SUMMER 2015
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WORLD BUNKERING
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INSIDE THIS ISSUE: Oil majors offer hybrid fuels ECA fuel switching issues Scrubbers gain ground Mediterranean round-up
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Editor’s letter
Reasons to be cheerful
I
t went better than expected. That is probably the general view of the implementation of the 0.1% sulphur in fuel limit in emission control areas (ECAs). Partly, this was because the economic impact of switching to distillate fuel was softened by the comparatively low fuel prices. However, there have been some reports of switchover problems, as our fuel management feature notes. As with most things, the more work that was put into being prepared, the more likely it was that switching fuels was a trouble-free process. Carisbrooke Shipping explains how it took the trouble to be ready, including, in some cases, fitting extra tanks and making other modifications to fuel systems. While the implementation of the 0.1% limit may have been less painful than many expected, shipowners have plenty of other problems to worry about.
World Bunkering Summer 2015
International accountant and shipping adviser Moore Stephens tells us that overall confidence levels in the shipping industry fell during the three months to February 2015 to their lowest level for two-and-ahalf years. Respondents to the latest Shipping Confidence Survey identified overtonnaging as the biggest factor behind the fall in confidence, but also expressed concern about the effect on the industry of lower oil prices and the growth of investment by financiers from outside shipping. So cheaper oil does mean cheaper bunkers, but not necessarily happier shipowners – especially those who run offshore support vessels as the oil majors scramble to cut exploration and production costs. The oil majors have had a lot to think about recently, and our feature on them in this issue describes how they have been busy developing new ECA-compliant fuels. Using ultra-low-sulphur fuel oil is one approach to the new regulations, another is to fit scrubbers. That is an option we also look at in depth. A new report raises concerns that open-loop scrubbers may have a harmful effect on water quality. It also raises doubts about closedloop scrubbers. Nevertheless, owners are opting for scrubbers of various types in significant numbers. This now includes Carnival, as we report in our Australia feature. In the scrubbers feature, we also look at Singaporebased Ecospec, which originally aimed to take carbon dioxide (CO2) out
of ship emissions. The company says there is no demand for that at present and so it has modified its system to work primarily as a sulphur scrubber, although it says its kit still removes enough CO2 to make the scrubber carbon-neutral. On the subject of CO 2, our environment pages note that negotiations are under way at the International Maritime Organization (IMO) on the establishment of a global system of data collection on CO2 emissions from international shipping. But there is a big problem. Yet again, the EU has pre-empted any IMO decision by adopting a unilateral regional regulation on the monitoring, reporting and verification of individual ship emissions, in advance of IMO completing its work. This issue also takes a look around the Mediterranean, including Gibraltar, which recently hosted an IBIA regional forum. This has been regarded as a major success, and a regional forum looking at the key western Mediterranean bunkering ports is likely to be repeated at some stage. While it is still some way off, organising the IBIA 2015 Convention in Cancun, Mexico, is now a major priority for the IBIA team. Now is a good time to put 2-6 November in your diary. As ever, I hope you enjoy reading this issue of World Bunkering, and, as always, welcome feedback or ideas for future issues.
David Hughes Editor
1
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SUMMER 2015
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Publisher: W H Robinson Editor: David Hughes editor@mar-media.com
Deputy Editor: Sandra Speares WORLD BUNKERING
LNG: BANDWAGON ROLLS How 'green' is LNG
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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.
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IBIA REPORTS Editor’s letter 1 Chairman’s introduction 7 Chief Executive’s report 9 Africa report 11 Asia report 13 IBIA Dinner 17 New members 21 Events report 23 Noticeboard 27 SPECIAL FEATURES Industry news 28 Environment 30 Interview 32 Oil majors 34 Fuel management 36 Scrubbers 38 LNG 40 Testing 44 GEOGRAPHICAL FOCUS Spain 46 Italy 48 Cyprus 49 Greece 50 Malta 51 Gibraltar 53 Turkey 55 Australia 59
Force bunker interview
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Russian update 63 Ukraine 67 Innovation 69 Legal news 71 Equipment and services 73 Review: Fujcon 74 Review: IBC 75 Preview: Gibraltar 77 Preview: Nor Shipping 78 Preview: IBC 78 Diary 84
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I
t hardly seems possible, but we are nearly halfway through another year and, on a personal note, I am now well into my second year as chairman. Time seems to have flown by and it is difficult now to recall the widespread concern in the industry six short months ago as the 0.1% sulphur limit in emission control areas (ECAs) loomed closer. Well, it would certainly be wrong to describe the implementation of the new limit as a non-event, but there were nowhere near the number of problems that seemed possible in the run-up. That was something of surprise, but, thinking about it, the small number of incident reports indicates that the shipowners and operators had done their homework, taken advice, listened and learned. So, in general, everybody was well prepared and ship staff had the expertise to handle the switchover from fuel oil to gas oil or one of the new ultra-low fuels now on the market. Another positive factor is that owners seem to be complying, as almost no infringements or penalties have been reported. What was a bigger issue was the availability of the new lube oil for the low-sulphur products brought out by all the major producers. Suppliers are struggling to meet demand. So, in this regard, the majors could have been a bit more proactive. I never had any concerns about the availability of low-sulphur gas oil in Europe and US, only in the Far East region, but it seems now that availability there is picking up. So thanks go to the suppliers there. Enough time has gone by now to get some measure of the OW Bunker collapse. Many owners are changing how they purchase fuel. They are more focused on who they are dealing with. At the same time, suppliers are generally more concerned about credit. So the credit situation globally has tightened.
World Bunkering Summer 2015
Of course, these understandable changes hit home particularly hard as owners have to contend with the current very low freight markets, especially in the container and dry bulk markets. The dry bulk market is at an all-time low and prospects for a number of years ahead are far from promising. By the time you read this, we will have just held the inaugural IBIA Asia gala dinner at the fantastic Fullerton Hotel in Singapore. More than 275 guests were expected to attend, reflecting lots of interest from the Far East market. Maybe one day the IBIA Asia gala dinner will be as big or even bigger than the London event. Time will tell.
Talking about Singapore and the Far East, IBIA (Asia) has stepped up a gear to seize the opportunities opening up in the Asian region. We welcome Jason Leon and Michelle Mo to the IBIA team and hope that our expanded Singapore office will provide a springboard for increasing our membership in the region. Well for now I will sign off by wishing you all a nice sunny summer. Please remember to keep smiling!
Chairman’s welcome
Interesting times
Jens Maul Jørgensen, chairman, IBIA
7
T
he start of the year is always a busy time for the association, and this year has been no exception. We started the year with our AGM in the first week of February, where it was announced that three new board members will join the team in April. They are household names in the industry – Nigel Draffin, Patrick Holloway and John Stirling. A big thank you to those board members standing down – Ciric Chung, Trevor Harrison, and Simon Neo. They have all given tremendous support to the association over the past years. Association growth
The association goes from strength, with further growth reported in membership, now standing at over 675 organisations and members spanning 67 countries. Membership is up by an average of 10% over the past two years. This growth has also meant our revenue has grown. Unfortunately, so has our expenditure, as we invest in new systems and resources in order to both deliver greater benefits and value to our members and to influence the industry. IBIA Asia
Early in March I headed down to Singapore, where I met over 40 companies, members and potential members, advising them of the restructuring of our IBIA Asia team. It’s time to change gear, and make the most of the potential that is present in the region. I am therefore pleased to advise that we have a new regional manager - Jason Leong. He has a deep knowledge of the Asia Pacific bunkering and marine lubricants markets, having previously worked for Castrol, Chevron and the Hess Corporation. He is a qualified marine engineer (seagoing) and has a successful career that spans four decades.
To add further strength to the Singapore office, we have also recruited Michelle Mo, a professional administrator. She will manage the day-to-day business of the office and support our growing training facilities. Building on success We had another highly successful annual dinner in London, which was sold out. For those disappointed they couldn’t attend, don’t worry – next year, we are going back to the Grosvenor, which can cater for a larger audience. The change of venue this year unfortunately was beyond our control – sorry. Following close on the heels of the dinner was the Gibraltar Forum – IBIA’s first Mediterranean regional forum. Attendees reported that it was a superb event and great value for money. The location allowed us to bring shipowners, the port authority, government officials, suppliers and traders together in a beautiful setting, providing unrivalled networking opportunities. April saw another first – IBIA hosting a gala dinner in Singapore at the prestigious Fullerton Hotel. The dinner took place during Singapore Maritime Week, which attracts over 14,000 delegates from the marine community. It was also the 50th celebration of Singapore as a country – anyone who visited Singapore in the 1960s and sees it now cannot be anything but impressed at the changes that have taken place.
These factors need to be adopted more fully within our maritime administrations. By the time this issue of World Bunkering lands on your desk, IBIA will have once again lobbied for changes at the International Maritime Organization during the Marine Environment Protection Committee session, where good, pragmatic solutions need to be embraced. It is also pleasing to hear that, so far, fuel switching has, in the main, been an uneventful experience and that supplies of low-sulphur fuels have been readily available across the world. This is a testament to all the preventative work put in by the various shipping associations, working together in a common aim of delivering a safer and more environmentally friendly atmosphere for all to work in.
Chief executive’s report
Growing membership
The future
So what do we have in store in the coming months? On the macro scene, we have those that see the glass half full – fuel oil prices remaining low, charter rates improving, administrations listening and responding. On the other hand, in the half-empty view, we have too many ships in a break-even market and costs that are still rising and could climb even higher in the medium term. Whatever your perspective, IBIA is here to help, and I Believe In Action – do you?
Changing scene
The flavours of Singapore Maritime Week are destroying the perception of the marine industry as an old-fashioned one, where nothing much is changing. That view is rapidly vanishing. We have an industry that is adaptable, embracing new technologies and transforming at a remarkable pace. This change is taking place based on thought and research.
Captain Peter Hall, chief executive, International Bunker Industry Association World Bunkering Summer 2015
9
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Africa branch reports steady growth. Tahra Sergeant Regional Manager International Bunker Industry Association
I
BIA Africa’s AGM and the election of the executive committee (exco) took place in April. We welcomed Shelton Thorburn, from Amoil, and Ebrahim Takolia, from South African Oil & Gas Alliance, as the newest exco members to join. Their expertise will be a welcome addition to our branch. Patrick Holloway, of Webber Wentzel, Veryan Bell and Paul Maclons, of SMIT Amandla, will remain as exco members. The AGM was well attended, with two special guests: Chris Fisher, who is well known to many IBIA members, and Sipho Nzuza, the port manager of Cape Town. Fisher delivered a well received speech on whether bunker quality claims are on the increase and the current problems. The testing agencies seem to say that some 12% of fuels supplied to ships are out of specification, but, in the majority of the cases, the fuels are still fit for use. He explained some of the more serious problems and test methods developed to detect contaminants. He also briefly talked about the types of low-sulphur (maximum 0.10%) fuels on the market and their suitability for use. We also had the pleasure of welcoming Colleen Jacka, a shipping industry media specialist and editor of Maritime Review Africa.
World Bunkering Summer 2015
As we look back on the development and growth of IBIA in Africa, we can highlight the following successes: • IBIA in Africa attends the Port Liaison
and Transnet National Ports Authority (TNPA) forums on a monthly basis • We have reciprocal membership with the South African Oil & Gas Alliance (SAOGA) and the South African Association of Ship Owners and Agents (SAASOA) • We have actively participated in a number of conferences, including: – African Ports Evolution (Durban, September), where we hosted a plenary session as an association partner. Our speakers delivered a session on the economic benefits to the port community of a flourishing bunker industry in South African ports. As a direct result, EMC funded a revised Jones Report – Maritime Week Africa (Cape Town, December) – Transnet Ship Repair Workshop (Cape Town) – African Renaissance Conference (Durban) – International Maritime Organization seminar (Cape Town) – South African Oil & Gas Summit (Cape Town) – TransAfrica Expo (Johannesburg) – IBIA information sent
IBIA Africa report
Exco changes Also, IBIA Africa was invited to join Operation Phakisa, a governmentled programme to unlock the ocean economy. As an industry association, our aim in this project is to elevate and maintain a presence for bunkering in South Africa. We still remain actively involved with Lawhill Maritime School in Simons Town, where we have supplied speakers. Our members have made some wonderful donations to the school, including office equipment and computer hardware. We also would like to acknowledge the successful nomination of our own Patrick Holloway to the IBIA board. The Africa branch is developing steadily and, with his support on the board, Africa can only go from strength to strength. Note and apologies: we would like to apologise for a misprint in the previous edition – South African Bunkering & Trading, or SABT for short.
11
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IBIA Asia report
Singapore success The special relationship that the International Bunker Industry Association (IBIA) enjoys with Singapore’s Maritime & Port Authority (MPA) was underlined at the annual IBIA Asia dinner on 23 April.
S
ingapore is a signatory to IBIA’s Port Charter designed to raise bunkering standards by requiring signatories to operate a licensing scheme for bunker suppliers, enforce regulations covering bunkering operations, have a testing regime in place, and have appropriately qualified professionals involved in the supply chain. Held at The Fullerton Hotel and attended by 280 guests including the MPA’s Assistant Chief Executive Captain M Segar, the dinner was hosted by IBIA in Asia, Exco Chairman Douglas Raitt and came at the end of a very successful Singapore Maritime Week. Guest speaker at the event Jens Maul Jorgensen, IBIA board Chairman, noted that more suppliers are using ISO 2010 specs but called on all refiners, traders and suppliers to do the same. Mr Jorgensen said: “The latest specs are not too expensive for owners. It’s a problem we don’t have any more because oil prices have dropped by almost 50 percent and with prices around $340 per tonne. There are no excuses, refiners don’t benefit when they blend the product down in quality because of a huge reduction and P&I clubs can now press their clients to get the latest ISO specs inserted in their vessel description.” The evening also saw the award of honorary membership to Capt Tey
World Bunkering Summer 2015
Yoh Huat Senior Research Fellow at the National University of Singapore Centre for Maritime Studies in recognition of his contribution to the maritime industry generally and, in particular, for his service to IBIA as Chairman of the IBIA (Asia) Bursary Committee. Capt Tey was the inaugural chair of the Bursary committee which provides support to young people engaged in a maritime career. The fund supports scholarships for young people who are undertaking cadetships. Jason Leong the recently appointed IBIA Regional Manager for Asia and Pacific said: “The Dinner has been a great success and something I would like to build upon, the opportunity to meet so many people from all aspects of the industry was a tremendous opportunity for me. I look forward to meeting many more.”
13
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
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CORPORATE SERVICE Pirasteh, Mohammad MEDITERRANEAN EASTERN ENTERPRISE LLC Unit 3502 Aspect Tower Business Bay Dubai UAE dina@medieastern.com SERVICE Beqaj, Endrit TPD - TRADING PETROL & DRILLING STR. Ibrahim Rugova Sky Tower, Floor 10 Office 10/2 Tirana 1001 Albania ebeqaj@tpd.al SUPPLIER / TRADER Bayindir, Atilla TECO PETROLCULUK Ataturk mah. Istiklal cad. No. 154/A Aliaga 35800 Izmir Turkey TR35 marine@teco.com.tr BUNKER TRADER Jenn, Jean Herve INATECH 3 Shortlands Hammersmith London W6 8DA UK anna.rydzewska@inatech.com
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TRADER Reyes, Jose KAMCA ENERGY Calle 50 CL 54, F&F Tower 45th Floor Panama jose@kamcapetrol.com SERVICE Hiew, Ceci METCORE INTERNATIONAL 120 Lower Delta Road Cendex Center #05-05 169208 Singapore accounts@metcore.com.sg
INDIVIDUAL SERVICE Ouweneel, Yuri VTTI KP Van Der Mandelelaan 130 3062MB Rotterdam Netherlands you@vtti.com
BUNKER TRADER Bobrek, Jan OKTAN ENERGY Hryniewieckiego 1 70-606SZCZECIN Szczecin Poland m.wojtowicz@oktan-energy.pl BUNKER TRADER Vorren, Gaute MALOY HAVNESERVICE AS Postboks 132 6701 Maloy Norway gaute@mhservice.no
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SUPPLIER / TRADER Duparcq, Danny MARITIME BUNKERING & TRADING BVBA Merksensesteebweg 192 1st floor Deurne 2100 Belgium danny@mbtnv.be BUNKER TRADER Boixados, Maria MANDARA ENERGY LIMITED Empire House 175 Picadilly London Uk W1J9EN mboixados@mandaracapital.com BUNKER TRADER Horn, Lindsay MANDARA ENERGY LIMITED Empire House 176 Picadilly London Uk W1J9EN lhorn@mandaracapital.com STORAGE Cebotarjovs, Vladimirs VEXOIL BUNKERING Atlantijas 27D Riga LV-1015 Latvia bunkering@vexoil.lv
BUNKER TRADER Barcelo Quintana, Laia MANDARA ENERGY LIMITED Empire House 176 Picadilly London Uk W1J9EN lbq@mandaracapital.com STORAGE Krasilnikov, Artur VEXOIL BUNKERING Atlantijas 27D Riga Latvia LV-1015 artur@vexoil.lv OIL INDUSTRY MAJOR Kutur, Nilufer NLF LUBETRADE Abdulkerim Sebik Sok. Manolya Apt No 26/1 Istanbul Ornek Mhallesi Turkey 34704 Atasehir TR34 sales@nlflubetrade.com Fevang, Hans DOLPHIN GEOPHYSICAL AS Damsgaardsveien 131 Laksevaag Norway 5160 hans.fevang@dolphingeo.com
World Bunkering Summer 2015
Steve Hoare Events Manager International Bunker Industry Association
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ello, everyone! February was one of our busiest months, with the annual dinner and the AGM at the beginning of the month and the Mediterranean Forum in Gibraltar at the end. The annual dinner saw us move to a new venue at the Park Plaza Westminster Bridge on London’s South Bank. After a champagne reception, 1,065 diners sat down to a three-course dinner – salmon gravadlax, confit of duck and a fruit panna cotta. After the starters, there was a presentation by Willie McPherson of the Vine Trust, a charity providing vital medical services and healthcare on the Amazon and Lake Victoria. The charity made £4,800 on the night, thanks to your kind donations, and obtained several offers of sponsorship and help from companies that were present. After the main course, IBIA chairman Jens Maul Jørgensen took to the stage with a short speech about partnerships and the fact that being a member of IBIA is being part of a family. At this point, Jens was interrupted by a ‘waiter’ who thought Jens should sing! It turns out that he was a plant and was a part of a singing waiters act, which ended with a rousing rendition of We are Family. The singing waiters returned later to entertain the diners with several well-known songs. After dinner, there was plenty of time for networking in the bar, with some further entertainment from the vocal harmony group. Feedback from the event has been generally great, although there was a lot of noise throughout the dinner. I would like to take this opportunity to thank all of our sponsors, Aegean, Horizon Energy, Oryx Petroleum, BP Marine, Total Marine Fuels and Searights for supporting IBIA and the dinner. 2016’s dinner will be on 8 February; the venue is still to be confirmed.
World Bunkering Summer 2015
IBIA Mediterranean Forum – Gibraltar
The inaugural Mediterranean Forum took place from 23-26 February in Gibraltar. It included an IBIA basic bunkering course onboard five-star floating hotel, The Sunborn. Day two consisted of some presentations from Gibraltar’s megayacht development board, before a trip up the Rock for a champagne reception hosted by Peninsula Petroleum and Vema Oil. The weather was kind to us, affording spectacular views from the Mons Calpe Suite across the Gibraltar Strait to Algeciras and Africa, taking in the Atlantic and the Mediterranean. Day three saw a morning of topical presentations onboard The Sunborn, before moving to Gibraltar Cruise Terminal, where there was a presentation from Vema Oil, as well as an exhibition with over 20 stands showcasing what Gibraltar has to offer in the way of marine services. There was also an opportunity for delegates to have tours of three bunker barges that were moored alongside the cruise terminal, courtesy of Peninsula Petroleum, Vema Oil and Aegean. The event was finished off with a gala dinner at the stunning St Michael’s Cave, with 125 people in attendance, including key figures from the Gibraltar government. My thanks go to all our sponsors and the Gibraltar Port Authority for their help in creating a great event with a difference.
London Regional Forum
A London Regional Forum will take place on Wednesday 9 September at the Baltic Exchange as part of London International Shipping Week 2015. The session will be entitled “The Cost of Failure” and will feature presentations giving four differing perspectives from • the media (an overview) • the insurance company • the shipowner • the bunker trader Presentations will start at 15:00 with drinks from 17:00 Full details are on the IBIA website.
IBIA events manager report
Meet and greet
Annual Convention – Mexico IBIA Asia gala dinner
Our attention now turns to upcoming events, with the Asia dinner fast approaching on 23 April. We have a few tables left, priced at just £960 or an individual at £96.00. If you do business in Singapore, you really ought to be there. Backed by the Maritime and Port Authority of Singapore, all Singapore’s movers and shakers will be there. Please see the IBIA website for further details.
Plans are well under way for the Annual Convention in Cancun from 2-6 November at the Live Aqua Hotel. The convention will follow a multistream programme including plenary sessions, workshops, training and leisure activities, allowing you to choose what suits you the best. There will also be a great programme of networking events. A programme is now available on the IBIA website (please note that this is subject to change and alteration).
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INTRODUCTORY COURSES IN SHIPPING
Have you recently started working in the shipping industry? BI Norwegian Business School runs two popular courses for new candidates in the Maritime sector INTRODUCTION TO SHIPPING, SEPTEMBER IN OSLO Get insights into the maritime framework, marine insurance fundamentals, economy- and market drivers within sea transport and chartering. Enhance your knowledge and confidence and advance your career in the worlds´ most challenging and volatile industry! bi.edu/introshipping KEY ELEMENTS OF SHIPPING, OCTOBER IN SINGAPORE Understand the complexity of the shipping industry, the elaborate regulatory of ship owning and management, the intricacies of ship purchasing and finance, shipping economics and market cycles, chartering strategy and revenue projection, risk management and marine insurance fundamentals – and explore the new green technologies for the shipping industries! bi.edu/kesoct2015
Benefits to members as of 1 May 2015
MEMBERSHIP COSTS
Individual membership: £150 Corporate membership: £700 Corporate additional membership: £150
These increases took effect on 1 July 2012. Additional The Board has also decided that the present practice of listing Corporate have changes some and needs s’ member meet fairly and Members does not properly ship to its member of benefits the match ly accurate more will that ed therefore been introduc cost; affected members will be contacted directly by the Secretariat. If you have any queries or comments about these changes, then please contact ibia@ibia.net or telephone: +44 (0) 20 3397 3850.
Noticeboard
IBIA noticeboard
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 log on to our new website and update them on your members page. The new website is designed so members can easily access and change their own information. This publication is only available to IBIA members. IBIA Guide to In-Line Blending
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 non-members at £50.
World Bunkering Summer 2015
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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Global news
Damage to container stacks can be an unintended consequence of energy efficiency measures
Slow steaming “can damage containers” Unplanned changes to speed, trim and draft can unwittingly increase metacentric height, and potentially lead to lashing forces on containers exceeding their designated maximum, warns BMT Surveys
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uel-saving measures can have a negative effect on lashing forces on containers, according to BMT Surveys. The company’s risk and quality manager and marine surveyor, Olivier van der Kruijs, bases this warning on audits on more than 100 container vessels last year. He says that the latest generation of containerships have been designed not only to increase capacity but also to improve energy efficiency and environmental performance. The rise in fuel prices in combination with a continuing pressure on freight rates has forced shipowners and operators to look closely at the amount of fuel being used. This has resulted in economical steaming and other fuel efficiency measures. According to BMT, fuel efficiency monitoring can be achieved in a number of ways; for example, by using computer and communication software, which monitors and analyses the ship’s performance and operational parameters in real time. The results of these analyses may then suggest, for example, to change speed, trim and draft. The optimal trim varies with speed, displacement, weather and underwater hull shape and can be a significant factor in saving fuel. One study suggested that fuel consumption could be reduced by as much as 5% using this technology.
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However, as an unwanted side effect, this fuel-saving method may increase the calculated dynamic forces to the containers and lashings, possibly exceeding maximum permissible levels. BMT carries out regular inspections of containerships, with a point of attention during these surveys being the requirement to review the lashing computer data and establish if there is a situation onboard whereby container lashing forces are exceeded. Usually, for the preparation of a stowage plan, stability and lashing forces are calculated. These calculations take into account the usual changes to stability as a consequence of expected fuel consumption, or changes to the ballast water quantity, while sailing. It has become apparent that during the voyage, the ship is sometimes instructed by the owner (or the charterer) to make adjustments to improve fuel efficiency. BMT cautions: “These (unplanned) adjustments of draught and trim increased the GM (metacentric height) on various occasions and, as a result, also the dynamic forces acting on the containers and lashings. This could lead to a situation whereby the ship left port with the calculated lashing forces being within design limits, but exceeding the limits at a later stage when the trim adjustments were made. For vessels enjoying a
voyage with good weather, exceeding the designated maximum lashing forces is unlikely to result in any damaged cargo. However, if the ship was to encounter its ‘design motions criteria’, damage to the container stacks and cargo could occur, thus as an indirect result of saving fuel.” Sulphur emission levels fall at Gothenburg
Measurements at the Port of Gothenburg show that sulphur emissions from ships have fallen by 80% since stricter rules came into force in January. At the turn of the year, the sulphur content in fuel was reduced from 1.0% to 0.1% in the Baltic, North Sea and English Channel. Measurements now show that sulphur emissions have fallen by 80% at the Swedish port. The measurements are being carried out using a ‘sniffer’ located at the Älvsborg Fortress, in the fairway leading into the port. The sniffer has been developed by Chalmers University of Technology with support from innovation agency Vinnova, the Swedish Environmental Protection Agency and Gothenburg Port Authority. The equipment measures the sulphur and carbon dioxide levels in gas emissions, thus revealing the sulphur content in the fuel.
World Bunkering Summer 2015
Geos Group’s Blyth terminal in operation
Having taken delivery of its first cargo last week, operations are now under way at UK-based Geos Group’s new marine fuel terminal at the Port of Blyth. Geos Group’s managing director, Barry Newton, said: “We are delighted to have completed the build and to receive the first vessel at our new fuel terminal. The facility is a strategically important new asset and will enhance our bunkering services to existing and new customers alike.” Port of Blyth chief executive Martin Lawlor added: “This is another important step forward in the port’s growth plans and reaffirms our position as a growing offshore energy hub. I am confident that the terminal and our partnership with the Geos Group will go from strength to strength, with future expansion of the facility a shared objective.” Bimco’s new environmental guide
The Baltic and International Maritime Council (Bimco) has launched its Guide to Maritime Environmental & Efficiency Management, developed in partnership with maritime efficiency specialist Fathom, and supported by ship classification society ClassNK. The guide is described as a “multipart guidance resource to support shipowners and operators in improving their environmental performance and the efficiency of their ships”. Bimco says: “The need for this sort of independent, fit-for-purpose
World Bunkering Summer 2015
resource is greater than ever, given the complexity of the regulations governing the impact of shipping operations on the environment and the ever-present need to drive ship efficiency.” Claude Dumais, vice-president, technical operations and environment, at Canada-based CSL Group, commented: “CSL assisted in the development of this guide by sharing our technical expertise and experience in improving the environmental performance of our shipping operations. We believe the knowledge and insights contained in the guide’s pages will contribute to improving environmental management and fleet efficiency around the world.” Singapore bunker firms lose licences
The Maritime and Port Authority of Singapore (MPA) has announced that it revoked the bunker supplier and bunker craft operator licences of Hong Fatt Oil Trading Pte Ltd and Tankoil Marine Services Pte Ltd with effect from 9 February. The move means the two companies are no longer allowed to operate as bunker suppliers and bunker craft operators in the Port of Singapore. An MPA statement said: “As part of MPA’s ongoing regulatory efforts to ensure the safety, reliability and quality of bunker supplies in Singapore, routine checks were conducted last year on Hong Fatt Oil Trading Pte Ltd and Tankoil Marine Services Pte Ltd.” According to MPA, its separate investigations into the two companies revealed “discrepancies and wrongful declarations” in the records kept onboard their bunker tankers. There were also incidences of transfers of bunkers between bunker tankers that were conducted without MPA’s approval. MPA has therefore decided to revoke the companies’ licences as they had breached the terms and conditions of their bunker supplier and bunker craft operator licences. Bellona Foundation and Damen to cooperate on low-emission designs
Oslo-based Bellona Foundation has launched a three year partnership with leading Dutch company Damen Shipyards Group. The main goal of the partnership is to explore and develop concept lowemission vessels for the future.
A statement says that Bellona Foundation and Damen both acknowledge that today’s global shipping industry will need to undergo substantial change in order to achieve its own climate and environmental objectives. The foundation and Damen have joined forces to work towards reducing the impact on the climate of a wide range of commercial and leisure vessels, as well as fleets employed by the aquaculture industry. “One of Bellona’s goals is to make the ships of the future independent of fossil fuels. This partnership will provide us with new knowledge on innovative shipping construction that will contribute towards achieving that objective, said Frederic Hauge, founder and president of the Bellona Foundation. “Today, the global shipping industry emits large amounts of carbon dioxide, sulphur dioxide, nitrogen oxide and other gases harmful to the climate and environment, and the European fleet is large and in need of renewal. The next three years of partnership with Damen will make us better equipped to handle the challenges, both domestically and internationally.” “We are very pleased to be starting this partnership with Bellona,” added Damen’s Remko Hottentot, sales manager, Norway, who is stationed at Damen’s office in Stavanger. “We have a strong focus on sustainability, and the vision of each organisation complements the other in terms of environmental awareness. “At Damen, the focus will be on creating alternative solutions that contribute to reducing harmful maritime emissions into both the air and the water. “This will go hand in hand with initiatives to develop cost-effective efficiencies through reduced consumption of potentially harmful inputs such as fuel, paint and lubricating oil. “During this long term relationship we foresee, in general, a valuable focus on co-operating in the creation of environmental technical sustainable solutions and the fostering of political support,” Hottentot concluded.
Global news
During the first few weeks of this year, the emission plume from around 200 passing ships was measured. It is estimated that 80% of these were approved, while for 20% the sulphur emissions were too high. “It is incredibly positive to see that the new rules are having such an effect and that sulphur emissions are falling,” said Edvard Molitor, senior manager, environment, at the Port of Gothenburg. “At the same time,” he added, “there is still uncertainty regarding the control system for vessels that are failing to comply with the rules. The industry has reason to be concerned that less serious shipping companies will not follow the rules and that this will lead to a distortion in competition.”
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Environment
Preparing for the inevitable Shipping needs to be ready for a low sulphur-in-fuel cap in five years’ time
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he wording may still be a little vague, but the basic message to the shipping industry is clear. The International Chamber of Shipping (ICS) now says that the shipping and bunker refining industries “should work to the possibility that the global 0.5% sulphur in fuel cap, required by the International Maritime Organization (IMO), is more likely to be implemented worldwide from 2020, rather than 2025”. ICS chairman Masamichi Morooka explained: “While postponement of the sulphur global cap until 2025 is still a possibility, the shipping and oil refining industries should not assume that this will happen simply because they are unprepared. ICS has concluded that, for better or worse, the global cap is very likely to be implemented in 2020, almost regardless of the effect that any lack of availability of compliant fuel may have on the cost of moving world trade by sea.” ICS believes the global sulphur cap could increase the cost of marine fuel for the shipping industry worldwide by as much as US$50 billion a year. In theory, Annex VI of IMO’s International Convention for the Prevention of Pollution from Ships (MARPOL) allows for deferral until 2025. This decision is meant to be subject to the results of a fuel availability study that IMO is legally required to complete before the end of 2018.
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Despite repeated ICS requests, IMO member states have so far refused to bring forward the conduct of the fuel availability study. If supply problems are identified at the end of 2018, this will be far too late for governments to take action. ICS says its member national shipowners’ associations have concluded that a political decision may in effect already have been taken, at least by the US and the EU, which view the global cap as a public health issue. Even if IMO decided to postpone the global cap, the EU is committed to imposing a 0.5% sulphur limit that will apply to international shipping within 200 miles of the coast of all EU member states. In theory, if the global cap was not implemented until 2025, this would create a narrow corridor along the coast of North Africa in which ships could continue to burn less expensive residual fuel with a sulphur content of 3.5%. ICS says it believes that the EU member states will be unlikely to permit this and will therefore push hard at IMO for global implementation of the 0.5% requirement in 2020. Meanwhile, the 0.1% sulphur in fuel cap has applied in emission control areas (ECAs) in North America and NorthWest Europe since 1 January. ICS stresses the need for a harmonised approach. It has been particularly concerned
by reports that some port states are charging ships for the analysis of fuel samples. While the increasing restrictions on sulphur may the most immediately pressing bunker-related environmental issues, there are others. In particular, restrictions concerned with combatting global warming are looming large on the horizon. At IMO, negotiations are under way on the establishment of a global system of data collection on carbon dioxide (CO2) emissions from international shipping. Yet again, the EU has preempted any IMO decision by adopting a unilateral regional regulation on the monitoring, reporting and verification of individual ship emissions, in advance of IMO completing its work. Morooka said: “The EU regulation will have major implications for the IMO negotiations on a global data collection system, which, until now, have been progressing well. There is a real danger the EU initiative will be seen by non-EU states as an attempt to present them with a fait accompli, which includes controversial elements, such as the publication of individual ship efficiency data, which had previously been rejected, for the moment at least, by the majority of governments at IMO.” The suspicion is that the ultimate motive behind the EU regulation is to establish a mandatory ship efficiency
World Bunkering Summer 2015
World Bunkering Summer 2015
the latest IMO Greenhouse Gas Study, published in 2014, the global shipping industry reduced its total emissions by more than 10% between 2007 and 2012. Another recent environmental development may seem of limited concern to the bunker industry but could have unforeseen implications. World governments have agreed that the United Nations Convention on the Law of the Sea (UNCLOS) should be expanded to include a new legally binding instrument on the conservation and sustainable use of marine life in areas beyond national jurisdiction. The new ocean regulations are proposed to include: area-based management tools, such as marine planning and marine protected areas; environmental impact assessment requirements; the transfer of marine technology; and a regime for managing marine genetic resources, including benefit-sharing. While bunkering is not referred to explicitly, there could be implications for ship-to-ship transfers, for example. The World Ocean Council (WOC), formed in 2009 as a maritime industry membership organisation, is keeping a close watch on developments. It asks: “How will these new ocean laws affect
companies currently or potentially operating in the high seas and deep seabed – shipping, oil and gas, cruise tourism, fishing, seabed mining, biotechnology, submarine cable, and others – as well those from associated support sectors, such as maritime legal, finance, and insurance companies?” Hinchliffe said: “It is important that ocean industries are informed and constructively engaged in ocean governance developments. WOC is providing this by monitoring, analysing and reporting on ocean policy and planning on behalf of the ocean business community. WOC merits the support and involvement of companies concerned about the future of their ocean operations.” The council says that there is still time for ocean industries to engage in this critical ocean governance process that will affect business access and operations. It stresses: “Industry involvement is critical and can help ensure that policies and regulations are developed with full and balanced information, are based on good science and risk assessment, are practical and implementable, and engender the involvement and support of the ocean business community.”
Environment
indexing system that will be used to penalise ships financially, in a manner that could lead to a serious market distortion throughout the global shipping industry. The monitoring of CO2 emissions is, however, only part of a run-up to an eventual global framework to drastically reduce greenhouse gas emissions. The working assumption is that shipping will be required to pay significantly to fund measures to combat global warming, and the industry fears being seen as a ‘cash cow’. This year will see the 21st annual session of the Conference of the Parties (COP 21) to the 1992 United Nations Framework Convention on Climate Change (UNFCCC) and the 11th session of the Meeting of the Parties (CMP 11) to the 1997 Kyoto Protocol. While it easy to be sceptical about the likelihood of real progress, the conference’s stated objective is to achieve a legally binding and universal agreement on climate. At an Arctic Summit, on 12 March, ICS secretary-general Peter Hinchliffe emphasised that shipping was the only industrial sector already covered by a binding global agreement, at the IMO, to reduce CO2 through technical and operational measures. According to
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Interview
View across the market Nigel Draffin of LQM has recently re-joined the IBIA board. Sandra Speares talks to him about his personal views of the bunker market
I
f you look at various comments made recently by fuel testing agencies, they have continued to highlight the number of samples that exceed the limits of the ISO standards, Nigel Draffin believes. However, he says that, on closer inspection, a lot are exceptions that are relatively minor and “once you strip out those which are with the 95% confidence limit, fuel quality in my opinion is generally not a significant issue for normal 380-type residual fuel oils”. A lot of the problems that the market was seeing involved raised levels of abrasive particles in fuels, especially where 1% low sulphur was concerned, he says. However, that fuel grade is now effectively obsolete and, as the root cause of that increase in abrasives was because of the components used to get the fuel down to 1%, it is “a non-event for us moving forward”. So far as distillates are concerned, there have been significant issues over the winter months with cold flow properties. As the ISO8217 standard exists at the moment, the requirement in terms of cold flow is based solely on pour point, he explains. “As the demand for distillates increases and people get more imaginative in their blending of distillates, in producing them a number of suppliers have had to resort to the use of pour point depressants, which bring the pour
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point within the standard. However, those depressants do not improve the cold flow properties of the distillate.” In addition, he says, many buyers are unaware of the fact that in asking for conventional gas oil they may routinely be supplied with what is, in effect, a summer grade of gas oil rather than the winter grade, even if it is being supplied in winter. Draffin says that this practice has probably been going on in the marine sector for a long time. There are strict regulations in the automotive sector, for example, where they must use winter grades. While winter grades do exist within the ISO standard, people have not been asking for them specifically. This winter was quite a cold one in terms of sea temperatures in Northern Europe, which prompted a number of issues where ships ran into problems with cold flow, he explains, and with wax deposition in storage tanks. He says that LQM advises buyers that, if they are trading in colder areas, they should ask specifically for winter grade. However, a number of suppliers find it difficult to meet the winter grade requirements. The problem, he explains, is the balance between flashpoint and cold flow properties. “We are asking for a relatively high flashpoint of 60 degrees, and to meet that while also having cold
flow properties for cold weather is a difficult balancing act.” Quite a few people do not use the alternative tests available in the marine sector, such as testing the cold filter plugging point or the cloud point. Although these tests are routinely used in the automotive sector, this is not the case in the marine industry and therefore marine suppliers are not routinely taking those tests. The ISO working group is looking at this issue, he says. So far as quality is concerned, the “big unknown” is how to track the quality performance of the new hybrid fuels, he says. Everything he has seen and read indicates that these fuels perform well. However, there are issues on segregation, as most producers say the fuels can be freely mixed with other gas oils, but they warn against mixing them with other residual fuels. Some also caution against mixing with other hybrid fuels. Although there has been a lot of interest in hybrid fuels, the take-up has not necessarily reflected this. There have been few firm enquiries, and Draffin’s gut feeling is that this reflects the current low price scenario. If prices move back up again, this may change. He suggests that big tanker or bulk carrier operators might prefer to go down the scrubbing route. There is probably a reasonable take-up of such fuel for those trading exclusively in emission control areas (ECAs).
World Bunkering Summer 2015
World Bunkering Summer 2015
huge opportunities on the other side of the Atlantic. Contacts with IMO are very important for IBIA, he continues, and the association has been given consultative status and contributes to issues before the IMO that are relevant to members. It also gives support and advice about members concerns to IMO – and vice versa. IBIA also has a growing relationship with other trade associations like the International Association of Independent Tanker Owners (Intertanko) and the International Association of Dry Cargo Shipowners (Intercargo), but Draffin says that IBIA is different because it represents all parts of the industry, not just those on the supply side or the demand side. This is an issue he “stands up and beats the drum about”. Another factor he mentions is training. A huge amount of effort has been put in by the association and the trading organisations he has worked with to make training in the industry available and affordable. He says he is still convinced that only 10%-15% of those who need training are actually being trained, partly because the churn
rate in the industry. The only real way to get the training percentage up is to make it mandatory, he says. The difference is that, in the case of bunker clerks or engineers on ships, they must be trained or they can’t do the job. “Anyone can be a bunker trader or a bunker buyer – training is not compulsory, so we have to persuade people of the value of training.” That is a major message that needs to be constantly put forward, he believes. Draffin says that last year he ran a course for one of the credit reporting agencies, because its staff might not have experiencing of the bunkering business yet were preparing reports on bunkering companies. He recently did a three-day course for the Panama Canal Authority. “I am also trying to schedule some training with one of the big analysis companies,” he adds. The problem, he believes, is that certain segments may know a lot about their business but don’t have a wider picture. “You need to understand your own business, you also need to understand your customer’s business. You can serve them better if you understand what they need.”
Interview
Where fuel availability is concerned, hybrid fuels have their own availability issue, he says, in that they tend only to be available in locations where they are manufactured. There is less appetite for shipping the fuel around, probably because of uncertainty over demand. Also, the VGOs used to make the fuel have other uses and there are other industries that want to use the products. For the refiner, therefore, it is a question of selling it to the market offering the best margin and that may not necessarily be the marine market, Draffin explains. In terms of supplies of residual fuel oil with 3.5% sulphur, there is no shortage in supply and he does not see that picture changing. With distillates, there is plenty of gas oil around, but the problem the industry faces is that gas oil is not necessarily in the places it is needed, and, as the demand for gas oil increases, it will have to be moved around. There may be an abundance of supplies in the Middle East or India, but a shortage in North Europe. “People are going to have to move cargos around.” There may also be supplies imported from the US, he suggests. Another question mark is what will happen if the global sulphur cap of 0.5% comes into force in 2020. Europe has already said that it will change in 2020, in spite of what the International Maritime Organization (IMO) decides. Draffin has been involved in IBIA since its inception, but he has not been on the board for a year, and was elected back onto the board on 1 April 2015. He sees changes to IBIA’s Singapore office as being “entirely positive”. He says it is extremely important for the association to engage with the membership in the Far East and to continue to grow that membership. He adds that IBIA has had a very fruitful relationship with port authorities like the Maritime and Port Authority of Singapore (MPA) over the years. One advantage for IBIA is having someone like Peter Hall as its chief executive, as he has personal experience of running a large bunkering port, Draffin says. The African market also offers huge potential for bunkering and is an area where IBIA wants to boost membership. There are also
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Oil majors
Sulphur reaction Oil majors have responded to the challenge of the 0.1% sulphur limit within ECAs with new products
O
n 1 January this year, a 0.1% sulphur in fuel limit came into effect in emission control areas (ECAs). This affects ships entering waters in the Baltic Sea; the North Sea; the North American ECA, including most of the US and Canadian coast, as well as the French overseas territories of Saint-Pierre and Miquelon; and the US Caribbean ECA, including Puerto Rico and the US Virgin Islands. While the initial expectation was that ships would have to switch distillate fuel, such as marine gas oil (MGO), several companies have developed versions of ultra-low-sulphur fuel oil (ULSFO). Shell has said that it is seeing strong demand for its ULSFO and believes this demand is set to increase. Since the launch of the new marine fuel in December last year, Shell has made over 250 deliveries from dedicated ULSFO barges in Antwerp and Rotterdam alone, the company says. Carolyn Comer, global sales manager, international marine fuels, Shell, says: “Shell’s ULSFO is the result of over two years’ research and development. We designed this fuel in preparation for the 2015 ECA regulation change and it is a residue-based rather than a distillatebased product, unlike similar products on the market. Our customers report very good ignition quality and lubricity, as well as demonstrable economic benefits.”
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Shell’s ULSFO has been successfully proven during a number of sea trials with a variety of different engines and is ISO8217:2010 RMD 80 compliant. It has excellent ignition quality with a low aluminium and silicon content, ensuring the smooth running of both main and auxiliary engines and boilers. A fully segregated supply chain ensures quality assurance of the product when delivered to customers. With patents pending, this fuel can now be found in Rotterdam, Antwerp, Singapore, New Orleans, Montreal and Freeport (Bahamas). Shell Marine Products (SMP) also introduced a complete line of ECA-compliant marine lubricants in September 2014. This portfolio includes Shell Alexia S3, formulated for use in two-stroke engines with low sulphur and distillate fuels up to 0.5% sulphur. SMP also offers Shell Gadinia for medium-speed four-stroke engines like the one in Harvey Energy, Shell’s new chartered offshore supply vessel (OSV) in the Gulf of Mexico. Shell Mysella for gas-powered engines is used on Shell’s chartered barge Greenstream, the world’s first 100% liquefied-natural-gas-(LNG)powered barge, which carries goods along Europe’s River Rhine. “We have been pleasantly surprised by the demand that our ECA-approved lubricants have gotten. We have been quick to expand availability of our prod-
uct range throughout our port network. Today, Shell Alexia S3 is available in over 330 ports in 20 countries, while Shell Gadinia and Shell Mysella are available throughout our global port network,” comments Jan Toschka, general manager of Shell Marine Products. The combination of newer high-performance engines, practices like slow steaming and, now, ECA zone implementation have presented increased complexity among ship operators, who tend to switch fuels and engine oils as they go in and out of ECA zones. “We see an increased need for technical services, be that in offering used oil analysis programmes, helping to interpret and implement original equipment manufacturer requirements, cylinder oil condition monitoring or in assisting ship operators in crew development. Shell is well placed to provide this support, as we have dedicated technical experts around the world who can help solve customers’ lubrication issues and also improve equipment performance,” adds Toschka. Chevron’s new 100 base number (BN) cylinder oil Taro Special HT 100 offers shipowners the ability to achieve the latest emissions legislation and has now received interim approval for its use in another key engine range – products made by Winterthur Gas & Diesel (formerly Wärtsilä). A Wärtsilä engine has satisfactorily completed 2,000 hours of a 4,000-hour
World Bunkering Summer 2015
World Bunkering Summer 2015
lubricant samples from deep-sea vessels every year. The scientists in Ghent have formulated a new lubricant which provides ultimate engine protection in a range of harsh operating conditions. Taro Special HT 100 is now available in selected Chevron ports worldwide. Meanwhile, ExxonMobil is expanding its range of specialist fuels for use within ECAs with the introduction of ExxonMobil Premium Advanced Fuel Marine ECA 200 (AFME 200). This joins ExxonMobil Premium Heavy Distillate Marine ECA 50 (HDME 50) in the company’s low-sulphur fuel portfolio. These low-sulphur fuels help engineers safely and efficiently operate their main and auxiliary engines and boilers. ExxonMobil Premium AFME 200 is an advanced fuel oil formulated using a proprietary refining process that removes sulphur, metals and other contaminants. This enables the fuel to comply with the ECA sulphur cap and also helps to optimise the performance of engines and extend component life. The viscosity of ExxonMobil Premium AFME 200 is comparable to heavy fuel oils (HFOs) enabling similar storage and handling practices for both fuels onboard marine vessels. Both fuels require preheating, therefore reducing the risk of thermal shock to engine components during switch-overs to comply with the ECA sulphur cap. Thermal shock may result in fuel pump seizures and engine shut-downs and has the potential to occur when switching from heated HFO to marine gas oil (MGO) at ambient temperatures. New 0.1% sulphur limits in ECAs have increased the use of distillate fuels, but,
without careful management and treatment, they can cause significant harm to engines, according to Wilhelmsen Ships Service (WSS). Distillate fuels can cause blockages in fuel lines, in addition to damaging fuel pumps and injectors and, in some cases, contribute to the loss of engine power, according to Jonas Östlund, product marketing manager, marine chemicals, at WSS. “If you are aware of the fuel’s basic properties and limitations, and are prepared to treat your distillates in order to manage and maximise their performance, they pose few challenges,” says Östlund. “Although MGO was readily available for operators to comply with the 2015 sulphur cap, new fuels made available in the market by leading oil and gas companies have raised the bar in terms of both safety and performance benefits,” says Rob Drysdale, global field engineering and logistics manager, ExxonMobil Marine Fuels and Lubricants. “ExxonMobil Premium AFME 200 and other new ECA fuels have a higher viscosity and flashpoint than MGO, helping shipping companies to undertake their day-to-day operations in a safe and efficient way.” Other benefits, the company says include excellent ignition quality; good combustion characteristics in slow and medium-speed engines; and good lubricity, reducing friction and wear. Extensive fuel compatibility and stability tests were undertaken during the development of ExxonMobil Premium AFME 200, including the ISO10307-2 sediment test. The results indicated that ExxonMobil Premium AFME 200 is fully compatible with ExxonMobil Premium HDME 50 and MGO. While ExxonMobil Premium AFME 200 is a unique product with advantages over traditional fuel oil, it does meet and exceed all the tests included in the ISO8217:2012 RME 180 specification. ExxonMobil Premium AFME 200 is available from the Port of Southampton, which is close to Exxon’s Fawley refinery, via barge. ExxonMobil now supplies ECA-compliant fuel at more than 40 ports worldwide. Throughout 2015, ExxonMobil will continue to expand its ECA-compliant fuels offer and the company said that AFME sales have exceeded its expectations this year.
Oil majors
shipboard testing programme conducted by Chevron and reviewed by the company. After examining the results for the Wärtsilä 8RT-flex82T engine and analysis of samples of the lubricating oil, Winterthur Gas & Diesel has now issued an interim no objection letter (NOL) covering the use of the lubricant. Chevron expects that a full NOL will be issued assuming the satisfactory completion of the remaining portion of the test cycle. The interim approval allows the use of Taro Special HT 100 oil in Wärtsilä RTA, RT-flex and W-X engines as well as in Sulzer two-stroke engines operating on fuels with a sulphur content range of 2.0% to 3.5% on a continuous basis. Late last year, MAN Diesel & Turbo (MDT) upgraded its interim approval to a full no objection letter following extensive sea trials of Chevron Taro Special HT 100. In addition to the trials for MAN and Wärtsilä engines, Chevron Marine has accumulated nearly 600,000 hours’ worth of commercial operation with Taro Special HT 100. “This is a further piece of excellent news for Taro Special HT 100, particularly given the exacting testing regime demanded by Winterthur Gas & Diesel. This development will help broaden the appeal of our new lubricant to an even wider group of global ship owners”, says Rafael Teodoro, Chevron Marine’s global marketing manager. The development of Taro Special HT 100 was overseen from Chevron’s global research and development facility in Ghent, Belgium, which undertakes in-depth analysis of many thousands of
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Fuel management
Things can get messy if ships aren’t well prepared for fuel switch-overs
Switching issues Despite the best efforts of classification societies and many owners, fuel switching to comply with emission control area regulations has on occasions been problematic, as David Hughes reports
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enerally speaking, shipping took the implementation of the 0.1 % sulphur in fuel limit within emission control areas (ECAs) in its stride. However, there were fears – based on the California experience, where ships have for some years been required to switch to distillate fuels – that some ships would experience problems. These have been borne out. In March, the United States Coast Guard (USCG) issued a safety alert about the importance of establishing effective fuel oil changeover procedures to comply with MARPOL Annex VI emission regulations. The alert noted: “Recently, there have been several reported incidents involving substantial machinery space fuel leakages while vessels were switching fuel oil to ensure compliance. Although such leakages were contained, fuel releases of any kind may result in pollution, injury or death of personnel and shipboard engine room fires. Moreover, many losses of propulsion have occurred in different ports and have been associated with changeover processes and procedures.” The USCG points out that, in some cases, vessels may require fuel oil service or day tank modifications and fuel oil service piping modifications to facilitate
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safe procedures and compliant fuel operations within the ECAs. It advises that the management and oversight of any fuel oil mixing that may be part of a changeover process must take place before the vessel enters an ECA or after the vessel leaves an ECA. This includes proper control and reduction of the operating temperature of fuel supplied, varying ratios of the mixed fuels and control of mixed fuel viscosity to the engines. The amounts of ultra-low-sulphur fuel oil (ULSF) onboard must be enough to satisfy the vessel’s fuel demand at all times while the vessel operates within the ECAs. Alternatively, efforts should be made to take on additional ULSF while in port. The USCG adds that there are many other important technical issues associated with the use of ultra-lowsulphur fuel oils and fuel oil switching, which are addressed in documents produced by class societies, insurers, engine manufacturers and industry associations. But, among other things, the USCG strongly recommends that vessel owners and operators ensure fuel oil switching is accomplished outside busy traffic lanes. Tom Boardley, marine director at Lloyd’s Register, has been quoted as saying that port authorities were concerned that engine blackouts
inside ECAs are a persistent problem. Shipping newspaper TradeWinds reported Boardley as saying: “Even though you may have tug assistance, if you’ve got a large ship that’s gone dead in a confined space, it’s a dangerous situation.” Distance learning provider Videotel says it has responded to USCG concerns by producing a programme that will help guide shipowners through the process. The Videotel programme, The Practical Management and Switching of Marine Fuels, details how to effectively implement fuel oil changeover procedures. It takes into consideration issues such as whether the vessel will require fuel oil service or day tank modifications; whether a crew needs to establish a fuel oil system inspection and maintenance schedule; how to check that all sensors, controls and alarms are operational; and how to ensure that fuel oil switching is done outside busy traffic lanes and designated ECAs. Videotel’s chief executive, Nigel Cleave, said: “It is critical that crews are aware of best practice when switching heavy marine fuel oil to low-sulphur fuel, because, without proper training, serious operational problems can occur, impairing a ship’s performance or even, in a worst case scenario, damaging a ship’s main or auxiliary engines.”
World Bunkering Summer 2015
Taking ECA rules in its stride Carisbrooke Shipping says trouble-free compliance depended on careful preparation
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areful preparation supported by the skill and diligence of its sea staff meant that UK-based Carisbrooke Shipping’s first three months of emission control area (ECA) operation ran “without a hitch”, according to its chief executive, Robert Wester. Carisbrooke, which operates a fleet of some 60 vessels, mostly on coastal and short-sea trades, says it is “affected more than most by the new regulations”. Since 1 January, ship operators running vessels in ECAs have been required to use bunkers containing no more than 0.1% sulphur while in these areas. Compliance options have included re-engining, scrubber installation or fuel-switching between waters in and outside ECA regions. But Wester says that, in reality, options for companies like Carisbrooke are limited. “In the short-sea trades, the economics of scrubber installations to clean exhaust gas, or engine retrofits to burn alternative fuels such as liquid natural gas, simply don’t stack up. In relatively small ships, there are invariably space and stability constraints relating
to scrubber installations. We are not fitting scrubbers to any of our vessels and at this time have no plans to do so in the future. However, as always, we will monitor the situation and review our plans accordingly. “Despite the new challenges, we have continued to offer our usual high standards of service to charterers and end users,” he added. However, a number of operators have experienced problems with fuelswitching, and short-sea operators such as Carisbrooke have faced economic and space constraints in complying with the new regulations. “We operate one of the most up-todate fleets in the short-sea sector,” Wester continued. “Nevertheless, the compliance process has been expensive, although we are confident that the investment has led to safer, greener and more efficiently run vessels overall.” Fleet technical director Martin Henry explains the company’s strategy. “Knowing what kind of serious failures and problems can occur during the extremely critical period of fuel change over if not managed well, we decided that careful preparation was a priority,
Hybrid fuels “uncertainty”
In a report on the use of new hybrid fuels compliant with emission control areas (ECAs), classification society DNV GL strikes a note of caution. It says that although hybrid fuels have successfully been tested during continuous engine operation, some uncertainty still remains with regard to the changeover from conventional heavy fuel oil (HFO). “Operational feedback from practical changeover processes from HFO to hybrid fuels is currently almost non-existent, and the main concern is related to potential incompatibility issues,” the report says.
World Bunkering Summer 2015
not least because the regulations were to enter force at the very worst time of year, when weather conditions are often at their most severe. “Bearing in mind that many of our vessels are constantly in and out of ECA-regulated waters, we assessed each group of ships in our fleet to see what modifications would be required in terms of fuel tank allocation and piping arrangements. On some ships, there was a considerable amount of work needed. “We seconded two serving senior chief engineers to head office and, between them, they visited all of our vessel series, carrying out actual changeovers to and from marine gas oil in order to draw up suitable detailed procedures. “If the process is not carried out carefully, there is a serious risk of damage to components. The procedures vary, because onboard some of our older vessels, there is limited tank capacity for distillate fuel, and more time is required for the changeover process. On others, we had to reorganise fuel supply pipework where this was economically viable.”
Fuel management
Carisbrooke’s 2012-built Vectis Eagle class design incorporated additional tanks for distillate fuel in anticipation of ECA rules
It cautions: “Based on previous experience, fuels with very different chemical compositions have a tendency to be incompatible when mixed in certain blending ratios. “All rules of thumb would indicate incompatibility between these types of fuel with the likely precipitation of sludge and clogging of the fuel/engine system as a result,” says DNV GL. “Careful monitoring of the fuel performance during the changeover process is therefore advisable. Starting this process well in advance of entering the ECA area is also advisable to ensure that the changeover process is completed in a safe manner.”
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Scrubbers Two Stena Line ro-ro vessels, Stena Transit and Stena Transporter, are to be retrofitted with Wärtsilä in-line closed-loop scrubber systems in Q4 2015 and Q1 2016
Taking off While some uncertainties over environmental issues remain unresolved, increasing numbers of owners are fitting scrubbers
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ne result of falling oil prices was that the cost of complying with this January’s implementation of the 0.1% sulphur limit in emission control areas (ECAs), by buying distillate fuel, was slashed. Nevertheless, many owners now seem convinced that abatement technology, or ‘scrubbers’, is the way to go. It might be a bit early to say all is clear-cut when it comes to considering this option. For one thing, there are a number of variations on the theme and several manufacturers. Also, a new report cast doubt on the viability of using scrubbers as a response to recently introduced and pending limits of the level of sulphur in emissions. A study commissioned by German environmental group Naturschutzbund Deutschland (NABU), “Scrubbers – An Economic and Ecological Assessment”, raises concerns that open-loop scrubbers may have a harmful effect on water quality. It also raises doubts about closed-loop scrubbers. The report notes: “The scrubber market is highly dynamic at the moment, due to the recent tightening of the SECA fuel sulphur limits. The number of scrubbers installed on ships has increased significantly over the last years. About 80 scrubbers are installed [on] the world fleet at the moment, with greatest interest for hybrid and open-loop scrubbers.
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The number of orders amounts to 300 at the time of writing.” It continues: “Concentrations of hazardous substances in the discharge of closed-loop systems are higher than in open-loop systems, but the mass flow rate of these substances determines the environmental burden. This is larger in case of open-loop scrubbers, which are not always equipped with discharge water cleaning systems. The current dominance of seawater and hybrid scrubbers indicates that a large share of the pollutants captured in the wash water may be released to the seawater.” The report asserts: “Due to the release of wash water, the use of distillate fuels or LNG is inherently cleaner compared with the use of open-loop scrubbers.” The study notes that the business case for scrubbers is highly dependent on fuel price, but it says: “To assess the cost and benefits for society as a whole, the benefits for shipowners would need to be weighed against the potentially harmful impacts of scrubbers on vulnerable coastal ecosystems and the lower lifecycle greenhouse gas (GHG) emissions of using heavy fuel oil (HFO) and scrubbers. Such an analysis is conditional on the availability of monitoring and modelling of the impact of scrubbers on water quality and marine ecosystems.” Still, owners do have to comply with the 0.1% sulphur limit within ECAs, and the cost of buying distillate such as marine
gas oil (MGO) is still high enough to give serious consideration to investing in technology that allows continuing use of HFO. To help owners take that decision, Wärtsilä and Clean Marine Energy (Europe) Ltd (CME) have agreed to provide a “convenient funding solution to drive the uptake of exhaust gas cleaning technology”. They says the move is intended to ease the financial burden on shipowners seeking to install scrubber systems in order to meet sulphur emissions legislation. A Wärtsilä statement says that the financing solution, similar to those prevalent and proven in the building environment, enables a shipowner to repay the cost of the scrubber system installation via a fuel adder – a fuel premium on the price of HFO via which the shipowner repays the cost of installing the scrubber. This provides a return from the differential between HFO and MGO for a period of four to six years, depending on price spreads. The deal means that shipowners do not have the burden of meeting the up-front capital expenditure, which is typically between $3 million and $12 million per vessel. Wärtsilä says: “This investment is often difficult to pass onto charterers, whereas with CME financing, the fuel adder charge can be easily passed on until such time as the scrubber system is paid for. The concept therefore minimises the impact on the owner’s balance sheet, banking and security arrangements”.
World Bunkering Summer 2015
Scrubbers
An Ecospec cSOx tower being installed on a Swedish ro-ro vessel
Odd one out A version of a Singapore system initially aimed at taking CO2 out of ship emissions is now being fitted as a sulphur scrubber
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any in the shipping industry do not know what to make of Chew Hwee Hong, managing director and founder of Singapore-based firm Ecospec and inventor of the CSNOx emission control technology. In July 2009, Chew took advantage of a lunchbreak during the 59th session of the Marine Environmental Protection Committee (MEPC 59) meeting to present his system to attendees as a way of taking carbon dioxide (CO2) out of ship emissions. It was announced that, in an initial test conducted onboard an Aframax tanker in December 2008, the CSNOx equipment had reduced sulphur dioxide (SO2), nitrogen oxide (NOx) and CO2 levels in emissions by 92.9%, 82.2% and 74.4% respectively. About half of those there were very excited by the presentation, while the other half were deeply sceptical, seeing the system as being too good to be true. That scepticism may have increased somewhat since then as developments have appeared slow. However, in September last year, Ecospec announced that shipowner TransAtlantic Sweden and Stora Enso, one of the world’s largest pulp and paper manufacturers, were fitting “Lloyd’s Register verified” cSOx emission abatement systems for their vessels trading in the Baltic Sea.
World Bunkering Summer 2015
The cSOx system has been jointly developed by Ecospec and Sembawang Shipyard from the original CSNOx system to specifically take sulphur dioxide out of the exhaust gas to meet the lowsulphur fuel emission requirement. Ecospec Marine Technology’s senior general manager, Tany Tay, told World Bunkering that, since that initial presentation six years ago, Ecospec had focused on developing a costefficient sulphur scrubber version of the original system. She said: “Our system is able to remove CO2. Currently, there does not seem to be any demand for CO2 removal. Almost all owners we spoke to require only SOx removal to meet regulations. “In order not to price ourselves out of the market, we are now offering the simpler version, cSOx, where SO2 is removed down to equivalent of 0.1% sulphur in the fuel and CO2 removal is sufficient to achieve a carbon-neutral position.” She said that the quantity of the water required for the system to achieve the equivalent of the 0.1 ECA limit was much lower than originally designed. This was because the cSOx system was originally designed with a cSOx tower spraying 800 cubic metres of ultra-low-frequency (ULF) treated water into three levels. Test results have shown that only 350 cubic metres of water spraying into only one level is sufficient to attain the removal rates.
This means big savings as pumping requirements, and therefore power consumption, have been reduced by as much as 56%. She added: “Another notable breakthrough is that we have discovered that it is not necessary to use GRE piping for the cSOx system. Our washed water is non-corrosive to begin with, unlike the conventional system, and we have found that the energy loss through metallic piping is negligible compared with the cost of glass reinforced epoxy (GRE) pipes and its installation in-situ requirement. This will reduce the overall cost of the system tremendously.” Referring to the NABU report (see previous page), Tay said: “The report claims ‘closed-loop systems barely exist’, but they did not include our system, which is a complete closedloop system, in their study.” Tay added: “The cSOx system is upgradeable to the full CSNOx version should future regulations call for tighter emission of CO2 and to include NOx reduction for existing ships. No other systems can remove multiple gases in one process.” With firm orders and installations fitted and working at sea, Chew’s system is starting to be accepted, but, for now at least, only as one of many competing sulphur scrubbers.
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LNG Wärtsilä has launched a new series of LNG carrier designs as shipping moves into the gas age
How ‘green’ is LNG? The LNG bandwagon appears unstoppable, and the environmental case for using it looks strong, despite environmentalists’ reservations over the dash to gas
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iquefied natural gas (LNG) is now being widely seen as a “bridge fuel” to help the move eventually to a decarbonised energy system. This is primarily because it emits less carbon dioxide (CO2) during combustion than other fossil fuels but is also cleaner in terms of other pollutants. However, environmental groups and others have raised concerns. LNG is essentially methane (CH4), and methane is a potent greenhouse gas, contributing to the enhanced greenhouse effect, or, more commonly, ‘global warming’. Even though it occurs in lower concentrations than CO2, methane produces 21 times as much warming as CO2 and it accounts for about 20% of the enhanced greenhouse effect. It remains in the atmosphere for a relatively short time, up to 12 years. About two-thirds of global methane is thought to come from man-made sources: the burning of fossil fuel, the accidental release during drilling and distribution and from cattle ranching. Methane is also released into the atmosphere through ‘slippage’ from methane-fuelled diesel engines, but this is seen as being minuscule in the marine context and outweighed by lower CO2 production. An article in Science magazine last year examined the issue in detail.
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“Methane Leaks from North American Natural Gas Systems” noted: “Because of the high global warming potential of methane... climate benefits from NG use depend on system leakage rates.” It continued: “Some recent estimates of leakage have challenged the benefits of switching from coal to NG, a large near-term greenhouse gas (GHG) reduction opportunity. Also, global atmospheric CH4 concentrations are on the rise, with the causes still poorly understood.” It concluded: “If natural gas is to be a ‘bridge’ to a more sustainable energy future, it is a bridge that must be traversed carefully. Diligence will be required to ensure that leakage rates are low enough to achieve sustainability goals.” Environmental pressure group Worldwatch asserted recently that “satellite photos show that methane leakage from the drilling and pipeline delivery of natural gas offsets any CO2 benefits that natural gas may bring over coal during combustion and use”. The discussion in the US has mainly been in the context of LNG replacing coal, but the environmental lobby appears to be homing in on natural gas leakage issue as a reason, in general, not to switch to LNG. That is putting pressure on the authorities in the US, especially, and on oil and gas companies to mitigate gas leakage.
While environmental groups have misgivings about LNG, many in the shipping industry, and the European Commission, are convinced gas is the way forward. Reflecting this view, influential business adviser Boston Consulting Group (BCG) asserts: “LNG is likely to become the marine fuel of the future— that much is clear to stakeholders in the commercial shipping industry. But the important question is when will LNG become the dominant bunker? The answer is critical to planning and executing investment decisions that will amount to hundreds of billions of dollars industry-wide in the coming years.” In a new report, “Forecasting the Future of Marine Fuel”, BCG says: “Executives rejoicing in low crude oil prices may be tempted to take a wait-and-see approach regarding investments in LNG and other lowsulphur fuels. But even in the near term, delaying the adoption of cleaner fuels will mean that large cargoships will continue making an outsized contribution to carbon dioxide emissions globally. Executives who are committed to transitioning to a ‘green’ shipping industry will stay focused on the environmental advantages of burning cleaner fuel.” BCG says uncertainty on whether the 2020 global 0.5% cap on sulphur
World Bunkering Summer 2015
LNG An LNG bunker vessel is to be built by STX Offshore & Shipbuilding in South Korea for Shell and will be powered by Wärtsilä DF dual-fuel engines
emissions outside emission control areas (ECAs) might be postponed until 2025 has added to the complexity of deciding when to switch to LNG. In fact, the chances of postponement now look almost non-existent (see Environment News, page 30 LNG is one of three main options for cleaner emissions, BCG notes, but “choice among these options is not clear-cut, as each one has benefits and drawbacks”. It says natural gas that has been converted to a liquid is the cleanest option from an environmental perspective. However, using LNG will require costly investments in new bunkering infrastructure, which is scarce today. BCG also considers the use of scrubbers and says: “This option has the advantage of enabling vessels to continue to use cheap heavy fuel oil (HFO); however, scrubbers require a significant investment, and some components of the technology (such as processes for waste treatment) have not yet been fully proved.” On the use of distillates, BCG notes they are cleaner than HFO untreated by scrubbers and represent the easiest solution from a technical perspective. But it adds: “Distillates are much more expensive than the other fuel options, however, and the cost differential could
World Bunkering Summer 2015
become greater if increased demand throughout the shipping industry drives distillates’ prices even higher.” Distillates and untreated HFO are the conventional options for bunker, compared with the technically advanced options of LNG or cleaned HFO. Today, only vessels operating outside ECAs can burn untreated HFO. When the global sulphur emissions cap goes into effect, the use of untreated HFO will not be permitted on any routes. However, HFO-powered engines can readily be adapted to switch to distillates, which will become the main conventional option. In selecting an option, shipping companies should also consider how refineries and ports will need to respond to the changing supply environment and how their actions will affect ship operators’ costs. To meet the increased demand for distillates, refineries will need to invest more in hydrocrackers and coker units that convert fuel oil into distillates. To supply LNG, ports will need to invest in onshore infrastructure. BCG has developed a proprietary tool that evaluates the economics of selecting each fuel option over the next 15 years. The model’s output is reported for vessels segmented on the basis of type (for example, tanker or
© STX
container), size, year built and route. Two factors will have the greatest influence on LNG’s penetration of the bunker market until 2025: the price differentials among LNG, HFO, and distillates and the date the global sulphur emissions cap becomes effective. Analysing these two factors across various scenarios, BCG’s base case, where price differentials remain constant and the global sulphur emissions cap takes effect in 2020, LNG’s market penetration in 2025 would be approximately 20%. If the base case is borne out, LNG will gain share globally beginning in 2020. According to BCG, after 2020, scrubbers will become more prevalent on new tankers and other vessels that require flexible bunkering because they travel on many different routes. It is not likely that bunkering infrastructure for LNG will be available at ports outside North America or northern Europe until 2025, so HFO and scrubbers will be the best option for ship operators wanting to comply with emissions regulations. Within the shipping industry, classification society DNV GL is an enthusiastic supporter of LNG as a marine fuel. In his keynote speech on innovation at the European Shipping Week
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LNG The FA Gauthier is the first gas-powered passenger ship to be built in Italy, for Canadian operator La Société des Traversiers du Québec
in Brussels, DNV GL’s chief executive, Tor Svensen, said: “Recently, there have been many global efforts and initiatives to protect the environment. But, to achieve the ambitious goal of a 60% to 80% reduction in CO2 emissions, there are still significant challenges that need to be addressed. European industry players were working hard to tackle these challenges, by being forerunners in innovative, greener propulsion technologies, such as battery and hybrid systems, fuel cells or LNG-fuelled engines. As the trend is to go beyond compliance, adopting these technologies gives you a competitive advantage.” On its website, DNV GL says that its classes most LNG-fuelled ships and a large number of LNG tankers. It says: “Currently, we are running a number of studies on behalf of governmental bodies to prepare Europe and European countries for the introduction of a small-scale LNG value chain.” DNV GL claims: “LNG as a fuel is both a proven and available commercial solution. LNG offers huge advantages, especially for ships in the light of ever-tightening emission regulations. Conventional oil-based fuels will remain the main fuel option for most vessels in the near future, and, at the same time, the commercial opportunities of
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LNG are interesting for many projects. While different technologies can be used to comply with air emission limits, LNG technology is the only option that can meet existing and upcoming requirements for the main types of emissions (SOx, NOx, PM, CO2). LNG can be competitive pricewise with distillate fuels and, unlike other solutions, in many cases does not require the installation of additional process technology.” Dual-fuel “remains attractive option”
Lower oil prices are not necessarily bad news for LNG newbuilding projects. Joe McGladdery, a partner with the London law offices of Wikborg Rein & Co, says that, while falling oil prices have exerted pressure on the LNG charter markets, the new generation of low-speed, dualfuel LNG carriers now in service and on order remain an attractive option for owners and operators. McGladdery notes: “As a result of the oil price collapse, energy companies are reducing capital budgets to protect against falling revenues. Given the investment levels needed to sustain an LNG production project, the final decision to proceed with a number of projects has been put on hold. This uncertainty over the progress of production projects has exerted
further downward pressure on an already static charter market for LNG carriers, and the prospects are not looking favourable as the number of open ships grows and anticipated new cargoes fail to materialise. He continues: “The economics of slow-speed diesel engines works when there is a marked differential between the relative prices of oil and LNG, but the recent collapse in the price of oil has been accompanied by a fall in the price of LNG as well. This has led to some doubt about the viability of dual-fuel gas-injection technology in the current market.” Nevertheless, McGladdery believes: “The fact remains that converting an LNG carrier’s engines so that it is capable of burning LNG as a low-sulphur fuel allows owners and operators to comply with the new requirements for ships operating in emission control areas. It also provides them with the flexibility to burn two types of fuel which other technologies, such as exhaust gas cleaning systems, or scrubbers, do not. So the application of dual-fuel, gasinjection technology to newbuildings and the conversion of slow-speed diesel engines on existing ships still make sense, despite the recent fall in the price of oil.”
World Bunkering Summer 2015
Society for Gas as a Marine Fuel (SGMF), the new non-governmental organisation established to promote safety and industry best practice in the use of gas as a marine fuel, has launched its first publication, LNG Bunkering – Safety Guidelines. The guidelines are the first output from one of six working groups and have been written and compiled by a group of experienced individuals from across the SGMF membership. The objective of the guidelines is to provide the bunkering industry with best practices in order to ensure that gas–fuelled ships are refuelled with high levels of safety, integrity and reliability. The guidelines include chapters on “LNG Hazards (Leaks, Cryogenic, LNG Fire and Explosion)”, “Safety Systems (Roles, People in Charge, Communications and Emergency Systems)”, “Bunkering Procedures (Before, During and After)” and “Specific Safety Guidance for Ship to Ship, Shore to Ship and Truck to Ship Bunkering”. Klas Ljungmark, principal technical adviser for SGMF, was also secretary for the LNG Bunkering – Safety Guidelines working group, which consisted of employees from SGMF members, including the Swedish Maritime Administration, Shell, MOL Group, Lloyd’s Register, DNV GL, the Norwegian Maritime Authority, Alkane Marine and
the International Association of Ports and Harbors (IAPH). SGMF’s general manager said that this was a critical time for the industry to have reliable guidelines that everyone can follow but also now build on with experience of operations. He said: “It’s about keeping a safety record and ensuring to the best of our knowledge and ability that this process is carried out in the right way. These guidelines will become a key reference for the industry to help make that a reality.” In another move to provide guidance on the use of LNG as a marine fuel, the United States Coast Guard (USCG) has published two new policy letters on LNG bunkering, personnel training and waterfront facilities. With regard to simultaneous operations (SIMOPS), USCG points to DNV GL’s Recommended Practice for “Development and operation of liquefied natural gas bunkering facilities”. The USCG guidance notes: “Since US ports do not have LNG liquefaction and storage facilities yet, ships will have to rely on small-scale bunkering for the time being. This practice harbours certain risks that had not been addressed by US legislation until now, but are covered in DNV GL’s Recommended Practice RP-0006: 2014-01”. The USCG’s LNG expert, Ken Smith, said: “DNV GL is already doing
everything the USCG could hope for and more, and we recognise and appreciate the vast experience and in-depth expertise that DNV GL has when it comes to LNG as fuel, both here in the US and internationally. The recommended practices and standards that you issue and the work you have done in other technical committees are helping to shape our policies and regulations in this area.” Tony Teo, DNV GL’s technology and business director, North America, stressed: “The early phases are essential when performing risk assessment in the context of LNG bunkering. They set the boundaries for risk acceptance, define the scope and lead either into a scenario-based or a full quantitative risk assessment.” Simultaneous operations like loading/unloading of cargo or passenger movements at the terminal during bunkering operations require special attention. Says Teo: “We recommend carrying out a full quantitative risk assessment with the aim to demonstrate that overall safety targets are met, evaluate and select safeguards and risk reducing measures and eventually confirm or develop safety zones. A quantitative or probabilistic risk assessment as against the consequence risk method is based on our 30-year data bank refined from the UK Health and Safety Executive.”
LNG
Guidelines
A new fast ro-pax ferry ordered by Estonia-based Tallink Grupp for its Tallinn - Helsinki route will feature Wärtsilä dual-fuel engines running primarily on LNG. The ship is to be built at the Meyer Turku shipyard in Finland and is scheduled to be in operation from the beginning of 2017
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Testing
Cold flow checks As Veritas Petroleum Services’ Sunil Kumar highlights, increased shipping activity in colder regions has underlined the need to monitor the cold flow property of fuel
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redictability of diesel fuel cold flow property is very important whenever a ship is sailing through colder geographic areas. Low temperature handling of diesel fuel is a concern for fuel manufacturers, sellers, buyers and ship operators owing to the presence of waxes. The basic phenomenon related to the cold flow property is the wax crystallisation tendency of the fuel. This property is sometimes unpredictable owing to the complexity of the type of waxes involved. It varies from fuel to fuel and is solely based on different type of waxes. The agglomeration of wax may plug the filter and making it difficult for the fuel to pass through the fine pores of the fuel filters. The situation becomes more critical when the fuel is blended with biofuels, which have a relatively high pour point. Both diesel and biofuels have crystallisable waxes present and the severity of the low temperature flow property is based on the extent to which the heavier wax is present. As the wax crystallisation in the fuel is a networking phenomenon, fuel which is used immediately and the same fuel if it is stored for a longer period, has to be thoroughly evaluated for its cold flow properties prior to use.
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Ways to improve low temperature flow properties
There are various ways to improve the low temperature flow properties of a fuel. Treating with a low-wax-content fuel is one of the options, provided other desired properties of the fuel shouldn’t have much impact. Another option is treating with wax crystal modifier, which can improve the cold flow property. These additives are polymers that can enhance the ease with which fuels can be handled at low temperatures. It is not necessary for a particular additive to perform equally well in all diesel fuels. Test methods to determine cold flow properties
There are several test methods available to determine the cold flow characteristics of diesel fuel. Basically there are four standard test methods to determine the cold flow properties of diesel fuel. These are cloud point (CP), pour point (PP), cold filter plugging point (CFPP) and low temperature flow test (LTFT). Cloud point gives an indication of the temperature that crystallisation of paraffin will start and it may be used as an estimate for the operational temperature limits. Filter blockage by wax does not happen when temperatures are above the cloud point .This gives an indication at what temperature the fuel is safe to use.
Pour point is the temperature at which the crystallisation of the waxes almost completes, and it may be used as a guide to the lowest temperature at which a fuel can be used. Cold filter plugging point is the temperature at which the filter clogging can occur owing to the crystallisation of wax, when the fuel can no longer flow freely through a fuel filter. This is a transition process between the beginning and completion of the crystallisation of wax. LTFT gives the lowest temperature at which the fuel can be filtered. This test method is useful especially when the fuel contains flow-improving additives. Each of these tests has its own significance in giving an indication of how a particular fuel in question behaves under cold conditions. A detailed investigation may be possible to evaluate the poor low temperature flow behaviour of diesel fuels other than CP, CFPP, PP and LTFT Veritas Petroleum Services (VPS) has carried out a study to correlate CP, PP and CFPP. Samples from different regions were selected. The general trend is for CP to appear first, before CFPP and PP. In certain cases, there is a slight deviation in the trend between CFPP and PP. This is either owing to the crystallisation behaviour of various type of waxes present or because the fuel is treated with wax crystal modifier.
World Bunkering Summer 2015
Testing
Cloud and pour point are almost static processes, where the wax crystallisation network is not disturbed, whereas, in the CFPP test, the wax crystallisation network is disturbed. The difference in result between the CP and PP starting from 1째C to 21째C and CFPP and PP from 1째C to 11째C is irrespective of whether the fuel is treated with a wax crystal modifier and in this case it is unknown. The extent of variation in difference between the results shows the unpredictable low temperature flow property of diesel fuels. So knowing pour point alone is not enough to understand the cold flow properties of a fuel. Ship operators should therefore seriously consider also testing distillate for cloud point and cold filter plugging point to have a better understanding of the cold flow properties of a fuel. The International Council on Combustion Engines (CIMAC) recently issued a guideline on cold flow properties. To predict the low temperature flow property of diesel fuels cannot be concluded based on a single test. In certain cases, an extensive laboratory scale evaluation may be required to predict the flow behaviour of diesel fuels prior to use since it is an unpredictable property. Dr Sunil Kumar is laboratory manager at Veritas Petroleum Services. He can be contacted at sunil.kumar@v-p-s.com
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World Bunkering Summer 2015
Intertek ShipCare provides fast, accurate testing for bunker fuel quality, helping avoid costly repairs and downtime.
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Ceuta Offering a convenient location
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ith its strategic location on Africa’s Mediterranean coast, the Spanish port of Ceuta is part of a group of bunker ports – Algeciras, Ceuta, Gibraltar and Tanger-Med – which suppliers tend to see as a single hub. The Port Authority of Ceuta puts bunker throughput at “nearly one million tonnes” a year. Oil products make up half of Ceuta’s thoughput, with bunkering being a significant contributor to the total. Ceuta’s entire economy
depends directly or indirectly on the port and related activities. Spanish oil company Cepsa operates in Ceuta, supplying vessels from alongside the berth. Early this year, there was a report of a minor spill when supplying a vessel alongside. A statement said that action had been taken to prevent any pollution from reaching the sea. Normal operations resumed shortly after the incident. Vilma Oil is another major supplier in Ceuta. The company was founded in 1996 and started operations in Ceuta in
2006. It supplies bunkers alongside the berth and also at the anchorage, using the time-chartered tanker Sea Dweller. Gibraltar-based Peninsula Petroleum notes that it has been an active physical supplier in Ceuta since 1999. It comments: “As a niche, all ex-pipe location, Ceuta is a port where local knowledge counts. With all marine fuel grades available, Ceuta offers optionality to Gibraltar and Algeciras, and Peninsula is happy to advise customers on the best options to suit their needs.”
THE PORT OF CEUTA BUNKERING IN THE STRAITS OF GIBRALTAR FOR MORE THAN 100 YEARS!
Port Authority of Ceuta Muelle España, s/n 51001 - CEUTA (SPAIN) Telf. + 34 956 52700 Fax. + 34 956527001
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World Bunkering Summer 2015
Spain
© Ruben Vique Oversupply of storage capacity at Algeciras could hinder further development
Volumes up While there have been some problems, Spain’s bunker sector has fared well in the past year. John Rickards reports
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t has been a bumper year for the port of Algeciras, with the port authority APBA reporting sales of just over 3.5 million tonnes through 2014, up a third on the relatively quiet year before. This followed the port’s previous record year in 2012, when it sold 2.9 million tonnes. However, all has not gone entirely according to plan at Spain’s chief bunker port. Terminal operator Vopak, which opened its 402,433 cubic metre tank farm at the port two years ago, principally to handle fuel oil being sold in Algeciras, Gibraltar, Tangiers and Cueta, now has spare capacity. Speaking at IBIA’s Regional Bunkering Forum in Gibraltar in February, the terminal’s managing director Agustín Silva said: “It has been tough to digest the space on offer for dark product.” He cited one unnamed customer – presumably BP, which pulled out of Algeciras last summer, passing its barge lease onto Peninsula Petroleum – which had made it difficult to fully utilise the available capacity. While his remarks might cast doubt on the keenness Vopak might feel for embarking on phase two of its Algeciras development, a rival has abandoned tank storage plans at the port entirely. VTTI signed a deal four years ago for a 380,000 cubic metre tank farm on land leased from energy company Endesa to be linked by pipeline to CEPSA’s Gibraltar-San Roque Refinery. Work
World Bunkering Summer 2015
had originally been expected to start in 2013, but repeated bureaucratic hurdles, particularly delays obtaining a Unified Environmental Authorisation, saw VTTI threaten to pull out last summer. The company apparently finally informed APBA that it was killing the deal and ending its planned investment in the port earlier this year, though it has remained largely tight-lipped about its dealings with the port body. While the terminal operator blamed red tape, others, including the port authority, have suggested in local press reports that low oil prices and the consequently weaker returns on offer put VTTI off its e128 million investment. The same low profitability brought an early end to BP’s foray into the Algeciras market, so it would perhaps be unsurprising if this was a factor in VTTI’s decision. The opening of Algeciras’ bunker market to players other than CEPSA and Repsol has certainly helped the port to make the most of a sharp rise in container traffic. But, at the same time, the increased competition has been a downward force on prices. With Gibraltar, across the bay, trying to boost its own offerings further, it will be interesting to see if fresh largescale investment occurs at the Spanish port before oil prices begin to rise towards pre-slump levels again. Elsewhere in Spain, it is alternative fuels that continue to attract developers.
The port of Huelva has become the latest site to announce that it is considering offering liquefied natural gas (LNG) bunkering as it bids to upgrade. The facilities would be part of a proposed gas terminal, and the development would involve input from other ports as well as Spanish energy company Enagás, with finance coming partly from the central European fund for boosting infrastructure. The new terminal would accompany €22 million of other work to improve rail facilities, complete two unfinished terminals and restructure the south pier in a bid to “eliminate bottlenecks in the Canary Islands and the Strait of Gibraltar”. Last year, Bilbao joined the country’s other existing gas terminals in offering LNG reloads after conversion work. The port said it has also paved the way for LNG bunkering, whether from barge or ashore, by putting in place the authorisation system to do so. When EU moves to bolster LNG bunkering infrastructure were mooted after a surge in interest ahead of the sulphur cap, Spain’s ports were quick to throw their hats into the ring to become major hubs for the new fuel. It seems this eagerness to carve out a slice of what promises to be a lucrative pie has not abated. With established gas infrastructure in place, in some ports at least, offering LNG as fuel to vessels would seem to be an easy target to hit.
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Italy © US Navy A US$9 million fuel scam involved fake shipments to the Italian Navy in the Sicilian port of Augusta
Suspicious deals While fraud investigation has grabbed the headlines, dealing with the need to supply alternative fuels could be a bigger issue in the longer term, as John Rickards reports
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he delicate economics of the Italian fuel market under current low oil prices – conditions which have seen the government hold back on its sale of a 4% stake in state oil company Eni – haven’t been helped over the past months by claims that have emerged after the OW Bunker collapse. The country’s bunker industry has been tainted by the revelation of a multi-million-dollar “ghost ship” scam connecting a Rome entrepreneur who has alleged Mafia links with the Italian Navy and a Danish OW Supply executive. The latter has continued to protest his innocence as he fights extradition. Rome-based Massimo Perazza was arrested by Italian police in December over a US$9 million fuel fraud. Police told Investigative Reporting Project Italy (IRPI) that they believed Perazza’s company, Global Chemical Broker Srl, acted as broker for OW Supply and its executive Lars Bohn. Along with a third man, Abac Petroli’s Andrea D’Aloja, and reportedly with the collusion of Italian Navy personnel, the scheme allegedly involved supplying US$11 million worth of fuel to Augusta, Sicily, between April 2012 and December 2013 – far more than the Italian Navy needed. Eleven delivery trips were supposedly made, but it is alleged that only the first three were genuine. Paperwork claimed that eight others were made by a ship that was never recorded as entering the port, according to records at Augusta, and which in fact sunk in the Atlantic in September 2013.
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According to the IRPI report, investigating judge Alessandro Arturi said the wording of the contract between OW Supply and the Navy was a particular red flag: “It is worth noticing the extremely vague and generic description of the contractual services, limited only by the maximum amount payable (e20 million, that can be further extended by another e8 million) and completely detached from any indication of the actual need of the base,” he said. “One cannot help wondering if this vagueness is a deliberate attempt at creating the environment for the criminal plan – in which case, we are staring at a criminal enterprise much wider than what we have discovered so far.” While Perazza and D’Aloja have been arrested and questioned, Bohn remains in Copenhagen, adamant in his innocence. “It is complete nonsense,” he said. “I’m pretty frustrated and sad, for I have been dragged quite undeservedly into this.” In January, a city court turned down an extradition request under a European arrest warrant, citing “inhuman and degrading” Italian prison conditions, meaning that his extradition would contravene the European Convention on Human Rights. The investigation continues
Away from criminal matters, the Environment Commission of the Italian Chamber of Deputies has floated the idea of putting a 0.1% sulphur cap in place in Italian waters from 2018, in line with the northern European emission
control area. Spokeswoman Giovanna Sanna described the move as an “important decision”, but added that “the other countries bordering these waters – Slovenia, Croatia, Bosnia, Montenegro, Albania and Greece – need to adopt the same limits within the same timeframe”. An earlier government directive had proposed a 2020 deadline for the same sulphur limit, but the new proposal would see the change brought in sooner. However, the necessity of having other Adriatic coastal states on board may still prove to be a major stumbling block. World Bunkering asked Sanna how confident she was of obtaining their cooperation and support, but she declined. Late last spring, the port of Civitavecchia became the first in Italy to perform truckto-ship bunkering of liquefied natural gas (LNG), refuelling an LNG-powered tug built in Turkey for a contract to Statoil in Norway. But, as a whole, the country has no major offerings of alternative fuels should a greatly lowered sulphur cap come in ahead of schedule. This leaves Italian owners with the same choices as those faced in much of northern Europe: the uncertainties of scrubbing or a switch to marine gas oil. So far, there has been no further announcement from the Chamber, but, without the support of other states and given the already difficult market for Italian bunker traders and ship operators, the proposals are unlikely to find support from an industry struggling with economic circumstances. World Bunkering Summer 2015
Cyprus
© Patrick Denker Ship operators in Cyprus have come out against EU-only rules on carbon monitoring
Difficult times As John Rickards reports, the past year has been a tough one for the Cypriot bunker industry.
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his hasn’t been the easiest year for Cyprus. Annual bunker sales for the island nation fell nearly 4%, down to 232,661 metric tonnes (mt), compared with 240,782mt in 2013. Heavy fuel oil (HFO) fared better than lighter marine gas oil (MGO) in sales terms, dropping 2.7% to 152,851mt against MGO’s 3.9% drop to 79,712mt. The country’s ongoing port privatisations under the terms of its EU financial bailout have muddied the waters a little, with negotiations over the running of Larnaca dragging on and the first steps on the sale of Limassol port only due to begin as World Bunkering goes to press. Despite this, the vice-president of the Cyprus Ports Authority (CPA), Photis Panayides, has remained bullish in local press reports about the CPA’s outlook, particularly with regard to the energy and fuel sector. In addition, in November last year, Cyprus was threatened with action by the European Commission for failing to write the EU’s 2020 0.5% sulphur cap in the Mediterranean, Black Sea and eastern Atlantic into national law in time. The original deadline for including the regulations in law was June 2014. Along with Belgium, Spain and Hungary, Cyprus both missed that date and failed to respond to formal notices issued in July. November’s nudge to the four countries was the last step before a referral to the EU Court of Justice. However, with the two-month
World Bunkering Summer 2015
time limit expired and no sign yet of the EC taking legal action against any of the four, hopefully Cyprus will manage to avoid more severe censure over fuel rules. The country’s chamber of shipping has already spoken out over the proposed European rules on carbon dioxide emissions monitoring and reduction. Last autumn, Alexandros Josephides, deputy director-general of the Cyprus Shipping Chamber (CSC), told the Cyprus Mail: “EU regulation would require that ships trading to Europe will have to introduce additional measures, both in terms of procedures, monitoring and reporting as well as in terms of equipment for the better monitoring of the ship’s fuel consumption. “If these measures are agreed at the International Maritime Organization, which is our strongly preferred option, then of course these additional costs will be incurred, but they will apply equally to all vessels trading globally.” Cyprus’ economy is strongly affected by shipping, with the industry accounting for 7% of the economy, according to the Chamber. It fears any move that might see Cypriot and European shipping become less competitive than that of rival nations. Given the geographical position of Cyprus on the periphery of the EU and its proximity – and vulnerability – to trade through Suez and north into the Black Sea, it is perhaps unsurprising that the local industry is concerned with fighting
its corner as rules on emissions of both carbon dioxide (CO2) and sulphur oxide (SOx) draw closer. The CSC said it isn’t against CO2 reduction and restriction, but suggested that, so long as fuel prices remained high, companies had a vested interest in reducing consumption. Its remarks echo those of organisations like the International Chamber of Shipping, which has opposed unilateral measures to monitor and control CO2 emissions, often in the face of indifference from European politicians. However, the argument that cost alone will drive down and control emissions through market forces may find little traction with EU lawmakers. In the present market conditions, prices are still depressed, and the boom in eco-ships is over for the moment, at least, as owners put orders on hold or cancel them outright. And a change in EU course now could be seen as a damaging about-face, particularly given the Union’s promises on carbon reduction. With economic control so much at the mercy of the price of raw feedstock, on which operators have no influence, the Chamber’s chances look slim. These factors haven’t stopped some expansion within the Cypriot bunker sector, however. Island Oil, which operates principally in Cyprus but also has a subsidiary in Greece, expanded its teams both in Limassol and Piraeus last autumn. It introduced new business development staff, as well as adding two trading staff at its Dubai office.
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Greece Results from EMP’s trial solar installation should be available this summer
Political uncertainty While Greece’s recent election has put a question mark over the future of the entire economy, as John Rickard reports, important projects to develop alternative fuels are carrying on
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hen the new Greek coalition government led by Syriza took power earlier this year, one of its first actions was to immediately halt the sale of Piraeus Port Authority to Cosco. The port sale was initially announced in June last year as part of Greece’s International Monetary Fund (IMF) bailout deal, with the Chinese company aiming to take a two-thirds stake to match the two out of three box terminals it already operates in Piraeus. At the time, China’s prime minister, Li Keqiang, said Piraeus could become “China’s gateway to Europe”. The deal had been reported to be worth US$5 billion, on top of the US$314 million terminal development that is already being undertaken by Cosco. Moves to make Greece a springboard for alternative fuel and energy technology have continued, however. Japan-based maritime solar venture Eco Marine Power (EMP) has begun its first field trials of one of its solar generation and energy management systems in conjunction with Blue Star Ferries and Furukawa Battery Co. The high speed ro-pax Blue Star Delos has been fitted with banks of solar panels since last autumn, tied to an Aquarius management and automation system (MAS) that tracks the solar array’s performance, the ship’s bunker usage and its emissions. As well as trialling the solar array and system in the field, the tests will allow EMP to evaluate performance of
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the 12 valve regulated lead-acid batteries installed – crucial if it is to market full-scale systems to the industry in the near future. “It is a great honour to join this renewable energy shipping project and work with excellent partners,” said Furukawa’s general manager of global business strategy, Mr Kodaka, at the time the company was brought on board. “We look forward to evaluating the trial results and further promoting our marine battery solutions to the shipping sector.” EMP’s director and chief technology officer, Greg Atkinson, told World Bunkering: “So far our focus has been on testing and checking the operation of the system. At the moment, LED lights are connected to the system as a test load, and we will add additional LED lighting during the next month or so. Near the end of May we will analyse the data that has been collected and I will present our findings and an overview of the project at the Electric & Hybrid Marine World Expo in Amsterdam in June.” The trial project isn’t EMP’s only Greek development. In December, the company signed a deal with Theodosiou Bros Ltd (TRIAD) to establish a renewable energy support hub for the Greek shipping industry, which will aim to offer technical advice to companies looking to reduce bunker consumption and emissions, including assessment of suitability for installation of systems similar to that on Blue Star Delos. TRIAD will initially focus on services related to EMP’s Aquarius MAS and marine
solar solutions, adding other products as they come to market. The company has also joined the Blue Star Delos project. TRIAD’s Akis Theodosiou said: “Participating in the Blue Star Delos Renewable Energy Innovation Project has been a great learning experience and a great honour. Now that we have also signed a support agreement with Eco Marine Power, we look forward to working with them to implement further innovative solutions in Greece and other markets as well.” It’s not just the nascent field of maritime solar where Greece is seeing development. At the start of this year, the country also won EU financial backing for an ongoing feasibility study into Aegean liquefied natural gas (LNG) bunkering, looking at supply chains, infrastructure, required retrofitting for ships and ports, and business plans for operators running passenger services in the Greek islands. Launched in October, the study should be complete by the end of 2015. The EU’s e600,000 injection comes under its Trans-European Transport Networks (TEN-T) programme, which aims to see LNG fuelling facilities in all core European ports within 15 years. The Greek islands and numerous passenger vessels that serve them have been mooted as a potential good fit for LNG fuel for some time, given the relatively short, loop journeys involved, the types of vessels and the possibility of fuelling from a limited number of LNG hubs, requiring minimal infrastructure.
World Bunkering Summer 2015
Malta
© Tobias Scheck The government is focused on turning Marsa into a bunkering hub, but questions remain
Controversial moves
While Malta continues to see fresh moves to piggyback its geographical position on the Suez trades between Europe and Asia to make it into a major regional fuel and bunkering hub, the island’s bunker sector has been dominated in recent months by political arguments centred on the energy ministry
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n October last year, Malta’s energy ministry gave the go-ahead for a deal allowing US-based World Fuel Services (WFS) the exclusive right to operate state-owned Mediterranean Offshore Bunkering Co’s (MOBC’s) storage terminal in Marsa. At the time, the ministry said: “The partnership agreement will solidify Malta’s aim of becoming a fuel services hub in the Mediterranean region. WFS has committed to maximise the use of MOBC tanks, and it will carry out marketing for its fuel products and services, namely gas oil and fuel, in the region. MOBC will thereby strengthen its finances in the process.” No value for the contract was released, nor was the period for which WFS will have control over the terminal, which was upgraded by the government between 2011 and 2013 after air pollution concerns. More controversially, though, the government signed the deal with WFS without putting the concession out to tender, and local fuel suppliers have since been up in arms over this lack of opportunity to bid. The Association of Ship Agents and the Malta Chamber of Commerce have both said there should have been a proper tendering process. Energy minister Konrad Mizzi claimed in a response seen by the Sunday Times of Malta that all local bunker companies were involved in court action or had
World Bunkering Summer 2015
been “under investigation” and were thus unsuitable to tender. WFS, however, was itself served with a lawsuit by its own insurance company AGCS in the summer of 2014, and the case was ongoing when the MOBC deal was announced. As originally reported by TradeWinds, WFS was duped by fraudsters claiming to work for the US Defense Logistics Agency, who purchased 17,000 tonnes of marine gas oil worth US$18 million. When the company presented its invoice to the Defense Logistics Agency, the agency refused to pay, and WFS claimed for loss of cargo from AGCS. The exact reasons for AGCS taking the company to court are unclear. World Bunkering approached energy minister Mizzi to ask what was the difference between the WFS lawsuit and those apparently faced by Maltese companies, which meant it had no bearing on its contract award. It also asked why being “under investigation” rather than “found guilty” was enough to prevent a local company tendering. No comment was forthcoming. In a move that has also drawn criticism, in March this year MOBC appointed a new chief executive, again without a public call for applications. New incumbent Joseph Montebello is energy minister Mizzi’s former chief of staff.
Not every development in Malta has been so controversial, however, and broader moves to boost the country’s fuel trade are progressing. While a deal at the start of the year with petroleum company IAG-Pacific seems to have fallen through, development agency Malta Enterprise signed a joint venture agreement in November with Singapore’s International Energy Group, a newcomer to the industry run by a consortium of private investors. The joint venture’s initial focus is expected to be oil trading, with the aim of eventually expanding into oil blending and bunkering. Malta Enterprise has a minority stake in the venture. The expansion of fuel service offerings is part of a long-term strategy of the Maltese government under the Blue Economy programme. The country’s parliamentary secretary for competitiveness and economic growth, José Herrera, has repeatedly pointed out that Malta’s location just a few kilometres from the main East-West shipping lanes puts the country in an enviable position. Already, the maritime sector accounts for 14% of Malta’s gross domestic product. Greater bunker offerings, particularly at Marsa, as well as reintroducing admiralty and commercial courts and boosting the Maltese flag are all stated aims under the strategy. Malta Freeport is already the third biggest transhipment hub in the EU.
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PORT OF
GIBRALTAR • Close to main shipping routes • Competitively priced bunkers delivered by quality operators • Safe anchorage • Broad spectrum of marine services • Excellent international communications
North Mole, Gibraltar, T: +350 20046254, F: +350 20051513 E: gpaenquiries@port.gov.gi
W: www.gibraltarport.com
Gibraltar
Gib sees MGO surge Mediterranean hub port looks to the future with ship-to-ship LNG transfer
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hile Gibraltar no longer publishes its volume figures, Gibraltar Port Authority (GPA) chief executive and captain of the port Bob Sanguinetti told World Bunkering that the Mediterranean bunker hub had “seen a marked increase in the supply of marine gas oil (MGO) since the recent change to legislation”. He added: “We have clear commitment from a number of bunker suppliers to increase their throughput during the course of 2015.” Commodore Sanguinetti explained that there had been a number of initiatives introduced over the past two years aimed at improving efficiency in the port with particular emphasis on the bunkering trade. He noted that GPA had doubled the number of vessel traffic service officers to 10, “reinforcing our commitment to safety of navigation in our busy waters”. At the same time, GPA had eased the restriction on the number of bunker barges able to operate at any one time. The port has also made itself more competitive by increasing the discount on tariffs for bunker calls from 50% to 75%. The 75% reduction also applies to vessels calling at the eastern anchorage to take on provisions, stores or spares or make crew changes. The
World Bunkering Summer 2015
intention was to make the eastern anchorage more attractive, both as a waiting area for vessels calling at Gibraltar for bunkers, and for other vessels wishing to avail themselves of agency support and ship husbandry services. Commodore Sanguinetti said: “We have introduced a web-based Vessel Management System, linking vessel traffic services (VTS) with shipping agents and pilots to facilitate the logistics and administrative aspects of ship calls. In conjunction with bunker suppliers and other service providers, we are constantly looking at ways of improving efficiency in the port. GPA has also carried out an indepth review of its oil spill contingency plan. A revised plan was published in January, following consultation with all interested stakeholders and specialists in this field. It took into account developments in this area, and is tailored specifically to routine activities taking place in the port and in British Gibraltar Territorial Waters. The plan forms part of the Gibraltar government’s wider national contingency planning. Paul Balban, minister with responsibility for the port, said: “The environmental protection of our waters is paramount. In keeping with this policy, this revised plan complements GPA’s wider capabilities in ensuring that our
environmental credentials remain second to none.” While current figures are not available, Gibraltar’s volumes peaked at just under 5 million tonnes in 2009. When World Bunkering asked if Gibraltar could expand its volumes further, Commodore Sanguinetti replied: “At that time, we had three floating storage vessels anchored in the western anchorage. The freeing up of these three slots translates into a 21% increase in capacity with regards to space. Therefore, volumes can go up significantly, but the general trend of slow steaming and increased energy efficiency in ships would appear to point towards significant downward pressures on bunkering volumes in general. Despite this, we are confident that 2015 will deliver an increase in throughput year on year.” He added that the priority of GPA has always been and will continue to be to ensure unrivalled quality of service to the bunker sector. He pointed out that Gibraltar was an enthusiastic supporter of the new IBIA Port Charter. This requires signatory ports to show that they operate a licensing scheme for bunker suppliers, can enforce regulations covering bunkering operations, have a testing regime in place, and have appropriately qualified professionals involved in the supply chain.
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Gibraltar 54
He stressed: “Our current efforts are in conveying to our end-user customers the benefits of our close working relationships with local operators (bunkers and non-bunker operators), where strong relationships enable the Port of Gibraltar to provide a one-stop shop for the widest range of marine services.” Gibraltar’s King’s Lines tank farm has now been unused for several years. World Bunkering asked if that facility could be reactivated and if there were there any other possibilities for onshore storage. Commodore Sanguinetti said: “There are a number of proposals which have been presented to government by interested parties, and we expect this to continue. For obvious reasons, we cannot comment on them in detail, but government is looking at each of these proposals with a view to making sure that any project which does go ahead will deliver the best service to Gibraltar as a whole. This includes consideration of King’s Lines. In any case, we are looking at ways to further consolidate our business by having a range of different supply chains and business models, providing healthy competition and resilience.”
Turning to floating storage, he said: “We currently have one floating storage vessel in Gibraltar, which is berthed at the detached mole. The company which operates this vessel is currently in detailed discussions with government to see what developments will deliver on the best service for all parties in Gibraltar. Again, due to the nature of these discussions, we cannot comment on them in detail, but for the short term we do not anticipate this vessel being withdrawn. The longer-term consideration will be loosely linked to the development of any of the proposals currently being studied for shore-based storage, although this concept is not mutually exclusive of the possibility of landbased storage.” Looking further ahead, liquefied natural gas (LNG) bunkering could be a real possibility. According to Commodore Sanguinetti, the government is in the final phase of discussions with a number of companies which have expressed an interest in supplying LNG for the new power station. “The infrastructure for this project would conceivably easily lend itself to LNG bunkering.”
While LNG bunkering may be some way off, Gibraltar conducted its first ship-to-ship LNG transfer, between Excelerate and Seishu Maru. The operation was organised and overseen by GPA-approved ship-to-ship (STS) coordinator Fendercare Marine. GPA said in a statement that, in addition to its STS code of practice, which incorporates all industry best practices, GPA had tightened its safety criteria by imposing stricter weather parameters and by positioning an additional STS superintendent on the receiving vessel. The transfer was also supervised by the Port Authority’s bunker superintendent, who is trained in specialist tanker operations, including gas cargoes. According to GPA: “The operation was totally successful, very tightly controlled and supervised and therefore extremely safe, in keeping with the Port of Gibraltar’s highest safety standards and reputation.” Commodore Sanguinetti said: “I certainly want to see more of this in the future, reinforcing our leading role as a premier bunker port offering the widest possible range of marine services.”
World Bunkering Summer 2015
Turkey
Expanding horizons The seventh International Istanbul Bunker Conference takes place during a period of rapid expansion for Turkey’s shipping industry and against the background of work now under way on the Kanal Istanbul artificial waterway project
C
hange is in the air in the Turkish bunker industry, primarily in the form of fleet renewal. New regulation affecting the bunker market was introduced in 2012 in line with meeting low-sulphur requirements, which came into force at that time in EU ports. A number of operators have also been renewing their bunker barge fleets with a view to pre-empting regulations due to enter into force in 2016. These will make double-hulled vessels mandatory. This is taking place at time of continued expansion in the wider Turkish maritime industry. Growth has been rapid in the past few years and the sector offers an burgeoning array of different shipping segments, from bunkering, ship building, ship repair, through to communications, agency work, shipbroking and insurance among others. According to Besiktas Ship Management managing director Yavuz Kalkavan, who owns Besiktas Shipyard, Turkish ship repair yards are the most active in the area. Only eastern China is more active, he says. The shipbuilding industry changed all over the world after the 2008 crash, and Turkish shipyards have been trying to specialise in areas such as offshore support vessels rather than more mainstream vessels.
World Bunkering Summer 2015
There are 40 shipyards in Turkey, which carry out 1,000 ship repairs and dockings per year, for clients from Greece, Germany, Denmark, Singapore and Japan, among others. Norway sees Turkey as a good future shipbuilding centre as prices are not too different from China, Kalkavan says, and the quality is good. The new generation of bunkering vessels is no exception, and Turkish yards’ links with Russia have resulted in a number of orders for newbuildings. Gazpromneft bunkering operator Gazpromneft Marine Bunker has recently commissioned a new high-capacity bunkering vessel. The 5,372dwt ship was built at Turkey’s Engin Shipyard. Developing the manufacture of diesel engines in Turkey has been on the agenda in recent times and a working group has been set up by Turkey’s Ministry of Science, Industry and Technology to consider the issue. Turkey is home to a number of well-known bunker operations, including Arkas Bunkers, CYE Petrol, Energy Petrol, KPI Bridge Oil and Triton Marine Fuels. Energy Petrol was established in 1997 by Mustafa Muhtaroglu, who has been in the bunkering business since 1986, and straightaway began physical bunker supply operations, supplying marine gas oil (MGO) from a storage
facility located in Gebze, in a terminal now called Yılport. In 2014, the company moved to its state-of-the-art Altıntel terminal, at the same location. Energy Petrol has continued to expand its market share in the marine fuel oil business and achieved impressive growth between 2001-2014. A total of over two million tonnes of bunkers have been supplied to more than 40,000 vessels, amounting to over $1 billion. The company notes that this was achieved while operating without any quality or quantity claims during that period. Starting operations in 1997 with two gas oil barges totalling 500 tonnes, Energy Petrol has also become an important operator of bunker barges along the northern Turkish shoreline. In 2013, the company started a barge renewal programme in line with new tanker regulations in Turkey that require companies to comply with International Maritime Organization (IMO) rules. It introduced new 810 dwt double-hull barges – Demre 1, Demre 2, Demre 3 and Demre 4. The renewal programme continued with the introduction of larger double-hulls with a 1,875m3 capacity for fuel oil and gas oil supplies. Energy Petrol now operates 10 barges, with a total capacity of 10,000 tonnes. Meanwhile, CYE Petrol launched Kalamis-E, a new generation, double-
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World Bunkering Summer 2015
to 25,000 tonnes and by increasing tonnage from 1.5 million to 2.6 million tonnes, we would be directly supporting the Turkish economy.” The mass flow meters are already being used by CYE Petrol at its Poliport loading terminal, near Istanbul. Installed in 2005, the Micro Motion Coriolis flow meters are providing accurate mass flow measurement data used when blending diesel fuel and fuel oil to achieve the desired grade. While today’s Turkish bunkering and shipping sectors are largely concentrated on the Bosphorus, a massive long-term project is under way that will change everything. Kanal İstanbul is an artificial waterway being built to connect the Black Sea to the Sea of Marmara, bypassing the Bosphorus and minimising shipping traffic in the Istanbul Strait. It is planned to complete the project in time for the 100th anniversary in 2023 of the foundation of the Turkish Republic. At present, about 56,000 vessels pass through the Istanbul Strait a year, including 10,000 tankers carrying 145 million tonnes of crude oil. The waterway will be about 30 miles long, 150 metres wide and have a depth of 25 metres. Tackling key issues
This year’s International Istanbul Bunker Conference will be an opportunity to discuss the major changes that have affected the industry in recent months. Chaired by energy consultant
and IBIA vice-chairman Robin Meech, the conference expects to welcome around 250 delegates from more than 20 countries. As in previous years, the conference is being organised by the Turkish Bunker Association and will take place from 20-22 May at the Four Seasons Hotel Istanbul at the Bosphorus. This year, the focus is on new international regulations, emission control area requirements, bunker contracts, supply and sample procedures, quality and quantity issues, low-sulphur bunkering (including ultra-low-sulphur fuel oil), alternative fuels, new engine technologies, credit risks and management. Sixteen speakers will cover issues, including those related to OW Bunker, Kanal İstanbul, liquefied natural gas (LNG) bunkering, alternative fuels and ship efficiency. “Since the Turkish commercial coastal fleet is in a process of renewal and rebuilding, the Turkish Chamber of Shipping and Turkish shipowners are showing special interest in the conference in order to get better information about new engine/fuel technologies and to meet industry representatives,” says Eraydin. He adds that there will be plenty of time and opportunities to meet delegates. The event includes a cocktail party, four coffee breaks, two lunches, one boat trip on the Bosphorus, one dinner on the Bosphorus and one gala dinner. And, of course, delegates will also have free time to visit and enjoy Istanbul.
Turkey
hull bunker barge, in November last year. The 1,805 dwt bunker barge is a sister ship to the Beykoz-E which was launched in May last year. The barges are fitted with Emerson Coriolis mass flow meters. CYE Petrol says it chose Emerson Process Management’s Micro Motion Certified Bunker Measurement Solution to enable accurate, transparent fuel deliveries from the two new bunker barges being built in Turkey. The mass-based measurement solutions are Measuring Instruments Directive-approved to meet international standards for custody transfer and will reduce measurement uncertainty that can lead to disputes or delayed vessel movements. “We want to be able to offer our customers a new level of accuracy,” said Deniz Eraydin, general manager of CYE Petrol and chairman of the Turkish Bunker Association. “The real-time and certified heavy fuel oil and marine gas oil bunker measurements provided by Emerson’s Certified Bunker Measurement Solution will help improve our overall operational efficiency and raise customer confidence in the quality of our deliveries.” Based in Istanbul, CYE Petrol supplies between 15,000 and 20,000 tonnes of bunkers per month to the Istanbul and Izmit Bay areas as well as ports in the Black Sea and Sea of Marmara. “CYE Petrol is continually looking for ways to increase the already high standards of our bunkering procedures and technologies,” continued Eraydin. “Emerson’s Certified Bunker Measurement Solution supports this objective by promoting the reputation and integrity of our quality and service in a highly competitive market. In addition, by reducing measurement uncertainty and the resultant disputes that can delay deliveries, our potential capacity may be increased from 15,000-20,000 tonnes per month to 25,000-30,000 tonnes per month.” “We would like to see every bunker company in Turkey using Emerson’s Certified Bunker Measurement Solution because it could help us all win more business,” said Eraydin. “By increasing the number of vessels receiving bunker product from the Istanbul Bosphorus from 15,000
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Registered dealer of
Australia
Ship emissions row A head of steam is building up towards imposing ECA-style emissions limits in Australia
O
ver the past year, ship emissions have become a big issue in Australia, with the subject brought further into the spotlight by protests against Sydney’s new White Bay cruise terminal, which opened in April last year. Sine the terminal opened, the press has been full of cruise ship pollution stories. In a typical report, carried by the Australian Daily Telegraph, Katrina Horrobin, a spokeswoman for the White Bay-Rozelle Precinct Group, described “the devastating effect the terminal had on their local community”. She said: “In the months following the terminal opening, local residents started to notice that we were getting sick — we had kids getting asthma for the first time, adults with worsening respiratory conditions, nausea, heart palpations and bronchitis, just to name a few. We were also overpowered by the strong acrid smell from the thick smoke spewing out of the ship funnels, located at the same level as our houses.” While there is a recognition of the important role of the cruise industry to Sydney’s economy, opposition focusing on emissions has grown. Carnival Australia’s announcement of a “stunning demonstration” of five P&O cruiseships in the harbour planned for November, designed to
World Bunkering Summer 2015
celebrate the surge of cruising in New South Wales (NSW), caused uproar in some quarters, with the company being accused of “thumbing its nose” at community concerns. However, a Carnival Australia spokesman said there was no need for the community to be alarmed. “The results of air quality monitoring since the ships began operating at White Bay show air quality is well within current standards and up to 40% better than those requirements,” the spokesman said. “Given this record… there is no reason for any concern about ships in the expanded P&O Cruises fleet sailing into Sydney Harbour in November, which will also highlight the economic contribution of cruising.” A spokesman said Sydney has never hosted five ships from one cruise line on the same day before, and the company intended to meet the standards set by the government in the future. “We are working with the NSW government as it reviews its current emissions policy for shipping, including cruiseships,” he said. Prior to the opening of the White Bay terminal, Carnival Australia engaged an air quality expert to provide a detailed assessment of the potential effects of its operations on air quality in the vicinity of the terminal. The assessment, which it presented to the
NSW government, used advanced air dispersion modelling techniques based on actual measured ship emissions data. The results of the assessment indicated that assessable air pollution levels from the operations of Carnival’s ships at the terminal would be below applicable NSW criteria. Carnival said that, given the confirmed level of compliance, the significant cost of low-sulphur fuel would constitute a very expensive option. The sulphur issue is only likely to be relevant until 2019, by which time Carnival Australia will have fitted scrubber technology on all of its vessels during scheduled dry-dockings from 2017 onwards. And, in 2020, the global 0.5% sulphur limit will be in operation. However, in the meantime, pressure is growing to mandate the use of distillate fuel in Australian waters, following the 28 March re-election of the Liberal/National Coalition, which had promised to act on ships emissions, as had the losing Labor Party. While sulphur in ship emissions has become particularly pertinent in Sydney, the issue is now a significant one throughout Australia.
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Interview
Ms Azize Bulut Senior Bunker Trader at Force Bunker
World Bunkering: Force Shipping has been developing its services as a bunker supplier. Can you give me more details?
WB: What do you see as the main challenges and opportunities facing the bunker industry at the moment?
Azize Bulut: Our company was established in 1997 and has been working in the maritime industry since then, handling provision supply, agency service, commercial and technical management of vessels, various repair organisations, spare parts and technical supply. In 1999, Force Bunker was set up as the bunker department of Fors Ikizler Denizcilik San. Ve Tic. Ltd. Sti. In 2013, Force Bunker became a registered dealer for the State Oil Company Of Azerbaijan Republic (SOCAR). Force Bunker bases its success on good relations with partners, fast and high-quality services and reliability.
AB: The shipping industry has been affected by the global crisis, with the majority of shipowners suffering from cashflow problems. Bunker companies are willing to work with the buyers directly, but the financial capabilities of some brokers are not sufficient. The low-sulphur regulations could force up the cost of products, and availability could also be a problem, especially with the global cap in 2020. Keeping up with the developments in the bunker market and proper analysis of competition is essential to both reinforce internal dynamics and increase our share of the domestic bunker market.
WB: With the recent introduction of emission control areas (ECAs), how has the Turkish industry been affected? AB: [Our] refineries do not produce low-sulphur fuel for bunker purposes, and it is not economical to bring it from distant refineries, as the demand is low in Turkish waters, so there is no significant negative impact on recent sales. On the other hand, all suppliers are ready to meet needs if they see a significant level of demand.
WB: Can you give details of your relationship with SOCAR and how that is developing? AB: We were licensed by Turkey’s Energy Market Regulatory Authority (EMRA) as a bunker barge operator for SOCAR in October 2013 and also as an official fuel dealer for SOCAR in November 2013. With the support of SOCAR, we are a physical supplier for all grades of fuel oil, gas oil and lube oil in Turkey, mainly in Marmara Sea ports and the Istanbul anchorage area, and offer competitive prices and excellent service. We have been operating four barges with SOCAR and plan to expand our fleet. 60
World Bunkering Summer 2015
Interview
WB: Do you feel that there will be adequate supplies of low-sulphur products going forward, particularly with the introduction of the global cap in 2020? AB: Most shipowners were expecting to see the 2015 ECA sulphur limit postponed, but that was not the case. The message from the authorities is very clear and they will keep decreasing the sulphur levels together with exhaust emissions from ships. The expected global limit in 2020 is risky in terms of product availability rather than high running costs for ships. Newbuild refineries are focusing on producing mainly white products without any fuel oil, using waste to produce petroleum coke. So who will help the shipowners? We believe that … • Authorities have to discuss with all related players in the market the production of ultra-low-sulphur diesel (ULSD) fuel oils rather than gas oil. • Scrubber costs should be decreased by the manufacturers. • Ships fuelled by liquefied natural gas (LNG) have to be built up.
World Bunkering Summer 2015
WB: How active is the refining industry in Turkey and do you feel there has been adequate investment in this area? AB: Tüpraş operates four oil refineries in Turkey. Official data shows that 11 million tonnes per year is processed at the Izmit refinery in North-West Turkey; 11 million tonnes per year is processed at Aliağa, Izmir, on Turkey’s central Aegean coast, processing crude from global markets delivered by tanker; while the Kırıkkale refinery in central Turkey processes 5 million tonnes per year of crude delivered from Turkey’s Mediterranean oil hub at Ceyhan to the refinery via a bespoke pipeline. The fourth refinery, the 1.1 million tonnes per year Batman refinery, processes crude produced by myriad small oilfields in SouthEast Turkey and delivered both via an existing pipeline network and by road tanker. Tüpraş has a total processing capacity of 28.1 million tonnes per year; its total Nelson complexity index is 23.59; while the total storage capacity is 5.5 million m3. In addition to this, SOCAR is investing in the construction of the Star refinery on Turkey’s Aegean coast, which will have a crude oil processing capacity of 10 million tonnes. It will supply feedstock to petrochemicals maker Petkim, SOCAR’s Turkish subsidiary.
The Star refinery will have a yearly production of 4.9 million tonnes of ultra-low-sulphur diesel, 1.3 million tonnes of naphtha, 0.45 million tonnes of mixed xylene, 1.7 million tonnes of jet fuel, 0.261 million tonnes of liquefied petroleum gas, 0.5 million tonnes of reformate, 0.69 million tonnes of petro-coke and 0.16 million tonnes of sulphur when it is operating at full capacity. WB: Do you have any fleet expansion plans? AB: Currently, we have four barges between 500 dwt and 1,700 dwt. We started our operations with Force 1 and Force 2. Within two years, we expanded our fleet with Force 3 and Force 4. We are looking at eco-friendly ways to expand our fleet to five bunker barges. In the meantime, we are also looking for general cargo vessels up to 10,000 dwt and hope to finalise our search soon.
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Sea Trade Ltd.
5, Leningradskaya str., Tuapse, Krasnodar Region, Russia 352800 Tel: +7 86167 50650, +7 86167 56404 Fax: +7 86167 50650 E-mail: servicetanker@gmail.com tseatrade@gmail.com Website: seatrade-bunker.com
Your reliable bunker supplier at Port of Tuapse www.worldbunkering.com
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AuTuMN 2014
Falling trend
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a drop in piracy has fuelled A decrease in Somali at the lowest level leaving incidents attacks worldwide, for six years met in February Industry bodies wages for seafarers
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BIG
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SEAFUFGEE
independents
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place of refuge for Finding a suitable the has been much on ships in distress times agenda in recent
INSIDE THIS ISSUE:
lubrica
Spring 2014
nts: Slow steamin g and fuel switchin Far east: Singapo g pose challeng re leads way on es flowmeters, Hk russia: Crucial on emissions court case won by suppliers
11/04/2014
Cover.indd 1
WINTER/S PRING 201 5
W RLD SHIPPING
WINTER/SP
COMPRE HENSIV E
COVERA GE
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SHIPPIN G
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INDUST RY
w w w . w o r l d - s h i p p i n g . n e t
MSI Spring 2014
– EXPANDING
BUSINESS
– Ports in the Amsterdam Rotterdam, Antwerp , (ARA) region have been posting positive results for the past year – KEEPING IN
TOUCH
– There have been a number of new developme nts in the communica tions field – SEEKING SHELTER
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Providing a place of refuge for casualties continues to be high on the agenda for salvors
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09:43
Russian update
Bunkering Association expands Olga Bogacheva reports the latest news from the Russian bunker and maritime sectors
New members for bunker association
Three new members joined the Russian Association of Marine and River Bunkering Suppliers when it board met recently in Petropavlovsk-Kamchatsky, in Russia’s Far East. The board also discussed current issues affecting the country’s bunkering sector. The three companies are KTK Bunker (Rostov-on-Don), Dilmas (Vladivostok) and BRAMS-Bunker based in Petropavlovsk-Rfvchatsky. The company was established in June last year. Major activities are sea transportation services and oil products supplies. The company works in Far Eastern ports. It owns the 4,986 dwt bunker tanker Gliar . When necessary the company also charters in another tanker, the BRAMS. It has applied for ISO certification. KTK Bunker was established in 2013 and operates in Rostov-on-Don and Azov. Major activities are cargo handling, sea and river transportation, fuel sales, oil and petrol storage. The company operates two vessels the 150 dwt TNM-19 and the 2,150 dwt Lena-Neft-2039. Dilmas was founded in 2008. It provides bunkering services in Far Eastern ports and oil products deliveries to fisheries in the Sea of Okhotsk and Bering Sea. It has now expanded its range of activities to includes tanker operation and road
World Bunkering Summer 2015
transport at the Far East. It also carries frozen fish to the Far Eastern and Asian ports as well as providing ship agency services in Primorsky Kray ports. The company has a fleet of six tankers, two refrigerated cargo vessels and two tugs. New St Petersburg container service
Famous Pacific Shipping (FPS) has opened a new weekly less-thancontainer-load (LCL service between Rotterdam and Saint Petersburg. The company claims this route will reduce transit time from fifteen to four days compared to traditional routes via Vilnius, Livonia. FPS also offers freight a forwarding service to other key destinations including Moscow. Transport consultant Kommersant agreed that there was demand for the service but doubted FPS’s ability to attract sufficient cargo in reasonable time due to the current economic constraints. While there were obvious delivery time and cost reductions trade between Europe and Russia has dropped significantly since 2014. Optimists hope for gradual growth when rouble rate is stabilised. Moreover, this route is traditionally used for importing Asian goods, and this trade is expected to grow.
New service to Novorossiysk
Novorossiysk Sea Trading Port container terminal (NSTP) has handled the first vessel on a new service from Asian-Pacific Region (APR) to Novorossiysk (AE3 Maersk Line), media representative of NSTP informed. Fourteen panamax and postpanamax vessels are operating a weekly rotation of: Yokohama, Nagoya, Pusan, Shanghai, Ningbo, Yantian and Singapore to Novorossiysk. Launching a new product, direct ocean service AE3 Maersk Line, which connects APR with Novorossiysk provides opportunity to expand Russian trade with China, Japan, Southern Korea, Singapore and other Far Eastern countries. NSTP Group is one of the largest Russian port operators. It includes Novorossiysk Sea Trading Port, Primorsky Trading Port, Novorossiysk Grain Terminal, NSRZ, NSTP Fleet, Novoroslesexport, IPP, Baltic Stevedore Company and SFP. Sochi port ready for cruiseships
A year after the Sochi Olympics port infrastructure has been expanded significantly expansion. The ports area has doubled, six terminals have been built and 12 berths reconstructed. Dredging works have increased depths to 11.5 metres. Other improvements include new terminal facilities and
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Russian update
administrative buildings and a new sea wall and breakwater. The northern breakwater was extended by a kilometre to take large cruiseships. The port can now accept two cruise ships of up to 311 metres in length with drafts of up to 8.8 metres, at the same time as three smaller vessels. The existing cruise berths have been converted into a marina for up to 300 superyachts and yacht repair yard. Passenger traffic, including foreign tourists, was expected to grow significantly in 2015 but the current political situation could keep numbers down. Archangel expands
The Russian government has put Alexander Land Island and adjacent waters in the Arctic territory of Frantz Josef Land Archipelago under the control of Archangel port. This will mean ships taking tourists to area will have to call at Archangel for immigration checks first. The authorities are expecting increasing numbers of visitors to the Russian Arctic National park and to the Archangel region. Aegean enters Russian market
Greek-based Aegean Marine Petroleum Network Inc says it plans to enter the Russian market. A spokesman said Aegean had taken on five former OW Bunker managers to set up the operation quickly. Aegean’s Russian operations will include a marketing and business development office located in St. Petersburg, dedicated to sales and marketing of marine petroleum products across all Russian ports.
With the assistance of the former OW Bunker employees, the company expects to gain “important local market intelligence, while providing enhanced service to clients at all Russian ports”. E Nikolas Tavlarios, the company’s president, commented: “We remain committed to meeting the increasing demand of our growing global customer base. This expansion is consistent with our opportunistic efforts to diversify our operations and enhance our global footprint. We believe that our expansion into Russia, combined with our recent entry into the US Gulf Coast, US West Coast, and German markets, demonstrates our continued actions to strengthen the Aegean network around the world. We are confident that Aegean is well positioned for continued growth, success and value creation in 2015.” Ust-Luga port “almost complete” The new Ust-Luga port being built in the Leningrad region in the Finnish Gulf is almost complete, according to an announced by the Ust-Luga Company which is running the project. Part of the companies assets are to be transferred to a subsidiary company that will develop an industrial zone (IZ) adjacent to the port and build a new town The new company, Industrial Zone Ust-Luga’s, key project will be building a large LNG plant, with an annual capacity of 15 million tonnes. This project was approved by Gasprom in January. The major industry in the IZ is expected to be processing of hydrocarbons and production of petrochemicals. Twelve berths are now operational, as is the Ust-Luga oil storage facility which has a potential capacity of 38
million tonnes and has already achieved is 30 million tonnes. Three new terminals are still under construction in the northern part of the port. In 2014 Ust-Luga’s throughput was 76.4 million tonnes, a 20 percent increase on 2013 but still a long way from its projected capacity of 180 million tonnes a year. Russian sea ports’ throughput up
Russian sea ports increased their throughput by 5.7 percent in 2014, to 623.4 million tonnes, according to Association of Sea Ports figures that include Crimean ports. Meanwhile plans to make Vladivostok a free port are progressing rapidly. In March a draft law was presented in the Region and for approval by the Russian government in April. Granting Vladivostok free port status was first mentioned by Russian president Vladimir Putin on December 4, 2013, in his Address to the Federal Assembly. The Ministry for Development of the Russian Far East has declared that almost all of southern Primorje would become a part of a free port including areas without access to the sea road check points on the Russian-Chinese border at Knevichi airport. Bunker industry insiders say they interested in plans for a free port in Primorje and expect details to be announced. But it is obvious that any industrial development in this region should bring growth of shipping industry. One bunker trader said: “We expect a reduction of charges at least and really simplifying formalities and round-the-clock customs services would be very helpful”. Ro-ros for Morskoy Facade
St Petersburg’s Morskoy Facade port is now officially a passenger and cargo port. The order to change the classification of the border control point at the Passenger Port of St Petersburg was signed by Dmitriy Medvedev, Russian prime-minister, on March 13. The new status will allow the port to accept cargoes from St Peter Line ro-ros. Cargo handling will start terminal facilities are complete late next year. Cargo throughput could reach 1 million tonnes annually.
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World Bunkering Summer 2015
In June 2015, the Russian Association of Marine and River Bunker Suppliers celebrates its 10th anniversary. Olga Bogacheva asks its president, Vitaliy Kovalev, about progress made and the current situation facing the bunker industry
Olga Bogacheva: Can you remind readers how the association started. Vitaliy Kovalev: In 2005, when our Association was founded, the Russian market totalled about 5 million tonnes. Now it has tripled. At the beginning of last decade, the commercial viability of supplying fuel to the shipping industry was questionable for large players. Independent businesses had an opportunity to develop this sector. Companies started from zero with very modest assets. Usually they made do with rented offices and computers. The situation appeared to be favourable. Modern infrastructure emerged. Gradually, the companies acquired their own fleet, became well-known and respectable. OB: What is the Russian bunkering market like today? VK: The bunkering industry has survived numerous challenges, as has the whole country. These have included highly volatile oil prices, the world economic crisis, strengthening of environmental legislation as well as various domestic economic and political shocks. The impact of competition was most important. The total number of players reduced at the same time as the market grew rapidly. After 2008, the profitability of the oil business reduced and large companies, including vertically integrated companies, noticed the margins in the
World Bunkering Summer 2015
bunkering sector. And, as you know, when big guys enter the game, the results may be easily foreseen. Anything registered as a separate section of a programme would be implemented steadily. The vertically integrated company share of the market is growing, and four large players account for more than half of the market today. The situation varies in different ports, but the common trend is obvious. All the industry experts believe it is now unlikely that new large bunkering companies will emerge. It is possible only for certain financially prominent entities to enter the market. Sometimes a small company may perform a couple of deliveries during a busy period, but they won’t change the general picture.
sulphur fuel. Diesel fuel sales were about 700,000 tonnes (4%). These figures include sales by 100 companies, but the annual volume supplied by the smallest of those companies was 15,000 tonnes. We believe that a couple of dozen other firms supply fuels during the most favourable period, but this doesn’t affect the major market trends. More than half of the total amount of fuel sold in Russia (52.8%) was supplied by subsidiaries of four vertically integrated companies: Rosneft (19.12%), Gazprom Neft (14.57%), NK Alliance (10.83%) and Lukoil (8.02%). A fifth big company, Transit-DV, delivered 630,000 tonnes of marine fuel during the year, accounting for 4% of the market.
OB: So how much fuel is being delivered in Russian ports? VK: I want to emphasise that I am using customs statistics, which don’t reflect sales in rubles, including sales in inland waterways. Since 2000, fuel sales have been growing by about 10% annually, matching port throughput growth. In 2013 and 2014, annual sales grew by 3 million tonnes and 4 million tonnes respectively. Total annual bunker sales reached 15.6 million tonnes by the end of 2014. Almost 15 million tonnes of heavy fuel oil (HFO) were supplied, 11.9 million tonnes of highsulphur fuel and 3.1 million tonnes of low-
Table 1: Bunkering in the Russian Federation, 2014 Far East
Russian interview
Russian Association celebrates first decade
The total market share in 2014 was over 7.9 million tonnes. This represents growth of 4.4 million tonnes against the previous year. More than 40 companies were involved in the sector. Nakhodka is the largest bunkering port of the Far East. In 2014, total supplies reached 4.1 million tonnes (1.3 million more than 2013). RN-Bunker occupied 29.9% of the market. It should be noted that, a year earlier, RN-Bunker was almost a monopoly with a market share of 41.6%
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Russian interview
Table 2: Bunkering in Nakhodka, 2014
In 2014, Vostochny’s total bunkering market comprised 2 million tonnes (compared with 609,000 tonnes in 2013). More than 50% of supplies were provided by RN-Bunker. The company built on its leadership in the 12 months since 2013, when its share was 46%. In second place was Alliance Bunker (about 400,000 tonnes), with Gazprom Neft Marine Bunker third at 11.2%. Vladivostok saw the same trends as the leading ports, but the total amount was lower. The total bunker amount was 884,000 tonnes, representing growth of 360% compared with the previous year. Alliance Bunker was the leader here (41.2%), followed by Pavino Shipping Company (11.6%). Southern region Novorossiysk
The bunkering market in Novorossiysk increased by 39% in 2014 and reached 2.5 million tonnes. The market there has been growing since 2007. In 2013, the increase was most impressive, at 56%. In 2014, Gazprom Neft Marine Bunker was the market leader with a 17.6% share. Taking second place was
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Transbunker-Novo (14.9%), followed by HMTM Fleet with 13.9%. In 2013, HMTM Fleet was the leader with 19%.
(18.4%). In third place was Gazprom Neft Marine Bunker. Primorsk
Table 3: Bunkering in Novorossiysk, 2014 North-western region St Petersburg
2.3 million tonnes of bunker fuel was delivered in 2014 in St Petersburg port. This was a 7% increase on the previous year. HFO accounted for 92% of the total (1.4 million tonnes of which was low-sulphur fuel). More than 20 companies operated in this market in 2014. The positions of the leaders were stable. Gazprom Neft Marine Bunker was first, with 24.7% market share; second was Lukoil-Bunker (22%); Baltic Fuel Company (BFC) followed (10.2%), replacing Nevsky Mazut in the rating. Nevsky Mazut was fifth, with an 8% share. Table 4: Bunker market in St Petersburg Ust-Luga
Total bunker sales almost doubled compared with the previous year, reaching 971,000 tonnes. The leader was Lukoil-Bunker, at 340,000 tonnes. Baltic Fuel Company, an independent company, supplied half of this amount
Table 1
Table 2
Table 3:
Table 4
Primorsk is mainly an oil loading port, so a 30% drop in bunker deliveries presented no surprise. In total, 195,000 tonnes of bunkers were sold. Four companies worked here. The leading three had similar market shares: Southern Bunker Company – 36.8%; Gazprom Neft Marine Bunker – 32.7%; and Primorsk-Resursy – 29.7%. OB: So what does the future hold for Russia’s bunker business? VK: I began by mentioning that volumes have tripled over the past 10 years. It is obvious that 16 million tonnes is still far off the maximum possible level, even taking into account the rather unfavourable geographical location of our ports, which are far from major world trade routes. I hope that the infrastructure projects recently announced, along with government efforts to improve the business climate, will be implemented. This will boost the shipping industry and increase customers. As for bunker suppliers, we are ready to solve any problems.
World Bunkering Summer 2015
Ukraine Ukrainian market hit by instability There is a long way to go before Ukraine has a thriving bunker business, according to Vladimir Kovalevych, managing partner of Ukraine-based logistics, marine services and bunkering company Marine Standard
F
ollowing Ukraine’s Maidan revolution last year, it is difficult to assess what is happening in the country’s bunkering sector. There has just been another political and administrative restructuring that has destroyed any reasonable system of quotes, standards, norms, rules and tariffs for the import, transit and export of fuel oil and diesel. As a result, the price of bunker fuel in the ports of Odessa, Yuzhny and Ilyichevsk now exceeds by far any Turkish offers. Meanwhile, physical supply is often difficult to achieve. Currently, the Ukrainian bunkering market as such is non-existent. We can talk about some extraordinary (emergency or really small volumes, for example after dock repairs) supplies of diesel fuel in the Ukrainian ports of Nikolaev, Mariupol and Berdyansk). TURKEY
Even then, we are only talking about ships buying enough fuel to last to Odessa or Kerch outside port limits (OPL), or to Istanbul. The price of diesel fuel supplied from the trucks, barges or shiprepair yards in the Ukrainian ports includes all current Ukrainian taxes (without the slightest chance of getting a tax refund) as well as costs for fire and environmental protection services. The instability of the Ukrainian national currency, the hryvnia, is a crucial factor. It is particularly difficult when exchange rates change significantly while processing the bunker request, which can affect the eventual price of bunker fuel considerably. Owing to the current conditions, with political instability and high bunker prices in Ukrainian ports and shipyards,
the Ukraine’s two former offshore bunkering areas, Odessa OPL and Kerch OPL, have more or less stopped operating. However, these two bunkering spots were essentially emergency and secondary, and could not influence the bunker market. They certainly could not compete with Istanbul or ports in the Russian Federation. Volumes of freight handling in Odessa have decreased to almost nothing. The former Ukrainian bunkering anchorage in Kerch Bay has been abolished completely by the Russian Federation. Cargo handling now takes place in the open Black Sea, but volumes have gone down. Cargo throughput at the Ukrainian ports of Mariupol, Berdyansk, Kherson, Nikolaev and Odessa has also fallen, affecting the potential for bunkering at Odessa – and previously Kerch Bay.
IFO380
IFO180
MGO (0,1)
MGO (0,2)
Barging
330
350
560
N/A
1500-2000
IFO380
IFO180
MGO (0,1)
MGO (0,2)
Barging
OFF ODESSA/ILYICHEVSK
400
420
680
650
750-1.000
OFF YUZHNY
560
580
700
N/A
1.000
IFO380
IFO180
MGO (0,1)
MGO (0,2)
Extra
ODESSA
N/A
N/A
1300
1200
TBN
KHERSON
N/A
N/A
1300
1200
750
NIKOLAEV
N/A
N/A
1350
1300
600
MARIUPOL
N/A
N/A
1450
1350
1000
ISTANBUL ROAD UKRAINE ex-barge
UKRAINE by Truck
World Bunkering Summer 2015
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Ukraine
Another problem for shipowners last year and this year has been the publication of incorrect bunker fuel prices at Odessa, Yuzhny and Ilyichevsk. Below is the comparison table for realistic Turkish and Ukrainian bunker prices as of 10 April, 2015. The bunker market in Crimean ports
After annexation of Crimea by the Russian Federation, the peninsula gained access to cheaper bunkers from Russian suppliers based in the Krasnodarskiy Krai region. The current confusion and lack of control have led to the Crimea bunker market being swamped with offers of all types of diesel, often of doubtful quality. During 2014 one could buy and supply marine gas oil (MGO) bunker fuel from a truck at any Crimean port. The cost was $500 to $600, which was more than at the Russian ports but still competitive compared with the Turkish market. However, demand for bunker supply in Crimea was practically non-existent. Shipowners calling at Crimean ports tried to load or discharge vessels as quickly as possible and leave unnoticed. This year, with Crimea now coming under the Russian Federation’s legal system, there has been a significant toughening of safety and environmental regulations. The table on page 67 shows bunker supply offers in Crimean ports compared to Istanbul. It is, however, difficult to be accurate because of the volatility of the Russian rouble during the last quarter of 2014 and first quarter of 2015. The ferries working between Russia and Crimea pick up fuel in Novorossiysk or buy from suppliers in the Krasnodar region, which is much more beneficial than buying in Crimea, considering the delivery costs involved in ferry crossings. To sum up, you can buy fuel in Crimean ports, but there is no market for it. The ports have stopped working. The main buyers of bunkers are service vessels or Russian-flagged ships calling for repair or waiting for orders at anchorages.
Author: Vladimir Kovalevich Managing partner of Marine Standard Ltd (www.marinestandard.com), PhD in economic sciences, Honorary Figure of Transport of Autonomous Republic of Crimea, Honorary Figure of Transport of Ukraine, and author of more than 20 scientific papers and a monograph on the development of the transport infrastructure of the Crimea and Ukraine. Marine Standard Ltd was founded in 2004 as a logistics company specialising in forwarding services from the manufacturing plants to the ports of Ukraine and Russia, transhipment at the ports and freight delivery by river and sea to the end-user. Since 2009, the company has been involved in oil products cargo handling and bunkering. The company also became a physical supplier of marine oils and diesel at the ports of the Azoz-Black Sea region and now owns a fleet of eight vessels. The company’s main market for physical supply is offshore Kerch and Odessa OPL.
TURKEY
IFO380
IFO180
MGO (0,1)
MGO (0,2)
Barging
330
350
560
N/A
1500-2000
IFO380
IFO180
MGO (0,1)
MGO (0,2)
Extra
KERCH
N/A
N/A
560
520
400
SEVASTOPOL
N/A
N/A
NA
530
300-400
FEODOSIA
N/A
N/A
N/A
N/A
N/A
YALTA
N/A
N/A
N/A
540
400
ISTANBUL ROAD CRIMEA PORTS by Truck
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World Bunkering Summer 2015
Innovation Damen Shipyards, which recently built this offshore support vessel, and Bellona Foundation are looking towards a fossil-fuel-free future
Concept vessels A new partnership between an environmental body and shipyard will explore the possibilities for building a new generation of environmentally friendly ships
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slo-based environmental organisation the Bellona Foundation has launched a three-year partnership with leading Dutch company Damen Shipyards Group. The main goal of the partnership is to explore and develop concept vessels for the future. The Bellona Foundation and Damen says they both acknowledge that today’s global shipping industry will need to undergo substantial change in order to achieve its own climate and environmental objectives. The non-governmental organisation and Damen have joined forces to work towards reducing the impact on the climate of a wide range of commercial and leisure vessels, as well as fleets employed by the aquaculture industry. “One of Bellona’s goals is to make the ships of the future independent of fossil fuels. This partnership will provide us with new knowledge on innovative shipping construction that will contribute towards achieving that objective,” said Frederic Hauge, founder and president of the Bellona Foundation. “Today, the global shipping industry emits large amounts of CO2, sulphur dioxide, nitrogen oxide and other gases harmful to the climate and environment, and the European fleet is large and in need of renewal. The next three years of partnership with Damen will make us better equipped to handle the challenges, both domestically and internationally.”
World Bunkering Summer 2015
“We are very pleased to be starting this partnership with Bellona,” added Damen’s Remko Hottentot, sales manager, Norway, based at Damen’s Stavanger office. “We have a strong focus on sustainability, and the vision of each organisation complements the other in terms of environmental awareness. At Damen, the focus will be on creating alternative solutions that contribute to reducing harmful maritime emissions into both the air and the water. This will go hand in hand with initiatives to develop cost-effective efficiencies through reduced consumption of potentially harmful inputs, such as fuel, paint and lubricating oil. During this long-term relationship, we foresee in general a valuable focus on co-operating in the creation of environmental technical sustainable solutions and the fostering of political support.”
Hauge says that he believes that the Bellona Foundation, as well as Norway’s maritime community as a whole, can learn a good deal from Damen when it comes to developing the next generation of lowemissions vessels. He sees Damen as an international trendsetter, challenging the Norwegian mindset in a positive manner. From his perspective, this partnership will improve the Bellona Foundation’s capability to influence both the Norwegian and European shipping industries. Bellona has a 29-year track record of working on maritime political matters at a high international level, from its offices in both Oslo and Brussels. The partnership with Damen represents an important milestone for the organisation, giving it access to new knowledge and technology that will enable it to influence Norwegian and European politics even more than before.
Sealing the deal: Frank de Lange (Damen Sales Director N/W/S Europe, Remko Hottentot (Regional Sales Manager Norway), Christian Strøm - Manager Institutional Relations, Frederic Hauge, Arnout Damen, Bjørg Tysdal Moe, Sigurd Enge - Advisor Shipping and Marine
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Innovation Blowing bubbles A cruiseship newbuilding will incorporate an air lubrication system to improve fuel efficiency
S
ilverstream Technologies, a pioneer of air lubrication technology for the shipping industry, has announced the first commercial installation of its Silverstream® System on the Norwegian Cruise Line vessel, Norwegian Bliss, scheduled for delivery in Spring 2017 from Meyer Werft in Germany. There is an option for two further Norwegian Cruise Line vessels to be fitted with the Silverstream® System. “Despite the recent decline in fuel prices, new sulphur regulations in emission control areas still mean significantly increased fuel bills for the cruise industry,” said Christer Karlsson, senior vice-president, newbuild, Norwegian Cruise Line. “In conjunction with the importance of constantly improving sustainability, it is therefore critical that we look at viable opportunities that improve operational and environmental efficiencies, driving down fuel bills and reducing emissions. The Silverstream® System is an example of such a clean technology that can genuinely make a difference,” continued Karlsson. The Silverstream® System produces a thin layer of microbubbles that creates a single ‘air carpet’ along the hull of the vessel. This reduces the frictional resistance between the water and hull and improves the vessel’s operational efficiency, reducing fuel consumption and associated emissions. The technology can be added to a newbuild design, or retrofitted to an existing ship within just 14 days. Commenting on the announcement, Noah Silberschmidt, chief executive of Silverstream Technologies, said: “It is a landmark moment for the company to secure a significant order from a leading cruise operator, which will be installed and delivered by one of the world’s most respected shipyards for technology and innovation. “Not only does this highlight the Silverstream® System and air lubrication as an applied and sustainable clean technology, it also demonstrates the industry’s culture and desire to improve operational and environmental efficiencies as a means of reducing emissions and fuel costs, and improving the sustainability of operations.”
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Methanol ferry in operation Stena looks in a different direction for a cleaner fuel
W
hile there has been considerable focus on the marine use of liquefied natural gas (methane), Stena Line has chosen to focus on an different alternative fuel, methanol. The company now runs the world’s first methanol-powered ferry, the Stena Germanica, which operates on the Kiel-Gothenburg route. The ship re-entered service on 26 March after a couple of months in refit. Now Stena Line says it has become the first shipping company to operate with “environmentally friendly” methanol as the main fuel. Carl-Johan Hagman, Stena AB’s chief executive, shipping, drilling and ferries, said: “We are very enthusiastic about methanol’s possibilities, and it has the potential to be the maritime fuel of the future. We want to pursue change and development in the shipping sector and, with the Stena Germanica, our environmental impact will be completely different to what the industry has seen before.” A Stena statement asserts that methanol is a biodegradable, environmentally friendly and cost-efficient fuel that reduces the emissions of sulphur and particles by 99%. The ferry’s fuel system and engines were adapted by the Remontowa Shipyard in collaboration with Stena Line and Wärtsilä. The dual-fuel system enables methanol to be the main fuel, but there is the option to use marine gas oil as a backup. The project has received support from the EU’s Motorways of the Sea project and, in total, has cost E22 million. The Swedish Maritime Administration’s director-general, AnnCatrine Zetterdahl, said: “I think Stena Line’s initiative in being the first in the world to use methanol as an alternative fuel is extremely pleasing. Together with the impressive efforts made in its Energy Saving Programme, ESP, over a number of years, this demonstrates a great commitment to sustainable development. This is showing shipping the way, both in Sweden and globally, for how to protect responsibly the environment and climate.” Dirk Claus, managing director of Kiel port, added: “Stena Line is steering a sustainable and particularly environmentally friendly course. We are proud that the route between Kiel and Gothenburg was chosen and that we are part of this outstanding pilot project.”
World Bunkering Summer 2015
Legal news Legal consequences of calling at Crimean ports Vladimir Kovalevich, managing partner at Ukraine-based Marine Standard Ltd, explains his view of the legal situation facing owners of ships calling at Crimean ports
M
any shipowners want to know what the consequences of calling at Crimean ports are likely to be. They understand in principle the seriousness of the sanctions and the possibility of legal action, but so far nobody has spelt out the consequences. With a very low freight market in the Azov-Black Sea region in 2014, shipowners could secure rates that were between 50% and 100% higher by calling at Crimean ports, which handle significant shipments of scrap metal, grain and liquefied petroleum gas (LPG). One of the main factors shipowners took into consideration was that others appeared to be calling at Crimean ports with impunity. Although the Ukrainian government announced measures prohibiting such calls, it then became preoccupied with its internal political situation and, even more important, the military situation in South-East Ukraine. While the Ukrainian government was distracted from taking action against vessels defying its prohibition on Crimean port calls, volunteers in Odessa tried to track and record the vessels calling in Crimea. These people compiled a database and created a blacklist of vessels. Sooner or later, however, the question of legal consequences of calling
World Bunkering Summer 2015
at Crimean ports was bound to move past the theory stage. That is now starting to happen. Two vessels have been detained in Ukrainian ports. The court decisions to act followed immediately after the implementation of a ceasefire in South-East Ukraine. The ships involved were the Tuvaluan-flagged Kanton, alleged to have called in Sevastopol in July last year, and the Moldovan-flagged Aliot, which was alleged to have called at Kerch, also in July. International action over the annexation of Ukraine is based on a United Nations General Assembly resolution adopted on 27 March, 2014, and supported by 100 UN member states. The resolution followed seven unsuccessful attempts by the United Nations Security Council to address the crisis, and it affirmed the UN’s commitment to recognise Crimea within Ukraine’s international borders. The UN resolution states that the referendum conducted in Crimea and Sevastopol on 16 March, 2014, carried no legal force and could not be grounds for any change of status in the Autonomous Republic of Crimea or the city of Sevastopol. The Criminal Code of Ukraine, Article 332-1, covers administrative and criminal liability of shipowners, masters and crews of vessels for unlawful group
crossing of the border and violation of entry into the occupied territory. In the cases of the two ships detained by the Pechersky District Court of Kiev, the masters were charged under Article 332-1. This law provides for penalties of three to five years in prison and the confiscation of the vessel. These two vessels were arrested during their calls at Ukrainian ports after visiting Crimea in 2014. However, when a Ukrainian Court orders the detention of a vessel for breaking Ukrainian law, the ships could be arrested in other countries. So the situation is now quite clear. It is now highly likely that a ship will be detained and confiscated if it calls at any Ukrainian port after visiting Crimea. Owners of vessels calling at Crimean ports are running the risk of being banned by certain flag states, including Moldova. They are also likely to either lose insurance cover or have it restricted. Charterers may reduce the risk of being involved in a legal case over Crimean ports calls by adding a clause to the charter party, such as: “Owners confirm that performing vessel had no Crimea port calls since 27.04.2014.” These developments mean that shipowners will have to consider carefully the likely consequences of calling at Crimean ports in the current circumstances.
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Legal news
Shipmanager pays for SMS failure Failing to keep a ship’s safety management system up-to-date led to a shipmanager picking up the tab for breaching California’s emission control laws
I
nternational Transport Intermediaries Club (ITIC) has confirmed that a shipmanagement company has had to pay over a quarter of a million dollars in connection with a breach of clean air regulations in the US. ITIC reports that an inspector of the California Air Resources Board (CARB), the clean air agency of the state of California, boarded a ship in July 2011 at a terminal in Los Angeles. The chief engineer was asked if he was aware of the revised 2009 California clean air regulations, which required vessels to switch main engine, auxiliary engines and auxiliary boilers to low-sulphur fuel when in California-regulated waters. The chief engineer said he was only aware of the requirement to switch auxiliary engines to low-sulphur fuel in accordance with regulations effective from 1 January, 2007.
The master checked the vessel’s safety management system (SMS) but was unable to locate the 2009 requirement. The inspector then examined the records of fuel switch-over for the vessel’s main engine, auxiliary engines and auxiliary boilers, and ascertained that the ship had called at California ports 17 times between 2009 and 2011 without switching over the main engine or the auxiliary boilers. A penalty of $283,500 was duly imposed on the shipowner for failure to switch fuel during the 17 port calls. The owner claimed against the manager, maintaining that the manager had been negligent. ITIC says: “In 2009, a fleet circular had been sent to all vessels by the manager, setting out the change in regulations, and asking that it be displayed in a prominent position. The manager
therefore initially rejected the claim on the ground that it had resulted from crew negligence, which was excluded under the Baltic and International Maritime Council (Bimco) management agreement. The owners, however, did not accept this rejection, maintaining instead that the manager had failed to update the SMS. As it was considered unlikely that the manager would successfully defend a claim resulting from its failure to update the SMS, the claim was paid in full.” The case highlighted dates back to 2011, but shipping companies continue to run foul of California laws. CARB has recently fined four shipping companies a combined $146,719 for failing to switch from residual to distillate when entering Regulated California Waters – within 24 nautical miles of the California coast.
Magic pipe fines Italian shipowner pays penalty for false oil record book entries
C
arbofin, the Italian-based owner of the liquefied petroleum gas (LPG) carrier Marigola, has been sentenced to pay an overall criminal penalty of $2.75 million by a Florida court for knowingly falsifying the vessel’s oil record book in violation of the Act to Prevent Pollution from Ships (APPS), following a plea bargaining agreement. According to the US Department of Justice (DoJ), out of the $2.75 million criminal penalty, $600,000 will be paid to the National Marine Sanctuary Foundation for the benefit of Florida’s only national marine sanctuary: the Florida Keys National Marine Sanctuary. During 2013 and 2014, on numerous international voyages, senior members
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of the crew of Marigola directed the installation and use of a so-called ‘magic pipe’ to dispose of sludge, waste oil and oil-contaminated bilge water directly into the sea, bypassing required pollution prevention equipment. On 16 April, 2014, the vessel called upon the Port of Tampa to load anhydrous ammonia. Coast Guard inspectors boarded the vessel and were approached by two junior engineering crew members, who showed the inspectors a video of the magic pipe hooked up between piping leading to the bilge tank and the vessel’s boiler blow down valve. The boiler blow down valve is a discharge point for the boiler to release hot water and steam. The inspectors had the valve removed and an oily black substance
was discovered. Oil samples taken from the magic hose, the bilge piping and the boiler blow down valve matched. The chief engineer, Carmelo Giano, and the second engineer, Alessandro Messore, had previously pleaded guilty and were sentenced for their role in illegally discharging oily waste into the sea. During the investigation, it was revealed that the Marigola oil record book had been falsified since at least 16 June, 2013. The investigation also revealed that illegal oily waste discharges had occurred from two other vessels owned and operated by Carbofin, Marola and Solaro. On Marola, a magic pipe was used from approximately December 2012 to April 2013 and on Solaro from February to August 2013.
World Bunkering Summer 2015
Canada’s Seaspan Ferries has chosen a hybrid liquefied natural gas/diesel/ battery-powered propulsion system for two ro-ro cargo ferries
F
rench classification society Bureau Veritas (BV) is to class two innovative projects for gas-fuelled vessels to be built for a Canadian owner in Turkish shipyards. British Columbia-based Seaspan Ferries has chosen BV class for two hybrid liquefied natural gas (LNG)/diesel/battery-powered ro-ro cargo ferries, which have been designed by VARD Marine Inc and will be built at the Sedef Shipyard in Turkey. Philippe Donche-Gay, executive vice-president and managing director of the Marine & Offshore Division, Bureau Veritas, said: “BV really knows LNG. We have extensive experience of handling LNG and using LNG as a fuel with our gas carrier fleet. Our ability to deploy that expertise for the benefit of shipyards and owners who are both breaking new ground was crucial to these owners entrusting BV with the classification of these vessels.” The 148.9 metre Seaspan ferries are due for delivery in 2016 and will operate on Canada’s west coast, carrying up to 59 trailers at speeds of up to 16 knots propelled by azimuthing drives. Twin dual-fuel W9L 34DF generators will be able to burn LNG from one single 200 cubic metre Type C tank below the main deck and there will be a hybrid battery pack power supply for generating zero emissions energy at
World Bunkering Summer 2015
quay or during manoeuvring and for any low-load operation. Donche-Gay said: “Now that the International Maritime Organization (IMO) has updated and adopted the International Code of Safety for Ships using Gases or other Low flashpoint Fuels (IGF Code), the regulatory worries which were holding back owners have been removed and there are a host of new gas fuel projects about to start as owners take advantage of this clean and economical fuel." He added: “BV’s expertise in risk assessment complements its experience with gas carriers, which is why we are the class of choice for innovative gas fuel projects. We are currently engaged in gas fuel conversion or newbuilding projects involving chemical tankers, small-scale LNG tankers, LNG bunker tankers, cargo and passenger ferries, product tankers and tugs, and we expect to announce more in the near future.” The energy storage system (ESS) for the ferries is to be supplied by Corvus Energy, Elkon Electric (an Imtech Marine company) and Seaspan Ferries Corporation. The new vessels will each use a 1050VDC, 546kWh ESS, consisting of 84 Corvus Energy AT6500 advanced lithium polymer batteries. The ESS will be integrated with an Elkon electrical propulsion and distribution system and will be powered by
dual-fuel engines capable of running on diesel and LNG, with a Corvus ESS as spinning reserve and power for responsive harbour manoeuvring. The innovative hybrid propulsion system with a Corvus ESS will help reduce fossil fuel emissions and greatly improve operational efficiency. “We are very pleased that Corvus’ energy storage system was selected for these innovative vessels,” said Andrew Morden, president and chief executive at Corvus Energy. “The two new Seaspan ferries are examples of the significant benefits, both operationally and environmentally, of battery hybrid LNG propulsion, and it is encouraging to see this technology take root in Canada.” Corvus asserts that lithium polymer energy storage technology is an effective solution for hybridisation of commercial vessels with dynamic duty cycles, providing consistent reliable power to support greatly improved efficiency when compared with conventional propulsion systems.
Equipment and services
BV class for innovative ferries
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Equipment and services
SCR for Wärtsilä engine Hudong Heavy Machinery builds IMO’s Tier III-compliant machinery for China Navigation Co
T
he first Wärtsilä two-stroke engine with a high-pressure selective catalytic reduction (SCR) system manufactured in China has been built. The system has been fitted to a five-cylinder Wärtsilä RT-flex58T-D two-stroke, lowspeed engine, produced at the Hudong Heavy Machinery Co (HHM) facilities. The SCR reactor was also manufactured by HHM. This is the first SCR system that complies with the International Maritime Organization’s (IMO) Tier III regulations for engine emissions of nitrogen oxide (NOx). The Wärtsilä engine with SCR is to be installed in a new 22,000 dwt multipurpose vessel currently under construction at the Ouhua shipyard on behalf of China Navigation Co. The ship, which is scheduled for delivery in the second quarter of this year, has been designed to allow sufficient space for the fitting of the SCR. This will enable the vessel to comply with the Tier III regulations for NOx control. The SCR system for this application has been jointly developed by HHM and
Winterthur Gas & Diesel (WinGD), the joint venture company of Wärtsilä and China State Shipbuilding Corporation (CSSC), using a basic design concept from Wärtsilä, which has been adapted to suit the particular requirements of the engine and ship. Wärtsilä has been producing its high-pressure NOx Reducer SCR systems since the late 1990s. The system injects a solution of urea into the exhaust gas flow to react with and eliminate the NOx emissions. It is a high-pressure process because the reactor is located between the engine exhaust valves and the turbocharger turbine inlet. This provides the most compact and efficient system without compromising engine performance or affecting fuel consumption. Andrew Stump, vice-president, product management, at WinGD, commented: “WinGD is committed to an ongoing testing and improvement programme on all areas of Tier III compliance. This first China-produced high-pressure SCR is an important milestone among many more to come.”
“HHM is very happy to deliver the first two-stroke, high-pressure SCR produced in China. We have been working on development of the SCR with major designers during the past three years, and now the cooperation with WinGD shows what is possible. We look forward to continued growth in this market,” said Zhou Weizhong, executive director of the Hudong Heavy Machinery R&D Centre. Martin Cresswell, fleet director of China Navigation Co, noted that his company would take delivery of 15 new vessels during 2015, all of which are to be fitted with Wärtsilä engines manufactured by HHM. “All these vessels are to be fitted with modern Wärtsilä RT-flex engines and are designed to be the most efficient ships of their type and size,” he added. The test bed trials were approved by Lloyd’s Register. “These trials show that the technology to produce IMO Tier III-compliant engines is actually available and hence give confidence that IMO Tier III certified engines will be ready for 1 January 2016,” said John Bradshaw, principal technical specialist at Lloyd’s Register.
Hull performance DNV GL launches an advanced hull and propeller performance analytics module
F
uel efficiency remains a key concern for shipping, but tracking hull and propeller degradation is a challenge that has not yet found an adequate solution, according to classification society DNV GL. It has launched an advanced hull and propeller performance analytics module as part of the new fleet performance management service, ECO Insight. The module is based on computational fluid dynamics (CFD) methods to correct for changing operational conditions and produces much more accurate results than existing approximate or experimental methods.
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DNV GL notes expert opinion that suggests that, as a result of hull fouling, the world fleet could be sailing with approximately 30% added resistance and, consequently, significantly higher levels of fuel consumption. Undertaking hull and propeller cleaning on a more regular basis is already recognised as an improvement lever by many shipping companies. However, the question of when and how the procedure should be carried out has not yet been addressed systematically. Hull and propeller performance computations show how much resistance owing to fouling is added over time, by analysing the gap between the theoretical and measured power demand of
a vessel, after correcting for influences like speed, draft, trim, weather and other operating conditions. “We use data that shipping companies are already collecting,” explained Dr Torsten Büssow, DNV GL’s head of fleet performance management. “Our CFD capabilities, which we also use in our lines optimisation, retrofit and trim assistant services, allow us to very accurately normalise vessel-specific power demand under each reported condition.” ECO Insight provides a comprehensive and easily accessible way to manage the performance of a fleet, including voyage, hull and propeller, engine and systems performance.
World Bunkering Summer 2015
FUJCON review
FUJCON success Yet again, the biennial FUJCON event has drawn participants from around the world to the major bunker port and maritime centre of Fujairah
T
he ninth International Fujairah Bunkering & Fuel Oil Forum – FUJCON 2015 – and the Fujairah Bunkering Week events once again exceeded expectations, attracting nearly 400 attendees from 35 countries. Held every two years, the Fujairah Bunkering & Fuel Oil Forum is now an important feature in the international bunkering community’s calendar of events, given its diverse geographic attendance and wide cross-section of industries represented. Organised by The Conference Connection Inc, under the auspices of the government of Fujairah, FUJCON 2015 took place in Fujairah, United Arab Emirates, from 23 to 25 March 2015. The forum was honoured to have the gracious attendance of the Crown Prince of Fujairah, His Highness Sheikh Mohammed bin Hamad bin Mohammed Al Sharqi, and other VIPs during the official opening on 24 March, which featured a welcome and two keynote addresses. Together with 33 other speakers who addressed the conference, the panel of speakers comprised several oil industry and maritime notables. This year’s new roundtable format and audience voting systems for topical industry issues went down very well with participants and promoted active dialogue between all industry players at the conference.
World Bunkering Summer 2015
The in-depth analysis, wisdom and experience of the moderators and panellists added greatly to the debate and knowledge-sharing for which FUJCON is noted. The opening and closing sessions were chaired by Mohamed Obaid Bin Majed Al Aleeli, director, Department of Industry and Economy. In a keynote address, Dr Ali Obaid Al-Yabhouni, chief executive of ADNATCONGSCO, and UAE Governor for OPEC, discussed “Low Oil Prices: Challenges and Opportunities for the Bunker Industry”. Dr Fereidun Fesharaki, founder and chairman of FACTS Global Energy Ltd (FGE) followed this with an address on “Global Oil Market: Impact on Fuel Oil Balances”. As in previous years, Dr Mohammed Saeed Al Kindi, chair of the FUJCON Steering Committee, gave a welcome speech, in which he traced the history of the conference and of Fujairah, and its evolution over the past years, both in terms of commercial and infrastructural growth. The Abu Dhabi Crude Oil Pipeline (ADCOP), construction of new tank terminals and storage facilities, advancements at the port in terms of jetties, very large crude carrier (VLCC) berths and increased anchorage, as well as its Matrix Manifold, Strategic Grain Reserve, liquefied natural gas (LNG) facilities, desalination and power plants and new highways have all worked to serve Fujairah in its quest to add strategic facilities to its strategic location.
The theme of the conference, “Fujairah – Towards Diversification and Expansion: Bunkering, Crude, Refining, LNG and Petrochemicals”, was covered by a group of 35 experts from Denmark, Iran, the Netherlands, Singapore, UAE, the UK and the US. The new format promoted leading-edge discussions on the opportunities and challenges of the bunker industry, especially the impact of new sulphur regulations, growth of LNG as a marine fuel, the new challenges of marine fuel quality, environmental regulations, fuel efficiency and technology. One speaker, Ara Barsamian, president of the Refinery Automation Institute (RAI), argued that a 1.0% sulphur limit would be “more reasonable, practical, and affordable” than the planned 0.50% global cap that will come into force in either 2020 or 2025. He argued that developing countries, in particular, would suffer economically if the 0.50% sulphur cap goes ahead. His case drew significant approval from among the delegates. The highlight of the conference included two first-time panels, showcasing bunker operators and terminal operators of Fujairah. These focused on growth plans for the Fujairah Anchorage, prospects for increased bunker activity, new sulphur cap regulations in the UAE and availability of acceptable bunker fuel. The panels were moderated by Dr Salem Khalil, technical adviser to the Government of Fujairah.
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Reviews: International Bunker Conference
Focusing on reality This year’s International Bunker Conference concentrated on the challenges of complying with the new emission control area regulations
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ore than 140 delegates gathered in Oslo last month at the 36th International Bunker Conference for an update on what has happened since 1 January 2015 and, of course, to network. The conference kicked off Wednesday 22 April with a lively welcome reception at Scandinavia Scene. Accompanied by a Norwegian jazz trio, the participants enjoyed tapas and drinks. Magician Mike Stoner amazed everyone, reading minds and performing breath-taking close-up magic. Meanwhile, football enthusiasts among the participants were able to follow the Champions League quarter final. The most recent International Bunker Conferences have focused on the milestones in MARPOL Annex VI. This year’s focus was on what happened after 1 January 2015 and all the challenges and consequences around the updating of the relevant regulations. We wanted to know: “If you were a first mover, how did it go? If you were a late mover, what were your choices?” On Thursday 23 April, Sveinung Oftedal from the Norwegian Ministry of Climate and Environment gave an introduction and told the audience that the Norwegian government will present a new maritime strategy in early summer 2015. Green shipping is one of the priority areas and bunkering is a main pillar in green shipping both on a political level and a technical level.
The morning session raised the question: What did we expect and what have we seen so far? Per Holmvang from DNV GL looked at how it all started and gave an overview of fuel-related historical highlights. Sigurd Enge from the Bellona Foundation told the audience that, from the NGO’s point of view, the sulphur regulations have been successful and they therefore urge the shipping industry to prepare for a reduction also in carbon dioxide (CO2) emissions. Other speakers in the morning session were Klaus Stamp from the International Association of Independent Tanker Owners (Intertanko), Peter Andersson from United European Car Carriers (UECC), Tomas Aminoff from Wärtsilä and Haakon Lindstad from the Norwegian Marine Technology Research Institute (MARINTEK). The latter stirred up the audience when pointing to unintended consequences of the new regulations. Lindstad explained that sulphur oxide (SOx) and nitrogen oxide (NOx) emissions have a cooling effect on the environment, while emissions of CO2 and methane have a warming effect. Lindstad therefore advocated continued use of high-sulphur fuels on the high seas and stricter regulations close to land and in ports. The afternoon session looked at options for late movers. Energy consultant and IBIA vice-chairman Robin Meech stated that most operators are complying with Annex VI. Some are using the new emission control area (ECA) fuels, some have fitted scrubbers and a very
small minority have converted to liquefied natural gas (LNG). According to Meech, using marine gas oil (MGO) will be the preferred method of compliance within ECAs, but will be surpassed by scrubbed high-sulphur fuel oil (HSFO) after 2025. Marine fuels consultant and conference chairman Keith Forget demystified the new ECA fuels by looking at their characteristics, and Bjørn Olav Odland from Veritas Petroleum Services (VPS) presented user feedback post-1 Jan 2015. Gordon van der Brugge and Sia Ratajczak, from Flinter Shipping and Heidmar respectively, gave the audience insight into the decision-making process when considering low-sulphur options for the vessels they are operating. On Thursday evening, participants enjoyed a boat trip and a three-course dinner at the Oscarsborg Fortress. Enforcement was on the agenda on Friday 24 April. Roel Hoenders from the European Commission presented the European initiatives, Dorte Kubel from the Danish Ministry of the Environment shared their experience with remote sensing of sulphur emissions, and Tim Wilson from Lloyd’s Register Marine gave an overview of onboard challenges. Both Niels Bjørn Mortensen from Maersk and Roger Strevens, chairman of the Trident Alliance, stressed the need for a level playing field in their presentations. Senior lawyer Torkel Hope, from Simonsen Vogt Wiig, rounded off by presenting 10 lessons learned in the aftermath of bunker industry turmoil.
World Bunkering Summer 2015
Regional forum attracts large number of delegates
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BIA held a regional forum for the Gibraltar Strait in February. The region collectively constitutes a key European bunkering location, with Algeciras, Ceuta, Tanger-Med in Morocco and Gibraltar together making up the largest supply hub in the Mediterranean. IBIA chief executive Peter Hall said: “We’re delighted at the turnout at this event, and that IBIA could bring suppliers, shipowners and port representatives together. “Gibraltar is one of Europe’s key bunkering hubs, and holding our regional event here gives us an opportunity to show what IBIA is doing to help improve fuel quality and, through our training, raise standards. “We’ve put together an event to both educate and inform on the latest bunkering issues, which mixes the theoretical, practical and, of course, the social.” An international audience of shipping and bunkering professionals attended a series of workshops, forums and receptions hosted by the government of Gibraltar and Gibraltar Port Authority (GPA). The forum, which took place at Gibraltar’s floating Sunborn Hotel, included a workshop on bunkering; a session focusing on mega-yacht and leisure services; an overview of bunkering in the Mediterranean as well as updates on the International Maritime Organization’s steps to improve fuel quality, IBIA’s Port Charter initiative, visits to bunkering barges and a reception at the top of the Rock of Gibraltar. Speakers included representatives from Peninsular Petroleum, World Fuel Services, the International Association of Independent Tanker Owners (Intertanko), Vopak, Vemaoil and Aegean. Commenting on the forum, Commodore Bob Sanguinetti, chief executive and captain of the port, said:
World Bunkering Summer 2015
Commodore Sanguinetti addresses IBIA’s Regional Forum
“We are delighted to be hosting this regional forum on behalf of IBIA. The conference will provide us with the opportunity to showcase the bunkering industry in Gibraltar, and to further cement our excellent working relationship with IBIA. It reflects the hard work that Gibraltar Port Authority and our operators put into the bunker industry, as well as reinforcing the prominence and high standards we have in place across the bunkering and wider shipping communities.” The Port of Gibraltar’s commitment to high safety and environmental standards was highlighted during an international bunkering forum. Delegates discussed key international trends in the market and had a chance to see how Gibraltar suppliers operated in this busy region. At a reception at the top of the Rock, port minister Paul Balban spoke of the Gibraltar government’s investment in port resources and manpower. “I think you will all agree that our track record in bunkering, in terms of volume and quality of service, even in a challenging economic climate, is an indication that we must be doing something right,” he said. “In particular, I’d like to highlight the very close working relationship between GPA and the wider port community in Gibraltar, which underpins our enviable performance and reputation, and makes us quite unique among our competitors.” That message was underpinned at a gala dinner in St Michael’s Cave by Albert Isola, minister for maritime affairs. Isola spoke of Gibraltar’s strategic location and its role as a staging post for ships sailing through the Strait of Gibraltar. He said the port and maritime community were not complacent and were always looking for ways to develop and grow the sector, as well as improve efficiency.
However, he added that this would never be done at the expense of safety and environmental protection, or indeed quality assurance. “When it comes to bunkering, we provide the highest levels of governance and oversight,” he said. “We have developed a very strict code of practice… that we see other ports emulating, an indication of our very high standards.” Commodore Sanguinetti said it took a lot of work to get the forum to come to Gibraltar and was delighted to see 120 delegates attend. He said people at the forum were “looking at development and trends in the future and how to take it forward”. He added that the forum enforces the link that GPA has with the bunkering association on one hand and that it also reaffirms the status of Gibraltar in the Mediterranean in terms of bunkering. Speaking about Gibraltar’s location, he said that the Rock’s unique position was one reason why bunkering here can be carried out so well. He said: “The uniqueness by virtue of size, culture and history means there is a close-knit community to service any ship that comes into Gibraltar.” Freddie Pitto, group manager at Gibunco, said: “This has been one of the best presentations on shipping we have had in Gibraltar.” He explained that the importance of where Gibraltar is located at the gateway to the Mediterranean Sea means that, in forums like this, Gibraltar can easily demonstrate what it can deliver. Robin Meech, managing director of Marine and Energy Consulting, was also very pleased with the success of the forum.
IBIA regional bunker forum Gibraltar
Gib success
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Preview: Nor Shipping 78
50 years young Nor-Shipping launches new initiatives for 2015
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ccording to its organisers, Nor-Shipping 2015 celebrates 50 years of looking forward, with more happening than ever before. “This year’s programme offers thought-provoking conferences packed with high-profile speakers, as well as outstanding new forums that will engage the international maritime community,” says Nor-Shipping director Vidar Pederstad. National and local dignitaries will come together with industry leaders to celebrate the official opening of NorShipping 2015 on the evening of 1 June at the City Hall Square in Oslo. The largest such event this year, not only in Scandinavia but also in Europe, Nor-Shipping attracts key maritime players from across 80 countries. Shipowners, technology and service providers, regulators, financiers and many other maritime professionals will meet in Oslo to explore the future. Opening conference speakers will address issues such as the balance between innovation, investment and regulation; the smartest strategies between here and 2030; how to ensure a return on high-tech investments; and other hot topics. Speakers will include DNV GL Maritime chief executive Tor Svensen, International Maritime Organization (IMO) secretary-general Koji Sekimizu,
BW Shipping managing director Yngvil Eriksson Åsheim, Nordea head of shipping, offshore and oil services Hans Christian Kjelsrud. The event includes the Agenda Offshore Conference, first launched in 2011, where Teekay chief executive Peter Evensen, Transocean director of technology and innovation José Gutierrez, National Oilwell Varco chief executive and president Clay Williams and many others will enter the debates. Topics up for discussion include whether the offshore industry needs to reinvent itself in the light of tumbling crude oil prices; the future energy mix and its impact on business; the realignment of global power into new east-west blocs; and smart collaboration in challenging business environments. This year, Nor-Shipping also launches several initiatives, the major one being Ocean Industry Podium. This programme features 24 onehour sessions on maritime finance, law, insurance or technology and innovation. Delegates can pick any of these sessions that suit their interests by popping up to the second floor of the exhibition. “Podium is an opening up of new opportunities for Nor-Shipping to engage with the whole ocean industry,” says Pederstad. “It is one example of how we intend to use innovative ways to include it in the future at Nor-Shipping.”
Other new Nor-Shipping 2015 initiatives include Brazil@Nor-Shipping and Women@Nor-Shipping. Brazil@Nor-Shipping features a programme of activities that focuses on the risks and rewards of doing business in Brazil. Meanwhile, the Women@NorShipping Waves of Change conference will focus on leadership, the environment and the future, with women setting the agenda and men participating both on stage and in the audience. In this anniversary year, there will be a special emphasis on social events. The two highlights include the everpopular Nor-Shipping BBQ and the Nor-Shipping 50th Anniversary Party. As always, with so many leading maritime players flocking to Oslo, the NorShipping social calendar brings unbeatable professional networking. New this year, the Nor-Shipping delegate pass gains delegates entrance to the exhibition and all Nor-Shipping events and has many other benefits such as free public transportation. Delegate passes can be purchased at www.nor-shipping.com. A proportion of every Nor-Shipping 2015 pass and party ticket bought will go to The Mission to Seafarers charity, as will proceeds from the Nor-Shipping Fun Run to be held on 1 June.
World Bunkering Summer 2015
Tasks for a leader
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azpromneft Marine Bunker’s total sales of marine fuels for 2014 amounted to about 3.9 million tonnes, which is 28% higher than in 2013. Moreover, the share of direct-to-vessel bunker fuel sales was 3.1 million tonnes, 41% more than in 2013. These results have been achieved by strengthening collaboration with existing customers, as well as gaining new ones, and by growing the number of vessel calls at ports operated by the company. Andrei Vasiliev, chief executive of Gazpromneft Marine Bunker, commented: “A broad geographical range, ownership of our own bunkering fleet and various terminal assets, high service standards, and direct contracts with the most significant consumers of marine fuels — it’s precisely these advantages that mean our company can be confident of maintaining its leadership of the Russian market. In the long term, we plan to more than double the size of the fleet. We are also lining up investment in the modernisation of our terminal complexes. Next year will see the introduction of stringent fuel controls in emission control areas, which will increase demand for low-sulphur fuel. To that end, we are focusing on the development of a new market sector in liquefied natural gas (LNG) bunkering, aiming to secure a foothold in this sector by 2025.” In 2014, the company began bunkering in Latvia and plans to actively continue in the coming year. Today, Gazpromneft Marine Bunker provides bunkering in 19 sea and 14 river ports in Russia, as well as in the European ports of Tallinn, Riga, Constanta and Lithuania. In 2014, Gazpromneft Marine Bunker conducted active preparatory measures to acquire a new large bunker tanker for working in Black Sea region ports. Today,
Gazpromneft Marine Bunker’s fleet consists of eight bunkers complying with international conventions. The fleet is licensed to transport goods by sea and perform loading and unloading operations for hazardous goods in sea ports. The operating area of the company’s vessels is not restricted. In 2014, the company expanded its presence in Russian ports, starting from bunkering vessels in Novosibirsk and Tomsk river ports. The acquisition of transshipment assets in Novorossiysk was a major step for the company, which made it possible to ensure the whole logistical network for storage and transshipment of marine fuel in all Black Sea ports. Having its own transshipment assets strengthened the company’s leading positions on the Black Sea. In March 2015 GazpromNeft Marine Bunker acquired a high-capacity bunkering vessel for operations in the Black Sea. Gazprom Neft bunkering operator Gazpromneft Marine Bunker has recently commissioned a new high-capacity bunkering vessel, covering the Russian Black Sea ports of Kavkaz and Taman, as well as Novorossiysk, Tuapse and Sochi. The new bunkering vessel is the ninth to join the company’s own fleet, which Gazpromneft Marine Bunker plans to increase to 24 vessels by 2025. The tanker has been named “Gazpromneft Omsk” and has, already, been put into operation at the port of Novorossiysk. At 100 metres in length, the vessel has a deadweight (the total capacity it can carry) of 5,372 tonnes, and was built at the Engin Shipyard, Turkey. It is intended,
primarily, to be used for the refueling of ocean container vessels and oil tankers. The Gazpromneft Omsk is able to complete up to six refueling operations of average capacity without reloading: considerably improving efficiency in the delivery of fuel to partner-company vessels. The tanker is equipped with stateof-the-art safety and automated control systems, and an unlimited navigation range. Gazpromneft Marine Bunker provides bunkering services to over 250 customers; most of them are international companies. The company works with all major Russian river and sea shipping companies. Since February 2008, Gazpromneft Marine Bunker has been a member of the Russian Association of Marine and River Bunker Suppliers and the International Bunker Industry Association (IBIA). Gazpromneft Marine Bunker gained ISO9001:2008 certification in December 2012 for petroleum product sales in the bunker market. ⏏
Company news
Gazpromneft Marine Bunker
Gazpromneft Marine Bunker Ltd Bolshoy Prospekt, 80 block R, Vasilievsky Ostrov, St Petersburg, 199106 Russia, Tel: +7 (0)812 4494970 Fax: +7 (0)812 4494628 E-mail: marinebunker@spb.gazpromneft.ru bunkers@spb.gazprom-neft.ru www.marinebunker.gazprom-neft.ru
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Company news
Force Bunker Company Force Bunker is the bunker department of Fors Ikizler Denizcilik San. Ve Tic. Ltd. Sti
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s well as supplying bunkers since 1999, Force Bunker is also a registered dealer and barge operator for the State Oil Company Of Azerbaijan Republic (SOCAR). It was registered in 2013 and is licensed by Turkey’s Energy Market Regulatory Authority (EMRA), operating mainly in Istanbul and Iskenderun Bay. Force Bunker supplies all grades of fuel oil, gas oil and lube oil – as a physical supplier in Turkey, mainly in Marmara Sea ports and the Istanbul anchorage area. It also operates as a trader at ports all over the world, using its reliable network to offer competitive prices and excellent service. Force Bunker prides itself on the fluency of its information and reports and its handover procedure in an emergency. Through long experience of ship operations, staff at Force Bunker appreciate the importance of supplying qualified fuel on time. Supported by first-class bunker barge services, we have a strong commitment to customer service and the supply of quality marine fuels. Force Bunker company is a member of the Turkish Bunker Association and of the International Bunker Industry Association. The company owns a fleet of four bunker barges: • M/T FORCE 1 (1.326dwt – IFO and MGO)
With quality always a top priority, Force Bunker pays attention to protecting the environment and human health as well as focusing on customer satisfaction and smooth operations. Plans to expand our fleet and facilitate further business growth are always handled in an eco-friendly manner. Fors Ikizler Denizcilik San. Ve Tic. Ltd. Sti. has been working in the maritime industry since 1997, handling provision supply, agency service, commercial and technical management of vessels, repair organisations, spare parts and technical supply. Our company services specialised dry bulk, coaster and handy size vessels. Our experienced and trained technical staff can provide docking service, engine repairs and auxiliary repairs. Under the International Management Code for the Safe Operation of Ships and for Pollution Prevention (ISM Code), Force Bunker has a document of compliance (DOC) issued by the Russian Maritime Register of Shipping and the Turkish flag state.
We are very pleased to assist our customers with any of the following issues: • Bunker (any kind of marine fuel) supply • Transit and port agency service in Turkey • Lubrication oil supply • Fresh water, provisions, technical, paint supply at Istanbul anchorage, in transit passages and at all Turkish ports • Technical services for any kind of repair • Collect sludge/slop • Diving support • Crew change • Motorboat and car service • Delivery services (cash to master, spares, mail and store) For your convenience, our highly experienced staff are available 24 hours a day, seven days a week. New customers are always welcome. As an official sponsor, we are very excited and pleased to welcome participants to the seventh International Istanbul Bunker Conference at the Four Seasons Hotel at the Bosphorus from 20-22 May 2015. ⏏
• M/T FORCE 2
(493dwt – MGO) • M/T FORCE 3
(1.723dwt – IFO and MGO) • M/T FORCE 4
(861dwt – IFO and MGO)
Force Bunker Salacak Mahallesi, Bestekar Selahattin Pınar Sokak, No. 112, Üsküdar Istanbul, 34668, Turkey Tel: +90 (0)216 4925333 Fax: +90 (0)216 3915775 E-mail: forcebunker@forceshipping.com info@forceshipping.com Website: www.forcebunker.com www.forceshipping.com
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World Bunkering Summer 2015
Bunkering in the Strait of Gibraltar for more than 100 years
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ith its strategic location in Africa, this Spanish port of call maintains an important geographic position for passengers, products and goods destined for Africa and Europe. • It is one of the top ports in the Strait of Gibraltar for bunkering services. • Tax-free bunkering and zero duty on goods passing through the port deliver a financial advantage. • We can offer a quick turnaround owing to efficiencies of scale. • The port boasts state-of-the-art facilities for superb ship servicing – specialising in medium-sized ships. • The port complies with the Cronos project for rapid response and prevention of accidental contamination of the port environment. The entire economy of Ceuta depends directly or indirectly on the port and its activities. Due to its geographical location, it is also the entry and exit point for most
goods and provides the foundation for most commercial activities. The existing infrastructure is excellent for the bunkering of ships. This reflects the importance of this activity for the port, which supplies nearly one million tonnes of bunker fuel. Quality service is what sets the Port of Ceuta apart from its competitors. This can be found throughout the facility, in areas including infrastructure, machinery and labour force. The port’s objective is to attract and meet the needs of medium tankers using intermediate fuels. This unique specialisation in the servicing and supply of medium moored boats has no equal in the Strait of Gibraltar. The port is also considered to be the least congested in the Strait. Liquid bulk traffic, which includes the loading and unloading of fuel and the supply of ships, represents over half of the port’s traffic. This is a reflection of the favourable times we are currently enjoying in bunkering.
Most of the port infrastructure is exclusively designated for this side of our business. Therefore, we can confidently say that this is our specialisation. Within the Spanish port system, we are an indispensable reference point for this type of traffic. For more information on how we can meet your energy and port needs, please visit www.puertodeceuta.com ⏏
Company news
The Port of Ceuta
Port Authority of Ceuta Muelle España, s/n 51001 – CEUTA (SPAIN) Tel: +34 (0)956 52700 Fax: +34 (0)956 527001 Website: www.puertodeceuta.com
SEA TRADE Ltd Your reliable bunker supplier at the Port of Tuapse, Russia
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he Russian company Sea Trade Ltd offers bunker fuel at the best prices, with quotations given by Sea Trade offering the best deal at the Port of Tuapse. On top of the low base rate, clients can get a further discount and take advantage of a flexible payment scheme and individual approach. This will ensure savings at every stage of bunker delivery, from the order to the receipt of fuel. Our company is the leading bunker supplier at Tuapse port. We deliver fuel using our own fleet of bunker vessels, and Sea Trade’s team of professionals have more than five years’ experience in bunkering.
World Bunkering Summer 2015
Among our clients are companies like Arcadia Shipmanagement, Palmali Shipping, Thenamaris (Athens), Minerva Marine (Athens), Delta Tankers Ltd, Ionia Management, Handytankers and others. Sea Trade offers its clients high-quality bunker fuel, intermediate fuel oil 180, intermediate fuel oil 380, marine gas oil 0.1.% sulphur. For quality guarantee purposes, we check the fuel at every stage – from delivery from the supplier to unloading to the client. All the oil products supplied by our company comply with ISO international quality standards and are subject to tough controls. The vessels we operate are ecologically safe and friendly to the environment. The safety of the personnel onboard the vessels is a key priority for our company. Sea Trade Ltd is a reliable supplier of high-quality bunker fuel. ⏏
Sea Trade Ltd 5, Leningradskaya str., Tuapse, Krasnodar Region, Russia 352800 Tel: +7 (0)86167 50650, +7 (0)86167 56404 Fax: +7 (0)86167 50650 E-mail: servicetanker@gmail.com, tseatrade@gmail.com Website: seatrade-bunker.com
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Company news
Saudi Shipping & Maritime Service (Tranship) Over the past three decades, leading oil products supplier Tranship has built up a strong reputation as a reliable operator
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stablished in 1979, Saudi Shipping & Maritime Service – generally known as Tranship – is a leading oil products (bunker) supplier and trading company. Based in Jeddah, Tranship has successfully chartered out its future strategic direction and has established a reputation as a reliable supplier, with services rendered promptly at all times. Professional service
The company’s dedicated team of managers is ably supported by highly qualified and experienced staff, who are extremely motivated and devoted to working innovatively in the best interests of our customers. We have been licensed since we became established to operate as bunker suppliers at Jeddah, maintaining an excellent reputation among buyers, brokers and shipowners all over the world. So far, we
have successfully distributed more than eight million tons of bunker fuel to clients’ ships over the past three decades. We currently have two oil tankers: MT Marwah-7 (4,999 tons DWT) built in 1991; and MT Marwah-6 (2,261 tons DWT) built in 1992. Both oil tankers are classed under the Japanese Classification Society (NKK). The tankers are equipped with the latest accurate electronic controlled dynamic blenders on board for blending all grades of CST to meet the exacting requirements of our valued customers. ⏏
For more information, contact: Saudi Shipping & Maritime Services (Tranship) 3rd Floor, Al Jawhara Building Madina Road, Baghdadiya Area, P.O. Box 7522, Jeddah 21472 Kingdom of Saudi Arabia. Tel : + 966 2 642 4255 (4 lines) Fax: +966 2 643 2821 E-mail: bunker@tranship.com www.ssmsc.com
Tranzit-DV Group Roads transshipment complex has been set in operation in the port of Slavyanka
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he “Tor” roads transshipment complex built in 2014 for Tranzit-DV Group of Companies at the shipyard of DAMEN, a Dutch shipbuilding company located in Nantong city (China), has been set in operation in the port of Slavyanka (Primorsky region, Russia). Container handling operations on bulk carrier Zolotaya Kolyma (length 200 m, deadweight 29 th. tons, shipowner NESCO) and on container carrier Ningbo Express (length 320 m, deadweight 100 th. tons, shipowner Hapag-Lloyd) became the fisrt experience of the roads transshipment complex. In the course of the operations, the ships were moored to a fixed mooring anchor in the roads of Slavyanka bay. The roads transshipment complex is a floating crane with the deadweight of 1.7 th. tons able to raise containers weighing up to 50 tons to the height of up to 36 metres. Its performance capability enables to process the largest container carriers up to 400 m in length. The roads transshipment
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complex capacity is 1 container per minute. The roads transshipment complex flies the Russian flag like the whole fleet of Tranzit-DV Group of Companies. Thus, the process task of performing cargo handling operations in the roads of Slavyanka port has been successfully completed for further implementation of the project of multimodal transport and logistic complex creation. The project implementation will make it possible to transship through Slavyanka millions of tons of commercial cargoes produced in Northeast China and intended for consignees all over the world. ⏏
Vladivostok, Russia Tel: +742 3249 1199 E-mail: bunkers@tranzitdv.ru Singapore Tel: +65 6337 3341 +65 8518 6670 Seoul, Korea Tel: +82 2722 1123 +82 10 9690 6878 E-mail: lee@tranzitdv.ru E-mail: panchenko@tranzitdv.ru saenko@tranzitdv.ru www.tranzitdv.com World Bunkering Summer 2015
Next issue
WORLD BUNKERING AUTUMN 2015 ISSUE INDEPENDENTS Our annual survey of the Independents scene. What impact have the lower oil price and the shock collapse of OW Bunker had on the key players?
FUEL QUALITY Fuel quality has increasingly become a controversial issue, with IBIA's chairman jens Maul Jorgensen taking a keen interest in the topic. We look at recent developments
SHIP EFFICIENCY Despite the efforts of the industry to use fuel more efficiently, a major new report has found ship efficiency has actually declined in recent years. We take a look at the issues.
GEOGRAPHICAL FOCUS: MIDDLE EAST Our annual survey of the region. We llok at the effect of the dramatic drop in the price of oil on the major bunker suppliers and at developments in the Gulf and the Suez Canal
FAR EAST Singapore continues to up its game, with several initiatives announced over the past year. We also look at the wider South East and East Asian bunker scene.
RUSSIAN UPDATE News, Views, Analysis SUMMER
REGULAR FEATURES
2015
Interview, Industry News, Environment, Testing, LNG, Abatement Technology, Lubricants, Risk Management, Innovation, Legal News, Equipment and Services, Diary
BUNK
LNG BANDWA: GO ROLLS N
ERING
Preview Norshipping
WORLD
EVENT PREVIEWS
SUMMER
How 'gre
en' is LN
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INSIDE THI
S
ISSUE: Oil majors offer hyb rid fuels ECA fue l switching issues Scrubbers gain gro und Mediterran ean roundup
THE ONLY OF FIC MAGAZIN IAL E OF
w w w.wo r l dbu nke r i ng.c om World Bunkering Summer 2015
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2015
Diary
13-18 May 2015
09 September 2015
APAC LNG – SINGAPORE The 4th Annual Asia Pacific Small & Mid-Scale LNG (APAC LNG) Forum 2015 will be hosted from 13 – 15 May 2015 at the Singapore Marriott Hotel in Singapore and will showcase an up-to-date view of the commercial and technical drivers of small-mid LNG value chain.
www.apaclng.com
IBIA FORUM – THE COST OF FAILURE LONDON IBIA are hosting a forum entitled the cost of failure, hearing perspectives from insurers, ship owners and traders.
ibia.net/event/ibia-forum-the-cost-of-failure/
23-25 September 2015
19-21 May 2015
INMEX INDIA SMM – MUMBAI
IMDEX Asia is Asia Pacific's premier international maritime defence show and a must-attend event in the global naval and maritime security calendar.
INMEX-SMM India is the number one meeting place for the maritime and shipping community in South Asia. The event attracts over 650 exhibitors from around the world including international pavilions from Germany, Singapore, Holland, Norway, Korea, Finland, and The Netherlands.
IMDEX ASIA – SINGAPORE www.imdexasia.com
inmex-smm-india.com
20-22 May 2015
INTERNATIONAL BUNKER CONFERENCE – ISTANBUL The 7th International Istanbul Bunker Conference, organized by the Turkish Bunker Association (TBA), will take place on May 20th to 22nd May 2015 at the Four Seasons Hotel – Istanbul at the Bosphorus. This year's conference will focus on new international regulations, ECA practices, bunker contracts, supply and sample procedures, quality and quantity issues, low sulphur bunkering (including ultra low sulphur fuel oil (ULSFO), alternative fuels, new engine technologies, credit risks and management
www.istanbulbunkerconference.com
21-22 May 2015
PLATTS 6TH ANNUAL EUROPEAN BUNKER FUEL CONFERENCE – ROTTERDAM The European Bunker Fuel Conference European Bunker Fuel Conference will bring together the leading ship operators, owners, brokers, fuel suppliers, refiners and other marine fuel organizations .
www.ibia.net
07-09 October 2015
INDONESIA MARITIME EXPO – JAKARTA IME is the most anticipated exhibition and conference in Indonesia for the world's maritime players. It's where you need to be to connect with 4,105 decision makers, shipowners, shipbuilders and other key players.
www.maritimexpo.co.id
27-30 October 2015 GASTECH – SINGAPORE
One of the world’s largest and most prestigious LNG and natural gas conferences and exhibitions, Gastech, is coming to Singapore in 2015, reflecting the country’s growing strategic importance as a regional hub for the Asian gas market.
www.gastechsingapore.com
02-05 November 2015 IBIA CONVENTION – CANCUN
Information – Communication – Education
02-06 June 2015
There will be something for everyone.
www.ibia.net
NOR SHIPPING – OSLO Nor-Shipping is the leading maritime event week. Its top-quality exhibition, high-level conferences and prime networking opportunities attract the cream of the international maritime industry to Oslo every other year.
www.messe.no/nor-shipping
11-13 August 2015
03-06 November 2015 EUROPORT – ROTTERDAM
Europort has a strong focus on special purpose ships including offshore vessels, dredging vessels, construction vessels, naval vessels, workboats, inland vessels, fishery vessels and super yachts. With almost 30,000 professional visitors and 1100 exhibiting companies Europort belongs to the world’s leading maritime meeting places.
www.europort.n
MARINTEC SOUTH AMERICA – RIO Marintec South America – Navalshore, universally 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.
events.ubm.com/event/3140/marintec-south-america--12-navalshore
01-04 December 2015
MARINTEC CHINA – SHANGHAI Marintec China 2015 will be held on 1-4 December 2015 in Shanghai. With increasing worldwide recognition and reputation throughout the past three decades, the exhibition is attracting an increasing number of high-profile exhibitors and visitors from around the world.
27-31 July 2015 BUNKERS FOR MANAGERS – SINGAPORE Bunkers for Managers is a comprehensive 5-day all-inclusive bunker industry management training course.
www.petroedgeasia.com/brochures/PD170.BunkersforManagers.JUL.SIN.pdf
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www.marintecchina.com
16-18 March 2016
ASIA PACIFIC MARITIME – SINGAPORE Meet 15,000 decision makers, shipowners, shipbuilders and other key players from the maritime and offshore community in 3 days.
www.apmaritime.com
World Bunkering Summer 2015
For groundbreaking fuels, follow the leader. To help manage the costs, risks and complexity of ECA compliance, we’ve added revolutionary new fuels — ExxonMobil Premium HDME 50 and AFME 200 — to our MGO offering. These high-viscosity, low-sulfur, OEM-approved fuels are formulated to help: • Provide quick, safe switchovers • Minimize risk of shutdowns and thermal shock • Reduce operational complexity One more way ExxonMobil moves the marine industry forward. Learn more at exxonmobil.com/ecafuels
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