

Lukoil is the only Russian oil company in which minor shareholders dominate in the equity ownership. Total company output was 66m tonnes in 2010, with 45m tonnes produced at Russian refineries. The company owns four refineries and two mini-refineries in Russia, three refineries are located in Romania, Bulgaria and Ukraine. Lukoil also owns stock in two other oil processing plants, ISAB in Italy and TRN in the Netherlands.

Gaspromneft on expansion trail

Energy giant Gaspromneft has announced an ambitious expansion of it bunkering activities, moving into new geographic areas of operation and boosting its sales volume. Last summer it

World Bunkering Spring 2012

commenced bunkering operations at Nizhniy Novgorod, Korsakov port, Sakhalin and Taman port in the Black Sea. The company says its share of the Far East and Black Sea markets is now 10%.

Gaspromneft sold 1.5m tonnes of bunker fuel in the first nine months of last year, 37% up on the same period in 2010.

The company is also expanding its fleet and bought another bunker tanker in November. After formalities are completed, probably by February, the vessel is expected to start operations in Ust-Luga port. The tanker was built in Turkey in 2011 and complies with MARPOL requirements. The ship has deadweight of about 2,600 tonnes and has been renamed Gaspromneft Nord-West.

This was the second vessel purchased in 2011 as part of the company’s medium-term investment programme. The Gaspromneft Zuid-West, joined the company’s fleet at the Black Sea in September. The company now owns 10 barges.

Far East boost for Rosneft

Rosneft and Sakhalin Energy have signed a new long-term contract under which Rosneft will supply the bunker Sakhalin from its Nakhodka terminal. Sakhalin Energy is undertaking the massive Sakhalin-2 project which involves the development of the Piltun-Astokhskoye and Lunskoye oil and gas fields in the Sea of Okhotsk on the Sakhalin continental shelf.

Until now Sakhalin Energy’s tanker and LNG carriers have bunkered in Korea, Singapore and Hong Kong. Rosneft has

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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

russian update

floating shop, which is part of a water fuel supply station, that went into operation last summer. This facility can accommodate vessels of up to 40 metres and is using the Sunflower brand name, in line with Rosneft’s petrol retail stations.

Meanwhile Lukoil-Bunker has been busy working on a contract with Rosmorflot to supply IFO 30 fuel for diesel-electric icebreakers bunkering in the Gulf of Finland during the recent winter navigation season that started in November last year.

Lukoil-Bunker also offered to supply bunkers to tugs and harbour craft in St Petersburg port and ports located in the Leningrad region during the winter navigation. The company owns 10 bunker tankers and operates in St Petersburg, Ust-Luga, the Lukoil-II terminal in Vysotsk and in the Primorsk area, where its barges have approval to use the Primorskoye terminal.

Open for business, RN-Rostovnefteproduct’s floating service station

recently supplied the tanker Ostrov Sakhalin.

The RN-Nakhodkanefte products terminal has an annual capacity of about 7m tonnes and delivered just over 6m tonnes of products to overseas and Russian customers during the first 11 months of 2011.

Meanwhile, within the Rosneft companies, RN-Bunker has time chartered the 4,622dwt tanker RN-Magellan from Rosnefteflot. The 10-year deal will see the ice class, 2007-built vessel carrying cargoes between Arkhangelsk and Murmansk, along the Kola Peninsula and Novaya Zemlya, as well as bunkering ships in Kola Bay. In a diversification into the small craft and leisure sector, Rosneft subsidiary RN-Rostovnefteproduct, opened a floating service station on the Don river last summer. A Stapel design bureau spokesman recently announced that it had completed the

World Bunkering Spring 2012

The floating station can accommodate 40-metre long vessels

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russian update

Lukoil-Bunker says it has successfully supplied fuel to stateowned ice-breakers at Primorsk port from Vysotsk terminal since January 2011. During the 2010/11 season conditions were quite severe, with ice thicknesses reaching 1.5m. This disrupted navigation, with up to 150 ships waiting for ice escorts. Since then the port administration has taken action with the intention of preventing a repetition in this current winter season. This winter, 16 ice-breakers have been operating in the Finnish Gulf, including one nuclear-powered ship. A new, electronic system for requesting and processing requests for ice escorts was due to be introduced. The measures are aimed at improving safety during the winter navigation and ensuring effective ice-breaker assistance.

Large boxship bunkered at Vostochny

Transit-DV’s bunker tanker Elara-DV supplied some 5,000 tonnes of bunkers to the 8,400 teu Maersk Seoul at Vostochny in November. The Maersk Line ship was the largest vessel ever to call at Vostochny port. It took 11 hours to complete the delivery and the fuel was supplied by Alliance Oil Company.

This supply was part of an Offshore Bunkering project announced by Transit-DV Trading House in September. The initiative involves other companies using tankers owned by Transit-DV Holding subsidiary North-Eastern Shipping Company.

The scheme means vessels do not need to berth at the terminal to take bunkers.

A statement says that cooperation within the framework of the Offshore Bunkering project will promote the Russian Far East’s economy and contribute to the creation of a bunkering hub similar to Pusan or Singapore, with vessels making bunker-only calls at the anchorage.

The first supply took place on 25 September when NorthEastern’s Vladimir Vysotsky loaded bunker fuel supplied by AllianceBunker from the Vladportbunker oil terminal. The bunker tanker then sailed to Vostochny to deliver 4,700 tonnes to the Zim Pusan.

However, other players in the market are not so confident

R15 bn has been allocated for dredging around Bronka

World Bunkering Spring 2012

about the success of the project. One expert said that the Offshore Bunkering project was expensive and inconvenient.

He emphasised that the tanker being used needs tugs and pilots while there are enough smaller bunkering tankers which do not need either.

New refinery in the Leningrad region

A new refinery, was commissioned in September. Volhovneftechim is in the Volhovsky district of Leningrad region, some 70 miles from St Petersburg. The annual capacity of the first production line is about 500,000 tonnes. Design of the second production facility is under way and aims to increase capacity to 1m tonnes.

The plant has cost about R6bn ($200m) to build so far, with another R12bn expected to be invested in the further development of the plant.

Konstantin Tikhomirov, chairman of Volhovneftechim’s board of directors, said that the conversion rate will reach 92% when the second line starts production. The company will produce Euro-5 diesel fuel, hydroprocessed vacuum gasoil and anodic refinery coke for Russia’s aluminium industry and will also produce bunker fuel.

Bronka port construction accelerates

The Russian Transport Ministry says it will allocate R15bn for dredging work around Bronka port near St Petersburg. This is expected to accelerate the new port’s development and attract investors interested in moving port facilities out from the centre of St Petersburg.

The newspaper Delovoy Petersburg reported that the dredging of the approach channel will start in 2013, increasing its depth from 2m to 14.4m. Implementation of the dredging project will accelerate construction of the port, which is expected to accept its first vessels in 2016.

Competition is expected to grow significantly when Bronka starts operations. The new port has several significant attractions.

St Petersburg’s approach is very narrow. Large vessels cannot pass in the channel and transits take three hours. Bronka will cut this time by half.

The new port is also more attractive than Ust-Luga because it is located near the St Petersburg ring motorway. Analysts predict cargo traffic in the Baltic Sea will double by 2020, especially after Russia joins WTO. If those forecasts are correct the development of Bronka will be well-timed.

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russian update

The top-three companies of Big Port

T

he largest bunker market in Russia, Big Port St Petersburg, has summed up the results of the past year. According to information, and analytical agency PortNews, during 2011 the port sold about 2 million tons of bunker fuel. This growth of almost 9% has enabled the local bunkering market to get back to its pre-crisis figures of 2008.

It is interesting that the bunker market growth is not proportional to the Big Port St Petersburg cargo traffic growth. This increased by 3% in 2011 and has reached 59,989,300 tons. This increase in bunker fuel is possibly explained by the increase in the tonnage of vessels calling at the port, as well as by the still comparatively low prices for bunker fuel. As previously reported by PortNews, the bunker fuel price, compared with the largest European port of Rotterdam, differs by about 200 dollars per ton.

The lion’s share of bunker fuel at the port of St Petersburg is sold by the top five leading companies, Gazpromneft Marine Bunker, Lukoil-Bunker, Baltic Fuel Company, RN-Bunker and Baltic Bunkering Company.

The three leading suppliers

According to the year-end figures, Gazpromneft Marine Bunker, a Gazprom Neft branch, became the market leader. As general director of the company, Andrey Vasiliev said: “The company currently supplies around 17-18% of the Russian market and has bunkering operations at 25 Russian ports (15 sea ports and 10 river ones). Gazpromneft Marine Bunker’s greatest sales are in the Northwest region of Russia. In the last year, the company has been quite active in foreign markets such as Tallinn, Riga, Klaipeda, Rostock and Constanta.”

About 85% of the company’s services are provided to foreign shipowners. Gazpromneft Marine Bunker provides its clients with a wide range of high quality marine fuels, mainly produced

World Bunkering Spring 2012

at the Gazpromneft subsidiary – Omsk Oil Refinery. Since April 2010, low-sulphur (less than 1%) TAS-380 marine fuel has been produced, which has made Gazpromneft Marine Bunker a major bunkering company in the low-sulphur fuel oil products market.

Gazpromneft Shipping manages a fleet of seven bunkering vessels operating in the ports of St Petersburg, Novorossiysk, Kaliningrad, Murmansk and Ust-Luga. In 2011, the company acquired two new tankers Gazpromneft Zuid-West for operations at the Black Sea port of Novorossiysk and Gazpromneft Nord-West for bunkering at the port of Ust-Luga. The new tankers meet the requirements of all international regulations.

According to Mr Vasiliev, “Practically all “aged” vessels have been sold. We now purchase bunker tankers, which are less than ten years old. By 2020, the company plans to increase its own bunker fleet to 15 vessels.”

At the same time Gazpromneft Marine Bunker is working on projects to develop its own independent terminal network and build a complete bunkering cycle at both sea and river ports.

Next, with the difference of 18,000 tons, is oil company Lukoil’s branch, Lukoil-Bunker. At the port of St Petersburg, the company sold about 500,000 tons of bunker fuel in the past year, which is 29% of the total annual sales volume of the company in Russia.

The sales have grown because of the increase in supplies in the home Russian market. The company is also expanding its presence in foreign markets. At the moment, Lukoil-Bunker operates in 29 sea and river ports in Russia and is actively developing its business abroad. Today it provides bunkering services at ports in Bulgaria, Romania, Serbia, Italy, Turkey as well as in the Atlantic around Mauritania and Senegal.

The company owns 28 bunker vessels, as well as vessels under time charter contracts. These include two tankers, Great Swan and TDT-3, affreighted by Lukoil-Bunker’s Italian branch Lukoil-Bunker

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Full range of premium quality bunker fuel For every type of engine Full oil compliant with ISO 8217:2005 Client-oriented service and flexible schemes of cooperation 4 Own bunkering fleet 4 4 4 4

Tranzit DV Group Co., LTD 13, Uborevicha street, Vladivostok, 690091, Russia Tel: 7 (423) 249-11-99 Fax: 7 (423) 243-28-28

Tranzit DV Trade House Co., LTD 13, Uborevicha street, Vladivostok, 690091, Russia Tel: 7 (423) 249-11-99 Fax: 7 (423) 243-29-94

E-mail: tranzit@tranzitdv.ru, group@tranzitdv.ru

E-mail: group@tranzitdv.ru

Marine Logistics Co., Ltd Office No. 18B-18F, One Capital Place, No. 18 Luard Road, Wanchai, Hong Kong Tel: (852) 2865-0381, Fax: (852) 2865-0189 E-mail: marine.logistics@gmail.com

russian update

Italy, which started operating in 2012.

The company has reported that this year it intends to increase its own fleet operating in the Northwest of Russia by launching two tankers with a capacity of 3,000 and 6,000 tonnes respectively.

The third of the big three, is the independent player Baltic Fuel Company (BFC). Last year BFC held on to its position at Big Port St Petersburg and also showed itself to be a serious player in the bunker and eco-service market at the neighbouring port of Ust-Luga.

The company is successfully realising its plans to enter the oil products transportation market in the inland waterways of Russia. In 2011, BFC concluded the contract with one of Russia’s leading shipbuilding plants for the construction of a series of four oil tankers. The capacity of each tanker will be about 5,000 tons.

The first two tankers, named Taisia and Maria, were launched in the second half of 2011. The launch of the other two tankers is scheduled for the first half of 2012. The company intends to use the new fleet during the forthcoming summer season.

Today BFC, with 31 vessels, is the largest operator of bunker and eco-service fleet in the Northwest of Russia.

“In the next five years, we plan to increase our own fleet up to 40 units”, said the general director of the company, Stanislav Korneev.

World Bunkering Spring 2012

“The company also plans to develop the port infrastructure in Big Port St Petersburg, to create ecological complexes at ports in the Gulf of Finland (special coast treatment facilities) and to expand its presence in Russia. Our investment program of R3bn will be realised during the 2011-2016 period”.

Market structure

During 2011, the number of players operating in the highly competitive bunker market of Big Port St Petersburg increased to 26. These include two companies who have been independent operators in the market for 15 years and have successfully competed with the oil giants’ branches. According to the PortNews rating, the other two companies in the leading group of five, are Rosneft’s branch, RN-Bunker and the independent Baltic Bunkering Company. The top five are responsible for about 78% of the total sales of bunker fuel. The next 10, most of which have their own bunker fleet, supply about 20% of the total sales. The final 2% is shared by the small players whose bunkering operations during the year have amounted to between 200-10,000 tonnes.

Elena Snitko IAA PortNews CEO

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NAYADA

14 years of safety,

quality and reliability

HEAD OFFICE: Room 708, 3, Portovaya Street, Nakhodka Russia, 692900 Tel/Fax: +7 4236 629779, 679113 E-mail: bunker@nayada.biz, nayada@nayada.biz Website: www.nayada.biz

VLADIVOSTOK BRANCH: Room 412, 10a, Okeanskiy Prospect Vladivostok Russia,690091 Tel/Fax: +7 423 230 2606 E-mail:nayada@vl.ru, vl@nayada.biz

legal news

Caught in the act Singapore and US authorities uncover scams.

Illegal sales

Three crew members of a bunker barge operating in Singapore were each jailed for two months in January for their part in the theft of three tonnes of diesel from the barge’s owner’s owner, Sentek Marine & Trading.

According to a report in Straits Times John Paul Fajardo Beltran and Quirico Jr Caguimbaga Capayan, both Filipinos, and Afdhal, an Indonesian, admitted to stealing diesel with a market value of S$5,579 ($4,326) on 26 August 2011. A fourth crew member was acquitted.

The barge involved was the then Singapore-flag, 2,120 dwt Shengtek and the diesel was discharged into a tug, the Kiribati-flag TK501, while at the Tuas Petroleum Holding Anchorage. Mr Capayan was apparently the instigator and agreed to sell diesel at S$910 per tonne. According to the Equasis database the ship was subsequently reflagged to St Kitts and Nevis. Sentek companies run a fleet which also including five bunker tankers named “Sentek” followed by a number. Press reports say that the tug has been confiscated by the authorities.

The case could however just be the tip of an iceberg. At the time of the arrests, Sentek Marine & Trading’s managing director Pai Keng Pheng was quoted by the online news service channelnewsasia.com as saying that he had suspected “all along” that fuel was being stolen.

The news service said that it was thought that not enough evidence could be gathered in the past. The company had apparently reported similar incidents before. It had also increased its security with more patrols, which led to the thieves being caught red-handed.

Mr Pai was quoted as saying: “For the past three years, they’ve stolen too much oil from us. In just two years, they stole about 5,000 to 6,000 tonnes. When we realised our oil was disappearing, we notified the authorities. But eventually we counted on our own effort to deal with this.” The company estimated that it has lost some S$6 million over the last two years.

Charterer “cheated”

Oil record book falsification cases all too frequently come before US courts but a recent one had an usual twist. False entries were not only intended to hide illegal discharges but also, according to the testimony of the ship’s officers, to defraud the charterer

World Bunkering Spring 2012

by claiming higher than actual bunker consumption.

Greek-based Ilios Shipping Company pleaded guilty at a federal court in New Orleans for violating the Act to Prevent Pollution from Ships (APPS) and obstruction of justice. The ship involved was the 69,351 dwt bulk carrier Agios Emilianos, which had been trading out of New Orleans with grain.

If the court accepts the terms of the plea agreement, Ilios will pay an overall criminal penalty of $2 million.

The company admitted that, from April 2009 until April 2011, oily bilge waste and sludge was routinely discharged from the vessel directly into the sea without the use of required pollution prevention equipment.

The master of the vessel, Valentino Mislang, had previously pleaded guilty to conspiracy to obstruct justice for his role in destroying evidence and instructing crew members to lie to the Coast Guard during an inspection of the vessel in April 2011.

According to Capt Mislang, a senior manager of Ilios directed the destruction of computer records and ordered him to tell crew members to lie to the Coast Guard.

The chief engineer, Romulo Esperas, previously pleaded guilty to conspiracy to obstruct justice for his role in falsifying the vessel’s oil record book and directing the discharge of oily bilge waste and sludge directly into the sea. According to Esperas, a senior manager of Ilios directed him to discharge the vessel’s oily waste into the sea and refused to provide funding for the proper discharge of the oily waste to shoreside facilities.

However the two officers also told the court that the company directed them to use a complex system to create the impression that the vessel was consuming the maximum amount of fuel under its charter agreements when in fact it was not. The result was that charterers would overpay Ilios for fuel. Capt Mislang would send daily fuel consumption reports: one to Ilios reporting actual fuel consumption and another to the charterer reporting maximum possible fuel consumption. When the vessel was in port, Mr Esperas would tell his engineers to install false sounding tubes into the vessel’s fuel tanks so that when the charterer measured the quantity of fuel in the tank, the soundings would show the tank to be emptier than it actually was.

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EQUIPment & SERViceS

SCR system verified

T

he Japanese classification society ClassNK has awarded its first statement of fact for Tier III nitrogen oxide (NOx) reductions to a marine diesel engine incorporating a Selective Catalytic Reduction (SCR) system.

The document verifies that the NOx emission measurement results for the engine, fitted with a preturbocharger SCR system developed by Hitachi Zosen Corporation, meets the NOx Tier III emission limits stipulated in amendments to Annex VI of the International Convention for the Prevention of Pollution from Ships 1973 (MARPOL).

The engine was fitted as the propulsion system for the 37,800 dwt, Panama-flag bulk carrier Santa Vista built

by Naikai Zosen Corporation for Nissho Shipping, which entered service last October.

A ClassNK statement says: “Not only is this the first time that ClassNK has issued such a document for a marine diesel engine fitted with an SCR system, it is also the first statement of fact issued by the Society for Tier III NOx reduction compliance of any kind.”

The classification society notes that SCR systems offer the potential for independent reductions in emissions of more than the 80% required under Annex VI. Anticipating a growing interest in this technology and its applications in the near future, ClassNK has released new guidelines, Guideline for SCR Systems and Reductant Agent Supply Systems, to assist manufacturers, shipyards, and owners in installing such systems on their commercial vessels.

Hamworthy Krystallon’s full-ship scrubber system

Full-ship scrubber system ordered

Norwegian shipowner Solvang has ordered a full-ship scrubber system for its panamax LPG carrier on order from Hyundai Heavy Industries, South Korea. Marine scrubbing technology manufacturer Hamworthy Krystallon will fit two scrubbers; one for the main engine and one combined scrubber for three auxiliary engines. The 84,000m³ vessel is due for delivery in the third quarter of next year.

It is the first commercial contract for a full vessel system, allowing the vessel to operate while burning only heavy fuel oil. A Hamworthy statement says: “The newbuild vessel

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World Bunkering Spring 2012

has been designed to take into account all aspects of energy efficiency and environmental performance, using Solvang’s and HHI’s extensive experience.”

The scrubbers and washwater treatment will be situated in the funnel, in a modular design. According to Hamworthy the concept can readily be applied to similar vessels such as tankers, demonstrating that seawater scrubbers can help shipowners comply with upcoming regulations, irrespective of vessel type and size.

The manufacturer adds: “The drive for energy efficiency will also see the vessel fitted with a next generation Hamworthy Cargo Handling system, which will ensure lower energy consumption and improved operational flexibility. Initiatives specific to the exhaust gas cleaning systems, will include varying the washwater amounts depending on the load and sulphur content of the fuel oil, as well as installing an additional particulate matter (PM) capture system, which reduces PM emissions by in excess of 90%.”

Hamworthy makes the point that the new contract precedes what from this month is effectively a threeyear deadline for the fitting of scrubber technology before the 2015 deadline for meeting 0.1% sulphur levels in European and North American emission control areas (ECAs) comes into place. The increased need for speedy decision-making as shipowners and operators face the pressures of meeting 2015 is compounded by the significant costs of using distillate fuel, the technical challenges of switching from heavy fuel oil to low sulphur products, as well as the considerable developments that need to be conducted with LNG, if scrubbing technology remains the only proven and viable solution.

Commenting on the contract, Sigurd Jenssen, managing director, Hamworthy Krystallon, commented: “We are delighted to be working with Solvang ASA and Hyundai Heavy Industries to deliver the

This 6S46MC-C7 engine is the first to operate with a Class NK verified Selective Catalytic Reduction system

world’s first complete scrubber system, and the first-ever scrubber to be fitted on a LPG carrier. There is real concern over the 2015 ECA regulations, and we are starting to see more owners and operators actively consider what solution they will employ to remain compliant, but time is running out. Shipowners and operators are increasingly aware of the impending supply chain issue facing the market, but many fail to consider that once a scrubber system is installed, it is important to develop operational experience prior to using it on a daily basis.”

Nissho Shipping’s Santa Vista now complies with NOx Tier III emission limits

World Bunkering Spring 2012

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EVENT PREVIEW: ASIA PACIFIC

Asian shipping on show The regions must visit event includes IBIA seminar.

T

he 12th Asia Pacific Maritime (APM) exhibition and conference, which will be held from 14-16 March should be memorable in more ways than one.

The event can always be relied on to be technically topnotch and that has certainly been the case for the past two shows, which were held in the business-like surroundings of the Changi Exhibition Centre.

The organiser, Reeds, says APM 2012 will be bigger than its 2010 predecessor in terms of participating companies, expected visitors and also the physical event space.

A spokesperson says: “The number of participating companies for APM 2012 is estimated to be about 10% more than that of APM 2010.

We are also expecting over 13,000 visitors this year, a 30% increase from 2010. The exhibition has increased not only in the number of exhibitors and participants but also in terms of physical space. We will be occupying 18,000m² across two levels, almost a 20% increase compared to 2010.”

She adds that, as of late January, over 90% of the exhibition space has been taken up. “There will be new official pavilions from Taiwan and Australia, increasing the number of official pavilions from 12 to 14. Also, key groups including Norway, UK, Germany and China be expanding their pavilions, too.

There is one obvious change from two years ago. APM has moved to the glitzy Marina Bay Sands which promotes itself as “Asia’s leading destination for business, leisure and entertainment, delivering oncein-a-lifetime experiences”. Located in the heart of Singapore’s Central Business District, Marina Bay Sands’ iconic design and multi-dimensional offerings transformed Singapore’s skyline when it opened in 2010, a month after the last APM. It offers a luxury hotel, plus state-of-the art convention and exhibition facilities, theatres, world-class entertainment and the best shopping and dining in the region. The three hotel towers are crowned by the spectacular Sands SkyPark observation deck on the 57th storey.

As with previous APMs, there will be conferences and seminars over the three days, kicking off with the main APM panel discussion on the Wednesday morning. The keynote speakers for this will be ClassNK’s chairman and president and vice-chairman of the IACS Council, Noboru Ueda, and the International Chamber of Shipping’s director of external relations Simon Bennett. And moderating the session will be World

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Bunkering’s editor David Hughes. On the Friday morning there is a (free) IBIA seminar on: ‘Environmental issues Affecting Bunker Supply and Quality: the Asian Perspective’, followed by a panel discussion. Maritime Media will be there for the whole event, too, with copies of World Bunkering available.

The organiser notes: “With the debt crisis and economic slowdown in Europe, APM 2012 is seeing more exhibitors from the West, seeking business and partnership opportunities in Asia. Also, with the rise of China, more Chinese companies are open to and keen on exporting their goods to Asian countries.”

APM’s exhibition and conference programme is reason enough to be in Singapore in mid-March, but so too is the opportunity to see Wonder Full, the spectacular light and water show that captivates audiences every night at Marina Bay Sands. The attraction has recently been recognised at the 25th ASEANTA Awards for Excellence 2012 as the Best New Tourist Attraction in the region.

Noboru Ueda

Simon Bennett

World Bunkering Spring 2012

IBC PREVIEW

© VisitOslo

Adapting to a new world

The 33rd International Bunker Conference looks at the challenges of operating in a changing marketplace.

T

he well respected 33rd International Bunker Conference (IBC) is the global marine fuel industry’s longest running and most respected bunker conference.

This year’s event will take place in Oslo, Norway, on 18-20 April at the Radisson Blu Scandinavia Hotel.

BI Norwegian Business School (NBS), IBC’s organiser, says that it is proud of its continued support from the industry and that it has remained a proactive forum ever since the first IBC in 1979, more than thirty years ago.

A spokesperson told World Bunkering: “Using all the experience of the previous 32 conferences, with more than 6,200 people from 20 countries having previously participated, IBC 2012 is the place to be, to meet and to network with businesses and organisations working within the bunker sector and beyond.”

So, what is on offer? According to NBS, the starting point for IBC 2012 is the paradigm shift over recent years from the ‘Seven Sisters to Traders and Independent Suppliers’. The conference will focus on the differences in the responsibilities and the physical supply chain, combined with the regulations and high bunker costs that have presented increased challenges related to bunkers for not only the purchasers, owners, charterers and operators, but the whole bunker supply chain. This year’s agenda will focus on: Production, Supply to Chain, Operation, Regulation, and Nomination to Arbitration.

While details were still being finalised as World Bunkering went to press, NBS confirmed that the conference chairman will be James Corbett, professor at the College of Earth, Ocean and Environment,

World Bunkering Spring 2012

University of Delaware. Other top industry figures confirmed so far as speakers are Melanie Moore, vice president environment at Wallenius Wilhelmsen Logistics; Simon Chattrabhuti, head of tanker research at Clarksons and Tony Vertommen, chief executive officer of Verbeke.

Judging by previous experience this should be another informative and thought-provoking conference. World Bunkering will be there, to report and, even more importantly, meet the delegates.

At last year’s IBC one delegate said that they were impressed by the event’s “open discussions, relevant presentations and good networking opportunities”. NBS is still finalising this year’s networking opportunities, but events already in place are a welcome reception on 18 April and a social dinner on the following evening.

But, of course, there are also the attractions of Oslo, a vibrant capital city set in a stunning natural landscape of ‘fjord’ and forests.

Oslo has just over half a million inhabitants, a very low number compared to other European capitals. On the one hand it is among the most spread-out of cities, covering an area of 450 square kilometres, most of it forest and agricultural land. On the other hand Oslo is a cultural hotspot, and the many museums and art galleries offer visitors a plethora of choice. The spectacular new Opera House on Oslo’s waterfront is a must-see. Other highlights include the Viking Ship Museum’s original longboats, Edvard Munch’s famous painting The Scream at the Munch Museum, and the National Gallery.

To find out more about IBC contact ibc@bi.no or visit www. bunkerconference.com.

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Company News

“Bunkering afloat” – the first step towards civilized market

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ranzit-DV has been developing the bunkering business area since 2004. All this time the company’s experts were carefully studying the bunkering market and its rules and trends. When analyzing the present-day situation, one can conclude that the problem of bunker delivery aboard the vessel very often comes up after closing of the deal and may put both the seller and the buyer to a lot of trouble. Such a procedure is morally obsolete and cannot satisfy the growing needs of ship owners and carriers. The time has come for new solutions and creation of the single civilized market.

The specialists of Trading House Tranzit-DV offer a groundbreaking service – “Bunkering afloat”. Special nature of this service consists in the following: we offer to the fuel manufacturers a uniform platform to sell their products on their own terms, such “platform” being the tankers of North-Eastern Shipping Company. Use of tankers allows simplifying the process of oil products delivery to the end consumer because now the vessels will not have to visit the permanent oil loading terminals – instead, the bunkering tanker will provide them with necessary quantity of fuel right in the open water.

Today, several ports of Primorsky region have major oil loading terminals: the terminal in Nakhodka port is owned by Rosneft Oil Company, the one in Vladivostok – by Alliance Oil Company, and in Slavyanka – by Vostokbunker JSC which is a part of Tranzit-DV holding. Each of these terminals is engaged in transshipment of a different oil product with its own unique properties. The consumers can make their own choice which fuel grades to use, but our task is to deliver the cargo aboard the vessel in time and to successfully perform the bunkering. Tranzit-DV is able to deliver a large quantity of fuel from any port of Primorsky region and to use this fuel for bunkering.

The boost in economic development of the Russian Far East, especially of Primorsky region, impels us to take bold decisions. The closest major bunkering hubs are Singapore (the southern hub) and Busan (the south-western hub). Creation of a single civilized bunkering market in the Russian Far East will result in formation of a bunkering hub here which will equal Busan and Singapore in the quality of services due to its favourable geographic location and opportunity to get the bunker without calling at a port. In this manner, we are creating a full-fledged bunkering hub in the Russian Far East which will give a strong impulse to the development of the whole Far Eastern area and increase the volume of its bunkering market manifold. In case “Bunkering afloat” develops successfully, one can even speak about the logistic synergism, meaning reciprocal

World Bunkering Spring 2012

strengthening of all elements and participants of the logistic chain by their integration into a single system.

As a part of “Bunkering afloat” project, Trading House Tranzit-DV has already performed several large-scale bunkering operations of vessels owned by A.P. Moller – Maersk A/S company.

Having made a good start, now the company is planning to develop the “Bunkering afloat” business area as a basis for creation of a major bunkering hub in the Russian Far East.

Igor Polchenko, President of Tranzit DV

Company

GroupTranzit - DV Co., LTD is a holding company providing a wide range of services on markets of energy resources (oil products, clinkers, coals, natural gas) refining and delivering, vessels bunkering and sea shipping.

By means of Company’s production capacities and top-skilled specialists Group Tranzit - DV Co., LTD lets its clients and partners to perform any operations on refining, storing and delivering oil products and bulk cargoes of any volumes to any destinations and by specified dates.

GroupTranzit - DV Co., LTD includes 9 companies - Trade House Tranzit - DV Co., LTD, North-East Shipping Company, LTD, Vostokbunker JSC, Vostokteplo Co. LTD, Khasan Service DV Co., LTD, Magadan – Tranzit DV Co., LTD, Kamchatka Tranzit - DV Co., LTD, Vladrybsnab JSC, Nash Sever Charity Fund under the single united corporate center – Management Company Group Tranzit DV Co., LTD. Due to the fact that GroupTranzit - DV Co., LTD has own vessels, oil-refining terminal and representatives in Moscow, in cities of the Russian Far East and in ports of Asia-Pacific region, we offer comprehensive services to our clients – we control cargoes from the moment of shipment to the moment of receipt by end-users.

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Company News

Nayada Co. Ltd. - forging ahead in tough times

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ayada Co Ltd was incorporated in 2008 and is one of the oldest and soundest bunkering companies in the Far East of Russia. As well as the head office, which is located in Nakhodka Port, the company also has a branch in Vladivostok Port that opened in 2003. Nayada has been an IBIA member since 2007.

The company has successfully worked in the Far Eastern region of Russia for more than 10 years, providing high-quality bunkering services for Russian and foreign shipowners and delivering bulk liquids on behalf of customers to all the ports in Primorsky region – Nakhodka, Vladivostok, Vostochny, Kozmino, Slavyanka, Posyet, Zarubino and Bolshoy Kamen. The average monthly volume of bunker oil sold totals 15,000-20,000 tons. Among the company’s long-established clients are well-known brokerage companies, such as World Fuel Services, Dan-Bunkering, Hanwa, Itochu Enex, KTB, Peninsula Petroleum, as well as large shipping companies, such as Nanjing Tanker Corporation, Maersk, STX Corporation and Hanaro Shipping.

Nayada Co Ltd has long-term contracts to supply bunker oils with numerous petrochemicals companies. Among them are the largest Russian oil industry groups: NK Rosneft Joint Stock Company, Gazprom Neft Joint Stock Company and NK Alliance Joint Stock Company, that own oil processing plants and cargo terminals in largest ports in the Far East.

As the geographical sphere of supply is constantly widening, this year the company added to its existing fleet by purchasing two tankers of 6,200 tons in total capacity. They are equipped with double freeboard and double bottom, and the construction permits the simultaneous carrying of five different types of cargoes, including those with low inflammation temperatures (below 60°C, eg gasoline, aviation kerosene, and diesel fuel). Their navigational area is unlimited and their ice class is enhanced, which is particularly important when taking into account the climate conditions in the far eastern region in winter. Currently, the company operates a fleet of six tankers, five of which are owned and one is leased. The total tonnage of the fleet is approximately 11,800 tons, which allows customers’ orders to be fulfilled for the supply of any quantity of bunker oil. All the company’s tankers have certified equipment for cargo measurements, taring, analysis and the storage of bunker oil samples, which correspond to all the necessary international requirements.

Mr. Evgeniy Gryaznykh, Director, Nayada Co., Ltd

In 2006, the company’s technical management department designed a technology for the serial manufacturing of admiralty fuel oil 0-5 (analogy of IFO-30), and in 2011 for the fuel IFO-80 and IFO-100 aboard the company’s tankers. Technical conditions have been registered and entered with the Federal Agency of Technical Regulation and Metrology and the Federal State Unitary Enterprise Standard. A sanitary and epidemiological inspection report from the Chief State Doctor of Sanitary and Epidemiological Service of the Russian Federation has also been issued. In addition to this, the company holds permission for using a conformity mark of the certification system GOST R (state standard of the Russian Federation) endorsed by the decree of State Standard of the Russian Federation No 50 dated 29 June 1998 (registration No 1333 dated 3 May 2006).

Because of its long experience in the bunkering services market, its own fleet and modern technologies, Nayada Co Ltd guarantees a supply of high-quality fuel to all of its customers in the required quantity and on time. The company’s staff of more than 100 employees combines years of experience, knowledge and service, which in turn ensures that the company retains its leading position in the market. Nayada Co Ltd is a reliable and sound partner that has been offering high-quality organisation and service for thirteen years.

HEAD OFFICE: Room 708 3, Portovaya Street Nakhodka Russia, 692900 Tel/Fax: +7 4236 629779, 679113 E-mail: bunker@nayada.biz, nayada@nayada.biz Website: www.nayada.biz VLADIVOSTOK BRANCH: Room 412, 10a, Okeanskiy Prospect Vladivostok Russia, 690091 Tel/Fax: +7 423 230 2606 E-mail: nayada@vl.ru, vl@nayada.biz

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Company News

Rosneft Marine poised for growth in 2012 and beyond

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n 2010, Rosneft Marine UK was established as the international trading office of Rosneft Oil Company’s marine fuel division.

Rosneft Marine UK has been tasked with expanding Rosneft’s marine fuel business and is in line with the company’s commitment to provide access and support to its customers throughout the world.

The company focused on growing its fleet in 2011 and received two modern barges in Tuapse and Murmansk. It aims to continue this process by adding vessels in the ports of St Petersburg and Arkhangelsk in the months to come. This will boost the efficiency of its fuel deliveries at St Petersburg, which is the main shipping gateway between Russia and the Baltic Sea. In addition, Rosneft Marine is planning to introduce a 6,000 deadweight tonne (dwt) tanker to meet the growing demand for bunkers in ports in the Far East.

Vladimir Brezhnev, director of Rosneft Marine UK, said: “Rosneft Marine has made a number of investments in the last year to modernise our fleet and increase our operational capacity. We intend to continue this trend and are constantly seeking to improve our control of the supply chain.”

As part of its goal to form more strategic alliances with global partners, Rosneft Marine signed an agreement with Sakhalin Energy Investment Company (SEIC) in October 2011. The agreement is for Rosneft Marine to supply SEIC’s fleet of three crude tankers and five LNG carriers in the Russian Far East port of Nakhodka. To better service this agreement, Rosneft Marine intends to add a 5,000-6,000 dwt ice-class barge that can supply fuel directly to the ports on Sakhalin Island.

The agreement with SEIC marks Rosneft Marine’s first term formula contract and has been followed by term formula contracts being negotiated with other major players in the shipping industry.

Term formula contracts are favourable to both the supplier and customer as they not only guarantee that volumes will be supplied but also that they are at a fair price for both parties. Rosneft is the only supplier in the Russian Far East that is able to guarantee volumes, as it controls the whole supply chain from the oil well to the barge.

This has made it an attractive partner, as formula based contracts can

World Bunkering Spring 2012

guarantee clients that they are getting a better price than in any other major port in the region.

In 2012, Rosneft Marine will be positioning itself to explore the Chinese market with supplies of DMA, which is in strong demand in the Chinese North-Eastern and Eastern provinces. It is also examining plans to open an office in Beijing with Chinese-speaking staff to better serve its Chinese clients.

Rosneft Marine believes that there is strong demand for high quality low-sulphur fuel oil (LSFO) in the Mediterranean and is looking for potential partners in the region.

Since 2008, Rosneft has gone from strength to strength and become a leading player in the Russian domestic bunkering market.

The company has recorded steady growth since its inception and all the signs suggest that it will continue this successful trajectory in the years to come.

“2011 was an extremely successful year for Rosneft Marine as we implemented many of our strategic plans to grow Rosneft’s bunkering division. We managed to both increase our operational capacity as well as extend our global network and grow our coverage for our customers,” Mr Brezhnev said.

“This year we intend to focus on implementing better standards throughout our supply chain. By continuing to build on our strengths and improve our operations, we believe that Rosneft’s success in bunkering can only grow,” he concluded.

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Company News

The attraction of port Ust-Luga The largest bunkering holding, Baltic Fuel Company, is strengthening its presence at the most up-to-date and promising port of Russia Ust-Luga. The target port capacity is 180 million tonnes per year, which will make up 15% of the cargo traffic of all Russian sea ports in the next 10 years.

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he port of Ust-Luga is aimed at large-capacity fleet: bulk and tanker fleet, as well as ro-ro ferries. According to the Head of FSUE Rosmorport, which is the operator of state property in the Russian sea ports, this new port demands a fresh approach to port service, too. It is well known that all-inclusive servicing for vessels is more economically effective. At the same time the service market at the port of Ust-Luga has not been formed yet, and not many participants of the nearby port of St Petersburg have entered this new market offering all-inclusive port services.

The working conditions at the new port are such that a considerable number of vessels are bunkered in the port road.

In order to ensure the safety of bunkering operations, the port management makes higher demands on bunker barges: first of all, vessels should completely meet the requirements of the MARPOL convention, as well as have a cargo capacity to satisfy large-capacity fleet demand.

Owing to specificity of transport access to the new port, nowadays oil products are delivered by sea. So, Baltic Fuel Company supplies oil products to the port and bunkers vessels using new conventional tankers Captain Shiryaev, 2,500 dwt, and Captain Ponikarovsky, 5,000 dwt. Currently, BFC is capable of making a single bunkering operation of up to 5,000 tonnes of fuel.

Earlier this year, Baltic Fuel Company made the first large bunkering in adverse weather conditions in the road. The crew of Captain Ponikarovsky ensured the high quality and efficiency of this bunkering operation.

Since 2009, the company has provided vessel ecological services at the port of Ust-Luga. Environmental services are also provided by its own fleet. Nowadays Baltic Fuel Company is the only participant in the eco-service market at Ust-Luga, where there is no ecological duty yet and shipowners themselves assign the eco service provider.

The company is thinking of widening its range of services and plans to offer a new service this year, to bunker vessels with water.

About the port

The port of Ust-Luga is located practically at the border of Russia and the European Union. The deep waters in the port area (16m) together with the short access channel (3.7km) make it the only Russian port capable of accepting dry-cargo vessels of up to 75 dwt and tankers of up to 120,000 dwt. In 2010, the capacity of Ust-Luga amounted to 11.8 million tonnes and 65,500 cars. The operator intends to increase the capacity to up to 180 million tonnes of various cargoes per year by 2018.

About Baltic Fuel Company

Baltic Fuel Company was established in St Petersburg in 2008 in order to manage bunkering holding companies. For over 10 years, the group enterprises have been engaged in exporting oil products, bunkering vessels, providing environmental services, etc.

The company’s fleet consists of 31 units and is the largest bunkering fleet in the Northwest of Russia. The company is also one of the top three leaders in the bunkering service market at the port of St Petersburg and the Leningrad region ports. Its fuel oil carrier fleet amounts to more than 25 units and is one of the top three leaders in this segment of the market in the Northwest of Russia.

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Company News

EKOTek bunkers in North West

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KOTek LLC operates a specialised fuel oil terminal in St. Petersburg and produces bunker fuels for the Russian part of the Gulf of Finland, which is the largest regional bunker market of the Russian Federation.

The company commenced bunkering on 1 July 2009, having bought the tanker Amur from Eco Phoenix Holding OJSC. The double-bottom, double-hull tanker has a cargo capacity of 1,320 tons. EKOTek bunkers IFO 30, IFO 180, and IFO 380 with 1% sulphur content, as well as MGO. The company’s specialised multi-field fuel oil terminal started operations three years ago and its annual capacity of petroleum products amounts to 20,000 tons. The tank storage farm consists of six tankers (3,000, 1,000 and 400m3) giving an overall storage volume of 7,000 cu m. The rail loading-and-receiving rack is designed to receive eight tank-cars at a time.

Overland transhipment is carried out via four car loading stations, with a pumping station operating at an overall capacity of 200 cu m per hour. EKOTek has all the necessary certificates and facilities available for production of almost any type of bunker oil conforming to ISO 8217:2005 standards. The company plans to enlarge its customer base and improve its capacity in future.

Petroleum products are delivered in railway tanks to the terminal directly from oil refineries in Russia. Cracked fuel oil makes up about 10% of the overall volume of products delivered and straight-run fuel oil makes up the balance. Thus the company can guarantee high quality of products, low coking properties and 1.5% sulphur content.

Being conveniently situated not far from the ring road, means speedy delivery of products, both to the terminal and to the final consumer. According to Dmitrii Galdanov, CEO of EKOTek LLC, ingredients used for production require thorough control. “There are products which are the result of different oil refining processes.

As a result, sulphur content in a tank may vary: 0.7% in one, 0.8% in another, 2.4% in third; it is impossible to talk about stability and quality of raw materials and products without knowing which materials are involved,” he explains.

Spot checking raw materials enables bunkering companies to independently carry out high-quality blending. The advantage of small petroleum farms is that they provide high-quality oil blending and can control the quality all along the processing chain; therefore at EKOTek a complex analysis of oil samples is carried out before pumping petroleum products into reservoirs. Additionally, there is a full analysis of each commercial shipment of fuel oil.

The production capacity of EKOTek, together with its own bunkering vessel, enables the company to present itself as a serious and responsible player in the bunkering market. The company has the whole chain of marine fuel delivery under the control of a single managing unit – from petroleum product delivery from oil refineries, fuel blending, production and storage, to bunkering.

EKOTek LLC 29, Polytekhnicheskaya Street, Saint-Petersburg, Russia, 194064 Tel: +7 812 325 13 58 Fax: +7 812 235 02 10 E-mail: info@ekotek-spb.net Website: www.ekotek-spb.net

World Bunkering Spring 2012

LUKOIL BENELUX B.V. as one of the key players in ARA ports

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UKOIL Benelux B.V. is a prominent, reliable physical supplier of bunker fuels in the ARA region (Amsterdam-RotterdamAntwerp). We are supported by the logistical 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 has wide-scale operations outside of Russia.

Our clientele varies from the well-known large and medium shipping lines to other physical suppliers and trading companies. We have a market share of 10-15% in our home markets of Rotterdam and Amsterdam. We also supply bunker fuels to Antwerp from the Zeeland Refinery in Flushing, where the LUKOIL Group has a 45% stake, and from the other locations in ARA. We are also active in the Baltic, Black and Mediterranean Seas.

Since 2005, LUKOIL Benelux B.V. and our Dutch partner Burando Holding have been jointly operating Service Terminal Rotterdam, which enables LITASCO SA and LUKOIL Benelux B.V. to store fuel oils and blend them to necessary specifications. Construction of the terminal’s new storage tanks will be completed in 1Q 2012. Having our own terminal and purchasing bunker fuels predominantly from parent company LITASCO SA gives us a competitive advantage in ARA’s saturated market and enables us to design and implement flexible delivery strategies.

We supply a wide range of products and grades of IFO 700, 500, 380, 180, 120 cSt, bunker gasoil, and can also make other products available upon request. We ensure quick and timely product deliveries to sea-going vessels using our fleet of six time-chartered barges, with deadweight ranging from 1,630 mt to 6,310 mt. Provided by our partner’s barge operating company FTS Hofftrans, they are all new double-hulled barges with greater bunkering capabilities. We can also hire other barges for spot deliveries in the range from 1,700 mt up to 9,200 mt with both FTS Hofftrans and alternative reliable transport companies in ARA. Our team of bunker traders and operators has all it takes to be your reliable partner: experience, expertise and a thorough knowledge of the bunker markets. They are friendly and available 24 hours a day, seven days a week.

LUKOIL Benelux B.V. will gladly look into your enquiries in ARA and any other regions in the world. We look forward to hearing from you and hope to do business with you soon.

Wilhelminakade 85, Building “De Maastoren”, 36th Floor, 3072 AP Rotterdam, The Netherlands Post address: PO Box 24065, 3007 DB Rotterdam, The Netherlands Tel: +31 10 264 27 00 E-mail: bunkers@lukoil.nl

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Company News

Neftehim Bunker Jsc

Aditya Fuels L.L.C.

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B

eftehim Bunker Jsc is an affiliate of the well-known and reputable oil product trader and bunker supplier, Neftehim Ltd, which has been operating since 2000.

We maintain a reputation for reliably supplying the highest standards of services and excellent quality of products. Because of our outstanding business relations with the major Russian oil companies, as well as the independent oil producers, we are able to be very flexible in the market, and always offer the best prices to our clients.

Thanks to these extensive and stable relations, we always have the full range of residual products available. Furthermore, our marine gas oil is fully compliant with the latest international industry standards.

Our company has access to the fleets of five different barging companies, giving us flexibility and efficiency in our bunker delivery operations. With growth in mind, we now have our own bunkerbarge, Severaynka, which was reconstructed on the Vyborg shipyard in accordance with the MARPOL regulation. Its cargo tanks have a total capacity for 1,000 mt of HFO and 260 mt of MGO. Quality control is a matter of great importance to us, so before a bunker delivery to the vessel we regularly engage a surveyor to test our fuel.

In choosing Neftehim Bunker Jsc for your bunker supplies, you will always find outstanding levels of service, quality and efficiency.

ased in Dubai, Aditya Fuels L.L.C., part of the Aditya Marine Group, offers fuels supply services to all ships visiting Dubai.

The company supplies bunkers in Ajman, Mina Saqr, Sharjah Hamriyah port, Ras al-Khaimah port, Jaballi, Steven rock jetty, and Khorffakan.

We have our own FO and MGO bunkering trucks, and the company is now investing heavily in building and developing our storage facilities. We are aware of the importance of uplifting bunkers at the agreed time and place; after all, ships need to be sailing, not standing idle.

We carefully monitor the supply and keep our customers informed of progress, 24/7. Our company policy is based on three major factors: quality, quantity and price; all our products meet with the ISO-8217:2005 standard and we pay great attention to safety and environment protection.

Our current 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 near future.

The company aims to maintain its high profile, and continue to enhance its international image as a professional supplier of quality bunker fuel. We value our clients and take good care of their bunkering needs. Furthermore, we always welcome new clients and are permanently ready to offer our services.

Neftehim Bunker Jsc. Office 602 Bolshoy Avenue V.O. 80 St Petersburg 199106 Russia Tel: +7(812) 332 2363/+7 (812) 942-3140 Tel/Fax: +7(812) 332 2364 E-mail: main@nh-bunkering.ru Website: www.nh-bunkering.ru Mr N.V. Rambabu Managing Director Bunker Supplier Flat: No.115, Alzaruni Complex Dubai Islamic Bank Building, U.A.E Mobile: +971555042872 E-mail: aditya@adioil.com E-mail: uae@adioil.com East Cost India 41-1-35, Rangayyanaidu street Kakinada-533007, India Mobile: 91 9848257582 Tel: +91 884 2366717/718 E-mail: aditya@adioil.com Website: www.adioil.com Mrs Sasi Adapa Mobile:+44 7825152973 E-mail: adioiluk@gmail.com

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Company News

Oliehandel Klaas de Boer

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stablished almost 100 years ago, Klaas de Boer is one of the oldest independent physical oil suppliers in the ARA region. The company started off as a small gas oil and lubricants supplier focused on the Dutch fishing fleet.

Nowadays, the fishing fleet is still one of the cornerstones of the company, but where shipping has changed, so has the organisation.

Klaas de Boer supplies a wide range of customers and businesses, varying from trawlers to dredgers, general cargo, chemical tankers and large bulkers. Also, the products delivered have changed over time and the range of products supplied has broadened.

With our 13 owned barges and mature supply network, KdB supplies lubricants, MGO, high and low-sulphur fuels between 30 and 380 cSt. Of course, KdB supplies according to the latest ISO standards, thus ISO 8210:2010 specs are applicable for all our deliveries.

Klaas de Boer is strategically situated to make deliveries from Emden to Rotterdam. We cover the whole Dutch coastline with our own quality products. All products are sourced from quality refiners and are delivered with the refiners quality certificates.

Throughout the years, KdB has developed into a preferred professional partner for many customers calling the Amsterdam/Ijmuiden area. This partnership between KdB and its customers has resulted in a good understanding of the specific needs of both shipowners and operators. The benefit for the customer is quick and smooth supply, within the short time window the ship has in port. Due to our proximity to the harbours, the net result for owners and operators is to have bunkering completed with no time loss.

Due to our short logistical lines, same day deliveries are usually possible; just call us and we will try our best!

KdB reaches its 100th anniversary having grown alongside many of its loyal clients into a busy physical supplier, proving its commitment to its customers and vice versa.

KdB is your reliable, established, quality supplier in the ARA.

Dear all, Corporate identity change and new head office

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n the business world today, organisations tend to focus primarily on problems, mistakes, obstacles and future company goals. Indeed, they rarely take time out to celebrate their accomplishments.

Therefore, we at Orion Bunkers want to share our achievements with all of our valuable clients.

Orion Bunkers was just a seedling back in 2004, planted in the land of Pakistan, but now through seven years of hard work and with the grace of Almighty Allah it has become a lush green tree. To celebrate these years of our utmost dedication to our customers, we would like to take this opportunity to announce that Orion Bunkers has replaced its corporate identity with a new and fresh, green look, while keeping the same innovative and reliable team that is passionate about the service that it delivers. In addition to this, Orion has a new head office with a marketing and trading office at Clifton, Karachi.

Change is an inevitable part of life and Orion Bunkers is embracing its new look – we hope that you like it as much as we do.

Regards, Malik Qutab Sher Managing Partner Orion Bunkers

Operation office: Suite # 6, 1st Floor, Al-Rehman Trade Avenue, 15, Timber Pond, Keamari, Karachi– Pakistan

For bunker enquiries please: E-mail: bunkers@klaasdeboer.nl or Tel: +31 255 513 240.

For more information, please visit www.klaasdeboer.nl.

We are looking forward to receive your enquiries.

World Bunkering Spring 2012

Previous logo

Head office/Marketing & Trading office: 503, 5th floor, Horizon Tower, Block - 3 Clifton, Karachi - Pakistan Tel: +92 21 35292523-24 Fax: +92 21 35292527 Mobile +92 321 3760669 Yahoo: adilsher1975 E-mail: orionkhi@cyber.net.pk Website: www.orionkhi.com.pk

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Company News

Scadar Ltd

Portugal fuel stop

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cadar Ltd is the oldest physical supplier at the port of Murmansk, established since 1998. For almost 14 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 Olga Sudova Logistic Department Tel: +7 8152 596171 E-mail: os@scadar.com

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

Galp Energia has professional bunkers team provide its customers with high-quality fuels and services, and the highest safety standards in all its bunker activity and 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, with the port of Lisbon being the main port for low-sulphur fuel.

Optimising its logistics resources and storage capabilities Galp Energia is able to provide high-quality services and products, including a wide variety of marine distillates. Galp Energia is the main bunker supplier in Portugal, and provides bunker services using its two barges with capacities of 5,800 tonnes and 3,000 tonnes each.

A 5,800 dwt double-hull barge, Bahia Tres, began operations in 2010 to support the company’s business in the ports of Sines and Setúbal, meeting all the important aspects for safety and protecting the environment. It is equipped with anti-pollution measurers and is covered by European Maritime Safety Agency regulations in the Atlantic Ocean and Mediterranean Sea. Always aware that its customers’ main concern is product cost, the company offers competitive prices without compromising product or service quality. Visiting Portugal and being supplied by Galp Energia will always be a good decision for regular customers, used to working with a professional team.

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

We hold a significant position in the Portuguese crude oil products storage market. Our two refineries in Portugal together represent 20% of the Iberian refining capacity, and collectively account for the majority of Portugal’s annual domestic petroleum product requirements. We are investing approximately €1.4 billion to upgrade and improve the efficiency of our refineries, representing €1 billion for Sines and €0.4 billion for Matosinhos. .

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 2012

Company News

Baltic Bunkering Company

Vilma Oil S.L. Madrid

T

V

he Baltic Bunkering Company was founded in August 1995.

During these 16 years of trading the company has succeeded in creating a reliable and high-quality bunkering service and is now one of the leading players in the St Petersburg bunker market.

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

We supply high-quality bunker fuels, including low sulphur products. All fuels are transshipped through POT and are closely monitored and controlled in the POT laboratory to ensure that they meet ISO8217:2010 (E). The process of quality control starts before we purchase the fuel. We only buy fuels from refineries that have consistently provided a quality product over a long period.

We have also introduced additional quality controls at the barge loading operations. Our bunker barge Alana (3,500 mt) is equipped with an express laboratory that tests every lot of bunkers before it is supplied to our clients.

Quality is the cornerstone of our business and is guaranteed by the daily work of our skilled specialists. Baltic Bunkering Company is approved for ISO9001 Quality System Certificate by Det Norske Veritas and is a member of International Bunker Industry Association (IBIA).

We also pay special attention to the ecological aspects of our bunkering activities. In our practice, we strictly follow and observe the existing standards and rules prescribed for petroleum transshipping operations and the 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 is always available; • All products conform with ISO8217:2010 (E) plus the later amendments; • Our own bunker fleet; • Prompt delivery of all bunker services; • Fuel deliveries conform with Regulations 14 (1) or (4) and 18 (1) of MARPOL 73/78, Annex VI, and Annex 1 and 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 Website: www.bunkering.spb.ru Sales department: Tanya Sorokina, mobile: +7 921 905 70 63 E-mail: tanya@bunkering.spb.ru Dmitry Elster, mobile: +7 921 965 87 83 E-mail: ed@bunkering.spb.ru

World Bunkering Spring 2012

ilma Oil commenced physical bunker supply operations at the Spanish port of Ceuta in 2008 as a natural extension of its established trading activities and capabilities. Strategically located in the Strait of Gibraltar, one of the world’s busiest seaways, Ceuta is one of the Mediterranean’s most popular bunkering stations.

In just three years Vilma has increased the Port’s bunker volumes by 30%, with over 1,000 additional vessel calls. Already supplying around 40% of all physical deliveries, the company has augmented the port’s income and generated several new jobs.

As a foundation to its logistics service, Vilma has the exclusive use of 83,500 cu m of oil storage facilities on a term basis. The installation is connected to the Levante wharf, from which the company operates its ex-Wharf bunker service, loads the bunker tankers, and conducts its import/export cargo trading activity.

In order to meet its customers’ needs, and in line with its commitment to continuous development, Vilma Oil time-chartered a modern double-hull 3,420 dwt bunker vessel for supplies at the designated anchorage within the port limits of Ceuta North Bay. Enhancement of delivery capabilities will be made in line with our continued expansion.

Optimising the ex-Wharf and anchorage delivery facilities to meet varying customer requirements, Vilma provides RMG380, RMG380 low sulphur, RME180, RME-180 low sulphur, and DMA 0.1%S, meeting ISO 8217 specifications.

Combining the exclusive storage facility, berth and bunker vessel capabilities with its long-standing international trading and operational competencies, Vilma continues to expand its vision of providing enhanced customer focused activities, based on core principals of ‘secure quality services’.

Vilma Oil aims for continuous improvement and sustainable performance, aligning its strategic direction accordingly. The company will continue to invest in improving logistics to ensure capacities are synchronised with its vision for growth.

Calle Chile, 10, Oficina 236, 282900 Las Matas, Madrid Tel: +34 91 630 8900 Fax: +34 91 630 8901 E-mail: Bunkers@Vilmaoil.com www.Vilmaoil.com

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Company News

Bunkering company TransOilBunker Co, Ltd

B

unkering company TransOilBunker Co, Ltd was established in 1995 after the merging of several companies that were already operating in the Russian Far East.

The main activity of our company is the bunkering of vessels in the ports of Vladivostok, Nakhodka, Vostochny, Slavyanka, Zarubino and Posyet.

Since our appearance in the Far East bunker market we have gained a good reputation among our clients – both national and foreign customers – as a reliable business partner. We are one of the top 10 bunkering companies in our region and have about 10% of the market share. Our average annual volume of supply of both light and heavy fuel is increasing to 200,000 mt.

We own five bunkering barges with a carrying capacity ranging from 600 to 3,350 tons, one of which is equipped with a mechanical fuel blender. We also operate our own tank tracks to deliver fuel to shoreside customers.

Last year we bought a new tanker to meet the demands of clients, some of whom require up to 2,000 mt of fuel. The tanker has unrestricted navigation, which give us the ability to deliver bunker to fishing grounds at the limits of the Russian exclusive economic zone in the Okhotsk Sea, Bering Sea and Sea of Japan.

We have a personal and professional approach to dealing with customer requirements; our team consistently meets and exceeds expectations. The quality of fuel is controlled by our skilled personnel, which starts at the refinery and finishes with the delivery on board customers’ vessels.

Quality of service, quality of fuel, safety at work and environmental precaution at every stage of the bunkering process is our main policy.

Our company values the professionalism and reliability of the personnel who work for us and share the responsibility for the quality of service we provide.

Our future development is focused on expanding activity and attracting new clients by means of co-operation with the best known bunker traders – the trading houses of Singapore, Hong Kong, South Korea, Japan, China and Europe.

Gazpromneft Marine Bunker: market leadership is our goal

G

azpromneft Marine Bunker, a subsidiary of JSC Gazprom Neft, was founded in October 2007 for the year-round supply of petroleum products – fuel oil, marine fuel and lubricants – for sea and river transport.

The company has five offices and two subsidiary companies: Gazpromneft Terminal Spb provides the timely transfer of fuel and marine fuel all year round. Gazpromneft Shipping manages a fleet of seven bunkering vessels Gazpromneft East, Gazpromneft West, Gazpromneft Nord, Gazpromneft Zuid, Kristall, Gazpromneft Zuid-West, and Gazpromneft Nord-West, which operate in the ports of St Petersburg, Novorossisk, Kaliningrad, Murmansk and Ust-Luga. In 2011, Gazpromneft Marine Bunker bought two new tankers Gazpromneft Zuid-West (constructed in 2004) for operations in the Black Sea port of Novorossisk, and Gazpromneft Nord-West (constructed in 2011), which operates in UstLuga. Both tankers meet all the international regulations.

Gazpromneft Marine Bunker is represented in the main sea ports of service in Russia, and is constantly expanding its geography. In August, Gazpromneft Marine Bunker carried out the first bunkering on Sakhalin island, at Port Korsakov.

• The main sea ports we operate in are: St Petersburg, Kaliningrad, Murmansk, Archangelsk, Primorsk, Ust-Luga, Novorossisk, Tuapse, Port Kavkaz, Taman, Nakhodka, Vladivostok, Vostochnyi, Kozmino and Sakhalin island.

• The main river ports we operate in are: Moscow, Yaroslavl, Kazan, Samara, Volgograd, Rostov-on-Don, Astrakhan, Azov, Ust-Kut, and Nizhniy Novgorod.

• The international ports we operate in are: Tallinn, Riga, Klaipeda, Rostok and Konstanca.

The main strategic goal of Gazpromneft Marine Bunker is to enter the international bunkering markets of Europe and Asia. The first step in this direction was made at the end of 2010, when the first international bunker service was provided in the port of Istanbul.

About 85% of the company’s services are provided to foreign shipowners. Gazpromneft Marine Bunker has contracts with major international shipping companies and traders operating in the ports of Russia. Among Russian clients are major sea and river shipping companies, as well as fishing companies.

Gazpromneft Marine Bunker provides its clients with a wide range of high quality marine fuels, mainly produced at Gazpromneft’s subsidiary, the Omsk Oil Refinery. From April 2010 a low-sulphur (less than 1%) TAS-380 marine fuel has been produced, which has made Gazpromneft Marine Bunker a major bunkering company in the lowsulphur fuel oil market.

Since its foundation, the company has tripled its operations, delivering 900,000 tonnes of fuel in 2008 and more then 2 million tonnes in 2011. Today, Gazpromneft Marine Bunker is one of the leaders in the Russian bunker market, with an 18.5% share.

TransOilBunker Co, Ltd 53 office, 11 Aleutskaya Street, Vladivostok, 690091, Russia Tel/fax: +7 (423) 2642-448, 2608-550, 2642-449 Mobile: +7 914 704 28 56 E-mail: bktob2006@yandex.ru Website: www.transoilbunker.org 90

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

World Bunkering Spring 2012

World Bunkering Summer 2012 issue Special Features: Oil Majors In a complex market dominated by traders, brokers and independent suppliers, where do the oil majors fit in?

Fuel Management As IMO and national regulations around the world impose sulphur caps ranging from 3.5% to 0.1% sulphur, how can owners and ships’ engineers ensure smooth and efficient machinery operation?

Alternative Fuels – LNG The past year has seen a major push towards the widespread use of LNG as fuel for merchant ships. We look at recent developments, and lingering doubts.

Alternative Fuels – Emulsions While some see only a limited future for heavy fuel oil, others are working to make HFO more efficient. A major owner is about to trial an emulsion and others are under development.

Surveyors With bunker prices at current levels it is not surprising that many owners regard engaging a surveyor to be a necessity when taking on fuel.

Information Technology We look at a how IT is assisting in the training of bunker barge owners and shore staff.

Geographical Focus: Mediterranean: Greece, Gibraltar Strait, Italy, Malta, Spain, Turkey, Cyprus.

Australia Reviews IBIA Annual Dinner Asia Pacific Maritime International Bunker Conference Preview Posidonia – Athens, 4-8 June (Preview & Distribution)

Russian Update News, Views and Analysis.

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

DiARY

Looking ahead 28 February – 2 March China Maritime Week Hong Kong www.bairdmaritime.com

14-16 March Asia Pacific Maritime Singapore www.apmaritime.com

19-20 March Bunkering 101 Singapore www.cconnection.org/Event.php?id=87

21-22 March Coping with Air Emissions from Shipping Singapore www.cconnection.org/Event.php?id=88

4-6 April SMM India Mumbai, India www.biztradeshows.com/trade-events/smmindia.html

18-20 April Sea Japan 2012

18-20 April 33rd International Bunker Conference Oslo, Norway www.bi.no/ibc

25-26 April Scandinavian Shipping & Ship Finance Conference 2012 Copenhagen, Denmark www.informaglobalevents.com

4-8 June Posidonia Athens, Greece www.posidonia-events.com/

17-19 October 17th Singapore International Bunkering Conference and Exhibition SIBCON 2012 Singapore www.ibc-asia.com

6-8 November IBIA Annual Convention Jumeirah Emirates Towers Dubai, UAE

Tokyo, Japan www.seajapan.ne.jp/en 92

World Bunkering Spring 2012

Truly transparent business We pride ourselves on our open and ethical business practices. We are continuously improving the accuracy of our measurement techniques, and are introducing advanced metering technology – so you can always see exactly what you’re getting. exxonmobilmarinefuels.com

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