spring 2014
Spring 2014
Inside this issue: Taking control of Quantity Northern Europe prepares for 0.1% sulphur Innovation – new ideas aplenty
Shaping the way forward IBIA looks to the future
World BUNKERING
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Editor’s letter
Better times ahead
T
his issue of World Bunkering comes out at a time of increasing optimism within the shipping industry. There are, of course, many challenges facing shipping in general and bunkering in particular. Nevertheless, cautious optimism seems to be the order of the day. For example, international accountant Moore Stephens’ shipping partner Richard Greiner says: “Shipping is in a different space to that which it occupied a year ago. Confidence rose to a three-year high over the course of 2013. Good things are predicted for freight rates in 2014, more companies are starting to consider new investment, and economic and political issues with the potential to hurt shipping are deemed less severe than 12 months previously.” But the firm cautions that the prospects for recovery may still be fragile if the industry fails to meet a number of challenges, including tighter regulation – as noted in our Environment pages – and increased operating costs. Of course, the bunker industry and its customers are no strangers to either of these factors. However, Greiner warns: “Operating costs are expected to go up in 2014. Shipping cannot operate without fuel and skilled manpower. Meanwhile, increased regulation of crew welfare, fuel quality and ballast water management are bigticket items. “Environmental regulation is selfperpetuating, witness the news that the International Maritime Organization (IMO) is to debate plans for shipowners to compile fuel-consumption data to support steps to create carbon dioxide reduction regulations.”
World Bunkering Spring 2014
World Bunkering is tracking that debate carefully. Again, our Environment pages include an update on this fast-moving issue. While the political debates on the environment and shipping’s contribution to increased CO2 levels continue, the shipping industry is changing in response both to current and impending regulation and also to market forces. Fuel has become the biggest expense. As the International Chamber of Shipping (ICS) told the United Nations (UNFCCC) Climate Change Conference in Warsaw (COP 19) in November, reducing CO2 emissions is an economic ‘no brainer’ for the global shipping industry. ICS’s director, external relations, Simon Bennett said: “The high cost of fuel means that market forces are already providing shipowners with every incentive they need to continue improving their fuel efficiency and reduce their CO 2 emissions. Otherwise, shipping companies will simply not survive.” That reality is reflected throughout this issue, and especially in the Innovations and the Equipment and Services pages. Ship and equipment designers and manufacturers are quietly working on projects that will change our industry greatly. Ships now coming into service are far more efficient than those of a generation ago that they are replacing, and even significantly better in environmental terms than those delivered just two or three years ago. But today’s newbuilds will soon look old fashioned in comparison with ships incorporating many of the features now being developed. A glance at our more technical pages reveals
a whole range of innovations that, together, add up to really significant fuel savings or, as in the case of liquefied natural gas-fuelled ships and scrubbers, effective responses to environmental regulations. Staying on the theme of an optimistic view of the future, in a special six-page feature Captain Peter Hall, chief executive of the International Bunker Industry Association (IBIA), outlines how the association’s board is working on plans to make IBIA even better able to represent the industry in the coming years. The plans outlined largely reflect the results of surveys of members’ opinions on key issues. Remember, World Bunkering is happy to publish letters from readers. So if you would like to comment on the IBIA proposals, or anything else in this issue, please get writing. We would really like to hear from you. In the meantime, I look forward to meeting many of you at the IBIA Annual Dinner. David Hughes, Editor
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Chris Midgley Shell International Petroleum Company
Kjeld Aabo MAN Diesel & Turbo
Robin Meech Marine and Energy Consulting Limited
Søren Christian Meyer OW Bunker
2015 in a flash ! The 35th International Bunker Conference 2 – 4 April 2014, Copenhagen, Denmark IBC, the world’s longest-running and most respected bunker conference, will continue down the road set out the past years. Get an update on what’s happening in the bunker industry and meet old and new friends at this great networking arena. The most positive aspect of IBC 2013 was meeting clients and lobbying. Anna-Maria Karakasi, Bunker Trader, Aegean Marine Petroleum, Greece
www.bunkerconference.com
SPRING 2014
spring 2014
spring 2014
Publisher: W H Robinson InsIde thIs Issue: Taking control of Quantity Northern Europe prepares for 0.1% sulphur Innovation – new ideas aplenty
Shaping the way forward IBIA looks to the future
Editor: David Hughes editor@mar-media.com
Deputy Editor: Sandra Speares
World BUNKERING
sandra.speares@mar-media.com
Project Director: Dawn Barley dawn.barley@mar-media.com
Project Consultant: Alex Corboude THE ONLY OFFICIAL MAGAZINE OF
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The views expressed in World Bunkering are not necessarily those of IBIA, or the publishers unless expressly stated to be such. IBIA disclaims any responsibility for advertisements contained in this magazine and has no legal responsibility to deal with them. The responsibility for advertisements rests solely with the publisher. World Bunkering is published by Maritime Media Ltd on behalf of IBIA and is supplied to members as part of their annual membership package.
On behalf of: IBIA Ltd Latimer House 5-7 Cumberland Place Southampton SO15 2BH, UK Tel: +44 (0) 20 3397 3850 Fax: +44 (0) 20 3397 3865 E-mail: ibia@ibia.net Website: www.ibia.net
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SPRING 2014
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Editor’s letter Chairman’s introduction Chief Executive’s report The future of IBIA New members Events report Noticeboard
IBIA reports 1 7 9 11 17 21 23
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Interview Industry news Environment Quantity Traders Risk management Testing
Special features 26 29 32 35 41 46 48
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Geographical focus Northern Europe 51 India 54 UAE 57 Russian update interview
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Innovation IT Legal news Equipment and services Preview: APM Preview: IBC Preview: Tranzit
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Diary
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D
ear members Where has the year gone? It feels like only yesterday that I was writing my introduction and now, 12 months later, I am scratching my head to write this column for the last time as chairman of the International Bunker Industry Association (IBIA). As my term draws to a close, it is with gratitude, a sense of excitement and a tinge of regret that I hand on the baton. I have thoroughly enjoyed these months and am delighted that I will be passing my duties into the safe and capable hands of incoming chairman Jens Maul Jorgensen of Oldendorff Carriers on 1 April 2014. The challenge
When I took over from Nigel Draffin last April, we also welcomed on board Peter Hall as chief executive and Anna Trant as event and membership manager. It provided us with quite a challenge – a new chairman, a new chief executive and a new event manager all in the space of a few weeks. Plus we had a number of things planned at that time: the Annual Convention in November 2013 in Hong Kong; a review of the association supported by a membership survey, a review of the implications of new fuels and the ever-present challenges of bunkering operations. They say you need a target to aim for and we certainly had several of them, requiring a lot of hard work, by the new chief executive, the event manager and the Annual Convention work group. I was delighted that the convention in Hong Kong turned out to be “a great success” – not my words but those of the members who attended. Globally, IBIA still has many projects to address: liquefied natural
World Bunkering Spring 2014
gas (LNG) bunkering, flash point, International Maritime Organization (IMO) legislation, availability of fuels, technology, emissions and the environment are just a few of them. The world doesn’t stand still. Education will also play a key part in the IBIA’s plans, as we try to educate and inform the industry of the many changes that face us in the near future. In Asia, we will also be seeing exciting times as Hong Kong embraces the control of emissions within its port (effective 1 April 2014), as announced by Christine Loh, under-secretary for the environment in Hong Kong. Will this initiative spread to the whole of the Pearl River Delta and, in time, the coast of China? Time will tell! IBIA, principally through its branch in Singapore, is involved in developing regulations for the use of mass flow meters. It is also engaged in a review of Singapore’s SS600 and SS524 bunkering procedures under the umbrella of the Technical Committee for Bunkering at enterprise agency SPRING Singapore. IBIA’s Africa branch is also working with its members on how to improve bunkering volume in southern Africa, working closely with the South African Maritime Safety Authority (SAMSA) to set up a code of practice for bunkering. With so much going on in addition to our regular work with the IMO, the International Organization for Standardization, the bunker subcommittee of the International Association of Independent Tanker Owners, the Baltic and International Maritime Council, SIGTTO and others, our work is ever-challenging. So we always welcome members who have a good knowledge of the bunkering industry – be it purchasing or supply or any other industry-related services – to contribute to our five
working groups. Anyone interested in joining a working group may get further information from the IBIA secretariat. Looking back at the past year as IBIA chairman, I am pleased to say I have got to know many more people and now have a much better understanding of the industry as a whole. The IBIA has always been a place where members can network, socialise and learn. I have found this very useful, especially after joining the board of directors in 2009. I am very grateful to all the board members for their guidance and support during my term as a board member and as chairman. Without their expertise, my chairmanship would not have been so smooth. As I become immediate past chairman, I would like to say a big thank you to all of you out there and hope that you will all continue to support the good work that IBIA has done and continues to do for the industry.
Chairman’s welcome
Passing on the baton
Simon Neo Chairman, IBIA
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F
irst of all, let me wish you all a happy new year. I hope it will be a peaceful and prosperous one for each of you. A new year offers new opportunities and challenges, and in that respect I don’t think 2014 will be any different from any other year. You will find in this edition a few pages dedicated to ‘the way forward’, which details structural changes agreed by the board and picks up on member’s views that have been captured by various surveys in 2013. Our overall objective is to deliver added value to the membership through a more effective regional structure, developing more frequent forums by addressing topical issues in regional locations. We also aim to provide stronger representation and active lobbying with industry in national and international forums.
Compliance
On 1 January, California mandated the use of 0.1% sulphur content fuel. The International Bunker Industry Association (IBIA) wrote to the California Air Resources Board (CARB) in 2013 expressing concern about the availability of compliant fuel, particularly in the Far East and African dry bulk ports. This has been borne out in practice, with operators experiencing problems obtaining supplies of compliant fuel. Consequently, the IBIA is lobbying for an extension to the dispensation clause by waiving the non-compliance fee until supply is readily available in either load ports or along the traffic lanes to California. The IBIA has also offered to assist CARB in establishing criteria for verifying availability. We would ask members to give feedback on availability, so we can inform CARB of the situation on the ground.
World Bunkering Spring 2014
Quality and cost
Programme
It may well prove that California’s action is the tip of the iceberg in terms of the need for readily available compliant distillate, as we move towards 2015 and 2020. The other significant factor facing operators is cost. At what price and under what credit terms will supply be provided? For the coming months and years, the challenge of picking the right fuel strategy to meet the terms of varying emission control areas will prove pivotal – not only for compliance but for profitability and sustainability of shipping operations. Listening to the industry, there appears to be a need to provide better information on the quality of fuel supplied. Therefore, the IBIA will, throughout 2014, disseminate good practical advice about fuel quality standards, how to avoid some of the pitfalls and what to do if things go wrong. This will be through workshops, forums and guides to good practice. We will do this in conjunction with other shipping organisations and associations. The IBIA welcomed the recent news that the Dutch courts have changed their view on off-spec fuel as waste. It is a good step in removing unnecessary cost from the supply chain.
As you will see in the events article, the IBIA has a packed year ahead, with opportunities for the secretariat to meet you and hear what is affecting you within the industry. I hope the changes to our way of business will help make it easier for you to let us know your views. Board elections and AGM
A reminder to everyone that the association’s AGM will take place on Monday 17 February at 15:00 – the afternoon preceding the Annual Dinner. The venue for the AGM is the Naval Club in London. Lastly, a big thank you to all the members who have voted in the board elections, the results of which will be announced at the AGM.
Chief executive’s report
A new year dawns
I hope to see many of you at the Dinner.
Captain Peter Hall
IGF Code
The International Maritime Organization (IMO) correspondence group reports in February on the standards, training and certification requirements for seafarers on board ships using gases or low-flashpoint fuels (any fuel that has a flashpoint lower than 60°C). The IBIA will be taking an active part in this debate, as it could have a significant impact on operations in the future.
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by Peter Hall, CEO
D
uring the past few months, the board of the International Bunker Industry Association (IBIA) has been considering shaping the structure of the association to be able to respond to the future while holding onto the core values upon which it was founded 21 years ago. In 1992, the association was established on the premise of providing a forum to communicate and educate
Structure A fundamental part of communication is to establish a good structure so that communication between the membership of the regions and the centre is improved and enhanced. To enable this to happen, the board has agreed to some structural changes that will allow the association to operate more effectively. This article sets out areas that have been agreed by the board and other aspects where we are looking to investigate options for the best way forward.
1. Regions The structured change is to increase the three current regions of IBIA to five. This should allow for more effective
effectively across the marine fuel supply chain. These two principles are still true today, although the manner in which they can be achieved has changed vastly. At the same time, the "audience” has grown from about 20 individuals to 600-plus organisations and members. The shape and manner of change proposed was unveiled at the Hong Kong conference, where members attending the event were able to give their views.
The future of IBIA
Shaping the way ahead
2. MEMBERSHIP We propose to investigate expanding the membership grades to reflect professionalism and experience and also to allow the opportunity to encourage students to join as associate members.
3. Working Groups Working groups are a core means of member participation and the mechanism via which local, national and international issues can be discussed and information given. The association aims to both promote participation of the membership in working groups and to broaden the scope of topics that working groups currently address.
4. EDUCATION
representation and support regional development. We propose to expand the branch model of Singapore and, in time, hope to have the opportunity to develop forums in each of the regions, addressing local issues. We also plan to encourage social events for IBIA members and guests as well. Another commitment is to get “out and about”, bringing topical issues to a location near you, by increasing forums and debates. These initiatives will provide opportunities to inform and listen as we continue to ask your views and encourage your participation as we grow together.
World Bunkering Spring 2014
A core value of the association is education, and quantifying the quality of education and assessing the needs of the industry is paramount to a credible industry. Like all industry, there is some excellent practice in operation, but what has an adverse impact on reputation is substandard operation.
5. WEBSITE IBIA plans to refresh its website, providing intuitive navigation, easier access to relevant information and online services enabling direct booking for events.
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The future of IBIA
1. REGIONS Currently, the membership is allocated into three main regions, with the size of representation as follows. Europe, Africa and Middle East 68% membership 7 board members
Asia (currently including India and Pakistan) 19% membership 2 board members
America 13% membership 1 board member
The board believes that the association would function more effectively by increasing the regions to five. This would mean making Africa a region in its own right and combining India, Pakistan and the Middle East into a new region. The impact of this on membership representation by region and the board representation is detailed below.
Europe 51% membership 5 board members
Asia 17% membership 2 board members
America 13% membership 1 board member
Middle East and India 9% membership 1 board member
Africa 9% membership 1 board member
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What our members said
“
“
70% of the membership agreed that five regions would improve communications
IBIA aims to encourage ‘branch activity’ in each region, providing opportunities for social activities, forums and technical groups. We currently have regional management in two locations and, in 2014, hope to establish local management in two more regions.
World Bunkering Spring 2014
The future of IBIA
2. MEMBERSHIP
Currently, we have four membership sectors
Associate member (AMBA) – Must be either:
(a) Corporate – (with additional corporate members) (b) Individual (c) Honorary (d) Affiliated organisation We propose to investigate expanding the membership grades to reflect professionalism and experience and also allow the opportunity to encourage students to join as associate members. These membership levels would be aligned to educational and experiential standards, comparable with many other professional institutes.
• student-level entry or starting a career in the industry; • undertaking an approved course of bunker training
Potential membership levels
Affiliated member (AMBA) – Used for members of likeminded organisations, with the same criteria. This process could be a stepping stone to the association taking on institute status.
Corporate – The requirements would be the same as they are at present.
or education. Notwithstanding the criteria set out above, the board reserves the right in the maintenance of professional standards to consider all applications for membership on their merits and its decision shall be final.
Honorary member (HMBA) – This level is used to recognise members who have retired from the industry, in recognition of their service.
Fellow (FBA) – Election by nomination, after a minimum of five years’ continuous membership and significant contribution to the industry (the definition of significant contribution to the industry would be assessed by a peer working group).
Member (MBA) – Having attained an adequate level of knowledge (to be defined) and management level or professional ability.
World Bunkering Spring 2014
“
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34% said: no preference
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54% of the membership said: yes, we do want other grades
What our members said
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Associate fellow (AFBA) – Must match one or more of the following criteria: • senior position in the bunker industry; • senior management position in a related company – shipping/oil company etc.
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The future of IBIA
3. Working Groups
Working groups are a core means of member participation and the mechanism via which local, national and international issues can be discussed and information given. The association aims to both promote participation of the membership in working groups and to broaden the scope of topics that working groups currently address. But, first, it may be helpful to explain a little about working groups.
What do they do? 1. They formulate IBIA’s position on key industry issues; 2. Influence industry policies; 3. Provide knowledge to our members.
What are they for? Working groups are there to: • provide guidance to members and non-members on contentious issues; • offer a basis for promoting the membership’s view to external organisations; • improve consistency within the bunker industry; • facilitate interaction with other marine sectors; • give input to IBIA’s information data bank.
How do they work? • Once a key issue has been recognised within the
association, it is the board’s responsibility to decide whether to establish a working group and then to: – define its initial terms of reference; – relate these to the specific IBIA policies; – appoint a chairman from within the board; – select key participants (always including the chief executive for continuity). • Other members are invited, who bring specific skills. • Any member or non-member can contribute. • Participation is on a voluntary basis.
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Output of the working group • They formulate IBIA’s position on key industry issues. • The position taken by a working group reflects the
membership’s views within the association’s policies on: – protecting the environment in a cost-effective manner, with practical, enforceable and equitable regulations; – progressing safety issues, particularly with new types of bunkers; – improving the skills of the bunker industry by providing: – guidance on training curricula; – guidance to trainees and their employers in accessing the best training; – providing a means to assess the skills of industry participants; • Providing guidance, with legal terms of reference, facilitating good business practice. • Developing internal association policies.
Current working groups Environment, safety and alternative fuels. Legal – terms of reference. Education and training. Branch management: – Asia; – Africa. • Events and marketing. • Possible future working groups: – knowledge bank; – Americas’ branch; – business practices, measurement, corporate social responsibility. • • • •
If you would like to be a member of a working group, please contact us: ibia@ibia.net
World Bunkering Spring 2014
5. WEBSITE
Training and accreditation A core value of the association is education, and quantifying the “quality of education and assessing the needs of the industry is paramount” to a credible industry. Like all industry, there is some excellent practice in operation, but what has an adverse impact on reputation is substandard operation. IBIA is thus looking hard at the standard of training.
Our objective is to improve our website • Intuitive navigation • Delivering easier access to more relevant information • Online services enabling direct booking for events
What is the process behind this? First steps Establish an assessment process for existing courses – an assessment model – and apply it to currently established courses. 1.
Assess the syllabus and material – against the existing IBIA model syllabus. Ensure that depth and rigour are appropriate for the type of course (basic, advanced and specialised). 2. Assess the delivery – ensure that the speakers are competent and effective. 3. Assess the result – ensure attainment is monitored and weak sectors improved by analysing the results of end-of-course assessment tasks. 4. Assess the quality control of each course, including the student assessment methods.
We need to look at what isn’t available and • Encourage new courses:
1. For ship’s staff; 2. For port staff. • Integrate bunkering into Standards of Training, Certification and Watchkeeping for Seafarers (STCW) courses – liaise with national and international bodies to encourage inclusion of bunkering training in their rules and requirements.
Therefore we are looking at developing a charging structure that allows IBIA costs to be covered, while ensuring that the cost is realistic in terms of price/benefit to course providers and to those paying for training.
World Bunkering Spring 2014
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72% of members use the website and World Bunkering magazine as their primary source of information about marine fuel supply
What our members said
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However, 66% of the membership felt the course provider should absorb any costs incurred in achieving accreditation”
“
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At the conference, the membership said
During the next few months, members will see a more interactive web site, with a structure that provides easy access to the pertinent information they are looking for. The site will be compatible with mobile phones and tablets, making it easier to obtain information on the move. We are also committed to delivering relevant, timely information about legislation, operations and the market, all aimed at meeting your needs. We are also looking at streamlining member information (identifying the sectors they are interested in) so that we can target information to the right market sectors and avoid overloading you with irrelevant information.
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“75% felt course accreditation by IBIA was important or very important
The future of IBIA
4. Education
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The International Bunker Industry Association
Join IBIA today Why Join IBIA? Are You a Bunkering Professional? Involved in the supply of bunkers to vessels? Want a direct line to IMO decision making? Want network access to over 600 professionals and their organisations?
Levels of Membership Corporate:
A corporate membership allows a corporation to register up to two other offices and contact details FOC. They can send as many employees of any registered company to events, training courses and working groups at member rates. They are able to delegate to different members within the registered companies to attend committees. They are eligible to book tables at the IBIA Annual Dinner. They are able to use the IBIA logo on the website and business stationery. They will receive three free subscriptions to World Bunkering. (This is up to 20 for Buyer members) This level of membership is designed for companies
Benefits allow companies
• Discounts to training courses, IBIA endorsed events - for all employees • Book tables at the prestigious Annual Dinner • Use of IBIA logo on their web site and stationary • Subscription to World Bunkering magazine
Individual:
This allows one person to register as a member in their own name. You will receive one set of free publications and one subscription to World Bunkering. All special rates and attendance at events will be limited to this member only.
Membership Options:
Recognition for your expertise?
Individual: £150.00 p.a Corporate: £700.00 p.a
t Join today online a
(e) ibia@ibia.net (t) +44 (0)20 3397 3850
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New members
CORPORATE Bunker Supplier Zhou, Rong International Bunker Services Ltd Room 3204-08, 32 F Sun Hung Kai Centre 30 Harbour Road Wanchai Hong Kong E-mail: ron@ibskk.com Bunker Trader Monteiro, Abrao Vivo Energy Cabo Verde Av. Amilcar Cabral CP 4 - Mindelo, S. Vicente Cabo Verde 4 Cape Verde, Africa E-mail: abrao.monteiro@vivoenergy.com Bunker Supplier Goujon, Hugues Petroineos Trading Limited Avenue de la bienfaisance Levera 13117 France E-mail: hugues.goujon@petroineos.com
World Bunkering Spring 2014
Maritime Intelligence Bird, Martin Lloyd's List Intelligence 119 Farringdon Road London EC1R 3DA UK E-mail: martin.bird@informa.com Surveyor Chinoy, Kaivan Bunker Detective (a Division of AVA Marine Group Inc)` World Trade Centre 404-999 Canada Place Vancouver British Colombia V6C 3E2 Canada E-mail: k.chinoy@bunkerdetective.com Bunker Trader Rose, Daniel Integr8 Fuels Inc. 2nd Floor, Kinnaird House 1 Pall Mall East London SW1Y 5AU UK E-mail: danielrose@integr8fuels.com
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New members
INDIVIDUAL Bunker Trader Kim, Sophie I&C International Pte Ltd 101 Cecil Street #24-02 Tong Eng Building
Bunker Supplier Murphy, Michael CIDRA UK Ltd 2 Minton Place Victoria Road Bicester OX26 6QB UK E-mail: mmurphy@cidra.com
69533 Singapore E-mail: sophie.kim@iandc.com.sg Bunker Trader Yee, Sampson I&C International Pte Ltd 101 Cecil Street #24-02 Tong Eng Building 69533 Singapore E-mail: sampsonyee@iandc.com.sg Raitt, Douglas Lloyd's Register Bunker Supplier Lim, Glen Sea Hub Energy Pte Ltd 3 Harbourfront Place #09-01 Harbourfront Tower Two 99254 Singapore E-mail: glen.lim@seahubenergy.com.sg Bunker Supplier Velikorodnyi, Andrei NIKO Bunker Co. Ltd 30 Tirovaya Vladistok 690001 Russia E-mail: avelik@nikobunker.com
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Bunker Trader Moller, Lars Dynamic Oil Trading (S) Pte Ltd 600 North Bridge Road #11-09/10 Parkview Square 188778 Singapore E-mail: lamo@dynamicoiltrading.com Bunker Trader Gemrek, Hasan Erdem Petrol Urunleri G端neli evren caddesi Elif sokak Erdem is merkezi kat:3 Istanbul 34212 Turkey E-mail: hcemrek@hotmail.com PO S&D Ho, Richard APL Co. Pte Ltd 456 Alexandra Road #06-00 119962 Singapore E-mail: richard_ho@apl.com Bunker Trader Niu, Huo Ming Chimbusco International Petroleum (Singapore) Pte Ltd 63 Market Street #20-01 Bank of Singapore Centre 48942 Singapore E-mail: bunker@chimbusco.com.sg
World Bunkering Spring 2014
Bunker Broker Aslam, Rizwan KRS MARINE SERVICES South Tees Business Centre Enterprise Court Middlesborough TS6 6TL UK E-mail: info@KRSMarineServices.com Services Newman, Michael International Energy Insurance Brokers 445 Figueroa Street 27th Floor Los Angeles CA 90071 USA E-mail: mn4ieib@earthlink.net
WEST & EAST AFRICA ATLANTIC/INDIAN OCEAN CANARY ISLANDS GREECE WORLDWIDE TRADING
TAKing THE PUZZLEMENT OUT OF YOUR BUNKERING NEEDS
New members
13716_World Bunkering Verticals_Layout 1 04/04/2013 10:36 Page 3
Bunker Supplier Karim, Rifai Mashreq Petroleum 2 Kasr El Dobara Sq. Garden City Cairo 1423 Egypt E-mail: K.rifai@mashreq.com.eg PO S&D Oginni, Victor Nigerian Ports Authority 26/28 Marina P.O. Box 1892 Apapa Post Office Apapa Lagos Nigeria E-mail: oginni@yahoo.com Hsu, Glen Wan Hai Lines 10th Floor, 122 Tun Hwa N. Road Taipai 10595 Taiwan E-mail: Glen_hsu@wanhai.com Bunker Broker Storm, Benjamin eBunkers Neuer Steinweg 22 Hamburg 20459 Germany E-mail: benjamin@storm.im
World Bunkering Spring 2014
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MarinhaTotems_178x128.pdf 1 17-01-2014 11:05:35
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12 Kithiron Street, Alimos 17455 ATHENS, GREECE Tel : +30 2109609860 Fax : +30 2109609861 E-mail: bunkers@oil-marketing.com E-mail: ceuta@oil-marketing.com E-mail: jamaica@oil-marketing.com
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
WEB: WW W. O I L - M A R K E T I N G . CO M
IBIA Events
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014 will see continued expansion of the IBIA programme of events. Before that, though, it’s time for an old favourite with a new twist – the IBIA Annual Dinner at the Grosvenor House Hotel, London, on Monday 17 February. If you’ve never attended, you’ve been missing a key date on the bunker
calendar. It falls on the Monday of International Petroleum Week and last
year we welcomed over 1,000 attendees: numbers grow steadily each time. This year, the event has been given a facelift and we have a surprise or two in store to celebrate the IBIA’s 21st birthday. Come along and help us party in style. March sees us hosting a forum at the 6th Chemical and Product Tankers Conference in London. Our forum and drinks reception will be on 10 March, before the conference on 11-12 March. We have a limited number of free places for IBIA members for the forum only (you’ll have to pay to attend the conference, although the good news is that IBIA members get a discounted rate). Later in the month, we are running a half-day seminar in Singapore as part of Asia Pacific Maritime 2014. The seminar is on 21 March and is free of charge. Next is the turn of the Americas – Maritime Week Americas 2014 to be precise – from 19-23 May in Panama. Join us for a Basic Bunkering Course in English or Spanish – the choice is yours. Or come and meet us at the conference. In June, the IBIA will be taking part in the International Festival for Business in Liverpool, with a half-day forum and drinks reception on 18 June, and a training course on 19 June. More details coming soon. In addition to this, we have IBIA members speaking at events around the world; if you would like to become part of our team of presenters, contact Anna Trant (see below for details). For further details and to book for any of our events, visit the events page on www.ibia.net or contact Anna. Anna Trant Events and Membership Manager anna.trant@ibia.net www.ibia.net +44 (0)20 3397 3850
World Bunkering Spring 2014
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Benefits to members as at 1 February 2014
Membership Costs
Individual membership: £150 Corporate membership: £700 Corporate additional membership: £150
annual increases. These increases took effect on 1 July 2012 and in future there will be small Additional te Corpora listing of practice present the that decided The Board has also have changes some and needs s’ member meet fairly and properly not Members does ship to member of therefore been introduced that will more accurately match the benefits iat. its cost; affected members will be contacted directly by the Secretar If you have any queries or comments about these changes, then please contact ibia@ibia.net or telephone: +44 (0) 20 3397 3850.
Noticeboard
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IBIA Publications and Benefits IBIA World Bunkering Magazine – free copies for Members of IBIA
Please note non-members are requested to subscribe to the magazine at a cost of Pounds Sterling £45, £60 or £80 depending on location. Up to 20 additional free copies of the magazine are offered to buyer members of IBIA for forwarding to their vessels. IBIA World Bunkering Magazine – discounts on advertising
Discounted advertising rates are available for members with savings dependent on the advertisement size. Please contact the Advertising Sales Team at Maritime Media London on + 44 (0)20 7386 6100 IBIA List of Members
If your details are not correct, please let the IBIA administration know at ibia@ibia.net. This publication is only available to members. IBIA Guide to In-Line Blending
Available free of charge to members IBIA Guide to Avoiding and Resolving Bunker Disputes
IBIA members receive their personal copy free, but the report is offered for sale to nonmembers at £50.
World Bunkering Spring 2014
Evaluate the Merits of a Bunker Claim
Interpretation of specifications for bunker fuels and a guide to the question of repeatability. For sale to non-members at £35. IBIA Glossary of Bunker and Lubricating Oil Terminology
A comprehensive guide to all those complicated terms that are in daily use in the bunkering industry. For sale to non-members at £45. IBIA Guide to Good Commercial Practice
On sale to non-members at £50 per copy. IBIA Safety Cards for vessels’ 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 Please note that all of the above publications can also be downloaded by members by visiting www.ibia.net and logging into your account. Please then go to the download section of the website. IBIA LogO
Free bromide supplied for use by corporate members only.
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Leading the way in Colombia’s ports C I International Fuels has just opened its refinery at Santa Marta, Colombia, in order to produce its own fuel, IFOS and diesel to supply the bunker business in the Colombian Caribbean. With this refinery, we can cover the needs of terminals in Pozo Colorado and Drummond Port. This new refinery is owned by International Energy Group IEG, of which CI International Fuels is sole shareholder. CI International Fuels also manages crude exportation, from Santa Marta to EEUU in quantities of 110,000 barrels every 20 days, expanding its operations to include selling heavy crude. For these reasons, CI International Fuels is renowned as being one of the most important bunkering companies in the country. The continued economic growth and improved security in Colombia, plus the exportation of low-sulphur crudes from the ports of Santa Marta and Cartagena, has made the past four years a period of dynamic growth for CI International Fuels – one in which it has gained a larger market share. As a member of the International Energy Group (IEG) and with its principal offices located in Barranquilla, CI International Fuels differentiates itself from competitors by its spirit of innovation and technological know-how and in delivering to its clients a service with attributes that include security, flexibility, quality and fulfillment.
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World Bunkering Spring 2013
Service
CI International Fuels is a leader in Colombian territories, but especially in the ports of Cartagena, Santa Marta, Buenaventura and Barranquilla, where it offers customers crudes, IFOS, diesel and lubricant products, with a fleet of more than 11 boats, from two refineries and two crude storage terminals. Its success is based on a vertical structure: logistics, financial support and security provide its operations with quality products, assisted by a talented team of staff within the company. Competitive prices as well as quality
CI International Fuels supplies, markets, refines and exports petroleum and bunkers. It also provides an excellent service with competitive prices, due to the fact that Cartagena is the largest Colombian port and vessels choose to bunker there, as well as in Santa Marta, Curacao and Cristobal. With a great platform of quality and environmental management, the company adheres to the codes and ISO specifications, along with several internal practices that assure its professionalism and efficiency. As an IBIA member, the company is fully compliant with OHSAS BASH security and occupational health.
World Bunkering Spring 2013
For more information, contact: Calle 77B No 59-61 Office 1101, Centro Empresarial \Las Americas II Tel: (57) (5) 3693777 E-mail: manager@ciinternationalfuels.com Website: www.ciinternationalfuels.com or www.ieg.com.co
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Interview Saving business relationships In the current difficult market conditions, maintaining business relationships is ever more important. Sandra Speares talks to Jonathan Lux, a mediator and arbitrator practising from Stone Chambers, about the role of mediation
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he advantages of mediation are threefold, Jonathan Lux says – speed, cost and preservation of relationships. “I’ve been a litigation lawyer for much of my working life, 37 years with Ince & Co, and I struggle to think of a single case, having fought all the way through court or arbitration proceedings, where the parties wanted to know each other at the end of the long hard struggle,” he explains. “It is such a draining experience, not only from the point of view of costs but it is also stressful. In England, at least, we have an adversarial system, and therefore each side may have harsh things to say about the other side, which makes it all quite stressful and means that at the end of that long hard fight it is very rare for either party to have any appetite at all to do any more business with the other.” Putting this in a bunkering perspective, if owners are trading regularly to particular ports, there will be a restricted number of bunker suppliers at those ports. “In any industry, relationships are important, and the bunker industry is no exception. If you can avoid burning your bridges, maintaining relationships is a very valuable thing in itself.” As far as time factors are concerned, with the Woolf reforms
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and changes to the Civil Procedure Rules, court proceedings in the English commercial court are probably as swift as anywhere else. But parties must bank on the process taking a couple of years if it is a complex case with quite a lot of evidence. Arbitration, Lux says, is unlikely to be any shorter than that. “Many people complain that arbitrators aren’t making robust enough orders, but I don’t think arbitration is likely to be more swift than court proceedings in general.” It might be possible to move more swiftly if proceeding on documents and submissions-only arbitration, or in a trial without witnesses being called, but in most cases it will be a year or two to get a judgment or an award. In the case of mediation, however, one can move ahead very swiftly. “I am often phoned and asked whether I can do a hearing in a month’s time and the parties then exchange short position papers and send those to me. They agree a bundle of documents and you can move forward pretty swiftly.” The quickest case he can remember was when he was contacted on a Monday morning and mediation was held the same week and the settlement was signed and the case concluded before the weekend. “If there is a common accord to get the case resolved quickly, then it can move very quickly indeed.”
Nowadays, the courts are encouraging mediation more and more, he says. A recent Court of Appeal decision showed that if one party fails to engage in discussion of mediation, then that party can be sanctioned on costs. In the case in question, the defendant made a Part 36 offer to the claimant to settle the claim. If the claimant accepts the offer within 21 days, they get awarded costs in the usual way. If the claimant does not accept the offer and the 21 days go by and the claimant later decides to accept the offer, then the claimant would be liable for the costs from expiry of the 21 days onwards. In the Court of Appeal case, the claimant accepted the offer at the door of the court. The additional gloss in this case was that the claimant had written to the defendant at about the time of the Part 36 offer saying he suggested the case should be referred to mediation, but the defendant ignored the suggestion. In consequence, the defendant was denied costs in the High Court proceedings, and the Court of Appeal upheld the decision. “The courts are incentivising parties to refer cases to mediation, and in cases where one party unreasonably refuses, or fails to engage with the other party in any discussion of mediation, then even though that party succeeds at the end of the day, that successful
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to rethink or modify their position. “I don’t see it as being evaluative.” In the case of bunkering, owners and operators will probably be dealing with a restricted number of suppliers and, in those terms, the ability to resolve disputes amicably, more quickly and at far less cost has particular value, Lux says. Using mediation leaves open the possibility of the two parties doing business in the future. In the case of court or arbitration, the parties “lose control” Lux maintains. Their respective lawyers take over and a decision is forced upon the parties by a judge or arbitrator. In mediation, parties retain control. “One of the necessary ingredients for a successful mediation is to have senior decisionmakers from each side present at the mediation hearing. In effect, those decision-makers are running the show. They may well ask their lawyers to engage in the mediation advocacy to make the statement in the plenary session, but often the clients themselves will chip in with their own observations. They retain control, they decide what terms are going to be put forward and whether the terms they are receiving from the other side are acceptable.” This may be an issue not just of money but the chance to engage with the other party to resolve the dispute
without lawyers flexing legal muscles as would be the case in court. It also offers a possibility to go back over comments made in the past that might have antagonised the other party. In court or arbitration proceedings, options tend to be rather restricted, Lux says. “The claimant is claiming damages amounting to ‘x’ and the defendant may be defending altogether or conceding that some sum is due – but not as much as is claimed – or pursuing a counter-claim.” What the court or arbitrator can do is rule on any claims or counter-claims put forward, whereas, in mediation, anything can be put on the agenda – for example, an apology for past behaviour, or a new contract setting out future business, as well as terms for resolving the immediate issues. “There is not the closed list of things to be dealt with.” Lux left Ince & Co in October 2012 and was called to the Bar on 25 July last year, starting at Stone Chambers the next day. His pupil master was considerably younger than himself, Lux says. “He was kind enough to remark that he wouldn’t ask me to run off and make the coffee.” The Bar Council allowed him to shorten the pupillage period to three months and, as of October last year, “I have had a licence to inflict myself on the courts of the land”.
Interview
party can be denied costs they would normally recover,” Lux explains. The court will expect the parties to go to mediation where it is appropriate to do so, he says. Skilled mediators can often bring unwilling parties to the point where they settle, even if they did not set out prepared to do so. So are there different ways in which a mediator approaches the job? According to Lux, there are three main schools of thought: the evaluative approach at one end of the spectrum; facilitative at the other; and the transformative approach, which basically calls everything into question. The borderline between facilitative and evaluative is “quite nebulous”, he says, and depends on “how you put the points”. He describes his own style of mediation as “robustly facilitative”. Lux says “I don’t believe that mediators should be sitting back and merely carrying messages. I believe that one has to act as devil’s advocate and be able to question propositions, sometime quite robustly, to test the position. One should do that without giving an opinion and without giving the impression that one has formed any particular opinion as to whether one side or the other is right or has the better of any particular argument”. Testing out the proposition can be quite vigorous and lead parties Jonathan Lux
World Bunkering Spring 2014
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Singapore Premium Bunkering Hub
Searights Maritime Services Pte Ltd Certificate of Accreditation: MPA/AS 04 001 80 Marine Parade Road #16-05/06/07/08 Parkway Parade Singapore 449269
Tel: +65 6344 1108 Fax: +65 6344 1128 email: bunkers@searights.com.sg www.searights.com.sg
Global news
Global round-up All the news from around the world
OW moves into Colombia
Major bunker trader and physical supplier OW Bunker has launched a new operation in Cartagena, Colombia. The company says its move into the Colombian bunker market builds upon OW Bunker’s presence across the region, where it has existing offices in Chile, Uruguay, Panama and Brazil. OW Bunker’s Colombia office is located in Cartagena – the country’s most active port – on the region’s north-east coast along the Caribbean Sea. Providing customers with a full range of high-quality products as well as risk management solutions and related
services, the office is ideally located as a hub for serving the wider Caribbean marine fuel market as well as vessels transiting the Panama Canal, particularly container vessels, tankers, bulk carriers and cruise ships. According to the company, the Colombia operation will include experienced OW Bunker employees and the team will be further strengthened by additional recruitment planned for 2014. They will be responsible for ensuring that the company’s best practices and quality standards are replicated in the region, and that customers receive the high-quality marine refuelling service
LNG -powered ferry ordered
A new Heligoland ferry for German company EMS is being built by the country’s Fassmer yard to DNV GL class. It will be the first German-flagged newbuild to be equipped with an propulsion system designed to operate primarily with liquefied natural gas (LNG) as a fuel. Delivery is scheduled for April 2015. The ship will have a passenger capacity of 1,000, while also having an onboard crane and room for up to 10 10ft reefer containers. The new ship will operate year-round between the ports of Cuxhaven and Heligoland. DNV GL says the 80-metre-long ship will meet Germany’s Blue Angel standards for eco-friendly ship design. “At DNV GL, we have promoted the use of LNG as a ship fuel for many years and it is very gratifying to see that there is a growing realisation of the potential of
World Bunkering Spring 2014
that OW Bunker is recognised for worldwide. Pedro Gómez, regional manager for OW Bunker Latin America, commented: “With our global network, financial strength and local presence, OW Bunker is well placed to support customers in what is a particularly fragmented and complex bunker market. “As an established company within the region, with a global benchmark for quality products and services, our experience enables us to work closely with customers as a trusted adviser to deliver competitive fuel solutions that increase operational efficiencies, saving them time and money.”
this technology to help the shipping industry demonstrate its commitment to acting as a responsible steward of the environment,” said Henning Pewe, LNG expert at DNV GL. Both the primary and auxiliary engines are dual-fuel designs, but the vessel will operate primarily on LNG, while retaining the ability to switch to conventional fuels if so required. The hull has been specially designed to enable a cruising speed of some 20 knots, with a dynamic stabilisation system in place to ensure passenger comfort.
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Global news
Singapore stays top
The Port of Singapore maintained its global lead in bunker sales and achieved good growth in annual vessel arrival tonnage, container and cargo throughput in 2013, according to the Maritime and Port Authority (MPA) of Singapore’s advance estimates of port indicators, announced by minister for transport Lui Tuck Yew. The Singapore Registry of Ships also continued to grow in size and ranks among the top 10 worldwide. The total volume of bunkers sold in the Port of Singapore in 2013 was 42.5 million tonnes, compared with 42.7 million tonnes in 2012. MPA says Singapore is also home to about 130 shipping groups. The maritime cluster employs more than 170,000 people and contributes some 7 per cent to Singapore’s gross domestic product. Annual vessel arrival tonnage reached 2.33 billion gigatonnes (gt) in 2013, an increase of 3.2% compared with 2012. Container ships and tankers were the top contributors, each accounting for around 30% of total vessel arrival tonnage. Container throughput hit 32.6 million teu in 2013, a 2.9% increase over the 31.6
million units (TEU) in 2012. Total cargo tonnage handled last year rose 3.6% over 2012, to reach 557.5 million tonnes. The total tonnage of ships on the Singapore Registry of Ships grew by 13.2% or 8.6 million gt in 2013. As of end-December 2013, the total tonnage of ships under the Singapore flag was 73.6 million gt, putting Singapore among the top 10 ship registries in the world.
Bunkering in Sea Of Ohotsk and Bering Sea. Transportation wholesale and retail of oil products in the Russian Far East ports
Morskoy Trust LLC Kamchatskiy region Office 206, 37, Vladivostokskaya str., Petropavlovsk-Kamchatskiy, Kamchatskiy Krai., Russia 683024 Phone/Fax: +7 4152 230763 Phone/Fax: +7 4152 232904 E-mail: tanker-41@mail.ru
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World Bunkering Spring 2014
BC Ferries is currently paying approximately C$0.14 per litre higher than the fuel price accounted for in its fares, which are approved by the British Columbia Ferry Commission’s commissioner. The ferry company notes: “In determining price caps (maximum average fares) for the current four-year performance term, the commissioner established a regulatory set price for fuel for the current year of C$0.952 per litre. In November 2013, monthly fuel prices reached a new high for this year of C$1.09 per litre.” “Market pricing indicates that the price differential will continue throughout the year,” said Mike Corrigan, BC Ferries’ president and CEO. “We are well aware that implementing a fuel surcharge is unpopular with our customers, and we are doing everything we can to keep our fuel costs as low as possible, including building new ships with LNG capability. We have waited as long as we can to implement a surcharge. However, we must act now as it is clear that fuel prices are unlikely to decline in the foreseeable future.” While the company has reduced its fuel consumption by 5.8 million litres since 2004, the cost of fuel in fiscal 2013 was C$121 million, up from C$50 million in fiscal 2004. Iranian sanctions violations
Singapore-based bunker and marine lubricant firm Mid Oil Asia (MOA) has been listed by the US government as a violator of its sanctions on Iran. It is alleged to have transferred funds for Iran’s National Iranian Tanker Company (NITC) through an Egypt-based company and is one of several companies and individuals accused of breaking sanctions. Singapore-based Singa Tankers has also been listed, for allegedly assisting Iran with “urgent payments”. Firms listed as sanctions violators are prevented from doing business with US citizens, while assets they have under US jurisdiction are frozen and other foreign subsidiaries can be penalised for any business transactions with them. Links to Mid Oil Asia Pte Ltd website say that the company was incorporated in 2003 to engage in worldwide bunker supply and to deal in exclusive marketing and distribution
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of Indonesian oil company Pertamina’s products. However, the website itself could not be accessed on 17.12.13. According to an ABC News report, the US State Department and Treasury announced the moves in December, nearly a month after reaching a deal with Iran and world powers in Geneva for rolling back sanctions in exchange for limits on nuclear-enrichment progress and reactor construction in Iran. The US Treasury Department’s under-secretary for terrorism and financial intelligence, David Cohen, was quoted by ABC as saying: “Today’s actions should be a stark reminder to businesses, banks and brokers everywhere that we will continue relentlessly to enforce our sanctions, even as we explore… a long-term, comprehensive resolution of our concerns with Iran’s nuclear programme.” New lubes barge for Rotterdam
Marine lubricant provider Total Lubmarine has added a 1,560 dwt newbuild to its fleet. The Atlantic Energy features a 35-metre bunker boom, allowing delivery to the largest container ships in the world calling at Rotterdam port and Europoort. Her 16 cargo tanks will carry Total Lubmarine’s cylinder oils, system oils and trunk piston engine oils. Atlantic Energy, owned by Atlantic Horizon Group, complies with the International Maritime Organization’s MARPOL Annex I Regulations for the Prevention of Pollution by Oil. Norbert Schieren, general manager of Total Lubmarine, said: “The addition of the Atlantic Energy to the Total Lubmarine-operated fleet is testament to our commitment
Singapore newspaper Today quoted the country’s Ministry of Foreign Affairs as saying it did not have “sufficient information to comment on the two specific companies” and that the action against them was based on US rules that were “above and beyond the sanctions imposed by the United Nations Security Council, which are mandatory on all UN members”. It also said that Singapore was “not in a position to enforce the laws of other countries”. However, a ministry statement said: “Given the importance of the US in the world economy, we expect companies with dealings with countries subject to unilateral US sanctions will take notice of these and other prior cases and make their own calculations and decisions based on how this might impact on their own commercial interests.”
Global news
Fuel price hike for BC Ferries
to continually upgrading our services and standards to meet our customers’ needs. Rotterdam Port and Europoort are two of the most important ports for ship operators worldwide, as well as premium ports in our International Ports Directory. There was a real need for this new barge to ensure that our customers are not left without the crucial products necessary to keep ship operations running smoothly.” Total Lubmarine said in a statement: “The introduction of the Atlantic Energy is a result of the company’s growth and follows on from the recent introduction of new barges in Singapore. Total Lubmarine will continue to expand, with further additions to the fleet in strategic locations expected next year.”
The specialist lubes barge Atlantic Energy will operate at Rotterdam and Europoort
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Environment
Crucial debate ahead Leading role of IMO in rule-making “could be in jeopardy”
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here is a danger that the primacy of the International Maritime Organization (IMO) in developing shipping regulations could be overturned as proposals for the development of measures for ships to monitor and report fuel consumption and CO2 emissions become an increasingly divisive issue. Some governments – primarily EU states, with the strong backing of the European Commission – want IMO to impose additional measures to improve fuel efficiency, including the possibility of operational efficiency indexing. The proposals will be debated at the IMO Marine Environment Protection Committee (MEPC 66) at the end of March. However, those countries have also held a series of ‘informal’ meetings, with the intention of exploring a possible way forward at IMO on CO2 issues. They were coordinated by Cyprus and the European Commission (EC). The third of these meetings was held at the IMO’s headquarters in London in December. All IMO member states were free to attend these meetings – including China and India, who do not want the imposition of fuel efficiency measures. But, in practice, the meetings are understood to have been attended by those who, to varying degrees, want to see mandatory fuel saving measures.
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The International Chamber of Shipping (ICS) was invited along with other industry associations to attend part of a meeting, held in December, to answer a number of detailed questions. ICS did not attend, partly because there was no consensus among its members on some of the questions that were asked by the meeting’s organisers. ICS is more concerned about the fundamental principles involved than detailed questions on how implement the proposed EU-backed regulations. It told Cyprus and the EC to read its recent submission to MEPC as well as the ICS’s critical comments on the draft EU regulation on monitoring, reporting and verification. In its carefully worded ‘political’ paper, ICS suggested that IMO should initially focus on developing regulations for the mandatory reporting of fuel consumption and CO2 emissions by internationally trading ships, deferring further discussions on how the information collected might be used to develop additional efficiency measures. In a statement before Christmas, ICS said it hoped that, if governments could agree to approach their work in distinct stages, IMO could work on the early adoption of mandatory CO2 monitoring and reporting measures that would be enforced worldwide. This could be done relatively quickly, according to ICS, and might be accept-
able to those governments that may not yet be ready to commit to more radical CO2 reduction measures for shipping, such as efficiency indexing. ICS added that it believes that focusing on monitoring and reporting measures now would not prejudice the positions of such countries at the highlevel United Nations climate change talks on a replacement for the Kyoto Protocol. These are not scheduled to be completed by the United Nations Framework Convention on Climate Change (UNFCCC) until 2015. Taking it one step at a time – the so called ‘three-phase’ approach that has already been proposed by the US – would, ICS argued, have little negative impact on the industry’s efforts to continue reducing CO2 emissions. The industry already has a very strong incentive to cut CO2 emissions, thanks to the unprecedented high cost of marine fuel, which is expected to increase further as a result of the introduction of separate IMO requirements to burn low-sulphur fuel. ICS points out that fuel is already the industry’s largest variable operating cost, typically now amounting, over a ship’s life, to about three times the capital cost of the ship itself. ICS warned that the alternative could be that ambitious proposals put together in the informal meetings, “apparently so far of like-minded countries”, would
World Bunkering Spring 2014
World Bunkering Spring 2014
and allowing the necessary flexibility while minimising administrative burden. Ministers also confirmed that the main objective remained achieving an agreement at global level.” The European Community Shipowners’ Associations (ECSA) said in its report on the meeting that ministers were quite critical of a decision to include all shipping emissions in the proposal. Neither were they in favour of enlarging the scope of the proposal so as to include ships of 400 gigatonnes (gt) or more and supported the original threshold of 5,000gt, as proposed by the European Commission. Under the EC’s original proposals, emissions for each ship would be calculated, in particular, on a per-voyage and an annual basis, based on ship-specific fuel consumption and fuel type. Other parameters to be taken into account include data on fuel consumption, distance travelled and cargo carried. Presenting the commission’s proposal, Connie Hedegaard, EU commissioner for climate action, said that a global action would cater more efficiently to the shipping sector’s needs than a purely regional approach. She argued that the EU system for monitoring, reporting and verifying those emissions should serve as an example for the creation and implementation of a global system in the context of the International Maritime Organization. Consequently, she claimed that the EC’s proposed regulation on monitoring, reporting and verification would achieve this objective by contributing to the work undertaken at IMO level. That view of the implications of pursuing its course is the opposite of ICS’s. Alternative fuels
The European Parliament’s Committee on Transport and Tourism has adopted a report from rapporteur Carlo Fidanza on the European Commission’s (EC) proposal for a directive on the deployment of alternative fuels infrastructure. The report largely supports the EC’s proposals, but does not goes as far the EC wanted, prompting a strong rebuke from Brussels. If the report is approved by the full EU Parliament, with a vote possible in
February next year, EU member states will be expected to push the development of liquefied natural gas (LNG) refuelling terminals. In EU jargon, they are to ensure, in close cooperation with local, regional and industry stakeholders, that a sufficient number of maritime ports in the Trans-European Transport (TEN-T) Core Network are equipped with publicly accessible LNG refuelling points for maritime transport, within adequate distances, to allow the circulation of LNG vessels EU-wide by 31 December 2020 at the latest. The report does, however, say that, when defining the network of LNG refuelling points in maritime ports, “the actual market needs and the existing bunkering points shall be taken into consideration”. Member states shall also ensure that shore-side electricity supply for waterborne vessels requiring more than 1 mega volt ampere (mva) is installed in berths of ports of the TEN-T Core Network located within 3km of residential and commercial areas. This requirement shall also apply to cruise and ferry terminals not included in the TEN-T Core Network, unless their managing bodies demonstrate lack of cost-effectiveness or absence of significant environmental benefits. European Commission vice-president Siim Kallas, in charge of transport, said: “I am very pleased with the positive vote. It strengthens our proposal, especially as regards the minimum infrastructure coverage, information for consumers and innovation aspects. I am confident that ambitious measures will be adopted soon for the benefit of EU citizens and industry.” However, the EC says in a statement: “There are a few points… for which the Parliament is less ambitious, and which the Commission deplores: For LNG in the maritime and inland-waterways sectors, the requirements are less stringent than original (sic) proposed by the Commission. This could lead to market fragmentation, continue the ‘chicken and egg’ spiral of lack of demand because of lack of infrastructure and put at risk member states’ chances of meeting the requirements on sulphur content of marine fuels.”
Environment
fail to get sufficient support at IMO. By then, though, so much impetus would have been built up that regional unilateral action would be almost inevitable. Should that happen, IMO would be far less likely to control the eventual CO2 reduction regime for shipping. ICS secretary-general Peter Hinchliffe said: “The recent impasse at IMO on making further progress is due to difficulties unconnected with shipping and imported from the UNFCCC. However, IMO is now confronted by the danger of unilateral action by the European Union, which is already considering a draft regulation on monitoring and reporting of ships’ emissions, which risks destroying the possibility of a global approach towards shipping and CO2.” He warned that, if the EU measures on monitoring and reporting ships’ CO2 emissions are adopted in advance of IMO developing its own global measure, it may be impossible to have a global regime that will be compatible with the EU approach. Hinchliffe stressed: “We are a global industry requiring global rules. Otherwise we have chaos and inefficiency.” The ICS position was partially supported by ministers from EU countries attending a meeting on 13 December of the European Council on the environment. They were critical of key aspects of a proposed regulation setting up a system to monitor, report and verify CO2 emissions from maritime transport. The concerns and criticisms expressed largely reflect those of shipowners. In particular, the ministers were worried about the confidentiality of the reported data and favoured the reporting of emissions on an aggregate basis rather than on a ship-by-ship basis. The official report of the meeting stated: “The ministers expressed their opinions in particular on the scope of the proposal and considered whether the harmonised system for monitoring and reporting of carbon dioxide emissions from maritime transport, introduced by the proposed regulation, strikes the right balance between ensuring a minimum level playing field
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Environment
Slight increase in oil spilt But ‘downward trend has been maintained’
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promotes an effective response to marine spills of oil, chemicals and other hazardous substances. Although the volume of oil spilt is also up on the past two years, ITOPF notes that the total quantity spilt so far this decade is only a sixth of that spilt for the same period in the previous decade. Three oil spills of 700 tonnes or more occurred last year, with one incident accounting for the vast majority of the total. In October, the tanker Yong Win 3 capsized and sank off Taiwan, spilling an estimated 5,000 tonnes of diesel oil. Two other incidents resulted in a spill of about 1,000 tonnes of fuel oil and 800 tonnes of bitumen respectively. ITOPF notes: “These incidents illustrate the unpredictability of spills and the importance of preparing to respond to the range of oils involved.”
ew tanker spill statistics, released in January by the International Tanker Owners Pollution Federation Limited (ITOPF), show that the total amount of oil lost to the environment in 2013 was 7,000 tonnes. The vast majority of this total can be attributed to three large spills and about 1,000 tonnes was fuel oil lost in one of those incidents. These figures represent a slight increase in the number of large spills from tankers compared with the previous two years, but ITOPF notes that “the downward trend has been maintained”. ITOPF is a not-for-profit organisation established on behalf of the world’s shipowners, originally to administer an oil spill clean-up fund but which now 700 ATLANTIC EMPRESS 287,000 Tonnes 600
ABT SUMMER 260,000 Tonnes CASTILLO DE BELLVER 252,000 Tonnes
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SEA EMPRESS 72,000 Tonnes
EXXON VALDEZ 37,000 Tonnes
200
PRESTIGE 63,000 Tonnes ERIKA 20,000 Tonnes
HEBEI SPIRIT 11,000 Tonnes
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0
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New ECA
The US Caribbean Sea emission control area (ECA) came into effect, under the International Maritime Organization’s (IMO) MARPOL Annex VI, on 1 January, bringing in stricter controls on emissions of sulphur oxide (SOx), nitrogen oxide (NOx) and particulate matter for ships trading in certain waters adjacent to the coasts of Puerto Rico and the United States Virgin Islands. The latest ECA imposes the same restrictions as the North American ECA, which came into effect in August 2012. In practice, to comply with the law, ships must either switch to 1.0% sulphur residual fuel, use distillate fuel, fit scrubbers or use liquefied natural gas (LNG) as fuel. The new ECA was designated under MARPOL amendments adopted in July 2011. There are now four designated ECAs in effect globally: the United States Caribbean Sea ECA and the North American ECA; and the sulphur oxide ECAs in the Baltic Sea area and the North Sea area. As in the US portions of the existing North American ECA, the emission limits are enforced by the US Environmental Protection Agency (EPA) and US Coast Guard (USCG). They can board ships to take fuel samples and the USCG can detain vessels exceeding the limits. MARPOL Annex VI violations within the US-enforced ECAs can lead to civil penalties of up to US$25,000 for every day the limits are exceeded, but both the USCG and the EPA can bring criminal cases against operators alleged to knowingly exceed the limits.
2012
World Bunkering Spring 2014
Quantity
Three ExxonMobil-chartered bunkers have been approved to use flow meters in Singapore
Going with the flow A major manufacturer reports increased take-up of mass flow meters by ship operators, while Singapore works towards mandatory use of flow meters
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ore owners are investing in flow meters to monitor bunker quantities taken on board, according equipment manufacturer Krohne’s international product manager, Colin Cheeseman. He notes that the custody transfer point is on the barge and so, legally, it is the barge’s figures and not the ship’s that hold sway. However, he says that being able to check figures in real time, without the need to sound tanks, would give the receiving ship some leverage over the suppliers should a significant discrepancy arise. It seems that European owners are particularly interested in putting flow meters onboard, although Cheeseman reports that there is interest from around the world. Meanwhile, Ang Chin Chin, the assistant director, marine services department, of the Maritime and Port Authority of Singapore (MPA), has signalled that the port is convinced that flow meters are the way forward and that, eventually, their use will become mandatory. “With the introduction of its industry guide and maritime innovation and technology (MINT) funding, the MPA hopes to encourage more bunker players to adopt mass flow meters,”
World Bunkering Spring 2014
she told the International Bunker Industry Association’s (IBIA) Annual Convention 2013. She added: “It is our intention to make the mass flow meter mandatory for bunkering at Singapore in the near future. It will also lead to the development of the Singapore standard for mass flow metering systems in future.” While Ang Chin Chin did not say when the use of flow meters would be made compulsory, she did say that the move was likely to be implemented in two phases. From a given date, new tankers coming into the Singapore bunkering market would need to be fitted with mass flow meters. The more difficult move would be fitting, and getting approval for, mass flow meters on existing ships. She said: “We could be looking at one to two years for all existing tankers in the port of Singapore to be fitted.” In 2012, the MPA introduced an industry guide for the use of mass flow metering systems to boost the take-up of mass flow meters in Singapore. In September last year, the director of MPA’s port services division, Parry Oei, was quoted as saying that flow meters were not “plug and play” systems. Approval of the system on each barge takes several weeks. Once
fitted, mass flow meters need to be recalibrated every three years. So far, take up of flow meters has been slow. In November, MPA approved the use of the ExxonMobil Marine Fuels & Lubricants portsecured mass flow metering system on board an additional two ExxonMobilchartered bunker tankers in Singapore. This brings the number of approved vessels to three. ExxonMobil appears convinced of the advantages and says that there are benefits for marine industry customers, suppliers and regulatory bodies, including improved accuracy and efficiency. It adds that the mass flow metering system introduces efficiency into the entire bunkering process by measuring fuel mass directly and reducing the uncertainties associated with density, temperature and other variables, such as varying tank geometry. ExxonMobil was the first bunker supplier to adopt a mass flow metering system approved by a port authority – the MPA – for bunker fuel delivery in June 2012.
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Company news
Practical considerations for bunker and fuel consumption measurement Introduction
Many operators are now considering mass flow metering for bunker verification on receiving vessels and for monitoring fuel consumption. However to achieve accurate and useable measurement, the installation and the data being collected must be carefully considered. For bunkering we must study the installation to improve filling and emptying and ensure we collect all the relevant information from the meter system. For fuel consumption measurement there are significant advantages of mass flow meters over mechanical metering, but again we have to ensure the meter is configured for the process and can be mounted in the harsh engine room environment. This article describes these considerations and provides advice on integrating the meters to deliver meaningful information. Bunkering installations
There are, principally, two key areas of consideration for installation and specification of the bunkering measurement system. Firstly, how a meter should be installed so that it can fill quickly and can be fully drained on completion of the bunker stem to optimise measurement accuracy. Secondly, the data stored from the bunker stem to ensure that historical quantities and the stem quality is held on record.
Selection of an installation location is often restricted by the design of the vessel and the existing pipework routings; however this can compromise the measurement accuracy. The guidelines below should be followed and modifications made to meet them if required. During bunkering there is very little back pressure, therefore the bunker line is not always full. We need to install the meter to ensure the meter is full during the bunker process. On receiving vessels where the tanks are bottom filled it is easier to ensure the lines are full, but on top fill tanks the fuel falls under gravity and the lines are often only partially filled. To resolve this issue, mounting the meter in a horizontal line lower than the main bunker line assists in ensuring the meter stays full during the majority of the bunker stem. Mounting the mass flow meter vertically with the flow from top to bottom requires some restriction after the meter to ensure the meter stays full. In a situation with top filled tanks even this is not sufficient to ensure the meter stays full, so horizontal installation is required as explained above. However a second consideration must be made, to ensure the meter can be drained fully after the bunker is completed. Allowing heavy fuel oil to remain in the measuring system even in very small quantities must not be allowed to occur; otherwise the meter will count ‘ghost’ measurements when no flow is present.
Fig.1 shows an ideal installation for a straight tube mass flow meter. The valve is opened at the end of the bunker stem to allow the meter to fully drain; this is often assisted by air blow-down of the bunker lines. Bunker stem data
Data acquisition and storage of the bunker stem data is critical. The main measurement is, of course, the mass transferred during the bunker stem to allow comparison with the bunker note, but other variables can be collected to compare with the bunker note and during the bunker cycle to show a complete picture of what happened during the bunker stem. The mass flow meter is a multi-variable device and can provide multiple outputs of volume, density and temperature as well as mass. Using these to compare to the bunker note can assist in identifying the cause of differences between the bunker note and the measured transfer data. Collecting data throughout the bunker stem can allow comparisons of bunkers to see differences in variables available, such as the two-phase flow signal, which indicates the entrained air content on the bunker fuel being transferred. Collecting data is only the beginning, buying a meter system only gives data. That data must be represented and displayed in a way where it provides information which can be understood and acted on. To provide this functionality, dedicated software visualisation tools are available
Fig.1
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Fuel consumption measurement
The primary advantage of mass flow meters is that, even if the meter stops measuring, the flow of fuel to the engine can still continue. Using meters which have secondary containment ensures that even in the very rare event a measuring tube fails, the meter remains safe and fuel still flows to the engines. The engine room environment requires rugged and vibration proof metering solutions, which can be installed easily below decks. Most mass flow meters cannot be mounted directly on the meter body and meters must be suspended from the pipework. Krohne has developed a range of meters which can be clamped on the meter body so that the pipework is not supporting the meter. Mass flow meters use a vibrating measuring system within the instrument. This measuring system must be isolated completely from the vibration of the working environment around them. Unfortunately many mass flow meters available on the market are not sufficiently
isolated to perform reliably in the engine room or require special installation to allow them to be used. The meters must be able to perform equally well on heavy fuel oils and gas oils when operating within the ECA areas. Measuring by mass provides the advantage that the viscosity and density of the fuel does not affect the measurement accuracy. This is not the case with mechanical metering. Marine fuel consumption systems often work on a differential measurement basis, the difference between the fuel return is deducted from the fuel feed measurement to determine the consumption. Unfortunately from experience we have seen that on many systems under some operating conditions the engine draw fuel from the feed and the return lines. Therefore we suggest that all mass flow meters on fuel consumption systems are set up for bi-directional flow and the visualisation system show this
as totalised data and makes available the forward and reverse flow information for diagnosis purposes. KROHNE has also pioneered bulk transfer mass flow meters with twin straight tubes suitable for bunkering applications which are far more compact than the traditional and cumbersome twin bent tube meters. This ease of installation and small installation envelope, combined with the natural viscosity insensitivity of the innovative straight tube design, coupled with the synthesized drive will deliver mass flow meters for bunkering which provide the operator with “continuous” “direct” and “accurate” measurement of the bunker stem. KROHNE 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 visualisation. ⏏
Company news
which allow the engineer on the receiving vessel to ‘see’ the bunker process as it happens and control the process and act when deviances or errors are seen.
For further information, please contact Colin Cheeseman Product Manager – Mass Flow Tel: +44 1933 408 528 c.cheeseman@krohne.com
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Dynamic Air Detection Enable Accurate Air Detection and Management Achieve New Levels of Bunker Loading Accuracy The SONARtrac ® Gas Volume Fraction monitoring system is specifically designed to detect and measure the entrained air or gas in marine bunker fuel. As well as real time monitoring and alerts, this enables improved fiscal accuracy for the bunkering transfer process. Key Benefits of the SONARtrac system include: • Real-time measurement of entrained air/gas • Alarm notification when air exceeds preset limits • Installation and the sensing mechanism is external to the pipework • Lightweight, with no modification required to pipework or the deck • No moving parts, ensuring high reliability • No inherent drift mechanism • Indifferent to pipe material • No recalibration required
For more information on how CiDRA can improve visibility into your bunkering process, please visit us at www.cidra.com or call us at +1.203.265.0035
Quantity
Detecting bubbles New technology applied to the bunker industry can overcome issues caused by entrained air, says Michael Murphy, managing director, Pacific Rim, for CiDRA Corporate Services
E
nsuring that the correct quantity of bunker fuel has been loaded has become a critical operational management concern for ship owners, and this has primarily been driven by the unpredictable cost of oil and the need for ship operators and owners to be competitive. Ensuring the accuracy of bunker supply has seen new techniques being developed by the industry, which has traditionally relied on tank dipping/ ullage measurement, as well as more sophisticated inline mass and volumetric solutions. Certainly, inline measurement has its advantages, but even that may be subject to error, particularly through the presence of entrained air (or gas), which can distort the volume received and measured. As an example, air can enter the fuel through a range of pumping processes, but its presence can be measured and offset (if present) through real-time monitoring and alarm. The SONARtrac flow platform is such an inline measurement system. It has the ability to detect the presence of entrained (usually unseen) air from as low as 0.01% through to gross bubbling at 10%-20% air/oil content. This is detected and measured by the SONARtrac system in real time. SONARtrac systems offer the unique
World Bunkering Spring 2014
ability to provide an ‘air alarm’ during a bunker loading process, so empowering the receiving crew to act and request preventative action from their suppliers. They also have an accurate totalising function – to confirm the actual volume of air (or gas) delivered to the ship’s bunker tanks as part of the fuel load. SONARtrac’s air measurement capability principally exploits the speed of sound (SOS) dependence with air (or gas) in fluids. Within the SONARtrac sensor is a passive acoustic array, which detects separate sound signatures and tracks these in the space and time domain as they propagate through the bunker fuel during loading. This SOS measurement technique is similar to that used in SONAR towed array systems in submarine warfare, so the physics is well proven and understood. Principally there is a logarithmic dependence of SOS with entrained air (or gas) content, which the SONARtrac system correlates, measures and displays in real time – simply put, the less air the faster the SOS and the more air the slower the SOS. This logarithmic dependence means extremely high sensitivity and accuracy over large dynamic percentage ranges of entrained air. SONARtrac is a well proven solution in other harsh operating environments
and industries, which includes mining and the offshore oil and gas industries, and has a high reliability, since it is clamped externally onto the pipeline and has no moving parts. Weighing less than 10kg, the installation of the SONARtrac system typically takes less than one hour, and the unit can be powered by a range of AC/DC supplies readily available onboard ship. For more sophisticated management systems, the SONARtrac system can be integrated into a shipboard control room distributed control system (DCS) via a range of supported electrical interfaces and protocols. The shipping industry spends many billions of dollars each year on bunker fuel, and the port of Singapore alone is reporting a spend in excess of $40 billion per year. Indeed, single shipping companies can easily expend upwards of several billion dollars per year on bunkers, so even the detection and correction of entrained air content of just a few per cent could lead to significant operational savings. SONARtrac technology is here to help the industry, as well as port authorities, to protect fuel investments and bring improved operational performance through the detection and measurement of entrained air in bunkers.
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Quantity Flowmeter detects short delivery A coriolis meter on board a receiving vessel recently detected a discrepancy that could have cost the owners nearly $32,000
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anish-based Insatech says its Bunker Control System (BCS) proved itself in June last year by detecting an under supply worth about US$32,000. The company has not revealed the port or the bunker supplier involved. The two sides dipped their tanks and then calculated volumes using standard tables. This procedure gave no reason for concern. However a Yokogawa coriolis Rotamass flow meter, controlled by an Insatech BCS, showed that the receiving vessel had taken on 767 tonnes of fuel oil. This was well below both the vessel’s soundings, of 818.1 tonnes, and the barges figure, of 820.3tonnes. Insatech pointed out that, using a notional fuel price of $600 a tonne the under supply was worth some $31,980. According to Insatech its BCS detected that, the barge switched tanks and a valve from the empty tank was left slightly open. It says that, by measuring mass and not the volume, the BCS provides a “valid and reliable measurement”. Insatech says: “The success of any bunker quality and quantity dispute will depend upon the quality of the evidence collected in support of the claim.” It adds that reliable measurement could determine the outcome of any subsequent legal case.
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World Bunkering Spring 2014
Traders
Growth in a tough market Markets are showing signs of improvement, with more commodities to support shipping, but too many newbuilds
“The economy is expected to grow in general, but Chinese growth of 7.7% is still below the average for the last ten years. However China still has an appetite for some commodities, for example, copper which should support some shipping markets,” says Harro Booth, managing director of ElbOil. However, he adds that there are still too many vessels sailing and too many newbuilds in the order book, despite the weak market situation. “Despite the positive momentum resulting from better demand, we will see a tough market in freight rates and competition due to the supply surplus of tonnage. ElbOil had a very positive year in 2013, with a growth of volume of more than 40%. We expect further growth in 2014 due to some very good and exclusive partnerships with major suppliers in Germany and Singapore as well as a recovery of the economy.” So what are the likely bunker costs going forward? “In the past three years the oil price/Brent is moving in the comfort zone within $105-$115. But with a foreseen additional demand of only 1.2 million oil barrels (bbl) per day, it seems that only countries in the Organization of the Petroleum Exporting Countries (OPEC) are producing more than requested volume. With the US set to surpass Russia as the top oil producer outside OPEC, as forecast by the International Energy Agency (IEA),
the market seems oversupplied in 2014. “We believe that market conditions for bunker prices in 2014 are moderate and should support the ship owner/ operator to reduce costs, or at least not to have higher costs as in 2013.” Credit issues and transparency have been a major source of concern for the bunker industry in recent times, so how does ElbOil view the current situation? “Being an independent, familyowned company, we have already proved that, with high attention to risk management, it is possible to grow even in this tough environment and we appreciate the support from many suppliers who offered us favourable terms. “Risk management consists of credit insurance with a full coverage and credit facilities that allow one to act independently – liquid funds are essential these days.” To a certain extent, the credit ranking reports and their database are also important, he says. “We believe in the personal business view and, with an extensive knowledge of and network in shipping and bunkering through many family members, friends and business partners, you need to determine your philosophy of business – to whom you offer credit and who you want to do business with. “With the combination of first-class finance and risk management tools
and a healthy personal attitude to our clients, we are running well. We can also offer extended credit terms – as long as the client is insured, we are pleased to do so in order to support our clients whenever needed.” So what of the ability of bunker traders to attract new blood to the business? “With the advent of liquefied natural gas (LNG) and upcoming changes, challenges and environmental issues, I believe it is even easier to attract new people to this industry. We are not working only on dirty products any more, but more and more on clean products, and the younger generation might see this as important. “One important factor for us is that young and new traders have sufficient time to build knowledge of the market, not only shipping but also the commodity market we are working in – oil. ElbOil is a vibrant, young and reputable company with highly experienced staff that has already proved that we can educate traders coming from scratch. It is definitely worth working hard to become successful in this fantastic, exciting and international business environment.” Bunker swaps
According to Freight Investor Services (FIS), bunker swaps showed growth in 2013, and there is potential in 2014. So how has the bunker swaps market
Continued 45 World Bunkering Spring 2014
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A distinct Scandinavian touch at West Africa There is a good reason that we are the largest offshore physical supplier at West Africa. When faced with tougher conditions, we work doubly hard to ensure timely and smooth deliveries. We refuse to compromise with our standards of excellence.
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World Bunkering Spring 2014
chief executive officer of CLTX. “It has for traders. We will also increase our always been our intention to develop focus on building volumes in the US and expand our role as a key player in Gulf contract. We believe there is still an the transformation of over-the-counter opportunity for innovation in this sector (OTC) freight and commodity markets and we are looking into different options to exchange-traded futures. To this end, to help manage price risk for our clients.” we have been seeking to diversify our Meanwhile, the European Energy shareholding for some time. In EEX, as Exchange (EEX) and Cleartrade Exchange part of the Deutsche Börse group, we (CLTX), a Singaporean Futures Exchange have found a partner with extensive founded in 2010, have announced that experience of running global futures an investment deal has been concluded. and energy markets and we are very EEX has become the new majority excited about the future for CLTX with shareholder, with a 52% holding in CLTX. such a backer. We firmly believe that this The transaction has been financed from new structure will enable us to enhance EEX book cash. This acquisition was the solutions CLTX provides.” agreed in Q4 2013, with all regulatory Baker adds: “We have always focused approval completed in December. on growing our business by providing Peter Reitz, chief executive officer of the best execution venue for our asset EEX, comments: “CLTX has succeeded classes. From the outset, we challenged in becoming an important execution the established methods of trading, exchange for commodity derivatives in bringing new levels of speed, accuracy and a remarkably short space of time. Its competitiveness to global trading, and core asset classes are a good fit with market participants were very quick to our existing markets. Combined with see the competitive advantages provided the impressive technical, regulatory and by our approach to technology and operational footprint of the business, regulatory infrastructure.” this made the exchange an excellent investment partner. With the acquisition of CLTX, EEX group Richard Baker expands its product and service offering to a global reach, with a presence in new markets and products that complements the existing portfolio. Furthermore, this deal is a further step in implementing Deutsche Börse Group’s Asia strategy.” “It’s great to be in this partnership with EEX,” stated John Banaszkiewicz, initial investor in CLTX and managing director of FIS. “Evolving and developing trading venues for derivatives takes time, expertise and commitment; CLTX has made great progress since we incorporated the business in 2010 (CLTX was launched as a recognised market operator in February 2011). I am delighted that EEX has made a major investment in CLTX. They are ideally positioned to support the next phase of growth and change in our markets. I am thrilled that, in EEX, CLTX has found a true long-term business partner.” “I am delighted to announce the completion of an investment deal with EEX,” said Richard Baker,
Traders
performed over the past year in terms of volume and volatility – what are the prospects? According to FIS bunker broker Ali Ersen: “We saw a strong increase in bunker swaps volumes traded through FIS in 2013 as more counterparts began to accept the concept and practice of bunker price risk management. New participants joined the market in 2013, both those looking to hedge and those looking to trade the swaps alongside other financial products.” The market in 2013 was, in fact, less volatile than in the previous year, but, even so, FIS saw more volume traded. Ersen believes: “This suggests that the innovative approach we brought to the market through the FIS screen and the FIS app, making firm two-way prices available on the FIS App, have struck a chord with owners and traders.” Which sectors are interested and are physical shipping participants taking part or is this a financial hedging market? “There has been an increase in interest from both sectors in the past year,” Ersen says. “We definitely see strong interest from shipowners – our screen was set up specifically to meet their needs – and, even with reduced volatility, there is a need to manage price risk. Traders are also increasing their share of bunker business, as they see the transparency and liquidity benefits that FIS has brought to the market and look to trade fuel oil alongside other cleared derivatives.” Are there regional differences in terms of interest in swaps or in the volume of swaps traded? “The most liquid swaps contract is Singapore 380cSt, which accounts for about half of the total volume traded. After that comes the Rotterdam 3.5% sulphur barges, Singapore 180cSt and US Gulf 3.0% contracts.” Does FIS have plans to develop its swaps offer further in 2014? “FIS will continue to invest in our bunker swaps business in the coming year. We have already added a fourth broker in London and will be adding more resources here. We are also looking to add new brokers in Singapore or Dubai to get closer to the Asian market. There are a number of refinements planned for the FIS bunker screen that will increase the functionality and flexibility
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Risk management
Richard Greiner
Cautious optimism The industry has faced a number of challenges in recent months, with ongoing financial problems, difficulties with regulations on issues such as bribery, as well as geopolitical risks, although there are signs that the business outlook may be a bit more bullish
I
nternational accountant and shipping adviser Moore Stephens believes that the shipping industry’s fortunes should be noticeably improved by 2015 if it maintains the recovery that got under way last year. But it warns that the prospects for recovery may still be fragile if the industry fails to meet a number of challenges, including tighter regulation and increased operating costs. The firm’s shipping partner, Richard Greiner, says: “New Year resolutions are invariably a case of in one year and out the other. Generally speaking, it is wise not to make resolutions that are too ambitious; American troubadour Woody Guthrie had the right idea when he settled for “Wash teeth, if any”. But the shipping industry can afford to be a little more bullish than previously in its aspirations for 2014. “Shipping is in a different space to that which it occupied a year ago. Confidence rose to a three-year high over the course of 2013. Good things are predicted for freight rates in 2014, more companies are starting to consider new investment, and economic and political issues with the potential to hurt shipping are deemed less severe than 12 months previously. “Over the next 12 months, we can expect to see more shipping money raised in the public and private equity markets. We may see more non-shipping money invested in shipping than
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for some time (although not necessarily by dentists!). Supply and demand levels should come closer into alignment. Consequently, freight rates are likely to rise and, with them, vessel values. Increased levels of demolition will be required to offset new tonnage. “China is already offering subsidies to shipping companies to scrap vessels before their operational expiry date and to replace them with new ships, which are eco-friendly and which fly the Chinese flag. So everybody is happy – owners, shipyards, environmentalists (except those worried about the perceived evils of irresponsible recycling) and politicians alike.” Greiner warns, however, that all the positive indicators remain somewhat fragile. Further, he says: “Operating costs are expected to go up in 2014. Shipping cannot operate without fuel and skilled manpower. Meanwhile, increased regulation of crew welfare, fuel quality and ballast water management are big-ticket items. Environmental regulation is self-perpetuating, witness the news that the International Maritime Organization (IMO) is to debate plans for shipowners to compile fuel-consumption data to support steps to create carbon dioxide reduction regulations. “It is to be hoped, however, that the industry can sustain the upturn that began in 2013. If it can, we may see a
return to rude health by 2015, although, as British economist John Maynard Keynes once warned, ‘The market can stay irrational for longer than you can stay solvent’.” Shale gas
The development of shale gas reserves and ongoing political risks in a number of oil-producing countries have continued to dominate, according to Global Risk Management’s latest annual report on the oil industry. According to the report, Global Risk Management says: “We completely agree that shale oil production has been a revolution for oil prices. However, as we have stated repeatedly, it’s not going to mean a price revolution on the downside. It has helped prevent a major spike in oil prices.” When Iran, South Sudan, Libya and North Sea production were, for one reason or another, unable to supply the global markets, the report suggests that “without shale oil there would have been an estimated supply gap of 2-3 million barrels per day (mbpd)”. “To put that into context, when Libyan production dropped to zero because of the war, Brent rose approximately $30 per barrel. Libyan production then was only around 1.5mbpd. Had twice the amount of oil been missing, we would have had to see a release from the strategic reserves in
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World Bunkering Spring 2014
Bribery warning
As the UK Serious Fraud Office shows signs of ramping up its efforts to investigate violations of the Bribery Act (having recently announced its intention to focus on the energy and construction sectors in the near future), we can expect to see a growing number of prosecutions, with surveys showing that many businesses are not familiar or compliant with the new legislation, says Amelie de Borchgrave, head of business intelligence at Stirling Assynt. “Following the introduction of the UK Bribery Act (effectively rolled out in July 2011), the UK’s anti-corruption legislation is considered the most stringent among the signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Considerably more far reaching than the US’s Foreign Corrupt Practices Act, which extends only to bribery of public officials, the UK Bribery Act introduces – among others – offences for the offer and receipt of bribes in the private sector. “With a broad extra-territorial reach encompassing both British companies with operations abroad and overseas businesses with a presence in the UK, liability for such organisations has been heightened through the introduction of a corporate offence for failure to prevent bribery. Whether or not a company and its directors were aware of bribery within the organisation will not constitute a valid defence. Instead, the enterprise will need to prove that the company has adequate procedures in place to prevent bribery, including: regular risk assessments, up-to-date anti-bribery and corruption programmes and training and appropriate due diligence on associated parties. “Enterprises therefore need to ensure that anti-bribery and corruption programmes and training are rolled out throughout the entire organisation, including anyone acting on behalf of the company, such as subsidiaries and agents. This is all the more crucial in countries where the incidence of bribery and corruption is high, many businesses having fallen foul of the Foreign Corrupt Practices Act in the past as a result of violations committed by agents and affiliates. Similarly, adequate and regular due diligence ought to be carried out on business partners, agents, acquisition targets, distributors and suppliers. The scope and depth of the due diligence effort on each will be determined by the jurisdiction in which they operate, their size and their significance to the business.”
Risk management
order to prevent oil from skyrocketing. Though it will not majorly affect the outlook for oil prices in 2014, we see it as important to focus on the flip side of shale oil production.” Shale oil has been, and still is, important in preventing prices from getting out of hand, the report says. There has been much talk about the energy independence of the US by 2020, but what hasn’t made so many headlines is that production from conventional oil fields, which makes up over 90% of oil production, will decline “unless substantial investments are made to make the remaining oil in the fields accessible”, Global Risk Management believes. Geopolitical risk continues to be a major issue. “We have mentioned the Libyan security situation in earlier outlooks, and why the yo-yo production is likely to continue. Now South Sudan is facing some of the same security issues. Many oil fields in the nation have been taken by rebels supposedly controlled by former vice-president Riek Machar.” Global Risk Management says it does not believe the security situation in either Libya or South Sudan will be resolved shortly. “At best, we see some improvements by the end of 2014, but it will be a long shot.” Another issue that the company highlights is the situation with regard to Iranian sanctions. While a six-month ‘ceasefire’ between the US and Iran regarding the latter’s nuclear programme is in place, “it is rather the content of the deal itself we gaze upon and wonder how the next step is made”. “Unless Alexander the Great himself swings by to solve the Gordian Knot, a new round of verbal battle could begin once we get near the end of the ‘ceasefire’ ending June 2014 – almost exactly two years after 1 million barrels per day of Iranian crude were removed from the global markets due to sanctions. It is not impossible that a rabbit is pulled out of the hat, but it appears unlikely. “We advise keeping a close eye on any progress in negotiations. If there is a breakthrough, it would – shortly –mean a setback to prices as the return of Iranian crude is implemented in price. Saudi Arabia is thereafter likely to scale back production to curb excess oil in the markets. If there is no breakthrough, prices are likely to spike – slightly – before stabilising.”
Amelie de Borchgrave
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Testing
Sulphur content dropping But, in general, test results for residual fuel show little change in the past year
W
hen looking at the overall global quality of residual fuels for 2013, DNV Petroleum Services (DNVPS) says that it does not see much difference from 2012. However, the percentage of tested samples that exceeded the global sulphur cap of 3.50% was reduced from 10% to 5%. A spokesperson notes: “What is interesting is that, based on the number of samples tested, the average global sulphur content is 2.09%, which is lower than the average of 2.20% in 2012. Global aluminium and silicon (Al+Si) content averaged the same as last year at 27mg/kg. Average net specific energy for 2013 is 40.72 megajoules (MJ)/kg.” Likewise, the majority of the off-spec residual fuels in 2013 were categorised as such because of parameters related to density and viscosity. For distillate fuels, visual appearance was the parameter that failed to meet the specification in most cases. Although often not seen as a critical parameter, visual appearance (DMX, DMZ and DMA specifications) can be an indication that the fuel contains water or has a stability problem. In severe cases, this can result in the filter clogging or the fuel pump sticking, making the fuel unsuitable for use. The global average sulphur content for distillates is 0.15% and net specific energy is 42.63MJ/kg.
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The overview for off-spec distillates shows an increase in off-spec pour point fuels, indicating that fuel usage in colder climates could be troublesome. Although it is not covered in the table below, the spokesperson also notes the fatty acid methyl esters (FAME) content in distillate fuels. In 2013, 8% exceeded the de minimis level of 0.1%. In 2012, this number was 5%. FAME is covered by the latest revisions (2010 and 2012) of the ISO8217 standard. Among its recent Bunker Alerts, one reports that DNVPS tested 16 fuel oil samples representing low-sulphur heavy fuel oil (HFO) deliveries in the Netherlands with a combined Al+Si concentration ranging from 61mg/kg to 113mg/kg (averaging 75mg/kg). Three of the samples exceeded the ISO8217:2005 maximum limit of 80mg/ kg, while all these samples exceeded the ISO8217:2010/2012 maximum limit of
60mg/kg. The deliveries were made by six suppliers in the period from 13 to 26 December 2013. DNVPS warns that Al+Si at the levels found indicates that the fuels contained large amounts of highly abrasive particles that could cause accelerated wear of diesel engine components, such as piston rings, cylinder liners and fuel pumps. It advises: “Efficient centrifuging is vital to reduce the Al+Si contents to an acceptable level for safe diesel engine use. It is recommended to take samples before and after the fuel treatment plant to gauge the fuel oil quality at the engine inlet. This will help in any subsequent assessment of increased engine wear and damages, and in resolving fuel quality disputes.” As with all its Bunker Alerts, DNVPS says that an alert does not necessarily reflect the overall fuel quality supplied at the subject ports.
High sulphur fuel oil
Low sulphur fuel oil
Off-spec residual
2013
2012
2013
2012
Viscosity @50C
58%
50%
39%
40%
Density @15C
20%
24%
36%
26%
Water
8%
8%
3%
6%
Sulphur
5%
10%
15%
14%
Al+Si
3%
2%
3%
6%
Total sediment potential
1%
1%
1%
2%
Pour point
1%
2%
2%
4%
Other
5%
3%
1%
2%
World Bunkering Spring 2014
cause accelerated wear of diesel engine components (eg piston rings, cylinder liners and fuel pumps) if not reduced to acceptable levels. Meanwhile, DNVPS has tested 11 fuel oil samples representing low-sulphur HFO delivered in Miami and surrounding ports, with combined aluminium and silicon concentration ranging from 80mg/kg to 88mg/kg. Nine of the samples exceeded the ISO8217:2005 maximum limit of 80mg/ kg, while all these samples exceeded the ISO8217:2010/2012 maximum limit of Off-spec distillate
60mg/kg. The deliveries were made by one supplier between supplier between 27 November and 9 December 2013. DNVPS added that aluminium and silicon at the levels tested indicates that the fuels contained elevated amounts of highly abrasive particles that could cause accelerated wear of diesel engine components, such as piston rings, cylinder liners and fuel pumps. Again, it advises that efficient centrifuging is vital to reduce the aluminium and silicon contents to an acceptable level for safe diesel engine use.
2013
2012
Appearance
40%
47%
Pour point
27%
21%
Flash point
12%
11%
Calculated Cetane Index
8%
8%
MCR10%
3%
4%
Lubricity
2%
1%
Density @15C
2%
2%
Viscosity @40C
2%
2%
Other
4%
4%
Testing
Meanwhile, two other recent alerts relate to deliveries in the US. DNVPS has tested four fuel oil samples representing low-sulphur HFO deliveries from Port Arthur and surrounding ports with sediment content exceeding the maximum total sediment potential (TSP) of 0.10%m/m stated in the ISO 8217:2005/2010/2012 specification, Table 2 requirements. The TSP levels ranged from 0.15%m/m to 0.18%m/m. The bunker deliveries were made by one supplier from 24Â November to 15Â December 2013. DNVPS warned that ships consuming these fuels might experience increased sludge formation, particularly at the centrifuges and filters, leading to possible blockage and loss of centrifuge and filter functions. Elevated sediment levels will make optimum onboard bunker treatment more difficult to achieve. The aluminium and silicon levels ranged from 48mg/kg to 52mg/ kg, indicating that, although within specification, the fuels contained highly abrasive particles that could
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World Bunkering Spring 2014
Intertek ShipCare provides fast, accurate testing for bunker fuel quality, helping avoid costly repairs and downtime.
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Testing Parker Kittiwake extends range DIGI cell portable oil base number test now compatible with up to 100 BN oils
G
lobal asset control and protection technology firm Parker Kittiwake has launched its newly updated DIGI TBN test kit. The company says the digital, used-oil analysis kit now gives a rapid indication of total base number (TBN) depletion in scrape-down cylinder lubricants with a BN range up to 100. Recent guidance from engine manufacturers recommends the use of higher BN lubricants in newer engines to help prevent the damaging effects of corrosive wear. Therefore, major oil companies are now adding higher BN lubricants to their product portfolios. Steve Dye, business development and marketing manager at Parker Kittiwake, says: “With the latest Parker Kittiwake DIGI TBN test kit, ship operators using high BN lubes now have the ability to test residual TBN levels in their oil. This gives operators peace of mind by ensuring they are following original equipment manufacturer (OEM) guidelines to prevent cold corrosion. This quick and simple test can be used in conjunction with laboratory testing, but gives an onboard reading within two minutes to meet OEMs’ testing recommendations.” Frequent TBN testing is important for residual cylinder oil, as it is continuously exposed to acidic combustion products that should be neutralised before they corrode engine parts. Consequently, maintaining a correct alkaline reserve is critical in preventing unnecessary harm to expensive components within the engine, such as cylinder liners. In a recent service letter, MAN Diesel & Turbo recommended Parker Kittiwake’s DIGI TBN test kit as an accurate and quicker alternative to sending samples to a lab for testing. The DIGI TBN test kit update is part of Parker Kittiwake’s ongoing research into the problem of cold corrosion. The company will soon launch a test kit that, within minutes, effectively measures the level of corrosive wear within used scrape-down oil. This will expand Parker Kittiwake’s portfolio and allow ship operators to monitor specific levels of both metallic and corroded iron in cylinder oil, giving them a comprehensive overview of the operating conditions within the cylinder chamber.
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World Bunkering Spring 2014
The past year has brought a number of challenges for the bunker industry, so what is in store for the next 12 months?
A
ccording to Gary Byers, head of marine at Certas Energy, recently rebranded from GB Oils, “the past 12 months have brought a range of challenges for the industry – ship yard declines, lower demand and higher fuel prices all made it difficult. “The higher fuel prices have also led to an increase in the practice of slow steaming, where vessels operate at significantly less than their maximum speed in a bid to optimise fuel consumption and combat the knock-on effects of high costs. Despite this, northern Europe is showing signs of a promising economic recovery and imports are predicted to rise, lowering surplus capacity over the next 24 months. “Northern Europe is also steadily becoming a big player in the offshore renewable energy sector, and increased marine traffic and investments from outside the marine sector will ensure a steady growth model for 2014. As a result, Certas Energy and other UK suppliers are thinking about their strategies moving forward in order to grow and manage new relations, looking at alternative bunker-only ports, bunkering transportation and available products. “On a wider European level, the maximum level of sulphur allowed in shipping fuel is set to drop from 1%
World Bunkering Spring 2014
to 0.1% in 2015 and this looks set to shape the coming year, as shipping companies continue to look into the installation of abatement equipment, such as scrubbers, to address this change, while also investigating the option of using alternative fuels. In addition, the price of fuel is expected to see an increase of up to 87% with the proposed changes. Until 2015, Certas will continue to supply marine gas oil (MGO), 10 parts per million (ppm) and lubricants, alongside exploration into options for the future supply of a greater range of fuel grade options. “Challenges remain with MGO, which is still not as readily available as a few years ago, but investments from suppliers and owners alike should start to see an increase in MGO availability in the UK, making it much easier for owners to plan and gauge costs. It will also be more feasible to transport bunkers further than before.” Harro Booth, managing director of ElbOil, also has views on how the market can be expected to develop. “With the new challenge for the industry coming up in 2015, and especially for suppliers and traders mainly active in north-west Europe and the US, market conditions will change and the prices might be separated from global price conditions,” he believes. “The market for low-sulphur fuel oil (LSFO) 1% will not exist anymore. If
Northern Europe
Encouraging signs more owners convert ships and install scrubbers, they will simply buy highsulphur fuel oil (HSFO).” Booth believes gas oil will be the main product used by shipping companies when the 0.1% sulphur limit is introduced. “We will need more product due to higher demand,” he continues. “The issue for supply is that it is unlikely that refineries will produce more low-sulphur MGO. Domestic products are simply seen as more attractive on price and desulphurisation is very capital-intensive.” Booth says that north-west Europe “is already a gas oil importer and thus we believe that prices for such products will increase as of the fourth quarter of 2014. It remains to be seen if pressure on LSFO will also influence the price for HSFO in north-west Europe. “From a trader perspective, we do see different views from suppliers. Some say that there are no supply problems with gas oil in 2015 but, at the same time, others forecast potential shortages. “ElbOil hired a new head of cargo trading to lead the existing cargo desk, as we believe there are a lot of potential synergies due to this new market scenario. Gas oil is needed and also the possibility of 0.1% fuel oil cannot be ruled out. “With both a bunker desk and trading desk, ElbOil offers a wide range
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Northern Europe
of expertise to add some value to the downstream and cargo market, with some niche products to be offered to the supply industry in bunkering. Regarding quality, Booth says: “We are very conservative. Gas oil usually does not encounter any problems or claims like fuel oil, but, with the ISO standards as of 2015, we do not necessarily need to sell a clear MGO but a 0.1% fuel that will offer potential for blending – and blending contains potentially more risk of claims. It is still not clarified if the main engines of the receiving vessels can simply burn a gas oil instead of a fuel oil or if a modification needs to take place.” In addition to the new emission control area (ECA) requirements in force from next year, there are differing views on the role that liquefied natural gas (LNG) has to play going forward. “As far as ElbOil is concerned, we believe in LNG as an alternative fuel for the future. We have made strategic partnerships with a Norwegian LNG consulting
company and with a very wellknown German ship owner in order to develop the infrastructure in the LNG sector,” Booth says. However, he does not see LNG as the alternative from 2015 onwards. “There are simply no vessels converted for LNG, but some are already built with a dual-fuel system. On the one hand, many ship owners simply do not have sufficient funds to invest into such new technology, and, on the other hand, the bunker industry is just not ready to offer a sustainable supply infrastructure. “It is still”, he says, a “chicken and egg situation. But looking at the improvements within the past two years and projects already in process, we can see that the infrastructure of LNG is growing fast. We have been working intensively in the LNG sector since our establishment and can already act as a service provider to shipping companies and to suppliers, owing to our extensive network within the LNG sector.”
Make certas energy your first port of call.
OW Bunker’s $700 million credit facility
Major global marine fuel supplier OW Bunker has signed a $700 million revolving credit facility, refinancing its current $450 million facility. The new facility consisting of two tranches – a 364-day and a three-year multicurrency revolving credit facility – was more than 100% oversubscribed by the 13 international banks and financial institutions in a syndicate led by ING Bank. The Danish company sees the over-subscription and the up-tothree-year commitment as a sign of confidence in its business model. This includes a strong balance sheet consisting primarily of relatively liquid current assets, with 70% to 75% of accounts receivable typically insured and a liquid inventory of fuel and gas oil. OW Bunker says that the new facility enables it to continue developing its business. “Liquidity is vital to growth in the bunker industry. This facility further strengthens our financial
With depots near every major UK port, an ex pipe facility at Aberdeen, barging on the Thames and an excellent delivery infrastructure, Certas Energy has the efficiency, flexibility and reliability to cover all of your fuel and lubricants bunkering needs.
Contact the Bunker Desk on 0845 6011880 or email marine@certasenergy.co.uk
certasenergy.co.uk
M1607 - World Bunkering Spring 2014 ad_P3.indd 1
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1/7/2014 9:02:10 AM
World Bunkering Spring 2014
Morten Skou
Northern Europe
position and the additional liquidity it brings provides us with flexibility to continue growing the business, including launching additional physical distribution operations. Our integrated business model, strong balance sheet and global footprint are key competitive advantages,” said OW Bunker’s chief financial officer, Morten Skou. ING Bank, Nordea and Rabobank International, acting as bookrunning mandated lead arrangers, were joined by 10 other financial institutions in the general syndication.
Blyth spirit
The Port of Blyth and marine fuels supplier the Geos Group have announced an agreement to build a new fuel storage facility at the port’s Bates Terminal. The initial phase of development will see the construction of three storage tanks by mid-2014, providing a capacity of over 15 million litres, with further expansion planned. This important development for the Blyth Estuary represents the first on the enterprise zone and has been supported by Arch, the Northumberland development company, which has provided investment through the Regional Growth Fund and other assistance through its Northumberland Business Growth Programme. An initial 20 jobs could lead to many more, as a large, modern marine fuel bunkering facility is attractive to both the oil and gas and renewable energy sectors. Port of Blyth chief executive Martin Lawlor stated: “This is excellent news and reaffirms our position as a growing
World Bunkering Spring 2014
offshore energy hub. Given our excellent deep-water facilities and prime location, we believe others will follow to join the significant cluster of organisations within the sector already established around the estuary.” The Geos Group’s managing director, Barry Newton, added: “We are delighted that the construction of our new marine fuel storage facility in the Port of Blyth is now under way, which will enhance our services to existing and new customers operating in the North Sea and beyond. We chose Blyth for its strategic location and ambitious expansion plans and look forward to working with the port and regional partners during an exciting period of growth.” Peter McIntyre, Arch group managing director, said: “We are pleased to see the first development on the enterprise zone around the Blyth Estuary bringing new jobs to Northumberland and hopefully helping to attract further investment to our prime sites.”
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India
Moving ahead While concerns linger about tax and customs procedures, infrastructure projects are being initiated around India’s long coastline
H
igh taxation on marine fuel, lack of bunker infrastructure, poor quality and quantity disputes were among the issues holding India back from becoming a bunkering hub. At least, that appeared to be the consensus among speakers at the third Annual Conference on the Outlook for Bunkering and Marine Lubricants in India, held in Mumbai last December, according to a report on the Maritime Professional site. Basheer Ahmed Sayeed, CEO of Chemoil Adani, said a reduction in tax and the streamlining of customs procedures would greatly facilitate bunkering. He also said that the direct supply of bunker to ships from tanks was necessary improve efficiency and speed up deliveries. Ashok Sharma, chief operating officer of Matrix Bharat, was quoted as saying: “Just a few years back, bunkering activity hardly existed in India and refiners banked on exporting their products. Indian refiners are now looking beyond the country’s borders, thinking of establishing their footprints overseas. Today, availability of 360cSt and other qualities are no longer an issue. India is well on its way to becoming a bunkering hub, with Kochi, Mumbai, Mundra and Chennai already having direct delivery facilities and almost no tax.” B.B. Sinha, director of the Shipping Corporation of India, complained about frothing of bunkers, which he said was a
54
frequent problem and made it difficult to establish actual quantities delivered. He also complained that bunkering is the only industry where payment has to be made in advance, adding that: “The shipowners operating their vessels on the Indian coast pay more for bunkers than foreign-going vessels. Unfortunately, the short supply of bunkers… poor quality and delays in supply all go to add to the cost of bunker when shipowners are trying their best to reduce freight rates. If, in the US, gasoline prices can remain stationary over lengthy periods, then why should bunker prices be so volatile in India?” Meanwhile, Chemoil Adani has begun bunker supply operations at Chennai on India’s east coast, with a delivery of 300 tonnes of 380cSt fuel oil to the 58,133 dead weight tonnage (dwt) bulk carrier Nikolaos A in January. The company used its 600dwt double-hull barge, Jalabala. Chemoil Adani has announced its intention to also supply at Chennai’s adjoining ports, including Ennore, Kattupalli, Krishnapatnam, Pondy, Cuddalore and Karaikal. The company has two other barges in Chennai, the 300dwt Jaleswara and the 1,050dwt Vamsee. The joint venture between Chemoil and the Adani Group now supplies about 50,000 tonnes a year through its Mundra operation in north-west India, making it the country’s largest non-state-owned supplier.
Elsewhere in India, there are several bunker infrastructure projects, either being proposed or already under way. A bunker jetty is planed for Chennai. However, local fishermen are reportedly objecting to the proposal because they are worried oil spills could damage local fishing grounds. The Hindu newspaper reported a spokesman for the fishermen as going further and saying: “With the movement of more ships and barges, our nets will get cut and more fishermen will die in accidents.” A new bunker terminal is also under consideration at Mumbai. The state’s port authority, alongside local maritime consultancy firm i-maritime, is looking for a location and working out a business model. The Hindu Business Line quoted the chairman of Mumbai Port Trust, Rajeev Gupta, as saying. “We are currently evaluating two or three locations for the terminal.” He added: “Traditionally, India has never been an attractive place for establishing a bunker terminal. However, the recent reductions in excise and custom duties on fuel give us the feeling that the time is right for a facility in Mumbai.” At the port of Kandla on the northwest coast, a concession to build bunker facilities and a liquid cargo jetty, costing some $66 million, has been signed with a group comprising Aditya Marine, Rishi Shipping, Frost International and IMC.
World Bunkering Spring 2014
While 2011 and 2012 have been difficult years for Pakistan's bunker industry, some suppliers were more sounding more optimistic by the end of last year
K
arachi Port remains at the centre of bunkering activity in Pakistan. The natural harbour has a deep channel that can take tankers up to 75,000dwt at three liquid cargo berths, while the port also has two container terminals and 30 dry cargo berths. The country’s second port, Bin Qasim, is 28 nautical miles to the south-east of Karachi city. It is well placed on the shipping lanes to the Gulf and can take vessels with drafts of up to 11 metres. However, the development of Gwadar port in the west of the country is gathering pace, albeit somewhat controversially as the port company now has a large Chinese shareholding. “Gwadar is strategically important and has full potential to become a free port. We can give it a special
World Bunkering Spring 2014
status, similar to that of Hong Kong. Meanwhile, special rules and regulations can be formulated,” prime minister Nawaz Sharif was quoted as saying recently. The management of major bunker supplier Orion Bunkers told World Bunkering that it is also interested in expanding its operations at Gwadar port in the near future. Orion’s director, Adil Sher, said “We have given the bunkering industry of Pakistan a whole new dimension.” He was referring to Orion’s recently acquired shareholding in Hascol Petroleum, one of the country’s leading oil marketing companies. Sher says the partnership with Hascol Petroleum will give Orion the advantage of being able to supply “any quantity of IFO 180cSt to our valuable customers”.
Pakistan
A better year According to Sher, 2013 was a very good one for his company. In 2012, Orion’s market share in Pakistan was 50%, but last year this increased rapidly to 60%. Orion has expanded its barge fleet recently with the addition of a chartered barge, the Al-Ahmed V. Meanwhile, Zak Bunkers has signed a deal with Total Oil Pakistan to distribute Total Lubmarine products in the country. M. Arif Hanif, Zak Bunkers’ general manager, marine lubricants, was quoted as saying: “Our agreement with Total will further strengthen our position in Pakistan’s maritime industry. “We are now very competitive on price, and ship owners can take full advantage of our supply services during their vessel’s stay in Pakistani waters.”
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UAE Expansion is order of the day The bunkering community in Dubai continues to grow while, at Fujairah, new oil and LNG pipelines come into service
T
he big political news affecting the Middle East oil and bunker markets is the January relaxation of Iran sanctions following the six-month suspension of EU Council Regulation 267/2012, which imposes considerable restrictions on trade between EU member states and Iran. Dubai-based Fichte & Co Legal Consultancy says it has borne in mind that the sanctions may be reinstated if Iran does not live up to its commitments. In exchange for significant concessions regarding its nuclear enrichment programme, sanctions were loosened most significantly in three areas: 1. The carriage of crude oil from Iran to countries that benefit from US sanction waivers. These countries are currently China, India, Japan, Taiwan, South Korea and Turkey; 2. The carriage of petrochemical products from Iran; and 3. Insurance coverage for permitted trade and period of time. Fichte notes that the import and purchase of Iranian oil and petroleum is still restricted for any country that does not benefit from a US National Defense Authorization Act waiver. However, it says, shipowners are now free to ship those products to the countries benefiting from a waiver. The EU sanctions on petrochemical products are lifted entirely and, as
World Bunkering Spring 2014
a consequence, carriers are free to ship Iranian petrochemicals to EU and non-EU states. The suspension of the regulation does not, Fichte warns, provide relief from the current prohibitions concerning designated persons or entities. Therefore, trading with or chartering of vessels to the National Iranian Tanker Company (NITC) or other Iranian designated persons or entities is not permitted. Also the consultancy cautions: “It should be kept in mind that whilst the sanctions in respect of the above trades may be lifted temporarily, there are still notifications to be made and/ or authorisations to be obtained for payments above a certain level. It has been indicated by the International Group of P&I Clubs that the level at which authorisation will be required should increase so that parties may make payments to an Iranian person, entity or body of up to E400,000 without having to seek prior authorisation from their competent authority.” It adds that the suspension of the regulation allows clubs to provide cover to both EU and non-EU owned or registered vessels undertaking transportation of oil and petroleum products as well as petrochemicals. So it would that appear that bunker tankers carrying Iranian-sourced fuel can be insured.
Time will tell what effect the resumption of Iranian supplies will have on the United Arab Emirates (UAE) market, but one insider told World Bunkering that it was likely prices could soften. Asked whether the mood in the UAE reflects the cautious optimism that seems to be prevalent in the global shipping industry, Zain Jamal, chief operating officer of Dubai-based physical supplier Asean International, said: “The general mood in shipping in the UAE does seem to have an optimistic tinge when looking forward into 2014. This is mainly attributed to aggregate demand in this part of the world, ie economic trade, the re-export industry, government spending on the rise and the prominent offshore industry in the Persian Gulf. In addition, as recently in the news, the softening of the sanctions on Iran is also boosting buyers’ and sellers’ interests alike, as doors to closed trade and shipping routes are waiting to be re-opened.” Conversations within the local bunker industry were about lower volumes and a flurry of new entrants into the UAE bunker market, he said. “Costconscious shipping companies and very low cost bunker suppliers still crowd the local bunker conference halls, but business is steady and long-standing business associations prevail.” World Bunkering asked: “Will the 0.10% ECA sulphur limit have a sig-
57
UAE
nificant impact on the Middle East bunker market?” “The Persian Gulf experiences an array of shipping routes and activities, so not all bunkers supplied are for ships bound for the emission control areas (ECAs), therefore the impact is limited,” said Jamal. “Most local suppliers can accommodate the low-sulphur demand, but only a few can support the 0.10% limit consistently and successfully. As 0.10% sulphur bunker fuels are not produced in the UAE, it’s a combination of correct blending and reliable sourcing that defines the limited amount of preferred suppliers for such a specification, and the price clearly reflects that.” Among the new entrants to the UAE market is Singapore-based bunker trader Dynamic Oil Trading, which appointed Jesper Jervild to lead its new operation in Dubai. Dynamic Oil Trading’s expansion into the UAE comes less than a year since the launch of the company in Singapore. Lars Møller, CEO of Dynamic Oil Trading, commented: “We have a growing customer base in the Middle East and an increasing demand for our services, so this is the perfect time for us to establish a strategic presence here in Dubai and I am delighted that Jesper will be leading our team.” Speaking on the impending launch of Dynamic Oil Trading’s Dubai opera-
World Bunkering Spring 2014
tion, Jervild said: “Dubai occupies a pivotal position in the global bunkering world and our presence here is an integral part of Dynamic Oil Trading’s strategic growth plans. Our goal is simple: to provide our customers with the quality fuel and lubricant products they require, when and where they need them and at the right price. Our new operation in Dubai will play a central role in serving Dynamic Oil Trading’s customers in the Middle East and worldwide. He added: “We also have ambitious growth plans for our Dubai office, given the scale and importance of the bunker markets in the UAE and surrounding countries, so we would encourage any experienced and ambitious bunker traders interested in joining our team to get in touch.” Meanwhile, Danish global bunker trader and supplier Dan-Bunkering has added to offices in Denmark, China, Singapore, Kaliningrad, Monaco and the US one in Dubai. This is the group’s first office in the region, and the company said its overall objective was to strengthen the company’s position on the Middle Eastern and South Asian markets. Like Dynamic, Dan-Bunkering has also been looking to recruit locally. “We already have a great team to start with, however, we expect further recruitment to take place”, says Kasper
Fulton Stiedl, managing director of the Dubai office. In other reported moves, one company, International Bunkers Supply, has returned to the Fujairah bunker market as a physical supplier after a four-year absence. Newcomer Azerbaijani state oil firm Socar announced it was to start bunker trading in Fujairah to boost its presence in the Middle East and Africa. Meanwhile Fujairah, the biggest bunkering centre in the region, is set to house a liquefied natural gas (LNG) regasification facility. The emirate’s government has approved EmiratesLNG’s plans to build and operate the LNG import facility, capable of taking the largest LNG carriers. A company statement said: “This development will give EmiratesLNG access to global gas markets [to] strengthen supply and add extensive economic value to the United Arab Emirates by creating potential business developments and opportunities as well as jobs for the UAE.” This development raises the possibility of being able to bunker LNGfuelled ships some time in the future. Some reports describe the Fujairah market as growing at about 5% a year. Among big infrastructure projects at Fujairah, Vopak Horizon Fujairah, a joint venture between Royal Vopak, Horizon Terminals Ltd – a wholly
59
UAE owned subsidiary of Emirates National Oil Company (ENOC), the government of Fujairah and Kuwait’s Independent Petroleum Group, recently commissioned five oil tanker berth pipelines connecting its terminals to the Port of Fujairah. The company said that the new pipelines would significantly improve the speed and efficiency of operations for customers of Vopak Horizon Fujairah and strengthen the global hub status of the Port of Fujairah. The pipelines directly link the Vopak Horizon Fujairah terminal with the jetties of the Port of Fujairah through five pipelines, two dedicated to carrying clean petroleum products, two for fuel oil and one for nitrogen.
Each pipeline is about 3km long, with the petroleum pipelines having a 24-inch diameter and fuel oil pipelines a 30-inch diameter. This marks the first time that construction work is being undertaken on land newly reclaimed for expansion of the port. The project was carried out by Vopak Horizon Fujairah Ltd, ENOC’s engineering and project management division, and contractors Al Banna Engineering, as per schedule within 11 months, at 700,000 man hours, without lost-time injuries. With the opening of the pipelines, Vopak Horizon Fujairah can now operate more vessels simultaneously. The company has also recently announced that it will be adding
478,000 cubic meters (cbm) of storage capacity for crude oil. This seventh phase of expansion will feature five storage tanks for crude oil, one manifold and pipeline connection to the new very large crude carrier (VLCC) jetty in the Port of Fujairah, raising the total storage capacity at Vopak Horizon Fujairah to over 2.6mcbm. The new tanks should be complete in the second half of 2016. This expansion will provide the first crude oil tanks in the Middle East for independent storage. It will not only strengthen Fujairah as a global hub for crude oil and oil products but also increase bunker stems as the VLCCs will take on fuel at their loading port.
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60
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World Bunkering Spring 2014
Russian update
Bunkering news from Russia Olga Bogacheva reports on developments in the Russian bunker market
State companies get LNG export rights
A new law allowing liquefied natural gas (LNG) exports from Russia came into force on 1 December 2013. However, there are strict conditions and, in effect, the only companies allowed to export LNG have to be more than 50% stateowned. These companies produce gas from beneath Russian territorial waters and its continental shelf. The law, signed by Russian president Vladimir Putin also provides for LNG Russian president Vladimir Putin
to be exported by users of sub-surface resources developing fields of federal importance if their licence, as of 1 January 2013, included construction of an LNG production plant. To prevent competition among Russian exporters, LNG sales to foreign customers are coordinated by the Russian Ministry of Energy, which has the authority of the Ministry of Industry and Trade to grant licences for gas exports.
As a result of the new policy, the Rosneft and Yamal LNG project, being undertaken by Novatek, may be allowed to export LNG alongside Gazprom. Until now, Gazprom has had a complete monopoly over LNG exports. Now its exclusive rights cover only LNG supplies via pipelines. According to Russia’s Ministry of Energy, the world LNG market increased by 1.8 times between 2005 and 2012 and reached 330 billion cubic metres. The LNG share in the total gas supplies is expected to grow by 10% in 2013 and up to 13-16% by 2030. Russia’s share in this is currently only 4.6%. The Russian government has set a target of attaining 12% of the total market by 2030, which would mean annual Russian LNG exports of 64 million tonnes. The major LNG importers are from the Asian-Pacific region – Japan, South Korea, India, China – as well as Europe – the UK, Spain and France. Pechora LNG project excluded from LNG exports
The liberalisation of LNG exports has not been extended to the Pechora LNG project. The LNG plant, which is under construction on the coast of the Pechora Sea 230km from NarjanMar, is projected to produce 2.6 million tonnes a year, but this figure could be doubled. The resource base
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Offices in Rostov-on-Don, Taganrog, Yeisk and the Port of Kavkaz Fleet of 13 own bunkering barges complying with loading and supplying regulations Own storage facilities giving flexible bunker delivery options Own terminal at the Port of Temryuk, providing safe fuel loading on tankers of up to 5,000 DWT Fuel deliveries compliant with MARPOL and SOLAS regulations
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www.ybunker.com
Russian update
consists of the Kumzhinskoye and Korovinskoye deposits, with total reserves of 160 billion cubic metres of gas and 3.9 million tonnes of gas condensate. Developing this project is expected to cost between US$5 billion and US$6 billion. The project’s target market is Europe. The Pechora LNG management team had hoped that LNG export liberalisation would significantly improve the project’s prospects, but the law granted export rights to Rosneft, Novatek and Gazprom only. Now the management team is interested in a partnership with a state company and is even ready to sell a controlling share. But Rosneft is allowed to export gas produced offshore, while Novatek can only obtain licences for exporting gas from the Yamal and Gydan deposits. Gazprom is the only company which is licensed to export LNG from Pechora. But the monopoly already supplies LNG by pipeline to Europe and has new LNG projects in the Baltic and Russian far east. Rosneft’s new bunkering tanker
At the end of November, Rosneft subsidiary RN-Bunker put the modern bunkering tanker, RN Olymp, into service at Tuapse port, according to a press statement. The vessel has a capacity of 4,800 tonnes and a discharge rate of about 800 cubic metres an hour. The company says that the new tanker meets all technical requirements and safety specifications for oil
World Bunkering Spring 2014
tankers, complies with international conventions and that its area for operations is unlimited. RN Olymp delivers to various Black Sea ports. “The new tanker will strengthen the company’s position in the Black Sea bunkering market, expand the geographical extent of its operations and increase fuel supplies,” the company’s press officer said. The Russian-flagged RN Olymp is expected to work in the ports of Novorossiysk, Tuapse, Sochi (including during the 2014 Winter Olympics), Kavkaz, Taman and Temryuk as well as performing offshore bunkering operations in the Black Sea. Rosneft activities in the bunkering business are undertaken by its subsidiaries RN-Bunker and Rosneft Marine. Longterm contracts have been concluded with several large foreign shipping companies, including Maersk, CMA CGM, SEIC and Exxon Neftegas Limited. RN-Bunker provides bunker supplies in the largest ports in Russia’s far east, Black Sea and north-western regions and in the river ports of VolgaDon, Amur and Lena. Lukoil-Bunker expands in Romania and Russia
Lukoil Bulgaria Bunker has started operations at Midia port, Romania, having been granted a bunkering licence by the authorities there. The company supplies heavy fuel oil and diesel at the port from its owned barge, the Navi. The company also reported increased bunker sales at Constanta
port. Deliveries were up by 20% in November, compared with the previous month. The company supplies heavy fuel oil and diesel fuel at Constanta. Meanwhile, in Russia, LukoilBunker’s barge, the Desna, resumed operations in November after undergoing maintenance in Murmansk port. The tanker passed a Russian Registry of Shipping survey following the installation of three new dieselelectric plants. The company’s bunkering barge, Aginskoye, also continues in service in Murmansk. Like the Desna, it was reconstructed to meet MARPOL marine pollution requirements. Lukoil-Bunker is a subsidiary of Lukoil, one of Russia’s largest oil companies. Its main activity is supplying bunkers at the sea and river ports of the Russian Federation and Bulgaria. It is one of the largest bunker suppliers in Russian ports. Russian Association’s new member
Fesco-Bunker LLC has become the latest member of the Russian Association of Marine and River Bunker Suppliers. The company was granted membership at a meeting of the association’s board on 21 November 2013. A subsidiary of the Far Eastern Shipping Company (Fesco), FescoBunker was established last year to develop the bunkering business in Vladivostok port and to supply the Fesco fleet. It operates in the Russian far east ports of Vladivostok, Nakhodka, Vostochny, Posjet and Zarubino.
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Russian bunker suppliers to learn from Norwegian LNG experience
The Russian Association of Marine and River Bunker Suppliers is to launch a new educational programme, entitled “Practical experience of LNG fuel in the shipping industry”, in March. The association says that although the bunkering industry is well aware of the rapid approach of the 1 January 2015 “zero hour”, when the new sulphur limit of 0.10% comes into effect, the outlook for the provision of marine fuel supplies in the Russian part of the Baltic Sea remains uncertain. However, the need to expand the use of natural gas in various industries has attracted the attention of top government officials. And the association says that, “from experience, we know that, under a hands-on management mode, a lot of Russian projects are implemented with impressive speed”. It adds: “There are certain signs that relevant infrastructure development in Russian ports, as
well as the development of necessary regulations, may become an important goal for the government. That is why a practical understanding of LNG handling technologies has attracted the attention of bunkering market operators in the whole of Russia.” The training programme will be delivered in Norway, because, the association says, “this country is the leader in LNG use in the shipping industry; it has already developed LNG infrastructure and acquired the most broad experience in this field”. Programme participants plan to visit working facilities – terminals, shipping yards, design centres etc – as well as enjoying an outing on an LNGfuelled ferry. Innovation Norway, St Petersburg, is the association’s partner for the programme. Russian participants include representatives from vertically integrated companies, independent bunker suppliers and managers of ports under construction.
Russian update
Fesco-Bunker’s main customer base is made up of internal clients within Fesco, whose fleet takes 120,000 tonnes of oil products a year. In addition, the company provides services to other companies’ vessels, and it is expected that the number of independent clients will grow, eventually outnumbering internal clients. In Vladivostok, Fesco-Bunker operates from Fesco’s Vladportbunker oil terminal. The terminal is located in the port and incorporates two berths and three storage tanks with a 5,000 tonne capacity. The annual capacity of the bunker terminal is about 450,000 tonnes, but work is under way to increase this to 1 million tonnes. An additional 20,000 cubic metre storage tank is being constructed. Fesco-Bunker uses vessels from the Fesco fleet for its operations. A total of 31 tankers, with a total capacity of over 48,000 tonnes, are used in the bunkering operations.
Lake Baikal urged to use gas fuel
Sergey Donskoy, head of Russia’s Ministry of Natural Resources and Environment, has put forward a proposal for vessels sailing on Lake Baikal to switch to gas fuel. He was speaking at a meeting of the interdepartmental commission for Baikal protection. He ordered the governments of Irkutsk Oblast, Zabaikalsky Kray and Buriatia to submit relevant proposals to the next commission meeting, to be held in the first quarter of 2014. According to government statistics, there are currently 6,459 small craft used on Lake Baikal and the Irkutsk basin.
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Rosmorport and Gazprom Neft have signed an agreement of collaboration to develop an oil terminal for Novoportovskoye oil field in the Russian Arctic. Gazprom Neft said in a statement that Alexander Dukov, chairman of the board, and Andrey Tarasenko, general director of Rosmorport, signed an agreement of collaboration on the design of an oil-handling complex to serve the field with an annual capacity up to 8.5 million tonnes. Rosmorport will be responsible for design drafting and obtaining state expertise for the handling terminal,
which it will manage once completed. The facilities include offshore and land navigation equipment, a marine traffic control system, landside port infrastructure facilities, offices and other accommodation to support the work of government agencies. Gazprom Neft is funding the complex, which should be completed by the end of 2015. The terminal will be located near Cape Kamenny on Yamal. A 100km pipeline will connect the production field with the port. Novoportovskoye is one of the largest Yamal deposits, with expected reserves of 230 million tonnes of oil and 270 billion cubic metres of
New LNG plant planned for Vyborg area
Gazprom has announced plans for a plant to be built near Vyborg in the Leningrad region, with construction starting in 2015 and completion in 2016, according to a ITAR-TASS news agency report. Annual output could reach 1 million tonnes by 2020. The investment is expected to be approved by March 2014. Some of the LNG produced at Vyborg is expected
gas. The first oil in Novoport was produced in August 2012. Gazprom Neft successfully completed test drilling in September 2013. Full-scale drilling will begin this year to prepare for industrial production. The peak annual output of oil – 8.5 million tonnes – will be reached after 2020. The viability of all-year transportation of oil from Novoport was confirmed in 2011, when Gazprom Neft experts undertook an experimental voyage from Sabetta port, in the north-east of Yamal, to Kamenny, 400km to the south, on the ice-breaker Vaigach. Oil will be taken to a transshipment point near Murmansk and then to Europe.
Russian update
Arctic oil terminal project agreed
to be used as marine fuel. Vyborg is a small general cargo port with an annual turnover of about 3 million tonnes. Located in the north-eastern part of the Finnish Gulf, 134km from St Petersburg and 10km from the Finnish border, it is connected to Lake Saima in Finland by the Saimensky Canal. Cargoes are delivered to the port by sea and river vessels, road and rail.
Vyborg
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Novatek says that construction of the Gas Condensate Fractionation and Transshipment Complex in Ust-Luga port on the Baltic Sea has been completed and that commissioning tests are under way. The second phase of the complex includes another stable gas condensate (SGC) fractionation unit, with an annual capacity of 3 million tonnes, and an additional berth. When the second phase is operational, capacity is expected to double to 6 million tonnes annually. A company spokesman quoted the chairman of the Novatek board, Leonid Mikhelson, as saying: “Construction of the complex in Ust-Luga is important for expansion of Novatek’s processing capacity to meet growing production of gas condensate. Full complex capacity provides an opportunity to preserve the level of existing vertical integrity of our production chain.” Novatek started operations at the first phase of the Ust-Luga complex on 19 June last year. The facility has an annual capacity of 3 million tonnes and includes a SGC processing line, crude oil and products storage tanks with a total capacity of 520,000 cubic metres, a deep-water berth equipped with loading arms to accept tankers with deadweight up to 120,000 tonnes, engineering systems refining equipment and an administrative area. The Ust-Luga complex is able to process light and heavy naphtha, jet fuel, gas oil and marine fuel and to export products by sea. Currently, it processes its entire SGS output at the Purovsky condensate processing plant.
Novatek is an independent gas producer and the second largest in terms of gas output in Russia. Founded in 1994, the company explores, produces and processes gas and liquid hydrocarbons. The company’s oil fields and licensed areas are located in Yamalo-Nenets, Russia’s most important natural gas-producing region, accounting for about 90% of gas output in Russia and 17% of world production. Novatek is an open jointstock company founded in compliance with the laws of the Russian Federation. Its shares are traded in Russia at Moscow Central Stock Exchange. Since 2010, Ust-Luga’s turnover has doubled annually. The forecast for 2013 is 70 million tonnes. A road junction connecting the new multi-purpose cargo-handling complex at Bronka with a nearby motorway was opened on 16 December, offering direct road access to the berths. Nikolay Asaul, deputy minister of transport, said at the opening: “I’m sure that in two years exactly, we will open the first phase of the port, which has a capacity of 1.45 million twenty-foot equivalent units (teu), standing in this very place.” When development at Bronka is completed, the cargo-handling complex will have an annual throughput of 1.9 million teu. The majority of goods will be delivered to Bronka by road. Construction of the complex is seen as being of strategic importance for the development of transport and port infrastructure in Russia in general and particularly in St Petersburg.
Russian update
Second phase of Ust-Luga complex complete
Novatek
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Russian update
Seeking answers ECOTek CEO Dmitriy Galdanov poses five questions for the European Commission challenging the sulphur limit
D
mitriy Galdanov is CEO of Russian bunker supplier ECOTek in St Petersburg. This article reflects his personal view on the impending 0.10% sulphur limit in emission control areas (ECAs), which he clearly sees as being the direct result of pressure from the European Union, and specifically the European Commission. Galdanov is very sceptical about EU initiatives to reduce sulphur emissions from ships. He says that, as a European citizen, he certainly agrees that reduction of sulphur emissions is necessary. However, he says that he is “anxious and puzzled” by what he sees as the undue haste and the unduly blunt approach adopted by EU bodies in trying to reach their goals. An expert in marine fuels, Galdanov was awarded a diploma as a military specialist in fuel and lubricants in 1990. He subsequently studied economics. ECOTek has been a bunker supplier since 2005. The company supplies a significant share of total marine fuel volumes in St Petersburg. Galdanov argues: “Almost all professionals in the shipping and bunkering industries are sure that the restrictions on sulphur content in marine fuel, which are due to come into force in 2015, will lead to bad and irreversible results. Various forecasts have been published concerning all possible
World Bunkering Spring 2014
aspects, from environmental to economic effects. Most of them, excluding optimistic reports from EU bodies, describe depressing scenarios.” Galdanov claims that the flow of statements pouring from Brussels does not offer answers to some very simple questions that could help to clarify the situation. He wants to ask: • Increased
marine transportation costs will clearly cause a switch of cargo to the roads. This, however, will lead to the expansion of road networks and reconstruction of motorways built in the previous century. Has anybody estimated the environmental consequences of the thousands of tonnes of additional asphalt, tarmac and other building materials that will be needed? • Goods from every bulk carrier will be transshipped on trucks. Every truck has 12-16 wheels. How much rubber will be required and by how much will emissions increase as a result of producing, and later recycling, the required extra tyres? • Diesel fuel is manufactured from heavy oil. Heavy fuel oil can either be a ready-to-use product or a raw material for diesel fuel production for the shipping industry. Hydrocracking [of gas oil into clean-burning jet fuel, diesel and gasoline] is a very
expensive process, consuming a significant amount of hydrogen. Has anybody calculated how much energy will be spent for this purpose and how much will it cost from an environmental point of view? • Has anybody compared the safety of using heavy fuel oil, diesel fuel and liquefied natural gas (LNG)? A marine fuel spillage may cause different consequences, depending on the fuel type. Heavy fuel oil, even in large amounts, spilt on the coast or at sea is very unpleasant but not catastrophic. It can be collected or, if all else fails, will biologically decompose eventually. Diesel fuel is a flammable material and its film may cover gigantic areas. But LNG is the most dangerous fuel. It is heavier than air and, if it leaked, would fill all underground spaces within a port area. It is impossible to predict how long it would remain there. It is very likely that explosive mixtures would form. But, unlike a spill of heavy fuel oil, LNG is invisible. Nobody would know where the danger lay. Has anybody analysed these scenarios? Are there any safety precautions that should be taken? • Lastly, how will countries deal with the economic and social consequences of a declining shipping industry? Is there not a risk that loss of port jobs could lead to social unrest?
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Innovation
Space age boost for LNG bunkers Applying rocket technology to shipboard LNG use
M
ajor US aerospace company Lockheed Martin says technology it developed for the NASA space programme may be able to simplify marine LNG bunkering. The company says an auto-coupler solution developed to automatically transfer cryogenic fuel for the Atlas V launch vehicle could be adapted for use with LNG, allowing for safe and simple bunkering of the super-cooled fuel in port. Already the company is making LNG tanks for offshore supply vessels, with orders from Wärtsilä and Harvey Gulf International Marine. The company's vice president Space & Cyber programmes, Rob Smith, says: "There is a growing need for storing and transporting LNG to consumers. Having developed complex cryogenic external tanks for NASA for years, it made sense for us to apply that technological expertise to the liquefied natural gas tank market.
Triple-fuel multi-purpose ships
Nantong COSCO KHI Ship Engineering Co (NACKS) and Lloyd’s Register (LR) China are to jointly develop an LNG-fuelled 28,000 dwt general cargo ship design, built to LR’s requirements, “that will meet current and future environmental
World Bunkering Spring 2014
targets”. The ship will also be able to burn heavy fuel oil or distillate. The design project will incorporate new propulsion systems (dual/triplefuelled) and will meet new operational requirements. This design will be an evolution of NACKS’ latest 28K multipurpose vessel (MPV) design. LR will be applying its risk methodology for novel technology processes, which provides a proven pathway through the complexity of the technical risk assessment. The goal is for LR to issue an approval in principle (AIP) for the new design including approval of the LNG as fuel systems. Luis Benito, LR’s Head of Global Marine Marketing, commented: "This project is the latest example of our efforts to work with key partners to develop safe, LNG fuelled deep sea ships. Assessing and addressing risk is where we really add value as we transfer five decades of leadership in LNG carrier classification into supporting the exciting opportunities offered by gas for mainstream shipping." The vice president of NACKS Mr Nishiyama, said: "We are focused on the development of green ship technologies, especially using LNG as fuel for merchant vessels. Co-operation with classification pioneers, LR, and sub-vendors, knowledge, experience and research resource can be definitely shared in order to keep pace with
leading expertise in this segment, and this will be beneficial for both parties involved to find practical, feasible technology solutions fit for customers’ expectations in the future. Castrol set for new lube launch
Castrol Marine says it will launch its “considered technical response to the corrosion issues that can arise in modern two stroke marine engines, especially when ships are slow steaming” in May this year. Castrol says its Cyltech CL 100 ACC (Advanced Corrosion Control) is a newly formulated 100BN lubricant developed for the latest generation of engines. The company says the new lube's introduction to the portfolio follows rigorous testing and trials of new ACC technology that drew on Castrol’s early identification of corrosion in the latest engine types when running on higher sulphur content fuels at part load. Castrol adds that its confidence that Cyltech 100 ACC is the right oil for the right job is based on significant wear reductions seen with this new technology compared to its previous generation lubricants. Cyltech CL 100 ACC will be made available to customers in major ports from May 2014. “Castrol Cyltech CL 100 ACC is not simply an existing oil that has been up-treated to give a higher BN,”
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youtube.com/user/NHSTevents1 @TWevents_NHST +44 20 7029 4163 info@tradewindsevents.com tradewindsevents.com
TradeWinds is delighted to announce it will be hosting the TradeWinds Shipowners Forum as the opening keynote of Posidonia 2014 in the Metropolitan Expo Centre on 3 June 2014. Following a sold-out, record attendance on the opening day of Posidonia 2012, the Forum will once again set the intellectual agenda for the entire week and attendees can expect a stimulating and inspiring start to shipping’s most important week of the year. The Forum is an interactive discussion led by a panel of experts and designed to reflect TradeWinds’ readers priorities and concerns, comprising two presentation / discussion sessions combined with high-level networking breaks. Attendance is by invitation. To register your interest to attend, please email info@tradewindsevents.com
Sponsors
Rigid sail passes tests
Eco Marine Power (EMP) says that its innovative rigid sail technology for ships - EnergySail - has passed a range of function tests which were conducted at the Aquarius Innovation Lab in Osaka, Japan. EMP describes EnergySail as a “unique renewable energy platform for shipping designed...that is able to harness the power of the wind and sun”. The system can be used either as a stand-alone device or as part of a larger array of up to eight EnergySails . During lab testing a number of unique features incorporated into the design of the patent-pending EnergySail were evaluated including a device to protect the EnergySail from sudden strong wind gusts. Also confirmed during testing were the control algorithms which will be used to fully automate the operation if the EnergySail via a computer control system which is being developed jointly between KEI System Ltd (KEI) of Osaka, Japan and EMP. EMP says completion of these lab tests is a significant milestone for the
World Bunkering Spring 2014
and the engine is operated at lower loads. Acid neutralization has proved critical in part load conditions when using high sulphur fuels. Cyltech CL 100 ACC includes a pioneering technology formulated to deliver advanced corrosion control. This ACC technology contains innovative surface acting agents, protecting cylinder liner surfaces more effectively and longer than our previous generation cylinder lubricants.” EnergySail development project and clears the way for the commercial production once sea trials, scheduled for this year, have been completed. It also paves the way for the commercial deployment of the Aquarius MRE System which will use an EnergySail array to reduce fuel consumption on ships such as passenger ferries, cruise ships, bulk ore carriers and oil tankers. "We are extremely pleased with the test results which have confirmed that we made the right design choices regarding the EnergySail and the devices that will be connected to it," said Greg Atkinson, Director at Eco Marine Power. "We have also been encouraged by some very positive feedback that we have received from a number of shipping companies and the increasing interest from companies and organisations around the world in the technologies we are developing". The lab testing phase for the EnergySail was supported by the Japan Ship Machinery & Equipment Association. (JSMEA). The Aquarius Innovation Lab was jointly established by KEI and
For several years, Castrol has been gathering evidence of cold corrosion where mid-range BN cylinder oils have been selected for slow steaming as a single solution for HFO across a full range of sulphur content and has been a lone voice in advocating the use of higher BN. It notes that “progressively restrictive ‘no objection’ circulars from MAN Diesel & Turbo and Wärtsilä on mid-range oils” have validated its position.
Innovation
says Jonathan Hutchinson, Castrol Marine Marketing Director. “It is based on a new chemistry that we have been developing over the past two to three years to reflect technical challenges set by modern super long stroke engines. These operate at higher pressures causing higher dew points and increased sulphuric acid formation, which in turn can result in severe corrosive wear, particularly where higher sulphur fuels are used
EMP to develop sustainable shipping technologies. The facility, located in Osaka, Japan, includes an indoor test centre plus an outdoor area for evaluating the performance of hardware such as solar panels, rigid sails & wind power devices. The companies say that the facility will conduct research and design plus product development activities related to marine renewable energy systems and fuel saving technologies. Tsukasa Nakagawa, President of KEI System said “The Aquarius Innovation Lab will allow us to develop with EMP a range of innovative technologies that will reduce fuel consumption on ships and also lower the noxious gas emissions from these vessels.” Greg Atkinson of Eco Marine Power said: “The establishment of the Aquarius Innovation Lab is another major step forward for Eco Marine Power and strengthens our relationship with KEI System. We look forward to working with KEI in bringing a range of innovative renewable energy and fuel saving solutions to the shipping market.”
75
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IT
Monjasa picks GL software Bunker fleet operator to use ShipManager for a wide range of processes
D
enmark-based bunker supplier Monjasa DMCC has chosen the GL ShipManager system to optimise and streamline its ship management practices. Monjasa operates a fleet of 18 vessels, delivering fuels and lubricants to customers around the globe. It says it will implement the system both onboard and onshore to “maximise the efficiency of its technical, quality and safety management processes as well as its crewing and procurement administration”. GL ShipManager is an integrated ship management software solution, supporting technical management, procurement, quality and safety management and crewing. Using intelligent data synchronisation, GL ShipManager ensures that the same information is available onboard and onshore. It also interfaces easily with other GL ship management software and tools, as well as with standard accounting and document management systems. “At Monjasa, we want to offer our customers the flexibility they need, through fast uncomplicated procedures. We need to be ready to go into action anywhere in the world at a moment’s notice, delivering the right product at the right place at the agreed time,” says Monjasa's
World Bunkering Spring 2014
technical manager Igor Bondar. “GL ShipManager allows us to optimally utilise our flat organization and network of offices around the world, by making sure that we have the right information to hand wherever we need it. “Monjasa’s focus on finding and using the best products, as well as their focus on innovation, makes them an ideal partner,” says Sebastian Eggert, account manager at software provider DNV GL. “GL ShipManager will provide them with the right foundation to manage every aspect of their shipping activities, increasing efficiency and transparency and giving them the systems to scale up as they grow.” Linking flowmeters to engine management systems
Fuel consumption has traditionally been worked out by dipping tanks and reading the volumes from tables. Now, however, owners are increasingly moving to the use of flowmeters linked to software that allows realtime monitoring of fuel consumption, according to Colin Cheeseman, equipment manufacturer Krohne’s international product manager. Cheeseman says that there has been strong demand over the past year for the company’s flowmeters and also for its EcoMATE software.
This package is aimed at providing easy-to-understand monitoring and reporting of consumption of fuel and bunker received. The move to more accurate monitoring is partly driven by pending requirements from the International Maritime Organization (IMO) or other authorities and by the need to benchmark consumption between ships. Benchmarking based on emissions may also be part of the future for charterers choosing shipping companies, according to Krohne. It says that accurate measurements and monitoring of fuel consumption is crucial to obtain full control over a shipowner’s use of fuel. All relevant data is logged and stored in the system database. At any time, the operator may view trends or print data in pre-defined reports. These reports can be exported as data files or emails transmitted to an office onshore. Reporting can also be automatically set up, eg as a noon report. Krohne claims this can save valuable time and ensure that reporting routines are performed regularly. The EcoMATE system monitors and stores detailed information about fuel usage and generates reports that allow ship- and shore-based staff to not only see a detailed picture but to see it in real time.
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Legal
Waste not A recent legal judgment in the European Court of Justice sounds like good news for bunker suppliers, while industry players wait to see the outcome of a temporary ‘ceasefire’ on Iranian sanctions
R
otterdam-based law firm AKD says recent guidance handed down by the European Court of Justice, which rules that offspec fuel oil does not have to be handled as waste, is a triumph of common sense that will be welcomed by all suppliers of fuel oils and bunkers. Shell Nederland and Shell Belgium were disputing a ruling by the Dutch environmental authorities (ILENT), which wanted to force them to handle a parcel of diesel oil rejected by a Belgian client as waste, when, in fact, Shell intended to up-blend the fuel to specification for selling on. Carel van Lynden, a partner with the shipping and offshore team at AKD in Rotterdam, commented as the ruling was announced: “This is a good decision for bunker suppliers. This case reverses the very strict interpretation that ILENT had placed on off-spec bunkers. By insisting they were classed as waste, they invoked all sorts of domestic and EU regulations for their handling, which imposed disastrous and totally unnecessary costs on the bunker industry.” The EU court ruling will have a major impact in the key northern European bunker hub of Rotterdam, where a lower Dutch court and, subsequently, ILENT had interpreted EU Regulations (259/93) that describe ‘waste’ as a “substance or object …which the holder discards or intends or is required to
78
discard literally with respect to off-spec bunkers”. Says van Lynden: “The problem is that when off-spec bunkers are defined as waste, all sorts of environmental regulations kick in. For storage, transportation, blending and recycling of waste, prior permission from ILENT is required. Such permission will only be given to a licensed waste collector or processor. A regular bunker supplier cannot take the bunkers back unless it has such licences, which, of course, it has not. So the value of the off-spec bunkers to the supplier drops to nil, and extensive costs have to be incurred for debunkering and processing.”
This literal interpretation of EU waste regulations has resulted in odd situations, AKD says. For instance, bunkers with an aluminium/silicon content of 82 (80 being the 2005 industry standard), which were refused by a vessel, could only be debunkered by a licensed waste collector. The normal practice in the Netherlands until then would be debunkering by the supplier, blending with a parcel with a lower aluminium/silicon content and resale on the market. There has even been a case where the master of a vessel wanted to reject high-sulphur fuel because low sulphur had been ordered, and where, for the mere reason that the master wanted to “discard” the
World Bunkering Spring 2014
had no use for the Belgian buyer, but that was not decisive: the buyer handed the parcel back to Shell against repayment of the purchase price. The buyer did not ‘discard’ the parcel in the sense of the regulation, ie a manner of discarding that is detrimental to the environment. The fact that the parcel retained a considerable value was of importance. Shell took the parcel back for the purpose of up-blending it to specification. The European Court decided that the strict waste legislation does not apply to cases like this, where the parcel can easily be reconditioned and resold for a considerable value. Marpol update
New Marpol/Safety Of Life At Sea (SOLAS) rules came into force on January 1, which prohibited the blending of bulk liquid cargoes. SOLAS regulations VI/5-2 prohibit the blending of bulk liquid cargoes during a sea voyage, Skuld P&I Club explained in a circular to its members. The process was defined as one “whereby the ship’s cargo pumps and pipelines are used to internally circulate two or more different cargoes with the intent to achieve a new product designation”.
Iranian sanctions
A recent ‘ceasefire’ as far as sanctions against Iran are concerned has resulted in some lightening of restrictions on the movement of oil cargoes from the country. On 7 January 2014, the European Union published proposals to lift some aspects of the sanctions by amending Regulation (EU) No 267/2012. According to Skuld P&I Club: “It remains to be seen how quickly the proposal will result in a binding regulation and whether the drafting will change. “However, if the law is amended in the way that is proposed, it will have the following results in relation to Regulation 267, including the lifting of: the prohibitions under articles 11.1(c) and (d) on transport and insurance/ reinsurance activities in respect of crude oil and petroleum products that are of Iranian origin or imported from Iran; the prohibitions in article 13 on the import, purchase, transport and insurance of petrochemical products; the prohibitions in article 15 on trade with the government or central bank of Iran, or those acting on their behalf, in gold, precious metals and diamonds; the prohibitions in article 37b on making available vessels designed for the transport or storage of oil and petrochemical products to any Iranian person or entity or to others where the vessel is used to carry or store Iranian oil or petrochemical products.”
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“The exception,” it continues, “is that a master will not be prohibited from making cargo transfers where either the safety of the vessel or the marine environment are concerned.” Any production process on board a ship during a sea voyage is prohibited, the Skuld advisory explains. This is defined as any deliberate operation whereby a chemical reaction between a ship’s cargo and any other substance or cargo takes place. This prohibition does not apply to the production processes of cargoes used in the search and exploration of seabed mineral resources on board such specialist vessels. “Members active in the bulk liquid cargo trade should take due note, in particular where the trade may involve requests from charterers/ shippers or other cargo interests for the blending of cargoes on board vessels,” the club says. It adds: “It would be prudent to review any existing charter arrangements and terms that may make express reference to such operations and to ensure future fixture terms are suitably amended to take account of these new SOLAS regulations.”
Legal
perfectly sound high-sulphur fuel, it was categorised as waste. The European Court came to the rescue of suppliers in December. In cases C-241/12 and 242/12, the court has ruled that such literal interpretation is wrong. The case concerned contamination of a parcel of ultra-lowsulphur diesel (ULSD) with remnants of methyl tertiary-butyl ether (MTBE). As a consequence, the flashpoint became too high, and the ULSD was therefore off spec. This was discovered when the parcel had been delivered to the buyer in Belgium. The buyer requested Shell to take the parcel back. Shell did that and re-transported the parcel to the Netherlands for up-blending to specification. ILENT found out and qualified the parcel as waste. In subsequent proceedings before the court of Rotterdam, Shell argued that the qualification as waste was wrong, because ILENT was misinterpreting the EU regulations. The Rotterdam court asked the European Court to give guidance. The European Court ruled that, in determining whether a substance is waste, one should take into account whether that substance is still of use to the holder. In the Shell case, the parcel
Skuld also points to “a tenfold increase in the authorisation thresholds under article 30 for transfers of funds that are permitted in relation to Iran, and a power for states to authorise the release or making available of funds or economic resources, in derogation from the Iranian asset freezing provisions of paragraphs 2 and 3 of article 23, where necessary for the execution of contracts to import, purchase or transport petrochemical products of Iranian origin or imported from Iran”.
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Equipment & Services
New gearbox promises fuel savings Wärtsilä says a consumption reduction of 8% was achieved in sea trials
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ngine manufacturer Wärtsilä has launched a new two-speed marine gearbox, which it says offers notable economic and environmental benefits. According to Wärtsilä, the product will serve vessels having multiple operational modes or reduced transit speed, including among others ropax ferries, offshore support vessels, tug boats, and fishing vessels. Wärtsilä says that, compared to a single mechanical propulsion system, a fuel consumption reduction of 8% was verified with during sea trials. It adds: “It is anticipated that further reductions of up to 15% can be achieved, with a similar lowering of nitrogen oxide (NOx) and sulphur oxide (SOx) exhaust emissions. These cost savings and environmental benefits are achieved, the manufacturer says, by operating the ship’s propeller at low speed when maximum vessel speed or propeller thrust is not required. At the same time, the engine speed is kept constant, thereby allowing the electric power generation from the Power Take-Off on the gearbox to remain uninterrupted. The Wärtsilä two-speed gearbox is also expected to reduce noise emissions by as much as 20dB both inside the ship and externally. This allows greater comfort for passengers and crew, while
the reduced underwater radiated noise is important for fishing and seismic vessels, and is beneficial to marine life in general. The first ship to use the new gearbox is a rescue vessel owned by the Rescue & Salvage Bureau of the People’s Republic of China’s Ministry of Transport. Wärtsilä says that sea trials have been successfully carried out at the Huangpu shipyard in China. The vessel operates mostly in low speed mode and reaches full speed only for limited periods of time. "The Wärtsilä that its new 2-stroke, low pressure, dualfuel engine has been selected by Danish shipowner Terntank to power two new environmentally advanced, 15,000 dwt tankers. These will be the first installations of this engine. When operating in gas mode, nitrogen oxide (NOx) emissions from the Wärtsilä RT-flex50DF engine are at least 85
percent below those specified in the current IMO regulations. CO 2 emissions are some 25% less than those of a conventional marine engine running on diesel fuel, while the sulphur oxide (SOx) and particle emissions are negligible at almost zero percent.
World Bunkering Spring 2014
Japanese classification society ClassNK has released the second version of its Guidelines for Gas Fuelled Ships. It says the updated version reflects the requirements for the design of natural gas fuelled ships based on the outcome of discussions held at IMO regarding the International Code of Safety for ships using gases or other low flashpoint fuels (IGF Code). ClassNK says that, with regulations curbing atmospheric pollution and greenhouse gas emissions growing stricter amid stronger calls for a greener shipping industry, the shipping industry is turning towards the use of natural gas as a potential cleaner alternative to liquid fuel oil. Expected reductions in gas prices due to the recent development of nonconventional energy resources such as shale gas has also led to an increase in gas fuelled ship newbuildings and projects. For this reason, discussions on the IGF Code at the International Maritime Organization (IMO) have been accelerated in order to extend safety regulations to this growing sector of the industry. The Code will govern safety aspects of the application of natural gas for propulsion and auxiliary purposes. A draft of the Code has been in place and regularly updated since 2009, and is set to be finalized by 2014.
ClassNK published the Guidelines for Gas Fuelled Ships to provide comprehensive information on key design features including bunkering, hull structure, fire safety, and explosion prevention measures in line with the results of IMO discussions on the IGF Code. The guidelines are available free of charge via the ClassNK website: www.classnk.com ABB heat recovery systems for boxships
Power and automation technology group ABB it won two orders in the third quarter of last year to provide waste heat recovery systems, each powered by a power turbine generator (PTG), for fourteen new 8,800 TEU container vessels. The orders are worth over $23 million in total. ABB says the systems will increase the ships' power output by up to 4 percent The first seven post-panamax vessels will be built at Dalian Shipbuilding Industry Co. Ltd., (DSIC) and the other seven vessels at New Times Shipbuilding Co, for China International Marine Containers Group and Mediterranean Shipping Co (MSC). When delivered, in 2015 and 2016, the ships will serve under a long-term charter agreement to MSC, one of the world’s largest container ship owners.
ABB says that a waste heat recovery system (WHRS) to increase energy output onboard ships is becoming an increasingly viable means of reducing fuel costs. In marine propulsion plants, around 50% or more of the energy from fuel is lost to heat when converted to mechanical work by the main engine. By supplementing a ship’s main propulsion plant with a waste heat recovery solution, up to 4% of the lost fuel energy can be recovered and converted into electricity. More efficient energy use also reduces CO2 emissions in relation to the engine’s mechanical power output. ABB’s scope of supply in the waste heat recovery system with a PTG consists of a PTL 3200 exhaust power turbine with control valves, alternator, reduction gear and dynamic compensator consisting of an ACS800 drive with a (step down) feed transformer and a breaking resistor bank. The package also includes two A185-L turbochargers. The electrical output of the system is 1.65 megawatt (MW). “The high efficiency of ABB’s turbochargers gives customers not only the option of a waste heat recovery system in the first place, but also the possibility of using this system at lower loads,” said Oliver Riemenschneider, who heads up ABB’s turbocharging business.
Equipment & Services
ClassNK updates LNG guide
Shoreside power at Los Angeles
The US port of Los Angeles, “with more berths for ships to plug into shoreside electric power... than any other port in the world”, said it was “fully ready” for its terminal operators and ocean carriers to meet California’s new clean air requirements on 1 January. “The Port developed and invested heavily in Alternative Maritime Power (AMP – the port's shoreside power system) ahead of the regulations to bring the tremendous environmental benefits of shoreside power to our region,” said Gary Lee Moore, Interim Executive Director of the Port of Los Angeles. The new California regulations set shoreside power plug in requirements, widely known as “cold ironing”, for container and refrigerated ship fleets, as well as cruise ships. At least 50 percent of fleet vessel calls must shut down their auxiliary engines and run their vital onboard systems by plugging into shoreside power. The regulation also requires that each fleet reduce its total at-berth emissions generation by at least 50 percent. These requirements will rise to 80 percent by 2020. The ports says that ships equipped to connect to AMP can now do so at all eight container terminals and the port’s World Cruise Center. About US$180 million has been spent over the last decade on the port's shoreside power infrastructure.
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Posidonia 2-6 June 2014
Metropolitan Expo, Athens Greece
it's a great deal The International Shipping Exhibition
Organisers: Posidonia Exhibitions SA, e-mail: posidonia@posidonia-events.com
www.posidonia-events.com
Preview: APM
Asia’s biggest maritime event This year’s Asia Pacific Maritime trade show also features three days of conferences and presentations, including a half-day IBIA seminar
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sia Pacific Maritime (APM) is billed as a one-stop market fo r the re g i o n ’ s maritime community, showcasing the latest in marine engineering and port technology, and covers the shipbuilding , marine, work boat and offshore sectors. This massive exhibition of marine technology can be seen from 19-21 March and takes place at Marina Bay Sands, Singapore. This latest, 13th, offering of the biennial event incorporates a full three-day programme of conferences and seminars. The first day opens with a ‘Shipowners’ focus’, when a panel of leading ship-owners will address six key issues in 60 minutes. The moderator will be World Bunkering’s editor, David Hughes, and the panel will consist of: Mahesh Iyer, vice chairman, Transworld Group, Singapore; Thomas Kriwat, chief executive officer, Mercantile Shipping Company, Sri Lanka; Neal de Roche, vice president, Asia Pacific, Wilhelmsen Ship Services; and Jeremy Nixon, chief executive officer, NYK Line, Singapore. The panel will look at how the Asian region’s container lines are responding to the various challenges – regulatory and commercial – that are facing them.
World Bunkering Spring 2014
An afternoon session will look at the prospects for dry bulk and break bulk shipping in the Asia Pacific region, with particular reference to China and Indonesia. On the second day, there are three seminars. The first is on green shipping, with the environmental theme continued by the second of the day’s seminars, on water ballast treatment. The event of the day is a double bill. The first part is a seminar on maritime security. This is followed by one on marine propulsion, which looks at energy efficiency and environmental compliance, both issues of interest to World Bunkering readers. The final opens with a forum, ‘Bunkering in Asia’, organised jointly by Reed Exhibitions and the International Bunker Industry Association (IBIA) (Asia). The forum’s moderator is Douglas Raitt, chairman of the IBIA (Asia) Branch Executive Committee, who will give the opening speech. IBIA’s chief executive, Peter Hall, will speak on ‘The importance of quality in the bunker supply process’. He will be followed by IBIA’s chairman, Simon Neo, who will cover ‘Supply and availability of bunkers in Asia’. ‘Bunker quality trends in Asia and strategic implication’ is the subject of a presentation by Captain Rahul Choudhuri, chief operating officer, Asia, Middle East and Africa, of
DNV Petroleum Services (DNVPS), Singapore. The final presentation, by Trevor Harrison, maritime arbitrator, mediator and legal consultant, on ‘Dispute resolution and arbitration’ will be followed by a panel discussion. The rest of the day is taken up with high-powered seminars on: ‘Shipyards and shipbuilding’; ‘Gas transportation’ and, lastly, ‘Maritime communication technology’. All in all, APM provides a comprehensive and authoritative series of events that give a good insight into the main challenges facing shipping. It will also provide a unique networking opportunity, and a chance to meet up with several IBIA officials and Council members. For more information, visit http://www.apmaritime.com/en/ Conferences/
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Preview: IBC
Strong line-up for IBC The 35th International Bunker Conference, Copenhagen, has brought together a strong panel of speakers
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he 35th International Bunker Conference (IBC) will held in Copenhagen, Denmark, from 2-4 April at the recently renovated Scandic Hotel Copenhagen. This year’s IBC has the theme ‘2015 in a flash’ and features a strong line-up of speakers to present a comprehensive view of today’s bunker industry. Conference chairman will be Robin Meech, managing director of independent consultancy Marine and Energy Consulting, which focuses on the marine industry with an emphasis on the transport of energy. He is co-author of Bunkers – An Analysis of the Technical and Environmental Issues and Outlook for Marine Bunker and Fuel Oil to 2035, both published in 2013. He has been a member of the IBC programme committee since 2007 and is a board member of the International Bunker Industry Association (IBIA). The opening address will given by Jan Fritz Hansen, deputy directorgeneral at the Danish Shipowners’ Association. Meech will speak on ‘What is new and coming up with regards to fuel and regulations’. He will be followed by David Owen, author of The Conundrum: How Scientific Innovation, Increased Efficiency and Good Intentions Can Make Our Energy and Climate Problems Worse. A staff writer with The New Yorker, he is the
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author of more than a dozen books, including Green Metropolis, about the environmental value of urban density. Chris Midgley, general manager, oil markets analysis, at Shell International Petroleum Company will present a paper on ‘Fuelling the future’. He has over 20 years’ experience in the oil industry. He was recently appointed head of oil markets analysis and chief economist to Shell Trading. Søren Christian Meyer will talk on the availability and pricing of distillates. He was appointed vice-president for OW Bunker’s physical division last year. He works with the leadership team to support further growth and development of the company’s physical supply operation globally. Jos Steeman, managing director at Vopak Oil Rotterdam, will look at storage and handling and some logistical challenges and their effect on quality. Kjeld Aabo, director, customer support, promotion and sales, marine low speed, at MAN Diesel & Turbo and Torbjørn Lie, senior sales manager at Wärtsilä Ship Power, will consider how to deal with changeover issues on various types of engines. Aabo is promotion director for twostroke engines in Copenhagen. He has been the chairman of the fuel working group of CIMAC, the International Council on Combustion Engines, for
over 20 years and is a member of the International ISO8217 Fuel Oil Group, representing Denmark. Lie has over 30 years’ experience in various international shipping roles. He has an in-depth knowledge of the operational challenges in the shipping industry and the preventative measures needed. He has also worked in the environmental sector and, for the past decade, has been giving lectures and speeches on environmental, technical and commercial issues affecting shipping and land-based industries. Charlotte Røjgaard, group technical director at DNV Petroleum Services (DNVPS), Singapore, will highlight the problems surrounding fatty acid methyl ester and other issues with distillates. She was appointed in November 2013, taking responsibility for the company’s technical team. Monique Vermeire, fuels technologist at Chevron, will discuss topics related to specifications. She holds a masters degree in chemistry from the University of Ghent, Belgium, and joined Texaco Technology in 1987. Since 2004, she has been in charge of global technology support for marine distillate and residual fuels to Chevron’s marine and power-generating business. She is also a member of CIMAC’s fuel oil group and since 2011 she has been the convenor of the ISO classification and specification of marine fuels working group. She
World Bunkering Spring 2014
Preview: IBC
represents Chevron in other industry organisations, such as the International Petroleum Industry Environmental Conservation Association (IPIECA) and the Energy Institute. Unni Einemo, managing editor at Petromedia Corp, will report from the Marine Environment Protection Committee (MEPC) in London. She has been writing extensively about the international bunkering and shipping market since 1997, when she joined the team that built up the Bunkerworld news service. Håkon B. Thoresen, principal approval engineer, machinery, at DNV GL, will explain the statutory approval process for sulphur oxide (SOx) exhaust gas cleaning systems or scrubbers, for which DNV GL is
World Bunkering Spring 2014
responsible. He is currently involved with approval of over 40 systems on more than 20 vessels, both newbuilds and retrofits. He is also representing DNV GL in the European Commission’s European Sustainable Shipping Forum (ESSF) sub-group on exhaust gas cleaning systems . Jesper Arvidsson, superintendent engineer at MAN Diesel, will outline developments in abatement technology. The discussion of abatement technology will end with a review of the financial aspects of scrubbers, by Dennis Lysemose Andersen, senior oil risk manager at Global Risk Management. While IBC presents a very concentrated, and high-level, view of the industry, the organisers stress that “social
events are a vital part of the conference programme”. Delegates arriving on Wednesday 2 April will have the chance to enjoy a boat tour of Copenhagen harbour, taking in several of the city’s most famous sights, including Copenhagen Opera House, the Little Mermaid statue and the modernist ‘Black Diamond’ waterfront extension to the Royal Danish Library. The trip will be followed by a welcome reception at the Scandic Hotel, giving delegates an opportunity to meet new and old friends in the bunkering community. On the Thursday, there is also a delegate dinner at the Train Workshop, followed by drinks in the venue’s Bunker Corner lounge. See www.bi.edu/ibc for more details.
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Preview: Tranzit
A hub in the making Tranzit-DV's International Business Conference is an opportunity to see how rapidly Russia's Kamchatka Region is developing
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ussia's Tranzit-DV Group, with the participation of the Ministry for the Development of the Russian Far East, is holding International Business Conference in the capital of Russia’s Kamchatka Region, Petropavlovsk-Kamchatsky. The conference theme is the creation of a major new logistics complex in the Asia-Pacific Region with developed infrastructure and traffic network. The goal of the three-day event is consolidation of the efforts of the public and private sectors to implement strategic investment projects focused on the modernization and development of ports in the Russian Far East.
The main topics of the conference include: • Seaports
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•
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in the Primorsky and Kamchatka regions: experience, opportunities, prospects and development of sea transport; Use of the Northern Sea Route in the global transport services market; State programs for investment support and development of the Russian Far East; Analysis of the situation on the Russian and global container transport and bunkering markets;Conference Prospects for port hub development and multimodal carriage; Maritime insurance issues.
World Bunkering Spring 2014
Conference participants will include representatives of Russian federal ministries, the Kamchatka Regional government, representatives of the Border Guard Service of Russia, the Federal Customs Service of Russia, Sanitary Control, the Federal Marine Administration, Russian and foreign bunker traders, Russian and foreign ship owners, and other participants. The working portion of the conference is scheduled for the first two days. There is a great deal to get through in the packed agenda which reflects the dynamism of the region. But the final working day finishes with an evening to remember. The conference organiser promises: “We will meet and transport all Conference participants from the hotel area to the best restaurant in PetropavlovskKamchatsky. We invite you to enjoy the delicious local cuisine, entertainment show and fine music.” The third day is set aside for rest and relaxation while enjoying the great natural beauty of Kamchatka.
Conference highlights • Opening welcome: Governor of
Kamchatka Region • Keynote Speech: Ministry for the
Development of the Russian Far East • Experience, Opportunities, Prospects for
Seaports in the Primorsky Region • Use of the Northern Sea Route • Prospects for Port-Hub Development and
Multimodal Carriage • Global Bunkering Market analysis by
Argus Media Ltd • Analysis of Russia's Oil Market and
Oil-Refining Industry • Analysis of LUKOIL's Commercial Activities • Transportation Corridors,
Russia’s Transit Potential • Far-Eastern Marine Research, Design and
Technology Institute • Development of Sea Transport in
Kamchatka region • Activities of Port Agencies • Federal Customs Service of Russia • Border Guard Service of Russia • Health and quarantine issues • Maritime Insurance Issues –
SOGAZ Insurance Group • Experiences of foreign shipping companies
working in the Russian market • Tourism in Kamchatka Region
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Company news
YugBunkerService With its own storage and loading terminals and 13 bunkering barges, YugBunkerService is one of the leading fuel providers in southern Russia
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ugBunkerService is a rapidly developing group of companies providing bunker services at the ports of the Black and Azov sea, and at the number of internal and river ports in Russia. The group supplies a full line of top-grade marine fuels (a wide range of IFO and MGO) and engine oils to sea-going and river vessels. YugBunkerService has been in bunkering for 17 years. Since launching our business in 1996, our priority has always been to meet and satisfy the requirements of our clients, providing superb service and high-quality fuel products at fair price. Years of hard work in the field have given us invaluable experience and the opportunity to establish a well-developed infrastructure for delivery, storage and bunkering of marine fuel. As a result, we have grown to become one of the leading fuel providers in southern Russia. Having our own marine storage and loading terminals, plus a fleet of 13 vessels with deadweight ranging from 200 to 5,700 MT, we are flexible and capable of coping with the demands of all our clients, from small independent carriers to large shipping lines. Being one of the biggest and most reputable bunker companies in the regional market, YugBunkerService has long-term and mutually beneficial relationships with large Russian, Turkish, Ukrainian and Greek shipping companies, as well as with a number of bunker traders operating at the Black and Azov sea.
YugBunkerService is a member of the Russian Association of Marine and River Bunker Suppliers, and of the International Bunker Industry Association. Recently we expanded the number of ports that we service at and currently we are operating bunker deliveries at the ports of Rostov-on-Don, Azov, Taganrog, Yeisk, Kavkaz, Temryuk, Taman, Saratov, Syzran, Samara, Volgograd and Astrakhan.
Our team is pleased to offer you our experience and knowledge, best prices and an excellent service on a 24/7 basis. ⏏
Key information • Offices in Rostov-on-Don, Taganrog, • • •
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Yeisk and the port of Kavkaz Fleet of 13 own bunkering barges complying with loading and supply regulations Our own storage facilities, giving flexible bunker delivery options Our own terminal at the port Temryuk, providing safe fuel loading on tankers of up to 5000 DWTs Fuel deliveries compliant with MARPOL and SOLAS regulations.
Our competitive advantages • Wide range of top-grade marine fuels • • • •
from leading Russian oil refineries Well-developed and extensive supply network; Best prices for our clients Equal high-quality services at all our ports of delivery Widespread compliance of our barges and loading facilities with all legal and environmental requirements.
For more information, contact: Rostov-on-Don Tel: +7 (863) 242-44-86 +7 (863) 242-44-87 +7 (863) 242-44-88 E-mail: rostov@ybunker.com Yeisk Tel: +7 (86132) 2-60-64 E-mail: yeisk@ybunker.com Port Kavkaz Tel: + 7 (86148) 4-43-47 E-mail: kavkaz@ybunker.com Website: www.ybunker.com
World Bunkering Spring 2014
A smooth bunkering operation is a given with Tranzit-DV
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n the summer of 2013, there was a landmark event in the history of the Primorsky region. That was the opening of a bunker hub in the port of Slavyanka. Container ship Apl Vanda (14,000 TEU), owned by the world's biggest container line APL, was built in Korea in July 2013. A visit to the Russian port for bunkering operations was part of the vessel's first voyage. As a result, the container received more than 8,000 tons of fuel per day. Bunkering was performed by tanker Vladimir Vysotsky, owned by group 'Transit-DV'. The team from 'Transit-DV', along with the head of Khasan district settlements and the head of the district and port authority
met the vessel’s crew with “bread and salt”. The ship was then provided with some vegetables and products supplied by Primorsky regional producers. The arrival of one of the biggest ships of its class in the world marked the opening of the bunker hub in Slavyanka. The transaction was a significant step in promoting the development program of the Far Eastern ports. Today, the 'Transit-DV' group promotes active development of contracts, not only for the fuel supply, but also for the rendering of related services. Guaranteed contracts for the supply of organic vegetables grown in the Primorsky region are also at stake. This will provide
impetus for the development of farming in Primorsky Territory since a market for large shipments will be guaranteed by contracts. Moreover, the creation of a bunker hub will facilitate the development of hotel and recreational businesses in the Khasan area. The overall bunkering market in SouthEast Asia is about 65 million tons of oil a year, 43 million tons of which is from Singapore – the largest bunker port hub in the region. The port of Pusan is the second-biggest in the region . Creation of an international bunkering hub in Slavyanka is the part of a large project. It will result in the multifunctional development of the port areas over an area of about 45 hectares. Project creators intend to use the favorable geographical location of the territory and to create here in the Far East, the largest multi-modal logistics center with a developed infrastructure and backbone transport network – rail, road, sea, air. A Khasan multimodal logistics centere will be able to handle ships up to 150,000 deadweight tons. To do this, existing port facilities will be upgraded, and a container terminal and trans-shipment facility for general cargo will be built along with a railway siding. A raid cargo complex will start to operate, and a specialised fleet will be purchased. Total funding for the project is $34 million. The investment program is created for three years. ⏏
Company news
Tranzit-DV
For more information, contact: 13 Uborevicha Street, Vladivostok, 690091, Russia Tel: +7 (423) 249-11-99 Fax: +7 (423) 248-11-28 E-mail: tranzit@tranzitdv.ru Website: www.eng.tranzitdv.ru
THE ONLY OFFICIAL MAGAZINE OF
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Company news
Nayada Co., Ltd Nayada Co., Ltd replenished its fleet with a new modern tanker of DWT 4400 mt
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013 was a special year for our company. We celebrated our 15th anniversary, shipped more than 1 million tonnes as well as replenishing our fleet with a new tanker. Nayada was among the first companies to carry out the transit bunkering of ocean containerships accompanied by cargo operations at anchorage and created barging pools consisting of first class tankers equipped with powerful pumps for the provision of prompt and safe operations. The bunkering of 6000 – 8000 tonnes of heavy fuel takes between 24 and 36 hours (from the time of dropping anchor until the time of raising anchor), This became possible due to excellent co-ordination between Nayada’s agent and operations department. In January the new tanker Zaliv Vostok was put into commercial operation. This vessel was purchased from
a European company and throughout its working life was used as a bunkering barge by the Exxon Mobil Corporation in European ports. It is an ice class tanker furnished with a unique jet type bow thruster which together with a controllable pitch propeller allows high maneuverability of the vessel which allows bunkering operations to be performed in heavy weather conditions. The heating system is a double loop with thermal oil and it enables loading and
unloading of heavy fuel of viscosity up to 700 cst even at an ambient air temperature -35° C. The main cargo pump has a discharge capacity of 1000 m3/h and two additional pumps of 350 m3/h and we are able to provide the prompt bunkering when so requested by the customer. The tanker is also equipped with 2 cranes which arrange the 2 main fenders. This allows the vessel to be ready for mooring within 10 minutes from its’ seagoing condition. This is the first bunkering tanker of its type in Russia. We hope that our partners will evaluate the potential of this vessel and the quality of our services which have moved to a new level. ⏏ Nayada Co., Ltd Bunker Supplier Portovaya Street 3A, 5Fl Nakhodka, Russia, 692900 Tel/Fax: 7 4236 629779 www.nayada.biz
Neftehim Bunker Jsc Excellent business relations with suppliers guarantee a flexible approach
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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 excellent 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 we can always offer the best prices to our clients. Stable relations
Thanks to these extensive and stable relations, we always have a 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. 90
With growth in mind, we now have our own bunkerbarge, Severaynka, which was reconstructed on the Vyborg shipyard in accordance with MARPOL regulations. Its cargo tanks have a total capacity for 1,000 mt of HFO and 260 mt of MGO. Surveyor testing
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. ⏏
For more information, contact: Neftehim Bunker Jsc. Office 503 Bolshoy Avenue V.O. 80, lit. R 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
World Bunkering Spring 2014
Company news
BUNKER-SERVICE LLC Supplying high-quality fuels to international standards
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he company Bunker-Service LLC was founded in 2012 in St Petersburg. The firm’s key areas of activity are wholesale trade in petroleum products and ship supply of bunker fuel in the ports of St Petersburg. During its development, the company has established itself as a reliable partner and gained a good reputation among foreign shipping companies and international bunker traders. The company is a supplier of bunker fuel to foreign vessels calling at the ports of St Petersburg, Ust-Luga and Primorsk. The main types of bunker fuels supplied are: fuel oil M-100, IFO-180, IFO-380 and marine gas oil (MGO). All fossil fuels supplied are of high quality and meet both national and international standards, including ISO, GOST and TU. Bunker-Service plans to strengthen and expand its client base with maximum satisfaction of customer demand. A business development programme will allow us to increase the volume of marine fuel sales by 15%, providing additional profits. Bunker-Service has been a member of the International Bunker Industry Association (IBIA) since December 2012. ⏏
Bunker-Service LLC Office 302-H, V.O. 4-Liniya, Building 65, Lit-A, St Petersburg, Russia 199178 General director: Andrei Ulasovich Tel: +7 812 937-20-04 E-mail: ulasovich@bunker-servis.com
Forum Ltd. Providing direct access to high-quality fuel oil, 24/7
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orum Ltd. supplies bunker fuels in the port of Saint-Petersburg. The company entered the market in 2011 and has proved to be a reliable supplier of bunker fuels, providing clients with fuel oil produced by Antipinsky refinery, an independent modern refinery with monthly production capacity of over 200 000 metric tons. Our main product is straight run fuel oil complying with ISO-F-RME, ISO-F-RMG and Regulations 14 (1) and 18 (1) of MARPOL 73/78, Annex VI. We supply MGO (DMA) 0,1% sulphur from the leading refineries in Russia as well. The company has several contracts with leading shipping companies to ensure smooth and secure supply. Product transshipment is carried out on the most up-to-date terminals of the region. Quality is the corner stone of bunker business, therefore, in collaboration with world-acknowledged surveying companies, we ensure the highest quality of the products we deliver. All our products are compliant with ISO 8217:2010(E) standard. World Bunkering Spring 2014
Since its beginnings of 2011, Forum has earned the trust of customers and partners by supplying high-quality products at competitive prices and on flexible payment terms. The company ensures a consistent supply of fuel oil, working on a contract basis as well as the spot market. We provide our services for a vast number of major companies in the shipping industry, as well as traders 24 hours a day, 7 days a week. ⏏ Our competitive advantages are: • direct access to high quality fuel oil; • products conform with ISO8217:2010 (E)
plus the later amendments; • 24/7 services;
For more information and bunker enquires please contact us at: Forum Ltd. Office 411, Barochnaya str. 10/1, St. Petersburg, 197110, Russia Bunker trader: Aleksey Miloradov Phone: +7 (812) 449-65-91 Mobile: +7 (921) 757-11-33 Yahoo ID: aleksey.miloradov E-mail: trade@forumbunkering.ru www.forumbunkering.ru
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Company news
Morskoy Trust LLC A fuelling company that is going from strength to strength
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stablished in 2007, Morskoy Trust LLC fuel supply company is based in the city of PetropavlovskKamchatskiy in Russia. Its main activities are fuelling of fishing vessels operating in the Sea of Okhotsk and the Bering Sea, wholesale and retail sale of oil products in the Far Eastern sea ports, and oil transportation. The company operates 11 vessels, comprising eight oil carriers and three fuel vessels, with a total deadweight of 47,550 tons. All the company’s vessels are ice-class ships capable of operating in any navigation area throughout the year. They meet all the requirements of the Russian Register of Shipping and the latest requirements of MARPOL 73/78 – International Convention on Marine Pollution.
All vessels are equipped with heating cargo systems, which makes it possible to transport any oil products and they can carry several types of various oil products at one time. During in the 2013 navigation our tanker Svatoy Petr sailing via Northern Sea Route. Morskoy Trust holds membership with the
Russian Association of Marine and River fuelling companies. It has undergone strong growth in recent years, due to its constantly increasing number of customers, highly qualified staff and reliable business partners. ⏏
Morskoy Trust LLC Kamchatskiy region Office 206, 37 Vladivostokskaya str Petropavlovsk-Kamchatskiy Kamchatskiy krai, 683024, Russia Phone/fax: 8(415-2) 23-07-63, 23-29-04 E-mail: tanker-41@mail.ru
Star player Leading bunker supplier celebrates decade of providing quality service
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hen it comes to the Pakistani bunker industry, Orion Bunkers enjoys the status of a leading player. Since 2004, it has succeeded in creating a reliable and high-quality bunkering service. We firmly believe that Pakistan will emerge as a strong bunkering hub around the globe, establishing its position a reliable and cost-effective supplier for both domestic and international clients. Orion has strengthened its roots by delivering continuity, innovation and value and we have achieved a number of accomplishments. • We have had the honour of becoming the partner of Hascol Petroleum Limited (a leading Pakistani oil marketing company). • Our partnership with Hascol gives us a unique competitive advantage and allows us to supply any quantity of IFO 180 centistokes (cSt) to our customers. • We have achieved a year-on-year rise in market share from 50% to 60%. • We are the only bunker company in Pakistan that owns offshore tanks for oil
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storage, which are able to store all grades of fuel, plus a full lorry fleet. • We have the largest fleet of bunker barges and have increased our capacity with the addition of the Al-Ahmed V. In the near future, we are also interested in expanding operations at Gwader Port. Orion has earned the trust of customers by supplying quality products at competitive prices. The company offers a range of fuel oils, including IFO/RMA 180cSt , MGO/ DMA, MDO and lubricants. All our products meet with ISO8217:2005 standards and comply with Marpol Annex anti-pollution requirements. We serve shipping companies and traders 24 hours a day, seven days a week, guided by our core values. • Uncompromising commitment to quality, safety and environment. • Integrity in all our deeds. • Transparency, accountability and discipline in our business. • An open relationship with our customers and traders, based on mutual trust, respect and success.
Orion Bunkers has the maximum pumping rate in Pakistan – 120-180 metric tons per hour – to supply fuel both onshore and offshore. Our 10 self-propelled barges can carry all grades of fuels. Our success and longevity is largely due to our flexibility and being able to adapt our service to meet the individual needs of our customers. This ensures that we deliver the service that is best suited to the customer – every time without compromise. ⏏
ORION BUNKERS 503, 5th floor, Horizon Tower Block – 3 Clifton , Karachi Tel: +92 (0) 21 35292523 Fax: +92 (0) 21 35292527 E-mail: Orionkhi@cyber.net.pk Website: www.orionkhi.com.pk
World Bunkering Spring 2014
Portugal's premier supplier of fuel services
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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's professional bunkering team provides customers with high-quality fuels and services, as well as the highest safety standards in all its bunker activity. The company’s bunkering products fulfil the ISO 8217: 2010 specification in all grades. To help customers’ achieve environmental targets, the company can also supply low-sulphur fuels at several ports, with the port of Lisbon being the main port for low-sulphur fuel. By 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. It is Portugal's main bunker supplier and provides bunker services using its two barges, with capacities of 5,800 tonnes and 3,000 tonnes each. The 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 €1.4bn to upgrade and improve the efficiency of our refineries, representing €1bn for Sines and €0.4bn for Matosinhos. ⏏
Company news
Galp Energia Group
For more information, contact: Galp Energia SA Tel: +3512 1724 0637/654 Fax: +3512 1724 2957 E-mail: bunkers@galpenergia.com Web: www.galpenergia.com
Rapid ascent Quality and flexibility underpin a winning formula
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tarting out barely four years ago, Overseas Petroleum & Shipping (OPS) has become the leading bunker supplier in Khor Fakkan, strategically located near the Port of Fujairah, the second largest (and often crowded) bunker port in the world. Delivering both in the port of Khor Fakkan and off-anchorage, OPS has established its reputation as a reliable supplier of quality fuel oils, mainly 380cSt and marine gas oil (MGO), and as a customer-friendly company. We are known for our flexibility, which allows us to adjust to the ad-hoc changes for which our industry is famous. Our products meet the ISO standards quality and we follow best industry practices to ensure that our customers receive only the highest quality products and services possible. This young company has implemented business strategies that have propelled us to the forefront of the bunker industry in the region. Providing the best service is not World Bunkering Spring 2014
a cliché for OPS but an everyday habit. And this habit has paid off handsomely for both our customers and for the company. Under the management and vision of its founder, the company has progressed quickly from a start-up operation to an established player in the industry. Having expert staff with many years of industry knowledge and hands-on experience means that the customers of OPS are the main beneficiaries, and we have been able to maintain excellent relationships with our loyal customer base. ⏏
Overseas Petroleum & Shipping Address: PO Box 19027 Khor Fakkan United Arab Emirates Tel: +971 (0) 9 2373000 Fax: +971 (0) 9 2373030 E-mail: bunkers@overseaspetroleum.com Web: www.overseaspetroleum.com
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Company news
Gazpromneft Marine Bunker Ltd Market leadership is our goal
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Gazpromneft Marine Bunker, operator of Gasprom Neft’s bunker business, has made its second acquisition in the international marine fuel market (after Marine Bunker Balkan S.A. in Romania) with the purchase of Estonia-based AS Baltic Marine Bunker. The Estonian company manages a bunker vessel with a deadweight of 2.786 mt that can supply both dark and light marine fuels. The company is in charge for bunkering operations in the Baltic sea ports of Estonia. AS Baltic Marine Bunker has taken over the bunker business from NT Marine, the company which was well known in the bunker market. Gazpromneft Marine Bunker, which is already active in the Baltic bunker market, plans to sell at least 270,000 metric tons a year of marine fuel in Port of Tallinn. The fuel is originally from Gazprom Neft's refineries in Russia with the sulfur content of 1%. Gazpromneft Marine Bunker is a bunkering business operator of Russia’s 4th largest oil and gas company Gazprom Neft.
The enterprise was founded in October 2007. It includes nine regional offices and four subsidiaries: Gazpromneft Shipping LLC, which operates the Company's own fleet of 8 fuelling vessels, Gazpromneft Terminal SPB LLC, which operates a bunker terminal in St. Petersburg; Marine Bunker Balkan S.A. (bunkering in the Black Sea port of Constanta), AS Baltic Marine Bunker (bunkering in the Baltic Sea port of Tallinn). Gazpromneft Marine Bunker is a leading operator in the Russian bunker market, with the widest geographical reach of any Russian bunker company. It operates at all major ports in Russia including 16 sea ports and 13 river ports. ⏏
Gazpromneft Marine Bunker Ltd Bolshoy Prospect 80 block R, Vasilyevskiy ostrov, St-Petersburg, 199106, Russia Tel: +7 (812) 449-49-70 Fax: +7 (812) 449-46-28 E-mail: marinebunker@gazprom-neft.ru Website: www.gazprom-neft.ru
World Bunkering Spring 2014
Next issue
World Bunkering SUMMER 2014 issue Special Features: Oil Majors We look at the different strategies adopted by the big players in the face of an increasingly complex market. Fuel Management With the 0.10% sulphur limit in ECAS just a few months away will shipowners be ready to switch between residual and distillate fuel safely and efficiently? Scrubbers A look at the latest developments in Information Technology and their effects on the bunkering world.
GEOGRAPHICAL FOCUS Mediterranean From Gibraltar to Greece, we look at how the region is faring and ask whether the implementation of the North American and Northern European and Baltic 0.10% sulphur limits will significantly affect this market. Turkey A year ago we reported that demand was down significantly and at least two suppliers had exited the market. Have things got better?
spring
Australia Last year hopes were high that LNG would be a game changer. We look at what has happened since. 2014
Russian Update News, Views, Analysis
InsIde thI
s Issue:
Taking con trol of Qua ntity Northern Europe pre pares for Innovation 0.1% sulp – new idea hur s aplenty
World
Shapin g the forwwaary d IBIA loo
ks to the
future
BUNK ERING
REGULAR FEATURES Interview, Industry News, Environment, Testing, Risk Management, Innovation, Legal News, Equipment and Services, Diary
spring
THE ONLY OF FIC MAGAZIN IAL E OF
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2014
Diary
12-14 March
International Business Conference, Petropavlovsk-Kamchatsky The Tranzit-DV Group, with the participation of the Ministry for the Development of the Russian Far East, is holding a conference in Petropavlovsk-Kamchatsky, the capital of Russia’s Kamchatka Region. The conference theme is the creation of a major new logistics complex in the Asia-Pacific Region with developed infrastructure and traffic network. The goal of the conference is consolidation of the efforts of the public and private sectors to implement strategic investment projects focused on the modernization and development of ports in the Russian Far East.
26-27 March
9th Maritime Communications & Technologies Summit, London Maximising Shipping Technologies with Human Expertise. ACI’s 9th Maritime Communications & Technologies Summit will focus on crew development and explore how they are adapting to new technologies. We will also investigate the changing needs of crew in there life on-board ship including; their access to internet and other communications systems. This summit will help prepare a shipping company to increase operational efficiency by implementing the appropriate technologies around the vessel.
www.wplgroup.com/aci/conferences/eu-mct9.asp
http://en.milc.biz/conference/
17-19 March
CMA Shipping 2014, Connecticut CMA Shipping 2014 is widely regarded as the world’s most important annual shipping conference where ship owners, operators and experts from around the world speak on the many issues that will shape the future of the maritime industry. The event represents all aspects of the international maritime industry and is considered by many to be the world’s most important annual shipping conference. The event is sponsored by The Connecticut Maritime Association (CMA), the largest commercial shipping association in the US.
2-4 April
35th International Bunker Conference, Copenhagen The 35th International Bunker Conference (IBC) is organized by BI Norwegian Business School, whose purpose is education and research. The school regularly organizes non-degree seminars and conferences intending to provide an interface between the academic world and the various businesses and industries. This enhances focus on research as well as it brings knowledge of both worlds back to the participating parties.
www.bi.edu/ibc
http://www.shipping2014.com/
18 March
Green Ship Technology Conference 2014, Oslo The 11th annual GST Conference - the biggest green ship technology event in the industry calendar Held at the Thon Hotel Arena, Oslo issues covered include: Can MRV meet the proposed goals?; is industry ready for 1.1.15?; strategies to cope with ballast water management implementation; retrofitting: analysis of the best methods for fitting new technologies and industry case studies; energy efficiency best practice and opportunities for alternative marine fuels
9-11 April
Sea Japan 2014, Tokyo Over the past several years Japanese ship owners, ship builders and marine equipment manufacturers have ridden out a 'perfect storm' caused by a fiercely strong yen, intense international competition and unfavorable economic conditions. The result is that they are now leaner, fitter and stronger than ever before.
www.seajapan.ne.jp
www.informamaritimeevents.com/event/greenshiptechnology
18 March
European Fuels Conference, Rome The European Fuels Conference will offer critical insight on the future for the fuels industry and the responses needed from the refiners and regulators in order to survive and remain competitive in the face of market imbalances, increasing EU regulation and decline in demand for oil products. 100 of the most senior figures in the European fuels industry and their partners will gather to put in place the vital components needed to overcome the current challenges facing the European market.
www.wraconferences.com/event/european-fuels-conference
19-21 March
Asia Pacific Maritime, Singapore Asia Pacific Maritime (APM) is the one-stop market for the region’s maritime community, showcasing the latest in marine engineering and port technology. Regarded by the industry as the region’s premier maritime event, APM will be featuring shipbuilding & marine, workboat and offshore segments. APM offers a holistic business experience by combining a comprehensive exhibition, high-powered conferences and seminars, and a host of networking sessions that connect quality Asia Pacific buyers to international maritime suppliers.
22-23 May
Platts 5th Annual European Bunker Fuel Conference, Rotterdam Hear from the IBIA, ESPO, BIMCO, Intertanko and the European Commission as they give their perspective on the challenges and opportunities faced. Discover how the bunker fuel industry is adjusting to keep up with evolving fuel regulations. Receive a detailed update on key market developments including advances in alternative fuels and on-board abatement. Understand fuel quality trends and their implications to the value chain...and much more!
www.platts.com/europeanbunker
2-6 June
Posidonia, Athens Known as the world’s most prestigious shipping event, Posidonia 2014 will see more than 1.800 exhibitors with over 18.500 visitors from 92 countries attending. The week-long event, which will start on June 2 and run to the 6th June 2014 at the Metropolitan Expo Centre in Athens, will attract attendees from across all aspects of the shipping industry.
www.posidonia-events.com
www.apmaritime.com/en/About-APM/
Marintec South America 2014, Rio de Janeiro
Hear from a wealth of leading technical and commercial speakers delivering ground-breaking new project presentations selected by the Gastech Governing Body from over 500 submissions made by the international gas community. Showcasing over 300 international exhibitors and offering free to attend technical seminars, the Gastech Exhibition brings the technical and commercial worlds together in a single location providing a valuable meeting place to network, conduct business and build strategic partnerships.
Marintec South America – Navalshore, acknowledged as the strategic event for the maritime value chain in Brazil, provides opportunities for your company to drive new revenue with a highly qualified audience. Navalshore brings together all the key people who are part of the decision-making process for the purchase of new products and vendor selection. Three high-impact days feature networking, project designers, engineers, operations, purchasing and directors of Brazil’s most important shipyards and ship owners, searching for new technologies, best practices and the best negotiations.
Gastech Korea
http://www.gastechkorea.com/
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12-14 August
24-27 March
www.navalshore.com.br
World Bunkering Spring 2014
GAZPROMNEFT MARINE BUNKER LTD. Tallinn
OUR GEOGRAPHY
Estonia
Riga
Latvia
Murmansk Baltiysk
Romania
Primorsk Ust-Luga
Kaliningrad
St.Petersburg Yaroslavl
Constanta
Arkhangelsk Cherepovets Sheksna YANOS refinery
Moscow refinery Samara
Nizhny Novgorod
Volgograd Rostov-on-Don Astrakhan Port Kavkaz Ola Taman
Azov
Sakhalin island
Kazan Ust-Kut Nizhnekamsk
Kozmino
Omsk refinery
Vladivostok
Novorossiysk Tuapse Sochi
High quality marine fuel complying with ISO 8217-2010
Posiet
Flexible pricing
Quality control from refinery up to end consumer
Gazpromneft Marine Bunker Ltd. Russia, 199106, Saint-Petersburg, Vasilyevsky Island, Bolshoy Prospect 80, Lit. “Р”
Tel: +7 (812) 449-49-70 Fax: +7 (812) 449-46-28 www.marinebunker.gazprom-neft.ru E-mail: marinebunker@gazprom-neft.ru
Nakhodka Vostochny Zarubino
ISO certification (9001:2008)