World Bunkering - Winter 2010

World

WINTER 2010

WINTER 2010

Bunkering

World BUNKERING

Tidal wave of regulation?

IBIA members have their say Maldives report

l Full report from the IBIA Convention and SIBCON l Pre-testing controversy ignites l The changing shape of Africa's bunker market

THE ONLY OFFICIAL MAGAZINE OF

World

WINTER 2010

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

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

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

Published by:

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

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

THE ONLY OFFICIAL MAGAZINE OF

ISSN 1367-5018

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

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

Visit online, with Page-Turning technology at

www.worldbunkering.com

Editor’s Letter

T

his has been a hectic quarter at all levels and the issue is a packed one. Of course for IBIA the highlight was the successful Annual Convention held in Connecticut. World Bunkering’s deputy editor Lucy Budd attended and reports on what went on, both in the conference hall and in the networking that is such a feature of these gatherings.

And talking of gatherings, over 1,000 delegates were at the Sentosa Resorts World venue for this year’s Sibcon. I was there and was struck by the sheer number of speakers the organisers had attracted in from overseas.

There was plenty to talk about at both events, especially on the topic of greenhouse gases following the failure of MEPC to agree on market-based measures, and this is reflected in our Environment News pages this week and in the reviews for both events.

It is important that IBIA members are aware of who the Association’s Board members are and what they do for the Assocation, so in this issue our Interview is with the whole of the IBIA Board.

As ever, this issue is a mix of technical and geographical features, so it is appropriate we start with blending, and IBIA’s moves towards providing guidelines in this area. Staying very much on the technical side, we also take a look at additives and what role they can play in, especially, reducing fuel consumption.

Our feature on barge design, which appears in the Maldives report, is a break from recent such reports in that it covers a very small vessel. On average, barges may be getting bigger but we still need the little ones to fuel the thousands of smaller vessels that also need bunkers, often in small, out of the way places.

The Africa report is largely an optimistic one with the story from West Africa being of well run and competitive offshore bunkering. In fact the South African suppliers now report that West Africa is very much a competitor to them. And East Africa is starting to develop its bunkering capabilities too.

LNG is increasingly in focus as a fuel for the future, and in our Scandinavia feature, we look at moves to establish an infrastructure for LNG bunkering in the region.

The Maldives evoke pictures of a tropical idyll but times are, as we report, quite tough for suppliers there right now as the economic downturn hits the country’s heavily tourist-dependent economy.

Oh yes, one final thing. The Spring 2011 issue will include a major feature on Quantity, focusing on mass flow meters. As a warm-up to that, we are including a personal view on metering from Jon Watson.

It is controversial, but I hope it will stir people up to respond, either with a letter to the editor or perhaps an editorial contribution to the Quantity feature.

So together with our regular slots, I hope there will be plenty of interest in the Winter issue. As ever, may I remind everybody that bunkers-related news and bunker prices are posted on a daily basis on our free-access website www.worldbunkering.com.

David Hughes

World Bunkering Winter 2010

3

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

World

winter 2010

Bunkering

28

31 34

IBIA Reports

Editor’s letter

3

Chairman’s introduction

7

Chief Executive’s report

9

Noticeboard New members

11 13

AGM

16

Membership application

20

IBIA Convention Industry news Interview Environment

22 24 26 28

Special features 33 37 38 40

Blending Fuel Additives Testing Comment

Geographical focus

Africa

43

Scandinavia

49

Maldives

51

Russian update

54

Sibcon Review Legal news Equipment and services Diary

64 66 68 80

34 54

66 64

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REPORTS

Chairman’s Introduction

C

onferences in our industry should not be judged on numbers alone.

You can, for example, attract big numbers to a first-time conference but, if it is not any good, people will not come the next time. In September, IBIA attracted over 150 delegates to its annual conference in Connecticut, but IBIA has been doing that now for many years.

So we must be doing something right.

It was great to see so many people in Stamford, and to observe how our members manage to combine work and pleasure so successfully during the course of our annual gatherings. I know of no other industry association which contrives to do this as well as IBIA does. What’s more, for the first time ever, the membership was invited to take an immediate and active role in determining the direction that IBIA will take, which is surely the mark of a truly representative body.

Even if you were not able to be in Stamford, you will have heard by now that IBIA’s members voted to maintain neutrality over the measures to reduce greenhouse gas (GHG) emissions from shipping, which are currently being debated at the International Maritime Organization (IMO). But this was no fence-sitting exercise. IBIA’s philosophy has been to keep an open mind with regard to all credible proposals and, when in receipt of all available information, to make a decision which is in the best interests of all its members. The vote in Stamford was confirmation that this will continue to be our policy, because we believe it is the right thing to do. As a result, IBIA will continue to monitor the debate at IMO and in the wider shipping community.

The bunkering industry is fortunate in that IBIA represents its eyes and ears at all relevant IMO debates, and that gives us a big

World Bunkering Winter 2010

advantage over some other industry sectors which are not so fortunate. But it is important that the members let us know their views on those subjects which concern them. It is a two-way process, and relies for its success on input from both sides. For example, how many members have told us their thoughts on MEPC61/4/7, which has been submitted to IMO’s Marine Environment Protection Committee (MEPC) and which sets out the position of Norway and Intertanko on the issue of fuel-testing quality?

Norway and Intertanko have noted that an ISO standard for marine fuels is a commercial standard that is referred to and used as the guiding specification for marine fuel purchase contracts and that, in this regard, ISO 8217 has no mandatory character and there are therefore no control mechanisms for the quality of marine fuels delivered to ships. Briefly stated, their proposal is that ISO specifications should be legislative rather than commercial. IBIA, for its part, has intervened at IMO in response to MEPC 61/4/7, suggesting that the routine quality of fuel supplied is a commercial issue between buyer and seller, and that regulation should be targeted at the issues of sulphur emission, flashpoints, H2S and any deleterious materials as covered by Clause 5 of ISO 8217. It may be that IBIA will elect to submit a paper to the IMO Bulk Liquid and Gases subcommittee outlining its position on MEPC 61/4/7. It will be a stronger document if we are able to draw on comment and input from our members.

Different issues affect different sectors of our industry to different degrees. And while regional measures may reflect regional concerns, they are of global interest because of the highly international nature of our industry. Stamford was a good place to

Mike Ball

hear about such developments, and it was encouraging to hear, for example, that work continues apace in Singapore on establishing standards for flow meters. How refreshing it is to see Singapore’s commitment to funding the research into this initiative, and how encouraging to find a port authority willing to take such a proactive approach.

There is an old saying that, if things don’t change, they will stay as they are. But the latter is not an option for the bunkering industry. Change is coming, and forewarned is forearmed. Over the coming months we will have new Marpol VI legislation coming into force, alongside the new North American/Canadian ECAs. Owners will need to be looking at low-sulphur IFO sources and tank capacities, and suppliers will have to be working hard to find out where they can access fuel with 1.00% sulphur content.

IBIA can help, and is always interested in receiving information and feedback on these and other important issues. It is developing all the time as a truly representative body for the bunker industry, and continues to look at ways of developing its geographical outreach.

For example, IBIA has plans to augment its presence in Asia, where the Singapore branch will start taking on full-time staff at the beginning of next year, and is also exploring the possibility of expanding activities into Hong Kong and other Asian ports. We heard, too, in Stamford that there is strong support for the establishment of a branch in the Americas, albeit in an as-yet unspecified location.

So IBIA is getting bigger, as well as better.

It must be, because the 2011 IBIA annual dinner will be moved to Grosvenor House, the biggest venue in London. We have outgrown everywhere else.

Mike Ball

7

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

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

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

REPORTS

Chief Executive’s Report Annual Convention

T

his year’s event was a great success with members yet again coming from all over the world to meet old friends as well as new. Please see the report later in this edition for full details. As the attendees at Stamford heard, next year’s event will be returning to Europe for the first time since 2006 and will be held in the fantastic city of Barcelona, Spain. More information will appear very soon, both here in World Bunkering and on the website. I would encourage members to visit the website as it is increasingly becoming the source of all sorts of IBIA related information.

This includes event announcements, press releases and information from IMO.

International Maritime Organization (IMO)

IBIA continues to attend regular meetings of IMO and endeavours to keep our members fully briefed about the latest developments.

At the most recent meeting of the Marine Environment Protection Committee a paper submitted by Norway and InterTanko caused a flurry of activity for IBIA. Our initial response was to hold some meetings at IMO and as a result of these meetings IBIA made an oral intervention after the introduction of the paper. Full details of the paper and the IBIA intervention have been circulated to all members. We have now held an internal meeting and are in the process of generating a paper to be submitted to the Bulk Liquids and Gases (BLG) subcommittee to which the previous paper has been referred.

Annual Dinner

As has become the tradition, this edition of World Bunkering has the details of next year’s Annual Dinner. Following this year’s record attendance, we have decided to change the venue and have moved the Dinner to the Grosvenor House, a JW Marriott Hotel, just up the road from the previous venue on Park Lane, London. We hope to see even more people attending what has become one of the largest events in bunkering, currently only second to SIBCON.

World Bunkering Winter 2010

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

communications as they are an important benefit to members.

BIMCO/IBIA Guide to Bunkering

SIBCON saw the launch of our latest publication, which was produced jointly with BIMCO. It is a simple guide designed to be placed on ships to give ship’s crew a better idea of the basic issues surrounding bunkering. BIMCO intend this to be an electronic download and it will also be available as a free download to IBIA Members. However, we have also decided to make one print run to enable us to issue one copy to all of our members. It should be in the same envelope as this edition of World Bunkering, along with the Calendar, Annual Report and the Membership Book.

Board Elections

Members’ Details

After the circulation of the e-mail about the above, a number of members of IBIA Committees contacted the Administration to say they had not received the e-mail. I would therefore urge all members to check their contact details on the IBIA website.

This is our central database and is how we communicate with Members. If your details are correct then please also check your “spam” filter. We want all of our members to receive our communications as feedback is extremely important to us. It is also important for members to receive these

This edition also contains the information regarding the Board Elections. We have three vacancies this year and are seeking nominations. The Elections will be conducted in time for the results to be announced at the Annual General Meeting in London prior to the Dinner. The successful candidates take up their seat in April 2011. Last year we had a very large interest which made the task of the Board Development Committee quite a challenge. It is important that we get new faces and new ideas on the Board and I hope for a similar number of nominations this year!

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REPORTS

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

IBIA Guide to Bunker Samplers

Sale price to non-members £50.

One-Day Basic Bunkering Course

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

Advanced Courses

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

IBIA Guide to Arbitration

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

This is now available free to IBIA members.

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

Vanadium and Sulphur in Marine Fuels

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

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

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

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

IBIA World Bunkering magazine – Discounts on Advertising

Discounted advertising rates are available for IBIA members.

Please contact the Advertising Sales Team on + 44 (0) 20 7386 6100 (London office).

copy. The report is available free of charge to members and non-members. Please ask IBIA administration for a copy.

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

IBIA Glossary of Bunker and Lubricating Oil Terminology

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

BOOK OFFERS

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

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

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

IBIA Guide to Good Commercial Practice

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

IBIA Logo

IBIA Fuel and Lube Oil Training CD

Free bromide supplied for use by Corporate Members only.

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

IBIA List of Members

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

IBIA Guide to Avoiding and Resolving Bunker Disputes

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

World Bunkering Winter 2010

IBIA Safety Cards for Vessel’s crews

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

IBIA Annual Report

The 2009/2010 report is now available. All members will have already received their

11

Oil Marketing & Trading Intl. (Europe) SA MARINE FUELS

in UAE

and now

in CEUTA - Spain 14 Tzavela str. 166 74 Glyfada ATHENS GREECE TEL: 0030 210 96 09 860 FAX: 0030 210 96 09 861 TELEX: (0510) 94078550 OMTI G Email: bunkers@oil-marketing.com Web: www.oil-marketing.com

REPORTS

New members Corporate

A&E PETROL NIG LTD BUNKER TRADER Ayirimi Emami 1 Swiss Cottage Road Ubeji Warri Delta Estate Nigeria Tel: +23 480 3382 1104 E-mail: aepetrol_info@yahoo.com HEIDMAR INC BUYER Gary Lawson 20 Glover Avenue Norwalk 06850 CT USA Tel: +120 3662 2625 E-mail:gary.lawson@heidmar.com SHIELD BUNKERING SIA BUNKER SUPPLIER Andrejs Vaitkevichus Bikernieku 2-102 Riga LV2008 LATVIA Tel: +00 371 2926 3636 E-mail: bunker@shieldagency.lv DLA ENERGY BUNKER BROKER Lee Dvonch 8725 John J Kingman Road Suite 3821 Fort Belvoir 22060 USA Tel: +170 3767 8467 E-mail: lee.dvonch@dla.mil Global Energy Trading Pte Ltd BUNKER BROKER J.A.L. (Hans) de Bruijn 438, Alexandra Road #18-00 Alexandra Point 119958 Singapore Tel: +65 6559 1626 E-mail: bunkers@globalmrktg.eu

World Bunkering Winter 2010

Corporate ADDITIONAL

Global Vision Bunkers (Africa) Shanaaz Bennett BUNKER TRADER 3 Gladioli Street Soneike 7580 SOUTH AFRICA Tel: +277 9523 6000 E-mail: shanaaz@globalvisionbunkers.com Global Vision Bunkers (LATAM) Renzo Baeza BUNKER TRADER Caracas 377 Recreo Viña del Mar CHILE Tel: +563 2319 3643 E-mail: renzo@globalvisionbunkers.com Cockett Marine Oil Australia Pty Ltd Angus Offer BUNKER TRADER Suite 2, 448 Roberts Road Subiaco W.A. 6008 AUSTRALIA Tel: +618 9381 3233 E-mail: a.offer@cockett.com

Cockett Marine Oil Southern Europe Ltd Florence Jaudronnet BUNKER TRADER 37 Rue D’Antibes Cannes F-06400 FRANCE Tel: +33 4970 6210 E-mail: fjaudronnet@cockettgroup.com Cockett Marine Oil (Asia) Ltd Louis Mak Yuk Tsung BUNKER TRADER 39 Gloucester Road Suite 1704 17th Floor Harcourt House Wanchai HONG KONG Tel: +852 2111 9939 E-mail: louismak.hk@cockettasia.com Cockett Marine Oil (Asia) Ltd Jungsuk Shin BUNKER TRADER Korea Coal Centre 2nd Floor, 80-6 Susong-Dong Jongno-ku Seoul 110-727 SOUTH KOREA Tel: +82 2730 1890 E-mail: jsshin.korea@cockettasia.com individual

Cockett Marine Oil Ltd Fernando Nicola BUNKER TRADER Avenida Rio Branco 45 Sala 505 Rio de Janeiro CEP-20090-00 BRAZIL Tel: +51 2122 0323 E-mail: f.nicola@cockett.com

Adeosun Ayodeji BUNKER SUPPLIER SWELTE-BASE NIGERIA LTD 22 Bornu Crescent Apapa Lagos Nigeria Tel: +2 3470 2821 0281 E-mail: adjoshun@yahoo.com

Cockett Marine Oil (Asia) Kevin Wo BUNKER TRADER 828 Zhang Yang Road 14H Huadu Mansion Shanghai Shanghai Province 200120 CHINA Tel: +86 2150 8169 E-mail: kevinwo.shanghai@cockettasiachina.com

Rahul Choudhuri SERVICES DNV PETROLEUM SERVICES 27 Changi South Street 1 486071 Singapore Tel: +65 6779 2475 Fax: +65 6779 5636 E-mail: rahul.choudhuri@dnvps.com

13

Katrina Thomas BUYER TEEKAY SHIPPING 86 Jermyn Street 2nd Floor London SW1 6JD UK Tel: 4420 7389 1424 E-mail: katrina.thomas@teekay.com

John Shade BUNKER SUPPLIER ASCO FUEL & LUBRICANTS ASCO House, Sinclair Road Torry Aberdeen AB11 9PL UK Tel: +44 012 2458 0396 E-mail: john.shade@ascoworld.com

Rahul Shankar Pandey BROKER UNIVERSAL MARINE SURVEYING & CONSULTANCY (S) PTE LTD 170 Upper Bukit Timah Road #13-02 Bukit Timah Shopping Centre 588179 Singapore Tel: +65 6466 4595 Fax: +65 6466 9401 E-mail: enquiries@umscpl.com

A.Burak Atac BUNKER TRADER LAGUNA ENERJI ve PETROL URUNLERI LTD.STI Yali Mah. Gozde Sok Vildan Apt. No. 3 D:1 Dragos-Maltepe ISTANBUL 34873 Turkey E-mail: info@lagunaoil.com.tr

Saskia Campbell Davies BUNKER TRADER VENICE MARINE OIL SERVICES SRL Via Cappuccina 19/A Mestre 30170 Italy Tel: +4198 9595 E-mail: bunker@venicemarineoil.com

Ian Booth SERVICES THE VANE BROTHERS COMPANY 2100 Frankfurt Avenue Baltimore Maryland 21226 USA Tel: +141 0735 8131 E-mail: ibooth@vanebrothers.com

J.A.L. (Hans) de Bruijn BUNKER BROKER GLOBAL MARKETING (EUROPE) Hellingkade 15 Maasluis 3144 EJ Netherlands Tel: +316 5379 0777 E-mail: bunkers@globalmrktg.eu Fil Santos BUNKER SUPPLIER MARINE FUELS PHILIPINES INC 21/F Times Plaza Building United Nations Ave, Corner Taft Ave Manilla Philippines E-mail: filsantos@magsaysay-logistics.com Theresa Hoever BUNKER SUPPLIER TRANSMONTAIGNE PRODUCT SERVICES 363 N Sam Houston Park Suite 750 Houston TX 77060 USA Tel: +28 1902 3409 E-mail: thoever@transmontaigne.com

14

Richard Perlman BUYER OSG SHIP MANAGEMENT INC 666 3rd Avenue 5th Floor New York 10017 USA Tel: +1 21 2578 1642 E-mail: rperlman@osg.com Carlos Aguirre BUNKER SUPPLIER PETROTRADING de CENTROAMERICA 31 Calle 0-53 Zona 12 Colonia El Carmen Guatemala City GT 01012 GUATEMALA Tel: +502 2476 1694 E-mail: ventas@petrotrading-guatemala.com Jinnat Ali BUNKER SUPPLIER JAR WORLD MARINE WALI MANSION (4TH FLOOR) 599,SK.MUJIB ROAD CHITTAGONG BANGLADESH 4100 ASIA E-mail: jar@jar-group.com

Matthew Atkins SERVICES THE MEETING HOUSE The Quay, 30 Channel Way Ocean Village Southampton Hampshire SO14 3TG UK Tel: +44 23 8020 8800 E-mail: matkins@meetinghouse.co.uk Abigail Shearer Robinson SERVICES CHORNCO International Trading Office 14A The Village Walk Onchan Isle of Man IM3 4EB UK Tel: +44 160 3831 1880 E-mail: chornco@aol.com Juan Pablo Veas BUNKER SUPPLIER GLENCORE DE MEXICO, SA. DE C.V Centro de Negocios Vivendi Americas Oficinas 8y9 Segundo Nivel, Av. Bonampak esquina Av. Nichupte Cancun QR 77500 MEXICO E-mail: juan.pablo.veas@glencore.com Colin Cheeseman BUNKER SUPPLIER KROHNE LIMITED 34 - 38 Rutherford Drive Park Farm Industrial Estate Wellingborough NN8 6AE UNITED KINGDOM Tel: +44 19 3340 8528 Fax: +44 19 3340 8589 E-mail: c.cheeseman@krohne.com Simon Chong Chai Thaim BUNKER SUPPLIER TOKYO KEISO - KROHNE PTE LTD 14 International Business Park Chiyoda Building #01-01/02 609922 SINGAPORE Tel: +65 6567 4548 Fax: +65 6567 9874 E-mail: simon@tokyokeiso-krohne.com.sg Reynaldo Jose BUNKER SUPPLIER BUNKERS PACIFIC LTD Unit 3005 30/F Antel Global Corporate Center Julia Vargas Avenue, Ortigas Center Pasig City Philippines Tel: +63 2571 5025 Fax: +63 2576 3499 Email: bunkers@bunkerspacific.com

World Bunkering Winter 2010

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IS YOUR BUNKERING SUPPLIER FIT TO DELIVER? As our dedication to performance and delivery will take a weight off your mind.

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

12, rue Michel-Servet P.O. Box 404 1211 Geneva 12 Switzerland Tel: (41-58) 702 90 40 Fax: (41-58) 702 91 40 e-mail: abs@aogltd.com website: www.addax-oryx.com

Addax Bunkering Services AN AFFILIATE OF THE ADDAX AND ORYX GROUP

REPORTS

Elections to the IBIA Board of Directors At the Annual General Meeting (AGM) on Monday 14 February 2011 there will be three members of the Board whose term of office has expired and who will therefore stand down with effect from 1 April 2011.

These elections are an opportunity for new people with new ideas to join the Board and take part in the running of the Association. In the same way as the officers of the Association change, so should the Board Members.

By order of the Board, the Administration is therefore requesting the Members of IBIA to put forward names of candidates who are willing to stand for election to the Board and who they think will make a contribution to the running of the Association. Prospective Board Members should be aware that being a Board Member is not just a titular position. They will be expected to take an active part in the running of the Association. A copy of Guidelines for Board Members is available on the website www.ibia.net

•

Candidates for election to the Board must: • Consent to stand for election • Be paid up Members of the Association Be proposed and seconded by paid up Members of the Association • Complete and return the Nomination Form

Prospective Board Members should be further aware that all nominations will be assessed by the Board Development Committee.

NOMINATION FORMS MUST BE RETURNED BY 3 December 2010 Nomination forms received after the above date will be deemed invalid.

Yours sincerely, IBIA ADMINISTRATION

16

World Bunkering Winter 2010

The International Bunker Industry Association Limited 17th Annual General Meeting Monday 21 February 2011 NOTICE IS HEREBY GIVEN THAT The 17th Annual General meeting of the Association will be held at

The Cunliffe-Owen Room The Naval Club 38 Hill Street London at 13.00 hours on Monday 21 February 2011 EVERY MEMBER HAS THE RIGHT, UNDER THE COMPANIES ACT 2006, TO APPOINT A PROXY. SHOULD YOU WISH TO DO SO, PLEASE CONTACT THE IBIA ADMINISTRATION TO OBTAIN A FORM Mike Ball Chairman By order of the Board

World Bunkering Winter 2010

17

REPORTS

IBIA Annual General Meeting Venue: The Naval Club, Hill Street, London on Monday 21 February 2011 at 13:00 hrs

AGENDA Approve the minutes of the last Annual General Meeting.

• Appoint Nunn Hayward, Accountants, as auditors of the Association until the conclusion of the next Annual General Meeting.

• Approve the Accounts of the Association for the year 2009/2010.

• A summary of the Accounts is in the Annual Report of the Association.

• Vote upon the appointment, or re-appointment, of Members of Board pursuant to Article 46 of the Association’s Articles of Association.

• Transact any other ordinary business.

IBIA Secretariat

18

World Bunkering Winter 2010

17th IBIA Annual Dinner Rooms are available at the Grosvenor House, for IBIA Members only, subject to availability, at the following rate: £239.00 (+ VAT) per room per night – single or double occupancy Contact Reservations Department: Tel +44 (0) 207 499 6363 Fax +44 (0) 207 399 8075 Quoting code “ER4” If you are hosting a table please ensure that all of your guests are aware of the following: DINNER ETIQUETTE 1. The correct and normal dress for formal dinners for gentlemen is Dinner Jackets (black tie) and for ladies long or medium length dress.

Monday 21 February 2011 at the Grosvenor House, a JW Marriott Hotel, London

The 17th IBIA Annual Dinner will be held at the Grosvenor House on Park Lane, London 21 February 2011 at 19:00 hours The Champagne Reception and Three Course Dinner with Coffee, will cost £125.00 per head + VAT (currently at 17.5%) This price also includes a Half Bottle of Wine per head Following the meal there will be a Post-Dinner drinks bar Dress code: Black Tie

2. Members should not leave the dining table at any time before the Loyal Toast except of course in case of an emergency.

Corporate Members are welcome to reserve tables, which are available for 10 or 12 people

3. If a “comfort break” has to be made it should, if possible, be whilst coffee is being taken.

Individual Members are respectfully requested to limit their guests to a maximum of 5 (exclusive of individual member ticket)

4. Leaving one’s place at table and visiting other tables should be avoided at ALL costs.

5. Silence should be observed during speeches, grace and the Loyal Toast

To register your interest, please contact Charlotte Egan: +44 023 80 226 555 or email charlotte.egan@ibia.net

REPORTS

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

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

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

• Implement the running of IBIA’s two-day

In the beginning

The board

Environmental

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

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

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

• Corporate membership: open to com-

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

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

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

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

• •

•

•

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

The working groups

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

Education • Run further IBIA Basic Bunkering courses

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

courses.

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

checklists.

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

bunkering procedure.

Technical • Continue to provide answers to technical

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

the members.

Commercial Working Group • Has been responsible for the production

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

Task Forces

IBIA now operates a Task Force system.

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

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

worldwide;

World Bunkering Winter 2010

Membership application

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

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

Trader

Port Operations/Storage/Delivery Broker

Services (eg Legal/Financial/Analytical)

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

Corporate Member £550

Free (please state reason)

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IBAN SWIFTBIC GB£ Sort Code Sterling Account Number Account Name

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

3. Cheque: Made payable to The International Bunker Industry Association Ltd. Application forms must be sent by mail or by fax to the

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

World Bunkering Winter 2010

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IBIA Convention

Finding out what the industry wants

M

any bunker conventions concentrate either on bunkering in the region in which they are based, or on a single issue of particular concern to the industry. By contrast, this year’s IBIA convention covered a wide range – everything from the inevitable environmental and regulatory issues to operational, legal and financial questions. Just as IBIA itself has members from every corner of the industry, it was fitting that the convention offered presentations from many different aspects. It offered attendees the chance to find out more both about their own business and about related matters – and to have their say about some of the most fundamental issues affecting the industry at the moment.

As the guest of honour, Beth WilsonJordan of the Connecticut Maritime Association, emphasised in her opening address, the bunker industry is above all a people business, and the convention offered plenty of opportunity for people to make and renew the connections that are a vital part of the way the bunker industry operates.

IBIA to maintain neutrality on GHG reduction measures

As the convention took place just prior to MEPC 61, a part of the convention was given over to discussing the two main schemes for reducing carbon emissions from shipping that were under active consideration at IMO; a GHG compensation fund, and a cap and trade system. After hearing detailed presentations on both schemes as the conferences opened, delegates had the chance to vote on the position that IBIA would take during the subsequent debate at IMO.

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This was a particularly valuable part of the convention, highlighting the way in which IBIA can give its members a real voice in the top-level debates taking place in the shipping industry.

Rear-Admiral Robert North, who represents the Marshall Islands at the IMO, spoke in favour of the compensation scheme, under which a fixed amount would be collected from suppliers per tonne of bunkers delivered. This would be transferred to an international fund to be used for the mitigation of climate change, operating in a similar way to the International Oil Pollution Compensation Fund (IOPC).

This presentation was followed by the opposing point of view, put by John Aiken of SEAaT. An emissions trading scheme, he said, would set an overall cap for emissions from the shipping sector, and allow owners and operators to trade carbon credits, allowing credits earned for more efficient ships to be sold to less efficient ships. This would allow shipowners greater flexibility to decide on GHG reduction technology, rather than focussing solely on reducing the amount of fuel burnt.

Following the presentations, a ceo panel, including Thomas Reilly of OceanConnect, Paul Stebbins of WFS and Gary Lawson from Heidmar, looked at the issues in more detail.

Issues of enforcement and compliance were a major concern, although all members of the panel agreed that some form of emissions reduction was both necessary and inevitable.

IBIA members debated the issues at length, both in this initial session and in the follow-up on Friday morning. There was little support for the concept of a compensation fund, and members were evenly split between those who supported

the introduction of an ETS and those who did not feel strongly about either option, or supported neither of them. Ultimately, IBIA members agreed that there was not enough information available about how either scheme would work to make any firm decision. Chief Executive Ian Adams said that IBIA will continue to monitor the debate at the IMO and in the wider shipping community.

Everything you wanted to know about bunkers …

While environmental issues inevitably played a large part in the conference, they were by no means the only thing discussed.

Instead, a wide-ranging programme looked at everything from financial to operational to legal matters.

Lloyd’s Register’s Tim Wilson took another look at the ongoing biofuel debate, particularly relevant in the wake of the recent decision to exclude biofuel content from the ISO 8217:2010 standard – for now.

Despite this, it would be almost impossible to avoid some level of FAME content in fuel, particularly in smaller ports, he said. The main risk is that biofuel is not fully compatible with the storage environment on board ship, with bacterial growth a particular concern. Shipoperators would do well to know exactly what they have on board, and how to deal with the consequences.

Rudy Kassinger continued the technical theme, looking at the effects of low-sulphur fuel on marine engines, and the gradually changing profile of marine fuel, where we are seeing a slow upward creep in density, viscosity and abrasives.

Jens Maul Jorgensson, bunker and risk manager at Oldendorff carriers, summed up both presentations in his opening slide,

World Bunkering Winter 2010

predicting that the future – at least for bunker purchasers – would be ‘a nightmare’ in terms of quality issues and LS supply. The answer, he suggested, was more, and more accurate testing.

Nigel Draffin, Technical Sales Manager at LQM Petroleum Services, gave a timely presentation on the difficulties – and the dangers – of working with ultra low-sulphur diesel, ranging from problems with lubricity and viscosity to the very real risk of igniting gas oil in burners when switching fuel. Given the growing number of ports now implementing mandatory or voluntary regulations on the use of ULSD at berth, this is going to be an increasingly important issue in the future.

All four panel participants were asked what fuel they thought shipping would be running on in 50 years time. Despite the debate on fuel use and ‘alternative’ environmentally friendly means of propulsion, all four believed that HFO would remain the fuel of the future. Tim Wilson thought that gas, and possibly nuclear power, would have a role to play; Jens Maul Jorgenson said that there would be some distillate in use, and Nigel Draffin said that there would be some use of methane, but for all the debate, it was clear that there will still be demand for HFO. Sessions continued to range widely after lunch, with Steve Taylor of the Port of London Authority looking at exactly what was needed to establish a new bunker port in terms of preparation for pollution response.

Exxon’s David Stern gave a refiner’s point of view on the challenges and opportunities offered by low-sulphur marine fuels, concluding that low-sulphur fuels may be challenging to refine, but that exhaust gas cleaning scrubbers offer an opportunity for all players, if the market accepts them.

Several of the presentations up to this point had mentioned issues with viscosity.

IBIA’s vice chairman Bob Lintott, managing director of ISO Bunkers, put the cat among the pigeons by asking why the industry uses viscosity as its parameter, and not specific energy. “Viscosity has nothing to do with ignition, or energy, and can apply equally to soup,” he said. Terje Cook, commenting from the floor, said that the trouble with this solution was that while you could ask suppliers to state the specific energy of a fuel, the reality was that subsequent tests often gave a very different result.

Angus Ogilvie, technical director at Cockett Marine Oil, pointed out that despite all the pressure on shipping companies to go green, oil companies continue to flare gas in large quantities, particularly in Africa, causing considerable pollution. Thane Gilman

World Bunkering Winter 2010

of the United States Coast Guard explained what actions the USCG expects to take in enforcing compliance with the ECA. While they are looking at retaining BDNs and samples, and carrying out more frequent spotchecks on those samples, their main concern is that fuel switchover is carried out correctly, to avoid the loss of manoevring power in environmentally sensitive situations, he said.

The first day concluded with a presentation from legal consultant Trevor Harrison, who looked in detail at what is implied by the terms used in many standard bunker purchase contracts, and concluded that they are not necessarily as draconian – or as heavily weighted in favour of the supplier – as they may at first seem. Good news for attendees to take into the evening reception, sponsored by ISO Bunkers, and celebrating 25 years of their presence in the bunker industry.

Where next for IBIA?

One of the things that makes the IBIA convention unique is the opportunity to discuss the direction in which the organisation is heading. The second morning of the convention – starting at 10, a humane move allowing delegates to recover from the two previous evenings of enthusiastic networking – was dedicated to this topic. IBIA has established a strong base in Singapore, where it will be taking on full time staff at the beginning of 2011. The Association aims to build on this success to expand its growth in Asia. In particular, it is looking at expanding activities into Hong Kong and other Asian ports.

Ian Adams also revealed the results of a survey on establishing an IBIA branch in the Americas. Perhaps unsurprisingly, given the location of the convention, there was strong support for the idea, although the location – if any – is yet to be decided.

Another topic of considerable interest to members was progress in developing IBIA qualifications. While this is proving more complex than expected, progress is being made, but more help from members in designing appropriate questions for the qualifications would be much appreciated!

As ever, the coffee breaks, lunches and evening events including the first ever IBIA quiz, provided a welcome opportunity to meet old friends and meet new ones, even if Connecticut regulations on bar closing times proved an unpleasant surprise for some.

Next year, the IBIA Convention returns to Europe, and the city of Barcelona. We look forward to seeing you there!

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Industry news

Global round-up AFRICA South Africa opening for Global Vision

Global Vision Bunkers is opening an office in South Africa as part of the group’s expansion throughout the African continent. Shanaaz Bennett will be heading up Global Vision Bunkers (Africa), a black economically empowered company situated in South Africa. Ms Bennett has worked as a supplier for Shell and most recently has been managing director of Wilhelmsen Premier Marine Fuels in South Africa. She has also worked as an international trader for two major worldwide trading groups and is the IBIA chairman for Southern Africa.

Global says of its new South African head: “She is an expert in all things Southern Africa and is responsible for developing further the Group’s considerable activities throughout Africa.”

Global is one of few international licensed resellers of Sonangol product (state supplier of Angola) and is active throughout the continent both in port and offshore. The new office in South Africa will give Global greater access to the fast developing oil activities throughout the continent.

ASIA Chemoil turns to derivatives for growth

Chemoil Energy is to offer its customers hedging services from next month, according to chairman and chief executive Michael Bandy.

Speaking in an interview with Reuters, Bandy said that Chemoil sees the derivatives market as a major growth area, and expects its derivatives volume to match its physical trades within three to five years.

Over the first 10 months of 2010, Chemoil has hired 30 risk, credit and marketing staff primarily for the derivatives business. Chemoil currently hedges its own physical inventory, and will be expanding these services to its customers. Glencore will be the preferred counterparty for these derivatives trades.

“It’s a very lucrative market. The margins are at least as good or better than the physical market,” Bandy said. “The start-up will be

24

slow but over the years we can expect substantial growth.”

Bandy also announced that Chemoil plans to split the chairman and ceo roles, and is looking for a new chief executive. “It was always in our sights to split the roles. We have to find young talented individuals who can potentially be ceo. That is my number one key priority,” he said.

‘Modest’ profit for Yujin

Its four bunker tankers helped Singapore-based Yujin International achieve a ’modest’ profit before taxation of $452,000 for the six months ended 30 June, down from $671,000 in the first half of last year. The company says actions taken by its management and the board have helped to return a modest profit despite the continuing difficult trading environment.

A statement says: “Yujin’s bunker tankers continued to perform well. These four tankers are on term charters until Q1 and Q2 of 2011. The actions taken by management to contain costs have resulted in a slight increase in operating profits by $15,000 to $1.46 million for the first half of 2010. During May and June 2010, three of the loans taken to purchase these ships were repaid in full according to their repayment schedules. A fourth loan was repaid in July 2010.”

The company was incorporated in 2004 with the main intention of owning and operating small range tankers in Asia Pacific, employed on both term and spot charter contracts, predominantly to companies providing bunkering services in the Port of Singapore and the transportation of liquid cargo in Asia Pacific.

The company had until last year also engaged in bunker trading but stopped that in the second half on 2009, describing it as incidental to its core activities and generating only insignificant margins.

Owning and operating bunker tankers on term charters remains, however, a core activity.

The company says: “Shipping activities in the second half of 2010 are expected to be at the same level as the first half. Continued cost savings programs may, however, result in a slight improvement in earnings in the second half.”

World Bunkering Winter 2010

MIDDLE EAST

GPSChemoil says $50 million financing for construction of phase four of its storage terminal at Fujairah is now in place. A consortium of banks in Abu Dhabi, Dubai and Singapore are to lend the money to the joint venture company between Gulf Petrol Supplies LLC, a subsidiary of the Fujairah National Group, and international bunker supplier Chemoil. The multi-currency loan was structured through a combination of Islamic and conventional loan tranches, with HSBC Bank Middle East Limited acting as the lead arranger.

The storage terminal will increase capacity in Fujairah from its existing 95,000 cu m to approximately 675,000 cu m. Phase four of the facility is expected to cost $130 million when completed in 2012.

It will be one of the largest bunker terminals in the Middle East and will also be Chemoil’s largest storage facility in its global footprint, exceeding the current 482,000 cu m storage capacity at its flagship Helios Terminal in Singapore.

Managing director of Chemoil Asia & Global Logistics, and GPSChemoil director, Sanjay Anand, said: “The GPSChemoil terminal, which is part of our extensive global supply infrastructure, will substantially increase our strategic presence in the Middle East. It will ensure our shipping customers highly reliable supply, speedy service and competitive pricing.”

He added: “The Fujairah facility will also significantly expand our worldwide fuel terminal business, helping to provide stable recurrent income amid current market volatility.”

Chemoil says that the construction of the terminal is part of Chemoil’s strategy to expand its global integrated marine fuel supply chain, further developing capabilities and services, enabling customers to benefit from Chemoil’s position as one of the largest physical marine fuel suppliers.

under development in Jamaica, Morocco and the UAE,” Tavlarios said.

IBIA news

BIMCO and IBIA have launched a new bunkering guide designed primarily for use by ships’ crew. BIMCO Asia Liaison Officer Thomas Timlen, and IBIA Chief Executive Ian Adams released the BIMCO and IBIA Bunkering Guide on October 27 to delegates in Singapore attending the 16th Singapore International Bunkering Conference.

Ian Adams explained: “In today’s market, the bunkering of ships is an intensive, highly regulated and quality-based operation which demands ships’ crew to be highly focused on quality assurance and environmental risk. This guide will help those involved in the bunkering process to act in compliance with industry regulations and best practice.”

BIMCO and IBIA first visited the idea of a guide in 2009, when they identified a gap in available resources to address best practice and industry compliance. The BIMCO and IBIA Bunkering Guide is an accumulation of BIMCO’s and IBIA’s combined experience, industry standing, and status as Non-Governmental Organisations at IMO. Speaking at the launch of the guide, Thomas Timlen said: “We are delighted that we have put together a comprehensive reference for all ships’ personnel involved in bunkering. We hope that making this guide available to the industry will not only benefit onboard crew but will also provide shore staff with access to information which could prove helpful in some shoreside operations.”

EUROPE Aegean volumes continue to grow

Aegean Marine Petroleum saw its sales volumes soar to 2.87 million tonnes in the third quarter of 2010 – an increase of 76% over the same figure last year.

Despite this strong growth, net income for the period was $4.6 million, down from $14 million for the same period in 2009. President Nikolas Tavlarios said that “Our results for the quarter reflect a change in the competitive landscape across our geographical portfolio, particularly in our two largest markets, which adversely affected gross spread. The industry experienced an increase in the supply of marine fuel together with a change in buying patterns by shipowners, who used increased downtime to fill their marine fuel requirements through smaller purchases in a higher number of ports. Additionally, our performance for the quarter was impacted by one-time restructuring charges for our Vancouver market as well as unrealized foreign exchange loss related to our Verbeke Bunkering subsidiary.”

Aegean has now completed the acquisition of the Shell Las Palmas terminal in the Canary Islands, expanding Aegean’s global network to 16 markets covering more than 40 ports. “Importantly, the terminal includes dedicated land storage facilities that broaden our new onshore storage facilities

World Bunkering Winter 2010

Chemoil has secured finance for terminal expansion in Fujairah

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REPORTS

An interview with the IBIA Board

T

he IBIA convention included an opportunity for the current members of the IBIA Board to introduce themselves, and explain both what they think is important about IBIA’s current role, and where they would like to take it in the future. Chief executive Ian Adams was asking the questions: IBIA members got to have their say as well Chris Fisher – Immediate Past President

Chris Fisher introduced himself as a ‘series of exes’ – ex-chief engineer, ex-marine director, ex-company manager, and currently ex-IBIA chairman. “Being the chair of IBIA is a major commitment, as it extends over three years; one as vice-chair, one as chairman, and one as immediate past chairman, but good fun,” Chris says. “Having been involved in IBIA since its earliest days, I believe it’s going in the right direction.” He highlighted the immense changes that have taken place in IBIA over the last few years, taking both membership and board membership well beyond the UK, and meaning that IBIA is no longer the ‘London gang’ it was at the outset. “My theme is always education,” Chris says. “Establishing a qualifications programme is not as easy as we thought, but it will happen.”

Bob Lintott – Vice Chairman

IBIA’s vice chair introduced himself as the ‘token member of the board from the US’, but admits his accent gives him away as the exile from the UK that he really is.

Bob claims to have ‘no qualifications in anything’, but has spent a very long time in the industry, as broker, trader, supplier’s

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rep, business owner, and now as a director of ISO Bunkers.

Nigel Draffin

Like Chris, Nigel is another Board member with what he describes as the ‘dubious distinction’ of being one of the original members of IBIA. Both Nigel and ex-board member Bob Thornton were working for well-known oil majors at the time, and were allowed to join IBIA on condition they stayed well away from any contentious issues. Accordingly, Bob Thornton ended up on the environment committee and Nigel on the safety committee – showing just what a sea change the industry has undergone in the 18 years since IBIA was established. Nigel has also been a stalwart of the education committee, and says that education “is one of the things that IBIA can really deliver”.

Having seen IBIA develop from the earliest days, Nigel is convinced that “the new board structure is much, much more effective than the old one. With just a dozen of us round the table, where the old council had 25, we can actually take decisions! The new structure is providing the best control of your organisation so far”.

Angus Ogilvie

Angus, who has a background in chemistry and joined Cockett Oil, as it then was, 30 years ago, is another board member with a long IBIA history. He has been treasurer twice, and served on many committees. “I think IBIA has a lot going for it, but there is a lot to be done yet,” he said. At the moment, he is principally interested in IBIA’s education and bridge-building efforts.

Trevor Harrison

As a barrister, Trevor Harrison claims he’d do anything for money – so why, he asks, is he a member of the IBIA Board, an entirely voluntary position? The answer – which some may find surprising – is quite simply that it’s fun.

As a lawyer, Trevor says he inevitably provides guidance to the board, and sometimes to members, on legal aspects of the bunkering business, often on some unusual aspects of the law. This is often behind-the-scenes work that doesn’t come into the public domain. He also regularly represents IBIA at IMO meetings. “IBIA has, I think, a good reputation at IMO, and we punch well above our weight in what is a tremendous lobbying forum. It is a privilege to have the opportunity to act as IBIA’s IMO representative, and I hope you’re pleased with what we do.”

Looking to the future, while IBIA has developed tremendously, Trevor would like to see that development continue. “I’d like to see IBIA expand its research activities, and perhaps become a point of reference for anyone who wants information on the industry.”

Jens Maul Jorgenson

Jens has spent ‘just’ 20 years in the bunker industry, starting out working for a charterer in 1990. In 2007 he left the Armada group to start a bunker desk for Oldendorff Carriers, which he still heads up today. Jens joined the Board in April and had just attended his third board meeting. “I am quite proud to be a member of this group – people have high levels of skills and experience, and always have a reply to your questions,” he says. “I feel that we have a strong board and

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a strong team at IBIA, and will in future be even better than we are today.”

John Stirling

A familiar figure at bunker conferences and seminars, John Stirling has spent 22 years at DNVPS. He became involved in IBIA in 2007, and joined the council in 2008, bringing both representation from the Scandinavian region and a connection with the fuel testing sector. John believes the Board is able and willing to push IBIA forward.

Mike Ball - Chairman

Mike is another ex-marine engineer, but, he says: “Once a marine engineer, always a marine engineer.” He first became a member of the IBIA council in 2001. Despite all the changes that have taken place, Mike says that IBIA has not projected itself to the outside world – or to its membership. “I get disappointed when people ask me what IBIA stands for. We have huge amounts of work going on, and we need to trumpet that. We must promote dialogue between the Board and the members. This is just the baseline, and if it means we get awkward questions, then so be it.”

Simon Neo Tiau Gee

Getting representation

Simon says that he joined the bunker industry ‘by accident’ in 1992. Since then, he has worked for a bunker supplier, for Wilhelmsen Bunkers, and is currently deputy MD of Singapore-based Equatorial Marine Fuels. He joined IBIA’s Asia branch in 2006, and became chairman of the branch in 2009. Simon also sits on the SPRING technical committee, which sets standards for bunkering in Singapore, the Singapore Shipping Association’s bunkering committee, and is a member of the working group on the mass spectrometer. “I am a strong believer in education, and I hope to increase the proficiency of the industry. Bunkering as an industry only really started in the mid-1980s, so it is still young. I want to spread what IBIA is doing to the rest of the region.”

Imami Ibgun, working for Delta in Nigeria, pointed out that while there was strong representation from Asia, Europe and America on the IBIA board, “it would be nice to see Africa involved on the front desk as well”.

All that’s needed to ensure this, said Ian Adams, is to find someone with enthusiasm to stand for the board. “Anybody who feels their region or sector needs more representation should send in an application, which will be passed to the Board development committee, which tries to produce a balanced Board, both geographically and in terms of the skills represented. The IBIA Board uses both Skype and conference calls as a way of ensuring that members can attend all meetings, no matter where in the world they are based.”

In summary, while IBIA tries hard to ensure that its Board is as representative of the industry as possible, it cannot do this unless members are willing to provide that representation.

There is a nomination form on page16 of the magazine for any members interested in applying to join the Board and take a more active role in shaping the future of the organisation – and the industry.

Dilip Mody

“IBIA is supposed to be an international association. That is why I joined the board; to take IBIA to India,” says Dilip. “When I joined the board, I didn’t know what IBIA could do, or was doing. I want to see the free flow of information between the members and the Board – tell us what you want us to do!”

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This subsidiary is already operating in Sicily and is fully-owned by LUKOIL-BUNKER OOO, St. Petersburg

World Bunkering Winter 2010

27

ENVIRONMENTAL NEWS

A tidal wave of regulation for shipping?

Quote of the quarter

I

nternational Chamber of Shipping (ICS) secretary general Peter Hinchliffe said in October that a “tidal wave” of environmental regulation was racing towards shipping and would coincide , “or perhaps collide is a better word”, over the next six or so years and initiate major cost increases.

Sulphur emissions

Governments at IMO have agreed with a formal ICS proposal that early consideration should be given to developing a suitable mechanism for review of the availability of low-sulphur marine fuels. ICS says: “The changes to MARPOL Annex VI, agreed in 2008, represent a heroic compromise between governments, the shipping industry, oil producers and environmental interests. However, implementation will be far from easy, particularly when the sulphur permitted in fuel is reduced to 0.1% in Emission Control Areas (ECAs) in 2015.”

ICS notes that while there is a formal mechanism in the IMO agreement to review progress in meeting the demand for fuel with the 0.5% sulphur content that is meant to be used outside of ECAs by 2020, the shipping industry body has been pressing IMO to start work now on developing a methodology that can consider all of the major changes required by the radical new regime. “Encouragingly,” ICS comments,

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“IMO has established a correspondence group for this purpose.”

When MARPOL Annex VI measures on sulphur and nitrogen oxides (NOx and SOx) were being debated, some industry voices argued that the need to reduce carbon dioxide (CO2) emissions should be taken into account when deciding allowable sulphur levels in marine fuel. Factors raised by the industry included the extra carbon emissions generated in producing distillate fuel and the cooling effect of sulphur particles in the atmosphere. This assessment didn’t really happen, but in October climate change adviser for Shell, David Hone, drew attention in his blog to the cooling effect issue.

He reported a discussion at a conference held by Canadian think tank Centre for International Governance Innovation. The discussion started with the “current reality” of sulphur being artificially pumped into the troposphere through the worldwide use of high-sulphur fuel Oil (HSFO) in ships (and from other sources). Mr Hone noted that a recent analysis showed that while the global annual average cooling effect of shipping is currently some -0.6 W/m2 (compared to the current additional radiative forcing from post-industrial CO2 now approaching 2 W/ m2), this would reduce to -0.3 W/m2 in the case of a global 0.5% sulphur specification.

That is to say, achieving IMO’s sulphur cap

target would add to global warming by 0.3 W/m2 of warming.

Scrubbers “can work”

Exhaust Gas Cleaning Systems Association director Don Gregory told delegates at October’s Interferry Conference: “After a rocky start, six or seven ships now have real systems that are taking out real emissions.

We’ve demolished the myth that it’s a good idea that will never work.”

He predicted a $500 per tonne price premium for 0.1% fuel and compared this with the $1 million to $4 million cost of abatement equipment. Mr Gregory said: “There’s no doubt that technology has a cost but it’s a one-off and then you have the benefit of flexibility on fuels.”

Greenhouse Gases – MEPC

IMO’s Marine Environment Protection Committee (MEPC) met for its 61st session in London from 27 September to 1 October. The committee spent much of its time debating market-based measures (MBMs) for emissions reduction without achieving any real progress. In contrast, work on developing measures to improve the energy efficiency of ships did move this process along.

Continued opposition to market based measures which do not follow the Kyoto concept of common but differentiated

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responsibility to reduce greenhouse gas emissions from several major countries, including Brazil, China and Saudi Arabia, ensured no proposals will be ready for the 2010 United Nations Climate Change Conference to be held in Cancún, Mexico, from 29 November to 10 December.

The MEPC agreed Terms of Reference for an intersessional meeting of the Working Group on GHG Emissions from Ships, to be held in March 2011, tasking the group with providing an opinion on the compelling need and purpose of MBMs as a possible mechanism to reduce GHG emissions from international shipping and further evaluating the proposed MBMs considered by the Expert Group, including the impact of the proposed MBMs on, among others, international trade, the maritime sector of developing countries, LDCs and SIDS, as well as the corresponding environmental benefits.

A report from the intersessional group will be submitted to MEPC 62 in July 2011.

While there was progress on development of the Energy Efficiency Design Index (EEDI) and the Ship Energy Efficiency Management Plan (SEEMP), both of which have been previously disseminated for voluntary use, there was disagreement over whether these should become mandatory for new ships

catch up to and surpass us in addressing this problem. Once they’ve done so, our regulations may no longer be necessary. But until then, domestic regulation is the best tool we’ve got.“ And finally ...

US-based researchers say they have developed a method that uses aluminium and a liquid alloy to extract hydrogen from seawater to run marine engines. Purdue University professor of electrical and computer engineering Jerry Woodall says the technique had previously worked only for freshwater, but a new formulation also enables the method to generate hydrogen from seawater. Hydrogen generated by the technology could be fed directly to an internal combustion engine.

The new method makes it unnecessary to store or transport hydrogen – two major challenges in using hydrogen in ships and vehicles. Prof Woodall says: “We generate the hydrogen on demand, as you need it.”

The aluminium splits water by reacting with the oxygen atoms in water molecules, liberating hydrogen in the process. The waste product, aluminium hydroxide, can be recycled back to aluminium using existing commercial processes.

Greenhouse Gases – Cancun

Reuters reported that Norwegian Prime Minister Jens Stoltenberg, who is co-chair of the panel advising on how to raise $100 billion a year for funding measures to counter climate change, confirmed that it would recommend a form of carbon pricing. He told Reuters that it would be “challenging but feasible” to raise $100 billion a year from 2020 onwards to help developing countries tackle climate change.

This report increased concern within the shipping industry that IMO’s failure to be in a position to present market-based measures at Cancun could lead to a levy being imposed outside the auspices of IMO. Speaking at the Greek Shipping Summit in early October, ICS chairman Spyros Polemis said that ICS and the shipping industry fully support continuing work at IMO to address shipping’s CO2 emissions.

“However,” he warned, “while we strongly support a bankable deal being negotiated at IMO, we also have to be aware of the parallel discussions taking place within UNFCCC circles, following the ‘Copenhagen Accord’ last year, which will be much harder for us to influence. Within UNFCCC circles, as opposed to IMO, we are greatly concerned that environment ministries may give much more attention to the money that could be raised from international shipping, as opposed to the emissions reductions that might be achieved.”

He continued: “It is most important that we resist any notion that shipping is some kind of ‘cash cow’ which might pay more than its fair share for the sake of political expediency in order to bring along the developing nations into a global agreement on climate change.”

Greenhouse Gases – Unilateral Action

Following the lack of progress on market based measures to curb ship-sourced CO2 emissions, US-based non-profit environmental law firm Earthjustice called on the US government to unilaterally strengthen regulations governing climate change pollution from ships.

Earthjustice attorney Sarah Burt said: “Global warming is a global problem, to which a global solution would be ideal. But the United States should not wait for strong mandatory requirements by the IMO when that body seems unable to act. Rather, we should push forward with domestic regulations that address a significant portion of the greenhouse gas emissions at issue. If the other nations object to the United States’ domestic action, we should challenge them to

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RN- BUNKER: Strengthening positions

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he bunkering business of OC Rosneft, Russia’s biggest oil company, is represented by its daughter company, RN –Bunker Ltd. According to Rosneft’s programme of bunkering business development, the daughter company has managed not only to enter the market of all major Russian ports, but also occupy the leading positions there, while dynamically increasing its share of presence. In March 2010, RN-Bunker Ltd joined the Russian Association of Marine and Bunker Suppliers.

Having separated bunkering into a separate line of activities, Rosneft has set several ambitious targets. Firstly, to maximise sales of oil products by cost reduction, balance of investment and capitalisation growth. Secondly, to deliver the product to the end user with constantly guaranteed quality, meeting all existing international standards, including MARPOL, as well as controlling the movement of oil products at all stages of bunker delivery. Another target set by the company is to increase the share of sales via its own distribution network, thus achieving stability and high efficiency of oil products sales in Russia and abroad.

Map of expansion

In the ports of its operation, RN-Bunker Ltd works both with shipowners and large traders. A vertically integrated company follows an approved strategy. That is why, by 2010, RN-Bunker Ltd, though not without difficulty, entered the bunkering market of 10 major Russian ports. At the time of writing the company has representatives in Nakhodka, Vladivostok, Yuzhno-Sakhalinsk, Archangelsk, Murmansk, St Petersburg, Tuapse, Samara, Rostov and Astrakhan. According to the company’s Deputy Director General, Vladimir Brezhnev, this allows the company to deliver the product directly to customers’ vessels and make sure that the quality of the fuel supplied meets all international standards. “In the future,” explains Vladimir Brezhnev, “there are plans to open new operations, expanding the map of company services”. In fact, the business plan for 2011 schedules opening offices in London and Singapore.

Sold

To date, monthly bunker sales by RN-Bunker Ltd amount to approximately 200,000 tonnes. This figure reflects both sea and river bunker sales. The Volga-Don basin alone handles 32,000 tonnes of bunker, while Siberian rivers Lena and Amur handle 16,000 tonnes monthly.

The sea ports of the Russian Far East are most successful in terms of bunker sales for RN-Bunker, with monthly sales of up to 70,000 tonnes. In addition to that, the company sells around 8,000 tonnes

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of fuel in Sakhalin ports.

The biggest ports of the north-west, being quite a tough market due to high competition, have also been conquered by the company.

Arkhangelsk and Murmansk account for 20,000 tonnes in bunker sales and St Petersburg up to 15,000 tonnes.

At the Black Sea the company sells indirectly up to 4,000 tonnes monthly in Tuapse, in the Novorossiysk market. The company is a physical supplier of oil products in the region, with the monthly volume of bunker sales amounting to 25,000 tonnes.

Considerable sales have been achieved due to “high quality management standards applied by our mother company,” says a senior manager. Cost savings and optimisation of logistical costs (90% of all RN-Bunker supplies are made on a FOB basis) allows the company to offer fuel at competitive prices in any region of its presence. It is these competitive prices that have enabled RN-Bunker to integrate into new business areas.

RN-Bunker Ltd controls the quality of the bunker fuel, from the manufacturing facilities of OC Rosneft Ltd to the delivery into the bunker tanks of the vessels. The company offers practically all types of fuel of high international standard in any region of its presence: Far East: IFO 180, MGO North-West region: IFO 180, IFO 380, MGO, MDO, HS, LS Southern region: IFO 180, IFO 380, MDO, MGO Northern region: IFO 180, IFO 380, MGO, MDO, HS, LS River bunkering: MGO, MDO PROSPECTIVE INVESTMENTS

The company has actively developed its own infrastructure for bunkering vessels. Currently, work is being undertaken to arrange rental, acquisition and construction of oil depots. The company is developing its bunkering fleet, as well its fuelling facilities, in compliance with all international standards. At present, RN-Bunker is renting its fleet from barging companies to deliver bunker fuel.

When it comes to buying or building new tanker fleet, RN-Bunker’s programme of strategic development relies on co-operation with the Russian shipping companies Rosnefteflot and Sovkomflot. “Thus,” says Brezhnev, “by the end of 2010, RN-Bunker Ltd will commence bunkering using its own fleet in every port in which it has a presence.”

In an interview with Port News Agency, Brezhnev commented: “We possess all the knowledge and experience required for the bunkering business, and strive for perfection in this area. We aim to create a modern, dynamic, flexible and efficient company of international standing, which will focus on establishing long-term mutually beneficial relations with our clients.”

World Bunkering Winter 2010

Oil terminal “Nakhodkanefteproduct” (Russian Far East)

Oil facility “Belokamenka” (Murmansk)

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BLENDING

IBIA gets to work on blending guidance

Trevor Harrison, chairman of IBIA’s Blending Committee, explains the association’s move to develop guidance on in-line blending

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BIA’s Blending Committee, which operates under the supervision of IBIA’s Board of Directors, held its first face to face meeting in Stamford, Connecticut, on the eve of IBIA’s 2010 Convention.

The principal item on the agenda was a draft guidance note on in-line blending. The guidance note, which is seen as a precursor for guidance notes on other bunker related topics, is aimed principally at those new to bunkering or without a technical background.

Subject to the number of graphics and other details, the guidance notes will be between six and ten pages long, a length designed to encourage quick end to end reading in one short session. Publication is planned for the year end.

In discussing the in-line blending guide it became apparent to the committee that there were other areas of bunkering that could benefit from similar treatment. Suggestions so far include a guidance note on the sources and composition of marine fuels to be followed by another note on the role of international organisations in the bunkering industry; other suggestions are welcomed.

Other topics discussed were the possibility of IBIA lobbying IMO, the International Maritime Organization, to allow the results of real-time in-line sampling to be used on MARPOL compliant bunker delivery notes and generally to revise guidelines to take account of best available practices.

This issue is particularly topical given the recent proposal made at IMO by Norway and Intertanko that the quality of bunker fuel should be a matter of regulation rather than simply a matter of negotiation between seller and buyer. What better time and place could there

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be to determine and control product quality than as it is pumped from barge to ship? It is an interesting argument and will no doubt be a topic of lively debate. Members’ views are important and the committee would like to hear from as many people as possible.

After the committee meeting, a tentative proposal was made by one of the Convention delegates that IBIA should develop a definitive best practice guide for bunker delivery, paying particular attention to pollution protection. Such a guide would necessarily be more extensive than a six-page guidance note but could usefully fill a perceived gap in information resources available to suppliers and consumers alike.

If widely adopted and implemented, it would also have the advantage of being an established system, functionally derived from proven best practice rather than the unattractive alternative of a scheme imposed by an external regulatory body, potentially influenced by those with distinct agendas and little interest in the well being of the maritime industry. Again, the views of members as to whether they feel this would be of value would be welcome.

As can be seen, there is plenty to do and the committee would be very pleased to hear from any member who wishes to contribute in any way to its activities. The committee’s terms of reference are very widely drawn and all suggestions and offers will be given serious consideration. Enquiries may be directed either to the committee chairman, Trevor Harrison, trevor@trevorharrison.com, or to the IBIA Secretariat, secretariat@ibia.net.

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BLENDING

Renewed interest in blending

Jon Moreau, Business Development Director at Jiskoot Quality Systems, explains how the blending scene is changing – and why investment now will pay off

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lending, and in particular in-line blending, is a topic of renewed interest to the bunker fuel market.

This interest appears to be driven by robust bunker prices combined with the increasing pressure on suppliers to measure and certify the quality and quantity of fuel to meet the requirements of ECAs, MARPOL Annex VI and the recently revised ISO specifications.

Conventional wisdom states that it is extremely unlikely that there is any bunker fuel supplied in the market today that has not been blended (in one location or another). It therefore seems logical that as higher accuracy and lower cost blending technology becomes available that, where possible, this will be utilised further and further down the supply chain. External pressures are driving changes in the bunker market and many believe that those suppliers that evolve to meet these demands will in the future be best positioned to capitalise on this market.

The adoption of in-line blending is seen as a significant strategy that a bunker supplier can use to improve their customer service, operational flexibility and value proposition. This article summarises feedback from some of the in-line blending equipment manufacturers about the trends, configurations and strategies being considered by their customers (physical bunker suppliers) throughout the world.

Who’s investing, and why?

There are a significant number of bunker infrastructure investment projects, both newbuild and expansion, which are developing in-line blending as a ‘core component’ of their facility and operations. Most of the companies making these investments are applying rigorous

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net present value (NPV) and return on investment (ROI) calculations to the blender as part of an overall operating philosophy focusing on ensuring the equipment delivers the best return for long-term operation rather than simply having the lowest purchase price.

When comparing the cost of an in-line blender with that of storage tanks, the differentials are not large. However, when consideration is also given to the reduction in capital lock-up and the flexibility of being able to blend on demand a batch at reduced cost, the payback periods are attractive.

Specialist in-line blending equipment manufacturers claim their customers will achieve savings of between $8 and $14 a tonne from this technology. Using the most conservative of these figures, indications are that even for fairly small facilities, with throughputs as low as 20,000 tonnes per annum, in-line blending can deliver a return on investment in less than a year, if correctly designed and utilised. As a result, physical bunker suppliers are developing new operational strategies and are placing demands on the manufacturers of in-line blending equipment to meet these evolving market needs.

Certification issues

Certification of the final blend, both for quality and quantity, is an important requirement of efficient operations. To achieve this, suppliers are demanding that in-line blending systems can accurately measure blend ratios and final blend output quantity. In most cases they also demand inclusion of equipment for the direct measurement of density, viscosity and/or sulphur, all of which can be used to control the quality of the final blended product. In applications where the return on investment for on-line analysis (such as sulphur) is not

World Bunkering Winter 2010

justified, in-line blending systems must now be able to dynamically calculate the final blend quality based on the measured ratio of each component and the certified analysis of each feedstock. This enables the blender to automatically produce a certificate of quality for every batch blended. To accompany this, bunker suppliers are demanding that the blender package includes an automatic sampler to provide validation of the final batch blend quality parameters, in the event of a dispute.

Meeting customer demand

As the pressure increases for lower sulphur HFO, larger facilities are exploring the option to purchase and blend high and low-sulphur heavy fuel oils simultaneously, with the cutter/distillate using in-line blenders with viscosity, density and sulphur analysis to benefit from pricing differentials on high-sulphur products.

Due to the higher profile of newer flow measurement technology within the industry, customers increasingly want in-line blending systems designed to include their preferred choice, or a locally regulated type of flow meter. These could be a low pressure-drop solution like an ultrasonic flow meter, a direct mass measurement technology such as Coriolis, or a more traditional PD and turbine meter combination.

As understanding of the flexibility of in-line blending increases, bunker suppliers are also looking to use more bespoke blending systems designed to meet their current needs as well as the ability to accommodate the future use of a much wider range of heavy and cutter stocks to continue meet evolving market demands.

CCV-412_Jiskoot_resize.indd 1

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IBIA’s role

What is evident is that in-line blending in the future is very likely to play a more prominent role in meeting the needs of physical bunker suppliers to deliver a range of bunkers that comply with specification from a wide range of feedstock products. What is also clear is that little formal or structured guidance exists for IBIA members (or others) about how best to minimise the risks and maximise the return from using in-line blending system within the bunker market. As a result, IBIA has formed a committee to address this topic. IBIA’s In-Line Blending Committee is preparing a concise guidance document to be published by IBIA on in-line blending of bunker fuels. The objective of the document is to provide impartial technical guidance for IBIA members who are considering the use of in-line blending for the physical supply of bunker fuels.

The guidance identifies the issues that need to be considered when selecting the most appropriate blending technology in order to meet the quality certification, operating profit and operational needs of a bunker supplier and its customers, as well as making recommendations against each consideration.

The committee formally met at the IBIA convention at Connecticut in September, where the preliminary draft of the technical guidance was discussed and the direction and content of the final document agreed. All that remains to be done is for the final amendments to be made and reviewed, after which it will be issued as a technical guide from IBIA. Given IBIA’s unique position in the bunkering market and the increasing pressure on quality, quantity and compliance certification, IBIA is considering issuing technical guides on a wider range of subjects such as sampling, analysis, and quantity measurement.

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ADDITIVES

Burning brighter

Combustion-improving additives are another option for owners looking to cut down on fuel consumption

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oth the increasing cost of fuel and the prospect of financial penalties associated with carbon emissions are leading shipowners to look at a range of measures for increasing the efficiency of their engines. While solutions such as waste heat recovery systems are effective, and can mean large savings when installed at the newbuilding stage, they are not necessarily suitable – or economic – for retrofitting. Fuel additives to improve the ignition and combustion, however, can improve performance, and thereby cut emissions, with no need for expensive modifications.

Jamie Pender, Marine Business Development Manager, EMEA region at Infineum, which produces fuel additives, told World Bunkering: “Environmental legislation and recessionary factors have brought about many challenges for the shipping market and there will be many more difficult challenges ahead. Dealing with these challenges means ensuring that every detail of shipoperation is optimised and that potentially hazardous consequences of new fuels and operation patterns are mitigated. Fuel additives can contribute towards emissions reductions, optimising fuel combustion and marine engine operations, and improving maintenance efficiencies for shipoperators.” Infineum continues to undertake tests to establish the extent to which additives can contribute to reducing shipping emissions through the simple application of robust additives, he said.

Fuel additives can also help mitigate the effects of slow steaming and the use of low-sulphur fuel, both of which can have adverse effects on engine condition and performance.

Some major shipowners are conducting their own trials into combustion improvers. MOL announced at the end of last year that it had developed a fuel additive that would improve the ignition and combustion efficiency of marine fuels, thereby reducing carbon emissions from its ships. The additive, Taicrush HD, was developed in conjunction with Taihokohzai, Japan’s largest fuel additive manufacturer. MOL announced that it would use the additive, Taicrush HD, on its operated vessels to reduce the environmental impact of its operations. MOL claims Taicrush HD improves the ignition performance and sludge dispersion in heavy fuel oils, reducing

World Bunkering Winter 2010

ignition delay and afterburning time by more than 30%. In addition, MOL and Taihokohzai verified fuel efficiency improvements ranging from 1.12% to 1.46% from data from engine tests both on shore and at sea. Operational trials were carried out on 106 voyages of a largescale Japanese coastal ferry which has a constant sailing schedule and is rarely affected by disturbance effects such as severe marine weather. Compared to conventional fuel oil additives for large-scale vessels, Taicrush promotes improved combustion and reduced fuel consumption, MOL said. Taicrush also plays a role in MOL’s concept large-scale iron ore carrier, the ISHIN-III, ensuring more effective ignition and combustion of fuel oil. MOL estimates that the use of combustion-improving fuel additives will reduce CO2 emissions by 1.5% The design showcases elements that MOL believes will play a key role in future transport, indicating that fuel additives are seen as a long-term solution for improving fuel consumption, rather than a short-term fix necessary only because engines are not currently adapted for slow steaming.

Fuel additives play a role in even the most futuristic designs

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testing

Pre-testing issue raised David Hughes looks at immediate reactions to a Norwegian/Intertanko proposal for the pre-testing of bunkers

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BIA sent out an e-mail to its members on 14 October asking for their views on a joint Norwegian government/Intertanko paper presented to IMO’s Marine Environment Protection Committee (MEPC) at its recent meeting, which raised the possibility of the mandatory pre-testing of bunkers.

The Norwegian/Intertanko paper commented on a submission

by ISO, which consisted of the revised ISO 8217 and asked MEPC to “address and discuss the need to improve proper control on marine fuels prior to being delivered to ships”. It added: “The question is whether the only retro-active assessment of fuel quality by the shipowners after the fuel is delivered to ships is adequately responding to the Committee’s aims to secure safety of ships and crews and to achieve environmental protection. In this regard, the Committee may wish to consider whether there is a need for mandatory requirements to ensure fuel oil quality prior to it being delivered to the ship.”

At MEPC IBIA made an immediate response, saying: “IBIA and its members are committed to the continuous improvement of the efficient and effective, and safe, performance of marine fuels on board ships. We are also fully supportive of any mechanism which can make a genuine contribution to safety, and to mitigate damage to the environment. However, we feel that routine quality of fuel supplied is a commercial issue between buyer and seller. Regulation should be targeted at the issues of sulphur emissions, flashpoint, H2S and any deleterious materials as covered by clause 5 of ISO 8217. The matter raised by Norway and Intertanko is not as simple as portrayed, however it may appear to members of this committee. We believe that legislation should not unduly restrict the adoption of non-traditional fuel sources which may help reduce pollution and improve the use of resources. IBIA is keen to cooperate with IMO in moving this issue to a practical solution”.

The issue has now been referred to IMO’s Bulk Liquid and Gases (BLG) subcommittee for further discussion. An IBIA Committee meeting has decided to invite comment from its membership in

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order to further develop a position on pre-testing prior to the BLG meeting.

A subsequent Intertanko Council meeting in Singapore made clear the tanker owners’ group’s determination to see mandatory pre-testing of bunkers come into force.

A statement said: “The Council has empowered Intertanko to renew its campaign for effective mandatory quality control of bunkers prior to delivery to ships, since there is currently no mandatory system to control compliance with statutory requirements.”

Intertanko is calling for control of specific criteria defining bunkers. It is seeking to: • ensure that bunkers meet contractual requirements prior to delivery; • ensure that bunker suppliers take corrective action in case of an off-spec delivery; • provide clarification on responsibility to ensure that bunkers delivered meet the criteria.

The Council was also supportive of a suggestion that bunkers should be delivered fully fit for use on board ship. Intertanko says impurities could be removed at the refinery rather than requiring the ship to do that job on board. “This,” Intertanko argues, “could help ships attain a potential zero operational pollution.”

By the time Sibcon took place there was relatively little awareness of the issue among IBIA members. However, a number of suppliers and others involved in the regulatory and testing aspects of bunkering raised doubts about the practicality of the proposals.

It did appear that Intertanko’s view was substantially based on the Singapore regulatory approach, which does not allow blending on the barge. World Bunkering asked a spokesperson for a major manufacturer of blending equipment whether the proposal would mean the end of blending on barges. He replied: “Not necessarily.”

He did, however, agree that a lot would depend on the exact wording of any new requirement.

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DNVPS managing director Tore Morten Wetterhus gave World Bunkering his detailed assessment of the proposal.

He said: “Pre-testing can be a part of the bunker supplier’s product quality assurance process, but it does not always guarantee that the fuel quality delivered to the receiving vessel will accord with the pre-testing results. The conditions of delivery pipelines as well as sampling methods and locations are among the factors which can respectively influence fuel quality and the representativeness of the fuel samples used in the pre-testing.

“If we consider the multi-party involvements in a typical bunker supply chain, oil majors may for instance sell their products to independent suppliers whose cargoes are then delivered by contracted barge operators to the receiving vessels. The quality of products pre-tested at the original source may change as they move along the supply chain, possibly because of poor ‘house-keeping’ or wilful adulteration. Should this happen, the fuel quality finally delivered to the receiving vessel will differ from that of the pre-tested products at the original source.

“Whenever cargoes ‘change hands’ in the bunker supply chain, testing the fuel samples taken at the point of custody transfer will help determine the product quality delivered and received. This may create an audit trail and add greater transparency to the supply chain, in turn pre-empting quality disagreements between any parties.

Some may argue that this proposal will add to the cost of bunker products, but realistically speaking, the extra expenses are minuscule compared to the overall value of the bunkers.

“Between the final supply party and the receiving vessel, the testing of custody transfer fuel samples is especially crucial as the receiving vessel will be consuming the delivered bunkers and therefore faces the attendant risks of operational challenges, engine

breakdowns, environmental pollution and compromises to the safety of crew and cargo on board.

“From this perspective, DNVPS does not support the sole reliance on pre-testing as an effective means of ensuring correct product quality.

“Moreover, the testing of custody transfer samples (taken at the receiving vessel’s manifold) will also manifest the receiving vessel’s accountability for the fuel quality received, especially in the event that new and on-spec bunkers received are stored in tanks containing existing quantities of bunkers of unknown quality.”

Another major figure on the fuel testing scene commented: “Pre-testing is not for the faint-hearted.”

Intertanko wants impurities removed at the refinery, not on board

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World Bunkering Winter 2010

39

A PERSONAL VIEW

Coriolis: the new black?

Jon Watson of Razaghi Meyer International presents a personal view on the development of flow meters – and why one size doesn’t fit all

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he bunker industry has been ‘instrument free’ for far too long.

Signs of the inevitable change are evident in the announcement of one shipping company taking unilateral action on quantity issues by fitting Coriolis meters on its vessels.

The news was not well received by some suppliers. There are always dangers from unilateral action; one concern was that vessels would challenge the supplier’s figures only when it was in their interest to do so, perpetuating the mutual mistrust between suppliers and vessels.

What is needed is an industry standard that delivers an equitable system, properly administered, that favours neither supplier nor shipowner, nor any one technology or manufacturer, and that deals with issues of different accounting methods reasonably.

Considering the alternatives

In its February article, ‘Entering a new Era’, World Bunkering reported on a welcome SPRING proposal to address quantity accounting. But the article implies that SPRING is likely to deliver an “any colour you like so long as it is black” solution: Coriolis meters. Sensitive regulation depends on supporting industry initiatives and in this case the supplier initiative is based on the Coriolis meter, but are other technologies to be evaluated, are there other initiatives pending?

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Any new standard ought to be such that the industry is able to choose the optimum solution for a particular application from a range of viable alternatives. It should not exclude other choices, especially if they may be better solutions in some cases.

“70% of installed flow meters are either the wrong technology or the wrong size,” says an article in Control Engineering titled ‘Flow meter selection: Right size, right design’. It isn’t saying the installed meter won’t work, except in rare cases; it is saying that it may not be the best technology for the application or that it may be wrongly sized. In an individual application this may be survivable, but if it affects an entire industry, the consequences could be serious.

It is therefore necessary to ask: “Are Coriolis meters the best choice?”

Coriolis meters may be every bit as good as people say, but there is a tendency to wrongly treat them as a universal solution.

It is this presumption that can lead to the neglect of the proper selection process and the failure to properly evaluate and compare other technologies. Coriolis may be a solution, but it is not the only solution and perhaps not even the best solution.

Choosing a technology

The way to choose a technology is to identify the key factors and evaluate each technology against them.

Fluid Viscosity

Fluid viscosity is an obvious and defining factor. We quickly reduce the range of possible technologies to just a few that are able to handle bunker fuel viscosities. This includes Coriolis meters, positive displacement (PD) meters and ultrasonic meters.

Accuracy

The industry needs an equitable standard, ie one that is fair to both supplier and vessel.

There are many examples of cross-boundary metering where different standards apply, but which is appropriate as a model?

• Domestic water meters deliver equitable

metering. The accuracy requirement of 2% is consistent with a low value product and it is not based on a single transaction but on a sequence of transactions. It factors in the lifetime performance of the meters.

• Forecourt metering (of petrol and diesel) measurement error must always be in the purchaser’s favour and thus a very tight accuracy requirement is essential to minimise the give-away of high value product.

• Fiscal metering is intended to deliver performance suitable for high value, duty payable products with optimum single transaction accuracy.

But which concept best fits bunkering?

Conventionally, mass is determined from

World Bunkering Winter 2010

the volume measured by tank dipping, the density reported in the BDN, and the temperature at which the fuel is delivered.

In the marine industry density readings are often rounded up to the nearest 0.5kg/ m3. Tank dipping is wide open to both inadvertent error and deliberate fraud but obviously, where well conducted, it has delivered an acceptable accuracy.

Taken together, the existing volume and density measurements suggest that the industry doesn’t need a full blown fiscal standard. Bunker fuel is not petrol. It isn’t taxed and it may not be desirable to be ‘taxation ready’, so what accuracy is required?

The industry might consider that a good accuracy could lie somewhere between 2% and 0.1%. SPRING is apparently suggesting 0.5% accuracy. Is this based on the industry’s needs or the capability of the chosen technology?

In fiscal applications we are not limited to a single technology: our possible technologies of Coriolis, ultrasonic and PD are all capable of delivering 0.15% accuracy but the accuracy the industry chooses need not be the best of which the best meters are capable. It may choose to permit the use of less expensive meters designed for lower accuracy. So is 0.5% too low or too high?

Operational factors

Operational factors may well be behind most wrong choices, where the meter manufacturer does not fully appreciate the application and the purchaser does not fully understand the technologies.

In bunkering we might isolate two key factors: pressure drop and air.

Pressure drop is already an issue for bunkering but consider where the industry is going: bigger vessels with larger stems and higher lifts, faster turnarounds and higher viscosities All these trends have one common consequence: they each introduce higher pressure drops.

If we rank our choices according to pressure drop, ultrasonic devices are the best because they have no more pressure drop than the pipe they replace; PD are next, but already sometimes a problem; and Coriolis have the least favourable pressure drop.

Note that I am not excluding any technology, but simply recognising that pressure drop is a factor that has to be managed.

One way to manage pressure drop is to find some suitable combination of pump size and meter size or to elevate the fuel temperatures. Already, some operators are over-sizing Coriolis meters, but does this involve unnecessary compromises or simply higher costs? And what happens if both the

World Bunkering Winter 2010

vessel and the barge have Coriolis meters?

We still have our three technologies as options, but cost is now likely to be a more significant factor in determining the optimum solution.

Dealing with the ‘cappuccino effect’

The cappuccino effect (the entrainment of lots of bubbles) and air pockets both ‘inflate’ the measured volume. Handling air pockets is a problem for all technologies and all generally have the same range of solutions. So is the cappuccino effect the real differentiator? And how can we deal with it? Remove the air? Meter the fluid with entrained air?

Getting air out of a heavy fuel oil is far from easy due to the high viscosity. This suggests that the only option is to meter the fuels with the air in them. This would eliminate ultrasonic meters, but it would still leave PD meters as an option, if there is a suitable accuracy budget.

But we should ask if this is the only solution. It is essential to understand the nature of the problem. Entrained air is not an intrinsic property of fuels. Air is introduced either inadvertently or deliberately just prior to bunkering. (It was reported that in trials in Singapore, air had to be deliberately introduced.)

Thus, there is a third option, to prevent air being introduced. In an ‘instrument free’ industry the cappuccino effect is a serious problem because it is very difficult to detect.

However, if it is detectable, then it can be prevented.

Air is very easily detected by most vibrating element sensors, including (conventional) Coriolis meters (see data plot).

The plot shown is the real time data from a digital viscometer collected as the bunker progresses. It shows both the density at 15ºC and kinematic viscosity at 50ºC and it clearly shows the difference between air entrained fuels and air free fuels. (The final section shows the effect of air blowing or pockets of air passing the sensor.)

Instantly recognisable and easily detected, it can now be dealt with by better fuel management. New operating procedures will solve the problem of poor operating practise. If the cause is poor equipment, eg fuel delivered by sparging, rather than stilling, then the solution is relatively easy and comparatively cheap. In either case, once fixed, always fixed.

Possibly a significant cause of the cappuccino effect is fraud, which depends on being undetected and profitable; once entrained air is ‘visible’, it is neither. It is probable that if entrained air Coriolis meters are used, the problem will rarely again be presented simply because the profit element has been removed.

An effective approach would be to reject any bunker where entrained air is detected.

A simple alternative, again intended to defeat fraud and encourage better fuel management, is to calculate mass based not on the BDN density value but on the online mean density measured using an EG (Entrained Gas) density meter. Either way, air due to fraud will be detected.

Note that just as the online sensor cannot report the true density and accuracy when there is air, offline measurement of samples is equally vulnerable unless samples are specially handled, eg centrifuged to remove air then remixed. Offline measure-

41

ments will give false low density and false high viscosity values, and the calculated ignition index (now a feature of the new ISO 8217 standard) will be suspect.

As quantity accounting is coming under scrutiny, is quality measurement far behind?

Maybe entrained air shouldn’t be tolerated, even if we can measure mass accurately. It would be ironic to adopt a meter standard simply because it can handle entrained air if it is later decided that entrained air should no longer be tolerated for quality assurance reasons. However, if we are going to meter the fluid with entrained air, there is more than one technology we can use.

The solution on offer at the moment is special versions of the Coriolis meters that can measure the mass of the fuel, even if at reduced accuracy.

An alternative is to use PD meters with EGA (Entrained Gas Amplifier) Density meters. The PD meter may accurately record 100m3 delivered, but the fuel volume fraction is unknown. If there is a 50:50 ratio of fuel to air and the fuel density is 950kg/m3, then this is going to contain only 475kg of fuel and not 950kg.

But if we don’t know the volume fraction or the fuel density, what then? An EGA 190X130_Edit_FA.pdf 1 11/8/10will4:59 (Entrained Gas Amplifier) densitometer

report the density as 475kg/m3 and the mass is thus calculated as 475kg (the mass of air is negligible, so in effect we have the mass of fuel) and we need to know neither the fuel density nor the volume fraction. In either case, Coriolis or PD meter, there is a necessary accuracy penalty.

It is inferred from the proposed standard that for Coriolis meters this is 0.5%. For PD meters the accuracy is the combined volume accuracy and density meter accuracy, which for the EGA densitometer is 0.5%, ie perhaps 0.6-0.7% overall.

Is 0.5% too tight a cut-off for accuracy, even if we accept metering as the necessary solution? Should we expect an accuracy that allows a lower pressure drop solution? Or if we want better accuracy, and meter choices, then entrained air cannot be acceptable.

Decision time

This is the point at which the industry needs to decide what accuracy it wants or can afford; to decide if air is a real problem or not; to decide if headloss is a serious enough issue to worry about and to start working out the costs associated with each technology choice.

The cappuccino effect is not an insoluPM ble problem and thus it is not a unique

differentiator between meter technologies.

Some may prefer to prevent air and others to manage it. If the cappuccino effect can be prevented then greater accuracy is possible, if it is needed. If it cannot, then is 0.5% a suitable compromise?

Perhaps the most important factor will be installation cost. Prevention may require some capital investment. This has to be balanced against the costs of metering air entrained fuels and those costs must include the issue of pressure drop and the future direction of the industry.

If headloss is to be minimised using larger pumps, meters, pipes or even high fuel temperatures, this will be expensive.

The optimum answers will likely be different for different operators with different bunker supply options.

The industry needs to be able to choose the best solution for the individual application. More colours than ‘black’ are needed, and if it is to be just one colour, maybe it shouldn’t be black.

The Spring 2011 Issue of World bunkering will include a feature on quantity measurement. Readers’ views would be very welcome.

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World Bunkering Winter 2010

GEoGraphical focus: AFRICA

Africa is rising

The oil market in Africa is heading for rapid expansion as business grows, says Andre Baard, managing director of SA Bunker

A

lthough Africa remains beset with many, many problems we see the continent rising from almost obscurity in terms of global trade to the future storehouse of scarce global commodities.

With initiatives by the African Union such as NEPAD (New Partnership for Africa’s Development) advocating a ‘peer review system’ to create more democratic and accountable ruling structures by Africans for Africans, hope exists for the most underdeveloped continent on the planet. For us based in Africa, our futures and destinies are intertwined with Africa, the continent with massively untapped potential. How do you have hope when faced with such great problems? You get involved and make a difference!

We are encouraged to find at a recent Oil Africa conference held in Accra that there exists a small but resolute community of market participants that want to bring about real change to the West African in-port bunker market. The conference was focused more on in-port realities since much of the offshore sector is compliant with all major IMO regulations and is a well organised and efficient market run by the major offshore bunker companies.

The movement is very much in its infancy but the vision for a more regularised in-port bunker service in ports in the Gulf of Guinea was very much top of my mind, as it was for many of the delegates attending the conference. Hot potatoes such as the ‘source of product issue’, participation of indigenous bunkering companies, and the almost routine quality or quantity issues made for a heated and emotional debate! The silver lining is that the awkward topic of doing straight-sustainable business in ports in West Africa is squarely on the table.

SA Bunkers’ methodology over the past four years as an active (and resident) trader around the continent has been to bridge the very real gap between first world expectations (our buyers) and African realities (our indigenous suppliers). This has occasionally meant some sobering conversations in some exotic locations but we

World Bunkering Winter 2010

are confident of the long-term benefit of this way of doing bunkers in Africa. By way of example, we have invited proactive indigenous companies to best-practice training in our Cape Town office, we have supported serious surveyors, and went as far as actually sourcing and supplying calibrated flow meters for one of our partners in Angola.

Besides our customers getting the best bunker solution available through our network of partners, our clients can know that the buying process is being done in a sustainable professional way. We take the opportunity to invite others attracted to the African market to be concerned with the way you buy in African ports and help in a small but profoundly meaningful way to become part of Africa’s rising.

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GEoGraphical focus: AFRICA

SA weathers the downturn World Bunkering asks two South African suppliers, SMIT Amandla Marine and Cockett Marine Oil, how the South African market is faring in the face of global downturn and West African competition.

W

hen the downturn hit shipping the two sectors to suffer most were the bulk and container segments. As James Nash, the manager of Cockett Marine Oil’s Cape Town office, points out, these happen to be the most important sectors for

South Africa.

The South African economy was, however, relatively sheltered from the global recession and this came through strongly on the domestic front. While the global shipping industry was tackling dwindling world trade volumes, credit complications, plummeting rates and surplus tonnage, South Africa’s coastal shipping by contrast remained buoyant.

Market fundamentals

Overall bunker volume growth has slowed due to global industry trends, including newbuilding cancellations and delays, scrapping of older tonnage and return of chartered vessels to owners.

SMIT Amandla Marine says the global downturn has affected the South African bunker market “a little”, adding: “Owners are very price sensitive and are topping up their vessels as opposed to stocking up.”

On prices; Mr Nash notes that after MFO prices at Durban, the country’s biggest port in terms of bunker throughput, touched over $775 a tonne in August 2008, prices went into free fall to a low of around $250 a tonne in March 2009.

SMIT notes that slow-steaming, which generates fuel savings, is another feature of the post-recession industry that has also helped rebalance market fundamentals.

Avoiding piracy en route?

While the downturn has clearly hit the South African market, is it still benefiting from vessels using the Cape route rather than Suez because of piracy? The SMIT answer to that is a simple “yes”.

44

Mr Nash is more guarded, saying: “Piracy remains a serious issue and a major concern for shipowners in the area. However, it would be very difficult to quantify the benefit seen in South Africa as a direct consequence of this activity. A complicated cost-benefit analysis must be conducted by each shipowner to determine whether such deviations can be accepted. There are a number of variables to take into consideration, such as the type of vessel, ship’s speed, value and type of cargo and crew, current bunker prices and the freight market to name but a few.”

The long way around the Cape of Good Hope , Mr Nash notes, will add about one week onto a transit from the Indian Ocean to Europe, and consequently increases fuel and labour costs. However apart from the main aim of avoiding pirate attacks, the long route has the added advantage of avoiding the “exorbitant” Suez Canal charge for passage. Shipping firms also see some relief from paying the highrisk insurance rates associated with transit through the Gulf of Aden.

The threat is continually changing, Mr Nash observes. Pirates responded to a shift in routes and since late 2008 have also been attacking ships coming out of the Mozambique channel’s northern end, which in turn forced mariners to go east of the island. Now the pirates have adapted to that tactic as well, threatening the vessels within the Mozambique channel.

Supply security

Historically, availability of supplies has been an issue in Durban and other South African ports. SMIT says that availability had been good until a recent power failure when both refineries were down.

Mr Nash remarks: “Avails at Durban are erratic as a result of supply interruptions and refinery turnarounds, both scheduled and impromptu. Shortages are more prevalent on MFO blends and less so on lighter products such as MDO and MGO. When the Enref and Sapref refineries are at full production, all grades generally have good availability. Maintenance is typically scheduled every quarter

World Bunkering Winter 2010

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and sporadic outages do occur from time to time. Richard’s Bay freight takes the majority of its product from Durban and thus when Durban is dry the same will generally apply to the bulk of Richards Bay tonnage. Cape Town product is largely ex-Calref and availability on all grades is generally very steady.

New markets

Once, South African ports were the only real option for vessels needing to bunker while taking the Cape route. Both companies agree that West African offshore bunkering is beginning to provide real competition.

Mr Nash observes: “Referring to offshore supply only, West Africa is certainly now another option for vessels traditionally calling SA ports for ‘bunkers only’. The obvious benefit offshore suppliers have over the South African market is, vessels do not need to call into the port and may therefore avoid the huge port costs involved.

The offshore market also provides RMG 380cSt and low-sulphur MGO when available, therefore offering a wider choice of products to operators. The majority of vessels calling South African ports are working cargo however, and it makes sense to take bunkers concurrently rather than making a bunker stop offshore and incurring downtime plus the possible delays and complications that are associated with this. Moreover, the prices of the bunkers in South Africa are typically cheaper than the offshore West Africa levels.

The two companies so far report different experiences regarding demand for low-sulphur fuel. SMIT says: “We have not seen any demand.” On the other hand Cockett’s manager says: “Low-sulphur fuel (max 1% IFO and 0.5% MGO) demand has trended upwards, particularly since the new ECA regulations effective from 1 July 2010.

Although ADO (500ppm) is available ex-truck at certain locations, bulk low-sulphur product is not readily available at South African ports. Domestic refineries do not have modernised desulphurisation units. Oil majors continue to monitor demand situation for LS product but any implementation of such steps still seems a few years away.”

World Bunkering Winter 2010

The two companies view the prospects for the next 12 months rather differently. SMIT says: “Depending on the price it could be a great year.”

Mr Nash is more reflective and says: “South Africa’s peak bunker volume reached approx 3 million tonnes in 2006. This coincided with record-high freight rates. With the advent of offshore supply, particularly off West Africa, volumes have decreased by approx 25% to date. Modern vessels, which can burn up to 700cSt, are limited for choice in South Africa where only max 180cSt RMF is available.

Higher viscosity product is available offshore which has further eroded SA supply.

“Cost-effective, quick and easy bunkers-only anchorage services are not currently possible in South Africa. These limiting factors will likely be offset by the significant turnaround in international trade, which is heading back toward 2006 activity levels. The SA market therefore looks set to maintain its flat curve into the next year.”

On Africa’s other markets, Mr Nash says: “The offshore East Africa market is developing now that there are two tankers that can supply RMG 380cSt, RME 180cSt and MGO. The port of Maputo in Mozambique will next year benefit from the current dredging project underway to provide more accommodating access channels, basins and berths. The project, which has an approximate completion date of March 2011, will allow the port the opportunity to handle larger vessels, and greatly enhance its attractiveness to potential port users.

As a consequence we may see a natural market driven improvement for greater bunker options in port.”

“West Africa,” Mr Nash suggests, “appears to have reached saturation point in terms of space for new physicals to enter the market. It has a very strong presence of physical suppliers with good International reputations. These offshore suppliers conform to ISO 8217: 2005 standards, unlike many of the local distributors based in minor African ports.”

47

MONDAY, 14 MARCH 2011 • FUJCON Pre-Registration • Opening Reception TUESDAY, 15 MARCH 2011 • Welcome Address • Opening Remarks by Conference Chairman • Official Opening • Keynote Addresses SESSION 1 – GLOBAL MARKET REVIEW • The Global Oil Market & Fuel Oil/Bunker Outlook East of Suez • Emission Reductions & Refinery Capacity • China – Will It Continue to be a Net Importer of Petroleum Products ?

• Port of Fujairah – Latest Developments SESSION 2 – THE BUNKER SUPPLY MARKETPLACE • Country Profiles - China - India SESSION 3 – OIL STORAGE/TERMINALS & TRANSPORTATION • Trends in Future Storage • Where Are Strategic Points of Storage and Why Fujairah Should be Counted Among Them • How Does Fujairah Compare with Other Storage Locations • State-of-the-Art Bunker Fuel Blending SESSION 4 – MARKET PRICE: BUNKER TRADING & PRICING • To Hedge or Not to Hedge – Risk Exposure & Management • Bunker Prices – Impact on an Organisation’s Preferred Trades

FUJCON 2011 CONFERENCE DINNER HOSTED BY THE GOVERNMENT OF FUJAIRAH WEDNESDAY, 16 MARCH 2011 SESSION 5 – IMO RULES & REGULATIONS • Recent Developments at IMO – Revised Marpol Annex VI & NOx Technical Code • A Regulator’s Perspective of Developments Affecting the Bunker Market • Market Based Instruments SESSION 6 – QUALITY, OPERATIONAL & TECHNICAL ISSUES • Marine Fuel Standards – The Changing Horizon • Improvements Through Fuel Management & Fuel Efficiency – Perspectives from A ShipOwner and A Classification Society • The Incidence of Fuel Contamination in Low Sulphur Fuels • The Use of Fuel Additives to Lower CO2 Emissions SESSION 7 – ENVIRONMENTAL, TECHNOLOGY & SAFETY ISSUES • Scrubbing Technology to Reduce Particulate Matter • Environmental Solutions from a Classification Society’s Viewpoint • State-of-the-Art Metering • Strategies for Maximising Your P & I in Today’s Environment • Best Management Practices to Combat Piracy in the Gulf of Aden & Somali Basin

GEoGraphical focus: Scandinavia

Is gas the future?

We look at the changing landscape for bunker supply in Scandinavia

O

ver the past year, there has been an increasing amount of discussion about the possibility of using LNG as a low-cost, low-emission alternative to residual fuel for powering ships. LNG is particularly well suited as fuel for use on regular liner services with short distances between calls, as the volume required for bunker space is much greater than that required for ships using fuel oil. For this reason, the Scandinavian region, particularly the Baltic Sea, has been seen as an ideal location for establishing the infrastructure for LNG-fuelled operations. In addition, many of the engine manufacturers and shipping companies interested in such developments are located in the region.

Sweden

The first steps are now being taken to establish an LNG bunker infrastructure. The Port of Gothenburg has been at the forefront of environmentally friendly port developments. In September 2010, it announced that it is to enter an agreement with LNG GOT, a collaboration between Swedish energy company Göteborg Energi and gas corporation Gasnor, to develop LNG infrastructure at the port. Port officials hope to begin delivering LNG as bunkers in 2013.

“Changing the fuel in large ships requires large investments. In addition to that, the vessels must be adapted to liquid natural gas, we will need a new infrastructure on land so that the gas can be delivered to ships. Our main objective is to construct a terminal which will be able to receive deliveries of liquefied natural gas for further delivery to bunker boats, which will supply the vessels,” LNG GOT said. “The vision is to be the natural choice of fuel supplier in Gothenburg. By choosing liquefied natural gas, we create a sustainable alternative fuel at sea.”

Finland

Viking Lines has announced that it intends to use LNG as fuel in a new cruiseship ordered from STX Finland to operate on the TurkuStockholm route, although the final decision has yet to be taken.

Gothernberg could be the first in a network of LNG bunker locations

World Bunkering Winter 2010

49

According to reports in the local press, Finnish company Gasum plans to build a distribution terminal for LNG in Naantali (Nådendal), to serve the vessel. According to reports in the local press, the parties are currently negotiating the terms of delivery. The goal is to have the LNG teminal completed by summer 2013, when Viking Line’s newbuilding will come into service. However, both Viking and Gasum are reported as saying that the timetable is tight.

in the commercial use of LNG as fuel. In addition to considerable environmental savings, LNG is also competitive in terms of price.

This project illustrates in practice that it is possible to comply with the environmental requirements imposed on the shipping industry and also maintain the competitive edge against established alternatives,” said Knut Arvid Fisketjøn of Nordic LNG. OW Icebunker extends range

Norway

In Norway, Sea-Cargo, a liner company sailing between Norway and the EU, have ordered two ro-ro fuelled LNG ships for delivery in 2011.

The company has signed a contract with Nordic LNG to provide fuel from the Skangass LNG facility at Risavika.

“Throughout the past few years, we, and our owners Seatrans, have expended considerable resources to realise the use of LNG as an energy source for our line vessels. LNG is clearly the green alternative of the future for the marine transport sector. It has been a challenging process, where it was important to get three issues in particular in place: class requirements (for equipping the ships), infrastructure (gas availability) and last but not least – a competitive price for gas compared with the current price of oil. The agreement with Nordic LNG has now put the last pieces in place: deliveries and competitive prices. Sea-Cargo is very proud of what has been achieved by this project – in 2011 we will start the world’s first ro-ro/ CONT-based line traffic concept with LNG as fuel,” said Ole Sævild, managing director of Sea-Cargo.

“We are very happy to have been awarded this contract in stiff competition with other suppliers. Sea-Cargo is one of the pioneers

There have also been several new developments on the more conventional bunkering scene. As cruiseships, fishing vessels, and cargoships venture further north, specialist provider OW Icebunker has extended the range of its services available in Northern Norway.

“OW Icebunker has one tanker operating in the Barents Sea and off the coast of Norway, and has access to the rest of OW Bunker’s logistics network of over 30 vessels to ensure that it can meet customers’ demands,” the company said. OW Icebunker can provide customers with products in port at Narvik, Hammersfest, Honnigsvåg and Kirkenes. It can supply all grades of fuel oil up to 380 cSt, MGO and LSFO. Bergen Bunkers moves into Oslo

Norwegian bunker trader and supplier Bergen Bunkers established BB Oslo AS, an Oslo-based subsidiary in June this year. Three brokers are now working from the Lysaker office.

Bergen Tankers has taken delivery of two newbuilding tankers in the last year. Bergen-Tank was delivered in June 2010, while Oslo-Tank was delivered in November 2009. Both tankers were built in St Petersburg.

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50

BB Oslo AS Adress: Lysaker Torg 5, 1366 Lysaker, Norway E-mail:bunkers@bb-oslo.no Phone: +47 67582180

BB Neva LLC Address: Stakhanovtsev str. 14/1, Liter A, office 413, 195196 St.Petersburg, Russia E-mail:bbspb@master.ru Phone: +7 8129646252

World Bunkering Winter 2010

GEoGraphical focus: Maldives

Downturn hits Maldives

Cautious optimism is the order of the day as the tiny Indian Ocean state weathers the storm

H

opes that the Maldives would start to realise its potential as an important Indian Ocean bunker centre during 2010 were stymied by the economic downturn.

In theory, the cluster of islands forming the Maldives is ideally placed for bunkering. Ships on the main East-West sea lanes, and using the One and a Half Degree and Eight Degree Channels, need make only small diversions to take on fuel off the islands.

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

Last year GDP contracted, with fewer tourist dollars, but continued high government spending led to a balance of payments crisis.

Also last year the IMF helped prop up the economy with a $79.3 million standby agreement. Now there is a feeling of cautious optimism in The Maldives that the worst may be over.

The fortunes of the small local bunker industry have followed those of the wider national economy.

The main business has been supplying domestic vessels, super yachts and cruise ships, as well as visiting warships. The decade up to 2009 saw considerable optimism and expansion but the past 18 months have been particularly difficult.

Mohamed Hameed, ceo of Antrac Maldives, comments: “The Maldives’ economy has taken a big hit as a result of the global

World Bunkering Winter 2010

economic crisis. The local bunker market has also been severely affected. Business has dropped a lot and now we can only see it picking up again slowly.”

He says port agency and bunker supplier Antrac attends over 500 vessels, more than 75% of the total number calling at the country’s ports every year. The company imports, stores and physically supplies MGO/MDO using its own barges and pipelines.

He continues: “For the future we are planning to build a berth so that vessels of up to 15,000 dwt can take fuel alongside the wharf.

In the same area we plan to provide an additional 10 million litres of fuel storage where small vessels can take fuel. This project will be completed by 2012.”

In the past, IFO has been supplied but Mr Hameed explains: “We have only MGO/MDO here in Maldives at the moment.” The lack of residual fuel tells its own story about the success of attempts to capture the massive potential trade from commercial ships crossing the Indian Ocean.

Another supplier with major plans is Fuel Supplies Maldives, a joint venture between State Trading Organisation (STO) and the Maldives National Oil Company (MNOC). Last year the company’s managing director, Ahmed Muneez, said the Maldives could compete with Sri Lanka as a bunker centre. He said that MNOC was planning a 6 million cu m onshore oil terminal. About a quarter of the terminal’s capacity could be used for bunkers.

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

51

Maldives/barge design

Small is beautiful too

To meet local requirements the latest bunker barge to operate in the Maldives is very small, but designed specifically for her operating area

I

n recent years, the definite trend worldwide has been towards larger bunker barges for a number of very good reasons, such as the need to carry different grades and the simple fact that the ‘customers’ – the ships taking on fuel – are getting bigger.

That move towards larger vessels has been reflected in the barges featured in World Bunkering in this occasional series of barge design features. This time, however, we are putting the spotlight on a positively tiny vessel, the Hais 1, which has just entered service in the Maldives.

Mohamed Hameed, ceo of Antrac Maldives, says that the company started planning for a new vessel early last year. The size of the barge was the result of operational constraints. It will have to operate within the inner harbours of the Indian Ocean island nation.

Hais

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Local designer and builder, NS Engineering, came up with a twin screw, 160 gt, 30-metre long vessel with a 10-metre beam and a draft of 3.4 metres. The barge has two Caterpillar 255 hp main engines.

The Hais 1 will carry only MGO and take fuel to the tourist resorts around the islands of the Maldives as well as super yachts and local and foreign commercial vessels. It has a cargo capacity of 180,000 litres in eight tanks, and a Roper cargo pump with a 1,000 litre per minute capacity.

This barge will operate only in Maldives waters and so has been built to Maldives Transport Authority requirements but conforms to international regulations. It will be manned by a minimum of five crew.

Although the barge is well below the size limit for mandatory double-hulls, Antrac decided to specify a double bottom in the design, making Hais 1 the first double-bottomed bunker barge built in the Maldives.

Mr Hameed says: “Yes, we know she is below the size limit for requiring a double bottom, but we decided to specify this feature since we are planning for the barge to be in operation for a long time, and we think things may change in the future. Also, this is the safest option for our sensitive environment if something goes wrong.” NS Engineering has built smaller bunker barges, all single-hulled.

The delivery of the Hais 1 coincides with a downturn in the Maldives’ bunker business but Mr Hameed says: “We have no worries about bringing this barge into operation, on time and within budget.”

World Bunkering Winter 2010

Russian update

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

St Petersburg retains market lead

St Petersburg traditionally occupies the leading position in the Russian bunkering market. In 2009, total sales reached 1.7 million tonnes, more than 35% of the whole Russian market. This figure is expected to grow by 10% this year. Statistics for the first six months and an increasing port turnover trend confirm this forecast. In addition, St Petersburg is a highly seasonal market, with peak fuel sales usually occurring during summer, due to the increased number of passenger vessel and cruiseship calls. Many of these calls – and the market growth they represent – will not be included in the first half figures.

During the first half of 2010 the total amount of bunker fuel sales at St Petersburg reached 794,000 tonnes, including 714,000 tonnes of heavy fuel oil and 79,500 tonnes of light fuel.

Currently, St Petersburg can boast 26 bunkering companies. Five market leaders were responsible for 67% of fuel sales, while another 19 operators accounted for the remainder. As in 2009, Lukoil-Bunker remains the leading bunker company, with sales of 152,342 tonnes (19% of the market) in the first half of the year. Gazpromneft Marine Bunker followed with 147,782 tonnes (about 19% of the market).

The third place was occupied by Nevsky Mazut, with sales of 91,602 tonnes (12% of the market); the company was only the fourth supplier in terms of quantity in the previous year. Baltic Fuel Company had sales of 69,951 tonnes (9% of the market), and Baltic Bunkering Company was slightly behind with sales of 65,279 tonnes (8% of the market).

Bunkering in St Petersburg is still cheaper than in other European and Russian ports. During the past six months prices for IFO-380 have remained at practically at the same level as in 2009 and stayed within the range of $340-350 per tonne. The average price for IFO-180 is $360-370 per tonne, while diesel fuel has sold within a range of $520-$655 per tonne. Low-sulphur fuel sold at St Petersburg attracted a premium of $20-50.

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Olga Bogacheva

Approximately 40% of fuel is supplied from Omsk Refinery and 15% from Uztinsky Refinery. Other large suppliers are the Samara Refinery group and the Mariysky Refinery. Some bunker companies also offer products from Yaroslavl, Moscow, Achinsky and other refineries.

St Petersburg saw strong port growth during the first part of the year, with turnover from January-September 2010 increasing by 14.85% against the similar period last year, reaching 42.55 million tonnes. The transhipment of bulk oil products increased by 1%, up to 12,164 million tonnes, although turnover decreased in some dry bulk areas. Container turnover increased to 1,380,520 TEU, an increase of 47% over the first nine months of the previous year.

26 bunkering companies operate in St Petersburg

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Oil loading terminal under construction in Ust-Luga

Turnover at Ust-Luga port grew the most rapidly of all the Baltic ports in the first half of 2010. According to reports from Klaipeda port administration, transhipment in Ust-Luga increased by 30%, against increases of 16.5% in Tallinn, 16.7% in St Petersburg and 14.5% in Klaipeda. Total throughput reached 5.68 million tonnes, including 4.21 million tonnes of coal and coke, and 451,000 tonnes of general cargo – an increase of 76% over last year.

According to Tiit Vyahi, Estonian ex-prime minister, “Ust-Luga port has received generous investment over the last three years, and is therefore developing more rapidly than Estonian ports”.

This statement is confirmed by port statistics for the first eight months of the year, showing that transhipment in July-August of 2010 increased to 7.40 million tonnes.

Six terminals are in now operation at Ust-Luga. These include the coal transhipment complex, general cargo complex, sulphur loading terminal, ferry complex for automobiles and railway carriages, the Yug-2 multi-purpose transhipment complex, and the Factor timber terminal. The oil loading terminal is expected to start operations in 2011. This complex is a part of the Baltic Pipeline System-2, and is expected to become one of the largest oil loading terminals in Russia. The terminal will have capacity of up to 30 million tonnes, and is intended for the storage and transhipment of crude oil, diesel fuel, fuel oil, petrol and gas condensate. The project is managed by Rosneftbunker, which is a subsidiary of Kompania Ust-Luga, and will run the terminal after construction has been completed.

Annual port throughput is expected to exceed 100 million tonnes by 2015. To implement the program, Ust-Luga administration needs to perform heavy dredging works. Dredging of the oil loading terminal, oil products terminal and bunkering complex is expected to be completed by the end of 2010. Construction of the second 18 metre deep seaway canal is planned for 2011. All these works are financed by the federal budget. According to Ust-Luga’s general

director, Maxim Shirokiy, the port will be able to provide services to large capacity vessels operating in the Baltic Sea and Danish Straits, up to and including 160,000 dwt tankers.

Ecoshelf wins Baltic safety contract

Ecoshelf-Baltica has won the bid to provide emergency response and oil spill response services for Lukoil at its distribution and loading complex RPK-Vysotsk LUKOIL II in the Leningrad region. The contract was awarded on 20 September, and will be valid for one year, according to an announcement on the company’s website.

Ecoshelf-Baltica is a professional rescue organisation specialising in oil spill response in the Baltic Sea and Russian inland waters.

Ecoshelf-Baltica has been under contract to RPK-Vysotsk LUKOIL II since commissioning operations began at the terminal in 2003.

RPK-Vysotsk LUKOIL II is one of Lukoil’s major export bases, and in 2009 it dispatched 13.9 million tonnes of oil products.

Lukoil offers bunkering at Baltiisk

The Kaliningrad branch of Lukoil-Bunker has started bunkering operations in Baltiisk Port in the Kaliningrad region. The company offers all types of fuel oil, including low-sulphur fuel and diesel fuel.

The first operation was the bunkering of the Ice Bird refrigerated carrier in August 2010.

Navi bunkering tanker starts operations in Constanta

Lukoil subsidiary company Lukoil-Bulgaria Bunker has launched physical bunkering operations in Constanţa, Romania, providing fuel oil and diesel for vessels calling at Constanţa Port. Bunkering is provided by the bunker barge Navi (formerly Unicom Energy), which the company bought and repaired. The vessel started operations in October 2010, and will provide services on the Bulgaria-Romania shoulder.

Lukoil-Bulgaria Bunker has now achieved its target of supplying 2,000 tonnes per month on the lower Danube River, 61 miles from

Port throughput at Ust-Luga is set to grow dramatically

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the estuary. Gas oil is provided from two barges, each with a capacity of 1,000 tonnes. The first bunkering operation was performed in August 2010.

Istanbul service extended

Lukoil-Bunker Istanbul Ihrakiye is to expand its fuel oil supply operations with the addition of two new bunker barges in Istanbul. The vessels are expected to start operation in October-November 2010.

Currently, Lukoil-Bunker Istanbul Ihrakiye sells up to 15,000 tonnes of light and heavy fuel monthly. The company also intends to expand its operations to other Turkish ports.

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Lukoil-Bunker Italy moves into Sicily

Lukoil-Bunker Italy started operations in the port of Augusta, Sicily, in August 2010. It currently supplies MGO 0.1% and IFO 380 from chartered vessels. The fuel is supplied from ISAB refinery facilities, which have an annual capacity of 14-18 million tonnes, and are 40% owned

by Lukoil. Oil and oil products are delivered to Sicily by tanker. The company plans to expand bunkering services to other Italian ports.

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Four new members for RAMRBS

The Russian Association of Marine and River Bunker Suppliers held its Russian update most recent board meeting on 23 September 2010. Four companies had applied for membership: TNP Bunker (Kazan), Transneft-Service (Novorossiysk), Trans Oil Service (Novorossiysk), and EKOTek (St Petersburg). The Board of Association approved all four applications • TNP Bunker is a subsidiary of Tannnefteproduct Holding Company. It was founded in 2006. The company supplies heavy fuel oil, MGO and diesel in Yaroslavl, Kazan, Volgograd, Chistopol, Samara, and Rostov-on-Don. TNP Bunker owns 16 vessels, including oil tankers with a capacity of 550 tonnes, four self-propelled fuel vessels, and fuel oil barges with capacity of up to 2,250 tonnes. There are also several storage facilities in Yaroslavl, Kazan, Volgograd and Rostov-on-Don, with capacities from 1,200 to 3,200 tonnes.

• Transneft-Service was established in 2007. Its major activities include: wholesale oil trading; loading oil and oil products for both Russian use and for export; export transhipment services; and ship agency in Novorossiysk Port. Transneft-Service operates in Novorossiysk, Odessa, St Petersburg, Primorsk, and Kozmino ports and in Kerch Strait. The company owns the 6,400 dwt bunkering barge Ophelia, which operates in Primorsk and St Petersburg, and the 3,850 dwt Orion, which operates in Novorossiysk. The company also provides bunkering services at Sheskaris oil terminal berth in Novorossiysk.

• Trans Oil Service was founded in 1995 to offer bunkering services in Novorossiysk. It owns the bunker tanker Melany.

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• EKOTek was established in 2005. It provides a range of services,

including the manufacture, transhipment, and storage of oil products, wholesale trading, and bunkering services. The company operates in St Petersburg and Ust-Luga ports. It owns the 1,300 dwt tanker Amur, and a personnel launch, Tsaritsa Alexandra.

EKOTek has taken long-term rent of an oil storage facility with a capacity of 7,000 tonnes.

Contour Group orders four

Contour LLC has placed an order with JSC Baltic Shipyard for four non-self steering oil barges, according to reports in Russian PortNews.

The barges, which have a capacity of some 6,300 dwt, are designed for transportation of petroleum products with flash point above 60° C, including those requiring heating. The vessels will navigate on inland waterways and in marine areas, and are classed for operation in ice of up to 20cm thick.

All four barges have reinforced double-bottomed, double-sided hulls in the areas of the 12 cargo tanks, and are built in compliance with modern standards, rules and regulations of the commercial shipbuilding industry under the supervision of the Russian River Register, the company said.

St. Petersburg-based Baltic Shipyard is the largest shipbuilder in Russia. The company specializes in the construction of icebreakers and ice-class vessels with nuclear and diesel power plants, largecapacity vessels for transportation of various cargo and warships.

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Russian update

New tankers for Gazpromneft

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azpromneft Marine Bunker has purchased a bunker tanker for operations in St Petersburg, and closed a deal for a second tanker for operations in Murmansk, reports Russia Portnews.

The bunker tanker intended for St Petersburg has a capacity of some 4,500 tons, and is built in line with MARPOL regulations, said Andrey Vasilyev, ceo of Gazpromneft Marine Bunkers. The tanker was renamed Gazprom Neft-Zuid and will operate in the waters of the Big Port of St Petersburg.

“This ship has double sides and double bottom. She complies completely with environmental requirements of the international MARPOL Convention. This ice-class tanker runs on fuel oil, which makes its operation very effective,” Mr Vasilyev said.

A similar vessel was purchased in early November 2010. The second bunker tanker will be named Gazpromneft-Nord and will supply bunker fuel at the port of Murmansk. “ Both tankers are built to the same design as the bunker ships we have acquired previously; Gazpromneft-West, which operates at the port of Novorossiysk, and Gazprom Neft-East in St Petersburg, but they have greater capacity,” said Mr Vasilyev.

The new acquisitions bring Gazpromneft Marine Bunker’s fleet to 10 tankers.

“All of them meet requirements of MARPOL Convention,” said Vasilyev. He added that his company was well prepared for new regulations which come into force in 2011. Under these rules, singlehull bunker tankers will no longer be permitted to operate in Russian ports. It is estimated that Russia has a single-hull bunker tanker fleet of some 600,000 dwt.

Gazpromneft Marine Bunker is a subsidiary of Gazprom Neft, which supplies bunker fuel to marine and river vessels. The company was founded in October 2007. Gazpromneft Shipping is the operator of Gazpromneft Marine Bunker’s fleet.

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World Bunkering Winter 2010

16th INTERNATIONAL EXHIBITION & CONFERENCE FOR TRANSPORT AND LOGISTICS

www.transrussia.ru/eng

TRANSRUSSIA 26–29 APRIL 2011 EXPOCENTRE • MOSCOW • RUSSIA

Official Support •

Ministry of Transport of Russia (incl. railway, road, sea/river and air transport agencies)

•

Federal Customs Agency of Russia

•

JSC Russian Railways

•

Freight Forwarders' Association of Russia

•

EuroAsian Transport Union

•

The Guild of Freight Forwarders

Enquiries Julia Wocka-Gowda, Senior Event Manager T: +44 (0) 207 596 5188 E: julia.gowda@ite-exhibitions.com

TransRussia moves to

a larger pavilion in 2011

REVIEw – sibcon

Challenges and options David Hughes reports on Singapore’s bi-annual bunkering talkfest

T

here can be no doubt that the Singapore International Bunkering Conference and Exhibition (Sibcon) continues to be a remarkable success story. This October’s event was the 16th Sibcon and was attended by over 1,100 delegates.

MPA supports metering development

As usual, the Maritime and Port Authority of Singapore (MPA) made full use of Sibcon to highlight policy initiatives. The centrepiece was an announcement by Minister for Transport and Second Minister for Foreign Affairs, Raymond Lim, that it will set aside Sing$1million (US$0.8 million) from the country’s Maritime Innovation and Technology Fund to support research into mass flow metering.

Trials of Coriolis meters have been underway for some time under the auspices of the Singapore Working Group on Mass Flow Metering, consisting of MPA, SPRING Singapore (the national standards body) and key industry representatives.

Singapore clearly sees mass flow metering as the future. Partly of course this is because a more accurate measurement system is a natural progression for the MPA, which has pioneered the development of bunkering standards. There is another practical reason, however. Working group convenor Seah Khen Hee told delegates that the new measuring technology could help increase Singapore’s bunkering capacity by one-and-a-half to two times by allowing faster turnaround and shorter port stays for ships. Administrative costs should also be reduced.

The MPA, which will draft a national standard on the application of mass flow metering, should have been pleased by the debate and the general support for adopting the new technology.

Multimedia bunkering guide launched

During the opening ceremony Mr Lim also launched an interactive multimedia guide for bunkering developed by MPA. The guide is intended to serve as a training and educational tool for the thousands of local and foreign officers involved in bunker delivery in Singapore.

The MPA said: “Strategically, by enhancing the knowledge of bunker-

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ing professionals in Singapore, [the guide will] allow the bunker industry to innovate and explore new possibilities for the future.”

IBIA has been closely involved in training developments at Singapore and, together with BIMCO, also used Sibcon to launch a new bunkering guide designed primarily for use by ships’ crew.

Without stealing the MPA’s thunder, BIMCO Asia Liaison Officer Thomas Timlen, and IBIA Chief Executive Ian Adams used the margins of the conference to release the BIMCO and IBIA Bunkering Guide to delegates in Singapore.

Environmental concerns dominate

However, Sibcon’s main theme this year was Forging Ahead – a New Era for Marine Fuels and there was little doubt from the presentations given over the two days that the new era will be defined by environmental considerations Mr Lim told delegates: “As the global economy gradually recovers from the financial crisis, the bunkering industry is presented with new challenges as well as opportunities. Key among them is the need to deal with the issue of environmental protection and climate change.

I encourage you to use this opportunity to discuss how the industry can develop innovative solutions while still promoting growth, just as it has successfully done in the past.”

The MPA was keen to stress it was using Sibcon as a sounding board to gauge industry opinion on potential innovations. It said in a statement: “The results of the dialogue will allow marine fuel industry leaders to assess the adoption of cleaner alternatives to current marine fuels in the near future.”

Sibcon took place as the industry debate on exactly what is meant by “cleaner alternatives to current marine fuels” continued. Some in the industry clearly now take the view that the future is either distillates or LNG and that was reflected in several presentations.

So Vincent Chong, global director of ExxonMobil Marine Fuels, did everybody a service. He split his address into two. The second half was on measurement integrity and added to the mass flow meter discussion. The first part of Mr Chong’s presentation was definitely the most significant of the conference.

World Bunkering Winter 2010

jeopardised even with a much lower flashpoint.

At a press conference, Mr Lindegaard stressed that safety must not be compromised but pointed out that there could be the possibility of increasing the pool of distillate available to shipping.

Minister Lim reminded delegates that the MPA is about to embark on a joint industry project led by DNV Technology Centre to assess the commercial viability of LNG. He said: “With its low-sulphur content and abundant availability, LNG could be used for short sea hauls and it also presents potential business opportunities for LNG bunkering in the Port of Singapore.”

CSNOx scrubbers attract interest

He set out very clearly the challenges facing the industry as a result of the increasingly strict controls on sulphur content and offered a common sense approach to dealing with them.

Mr Chong stressed just how much global demand for distillate fuel is likely to grow. He expected demand to surge by 50% by 2030 once the global bunker fuel sulphur cap has been cut to 0.50%.

He told delegates: “At this low-sulphur level, distillate or distillate fuel oil blends will be the primary fuel source. This represents a major increase in distillate demand, a product that has expected high growth even without the marine fuel growth.”

However, he qualified this by running through the options available to the industry, including LNG and abatement technology. He made the point that using heavy fuel in conjunction with scrubbers would have advantages in terms of reducing greenhouse gases since producing distillates increases carbon dioxide (CO2) production by between 3% and 10% compared to burning heavy fuel oil on the ship. Overall Mr Chong emphasised the need for an ‘solution’ making use of all the options available.

Another speaker, AP Moller–Maersk group vice president NielsHenrik Lindegard, had earlier raised an issue regarding distillates which is likely to become the subject of increasing interest. He asked whether the 60 deg flashpoint limit for marine diesel was necessary, given that a much lower flashpoint was allowed for diesel used ashore. That drew an intervention from the floor by Wanda Fabriek who was also the convenor of session on ISO 8217. She said that tests had been carried out and it appeared that safety might not be

World Bunkering Winter 2010

On the subject of the greenhouse gases, and CO2 in particular, delegates had an update on what is increasingly looking like a major Singapore-originated technical break through.

Tadic Tonci, director of environmental strategy for Zodiac Maritime Agencies, was due to present a report on trials of the Ecospec CSNOx system on a Singapore-flag tanker, the White Sea. Unfortunately, Mr Tonci was called away overseas and it fell to Ecospec general manager Tany Tay to present his paper.

The trials process is still not complete but it appears that it will be finished by the end of the year. The system so far seems to be working well on the White Sea and has certainly generated a lot of interest from foreign owners. Engine manufacturer Wartsila has signed a collaboration deal with Ecospec, despite producing its own scrubber.

The reason for all the excitement is of course that the CSNOx system is claimed to not only solve the sulphur and nitrogen oxide issues, which are the subject of current Marpol Annex VI regulations, but also to remove a high proportion of the CO2 from ship emissions.

Once type approval is obtained, Singapore will have an innovation that has applications going way beyond the maritime industries.

Revisiting the sulphur issue

The emissions issue was given the final panel session of the conference and it says something about industry’s attention to this issue that the convenor, IBIA’s Ian Adams, looked out on a still impressively full conference hall.

The panel comprised Norwegian Ministry of Environment senior adviser Sveinung Oftedal, Danish Maritime Authority deputy director general Christian Breinholt, Thome Ship Management managing director Bjorn Hojgaard, Intertanko regional manager Tim Wilkins, SEAaT (Shipping Emissions Abatement and Trading) secretary general John Aitken and Andreas Chrysostomou At the end of a wide-ranging discussion Mr Adams asked the panel: “Given what we have heard at the conference and given the importance of climate change should we revisit the sulphur limits?” He asked for one-word answers: “Yes”, “No” or “Maybe”.

Mr Chrysostomou abstained while the rest said “No” except for Mr Aitken, who was a “Maybe”, and Mr Wilkins who said he wanted to be asked again in a few years time!

Sibcon was, as ever, as much about networking as the actual conference and exhibition, and this aspect was clearly important to the large number of speakers and delegates who travelled to Singapore for the event. It was pretty much a gathering of the global industry. The venue was the new and mind-blowing Resorts World Sentosa, which added to the buzz of an extremely busy social scene surrounding a workmanlike industry event. Roll on Sibcon 2012.

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legal news

Crunch time

Carel Baron van Lynden of law firm AKD looks at what the credit crisis means for bunker claims

A

lthough the credit crisis would seem to be easing, and with it the fear of a double-dip recession, still the economic picture is far from encouraging. In shipping, for example, the boom years seem a long way off now, and further overcapacity is looming in several sectors.

To date, not many shipowners have gone bankrupt, but in most cases this is simply because the ship finance banks have been reluctant to foreclose. At the same time, the number of shipowners in default is staggering, either because of breaches of loan-to-value ratios as ship values go down, or through an inability to repay principal and interest on time, or for still other reasons.

The big difference between now and the last comparable economic crisis, in the 1980s, is that today there are hardly any buyers.

In such a market, foreclosure would lead to rock-bottom prices. And because of low freight rates, charterers are also encontering difficulties, and a number have gone out of business.

The bunker market, of course, cannot escape the consequences of these financial difficulties, either. Bunker suppliers still in many instances sell on 15 or 30 days’ credit terms. Where shipowners or charterers are short of cash, they may easily be tempted (or forced) to delay paying their suppliers or else advance reasons for not paying at all, such as non-conformity of the product supplied. And, in the event of bankruptcy or Chapter XI or similar, the chances of recovery become much slimmer.

How can suppliers protect themselves?

However, there are measures which suppliers can take to strengthen their position, other than through pre-payment. To start with, a good contract with good conditions of sale is required. Under such a contract or conditions, a number of issues can be dealt with which protect the position of the supplier.

Firstly, though, the applicable law and jurisdiction must be fully understood. Shipping is a very international business by nature, and it is wise to achieve clarity at the outset in respect of the law which applies to the contractual relationship between the supplier and the buyer. Where this has not been clearly defined, disputes as to the

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applicable law may arise later. The question of forum (which court in which country will have jurisdiction, or arbitration in which country) and of enforceability of judgements or awards is also of great importance. Clear contractual provisions in this respect are essential.

Bunker suppliers may be able to benefit from the legal systems in other countries.

World Bunkering Winter 2010

Issues involving contracts or conditions can include retention of title (the bunkers remain the property of the supplier until paid), short claim periods (to avoid late and fabricated defences that bunkers are off-spec), non-set-off clauses (to avoid set-off with a fabricated claim) and others. In all such cases, however, the ship will have left the port and the bunkers may have been used.

Can arrest help?

When the bunkers have been ordered by the owners, it may be possibe to arrest the ship in the event that payment is not made.

Of course, it then remains to be seen whether this helps, given that the mortgagee may come first when it comes to getting money out of the value of the ship. The ship may also have been sold in the meantime. But an arrest will put immediate pressure on all parties involved, including charterers and owners, and can be a good method of getting security or even payment for a claim.

When the bunkers have been ordered by the timecharterers, however, the position is quite different. The usual method of addressing the invoice “to owners and/or charterers and/or managers…” will not really help. One cannot change a legal relationship by a mere invoice. The general rule under almost every legal system is that a contractual claim, such as one for the sale of bunkers, is a claim “in personam”, against a particular person (ie the contractual buyer).

This means that the buyer is liable with its whole estate (including ships), but only that buyer and its estate, not third parties.

Thus, under many systems of law, a claim for the supply of bunkers to a time-charterer cannot be enforced against the ship.

In the event that the timecharterer goes bankrupt, and the estate does not cover the claims, the supplier will end up empty-handed.

ADDAX BUNKERING SERVICES ALBA PETROLEUM LTD BALTIC FUEL COMPANY BERGEN BUNKERS AS C-FUELS AMERICA INC CEA BUNKER PTE LTD GAZPROMNEFT MARINE BUNKER GLOBAL VISION BUNKERS INFINEUM UK LTD JISKOOT LTD JSC BUKER COMPANY LEV LTD LUKOI BENELUX BV LUKOIL-BULGARIA BUNKER LTD

But, because of the existence of different systems of law, there may nevertheless be ways to proceed against the ship in a particular jurisdiction. In this respect, an important question is whether a claim for bunker supplies creates a ‘maritime lien’, or whether such claim has ‘droit de suite’ (follows the ship).

Under certain systems of law – generally speaking, the system in common law countries and in certain civil law countries – a claim for ‘necessities’ such as bunkers is recoverable against the ship to which the bunkers have been supplied. This may be the case generally, or only under certain circumstances (eg when the order to supply has come from the master). Also, these rights usually have a short lifespan, for example six months. To avoid such recovery rights against the ship, charterparties commonly contain “no lien clauses”, but a supplier is not party to a charter and so this has only limited effect.

Another attempt to avoid these rights involves ships’ personnel being instructed to stamp bunker delivery receipts (BDNs) with clauses stipulating that the bunkers are not for the account of the ship – at the same time, however, BDNs often contain a clause specifying that any remarks thereon will be without effect; and, quite as often, the BDN comes from a physical supplier who is not the contractual supplier. That defence is therefore of limited use.

Thus, arrest of the ship to which bunkers were supplied may well be possible. Although there may be cases where nothing can be done, suppliers should not give up too easily. There may be more possibilities than they think. But they must act quickly, and will help their own case by making sure that the contract is as good as possible and contains clauses which will help them if the worst comes to the worst.

LUKOIL-BUNKER ITALY SRL MARINE BUSINESS DV NEFTEHIM LTD O W BUNKER GROUP AS OIL MARKETING & TRADING PETROLEOS DE PORTUGAL PUMANGOL ENERGY BUNKERING LLC RN-BUNKER SHELL EASTERN PETROLEUM (PTE) LTD SMIT AMANDALA MARINE (PTY) LTD SOLARC INC SOUTH AFRICAN BUNERING & TRDING TRANSOIL BNKER

For more information on these companies and to view this publication online using the innovative Page-Turning technology, visit: World Bunkering Winter 2010 www.worldbunkering.com

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Equipment & services

Equipment & services

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

LS pump wear causes increasing concern

Allweiler, a provider of marine pumps to the shipping industry, has warned that increasing use of LS fuels, and frequent swapping between low and high sulphur, is leading to rapid deterioration of fuel service pumps.

When BW Gas overhauled a low-performing fuel service pump, it discovered high wear on pump elements. BW Gas concludes that, while the use of 0.1% sulphur marine gas oil was a contributing factor to the increased wear rate on the pump, it was clear that other factors also played a significant role.

“Today we have a lot more knowledge about the effects of low-sulphur content diesel fuels,” says Christian Martin, Business Development & Marketing, Allweiler. “Some vessels, depending on areas of operation, are more affected than others,” says Martin.

The majority of pump problems occur on vessels in global operation which have to switch fuels as they enter ECA zones. “When two different fuels are mixed there is a risk of incompatibility, which may cause clogging of fuel filters and separator, sticking of fuel injection pumps and considerable pump deterioration,” he says.

Allweiler confirms that several major shipowners operating in the deep-sea trade are facing major overhauls or full pump replacements.

The main concern is low viscosity levels when operating with lowsulphur diesel fuels.

Martin explains: “When switching from HFO to diesel, oil temperatures must drop from 150 degrees to 40 degrees. This process is extremely difficult to manage, due to the resulting low viscosity of diesel caused by too high temperatures. Or the very high viscosity HFO levels caused by too low temperatures.”

Extremely low-sulphur content and consequent low viscosity levels have a strong impact on fuel injection and pump/valve lubrication. Pumps must be capable of handling low viscosity fuels while retaining the required pressures and capacities.

Allweiler is experiencing an increased demand by shipowners for technical evaluations and modification recommendations of existing pumps. “Compared to the past, today’s fuel oil pumps encounter new operational conditions. Shipowners are in doubt about the

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effects of low-sulphur content diesel fuels and the limits that pumps can handle, especially when exposed to mixed fuels,” says Martin.

“Optimal pump performance depends on the type of materials used to construct the pump, which must be appropriate for the liquid’s chemical and physical properties, operational conditions, such as pressure, speed, temperature, and the areas of operation.”

Lubmarine launches new LS luboil

Marine lubricants supplier, TOTAL Lubmarine, launched what it claims is a revolutionary cylinder oil at SMM 2010. Talusia Universal is designed to solve engine wear problems encountered by owners and operators in meeting regulatory and environmental requirements relating to sulphur limits.

“Lubricants have not always been top of the priority list for shipowners. But this is changing. In the current economic climate, shipoperators simply cannot afford to ignore any potential cost savings that can easily be made,” said Patrick Havil, global marketing manager of Lubmarine. “In the current legislative climate, shipoperators are forced to face issues arising from the need to operate within Emission Control Areas (ECAs). They must also, above all else, observe the highest standards of safety in order to protect both their workforce and the environment.

“When the difficulties of operating in ECAs are raised, we often hear about the challenges involved in switching fuels,” Havil continues. “What is often not mentioned is the fact that shipoperators also face similar challenges in terms of lubricant switching. Talusia Universal has been the only lubricant on the market until now which can be used with fuel of all sulphur contents, meaning that the need to switch lubricants when moving in and out of an ECA is completely removed.”

Lubmarine undertook a specific test with a MAN engine on a containership running continuously on a fuel containing less than 1% sulphur for 4,200 hours, and MAN certified that the results were good. It is believed that Talusia Universal is the only lubricant to have achieved a successful field test over more than 4,000 hours with an HFO containing less than 1% sulphur. This was achieved with a feed

World Bunkering Winter 2010

The Wärtsilä Marine ECC will improve energy efficiency and reduce fuel consumption, thereby reducing both operating costs and exhaust emissions

rate of 0.60 g/kWh, the lowest figure recommended by MAN. Havil also outlined Lubmarine’s progress with the next incarnation of the new generation of lubricants, including a universal oil for the 2015 market that will give optimum assured performance from the highest sulphur content HFOs right down to less than 0.1% sulphur content fuels, and a range of biodegradable lubricants.

Martek launches exhaust monitoring system

Martek Marine has recently launched a monitoring system that measures the density of the smoke being emitted by a vessel to prove compliance with new stringent regional rules against ships exhausting black smoke within sight of shore.

The system, known as ‘Vigilant’, uses a transmitter and a receiver on either side of the ship’s funnel to measure the density of the smoke and grade the results in terms of the Ringelmann Scale. It is suitable for use on either auxiliary or main diesel engines, and can be connected to a PC, where full data logging and alarm summaries can be recorded for historical use.

Wärtsilä introduces ORC technology

Wärtsilä has signed an exclusive agreement with Italy-based company Turboden to jointly develop, market, and distribute the Wärtsilä Marine Engine Combined Cycle (ECC) product. Marine ECC uses Organic Rankine Cycle (ORC) technology to improve energy efficiency and reduce fuel consumption, thereby cutting both operating costs and exhaust emissions. The joint development work will initially focus on applying the ORC technology for ship applications, and the Wärtsilä Marine ECC product is expected to enter the market during 2011.

The Wärtsilä Marine ECC provides a means of obtaining an efficient and reliable small-scale combined cycle system from the otherwise wasted energy recovered from downstream exhaust gas, and/or from the high-temperature cooling water of reciprocating

World Bunkering Winter 2010

engines. This could provide added power in the range of 8% to 12% to the prime mover. Typical sizes range from hundreds to several thousand kWe. At the same time, and as a direct result, exhaust gas emissions are lowered and this too aids the operator in meeting increasingly stringent environmental regulations. With the Marine ECC in operation, fuel oil consumption is significantly lowered, which in turn provides the operator with reduced operating expenses.

“Because of high fuel prices and the need to reduce emissions, improving energy efficiency is today a matter of great importance to our customers. The Marine ECC will benefit both the customer and the environment, and is, therefore, completely in line with Wärtsilä’s strategy,” says Juha Kytölä, vice president, Product Centre Ecotech, Wärtsilä.

The Rankine Cycle is a thermodynamic cycle that converts heat into work energy. Water is the most commonly used working fluid in Rankine Cycle systems, which generate the majority of the electricity used throughout the world. The ORC, on the other hand, can operate using various organic fluids to utilise the waste heat from exhaust gas, and from lower grade heat sources such as high-temperature cooling water.

While the ORC is already a well-established form of energy production with an increasing application base, it is new to the marine market. The ORC technology provides many advantages, including high thermodynamic cycle efficiency, the ability to operate at lower heat source temperatures, simple start-up procedures, automatic and continuous operation without operator intervention, simple maintenance procedures, and long lifecycles.

“Following the very positive results that Turboden is now achieving with heat recovery systems for stationary internal combustion engines, we are now excited to be working with Wärtsilä to develop an ORC solution specifically applicable to the marine market,” says Paolo Bertuzzi, general manager, Finance & Commercial Area, Turboden.

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Company News

LUKOIL Benelux B.V. set to grow and optimise its activities in ARA

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

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

Our clientele varies from the well-known large and medium shipping lines to other physical suppliers and the smaller niche companies from different sectors. In the last couple of years LUKOIL Benelux B.V. has had a market share of 10-15% in our home market of the Rotterdam and Amsterdam ports. In June 2010 the Credit Risk Management Committee of LITASCO SA approved the strategy of further growing our bunker trade in ARA, increased the credit lines for a significant number of our customers, and allowed more flexibility in dealing with new customers. This step clearly shows that LITASCO SA and LUKOIL Benelux B.V. have adapted themselves very well to the post-crisis situation in the bunker industry and feel comfortable to explore new market opportunities. However, we continue to closely monitor the situation in the market and are ready to implement necessary changes to sustain the growth of our business.

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

Since September 2009 LUKOIL Benelux B.V. has supplied bunker fuels to the Belgian port of Antwerp from the refinery TRN (Total Raffinaderij Nederland) in Flushing, where the LUKOIL Group purchased a 45% stake. We are also planning to receive a bunker license for the full-fledged operations in Antwerp by the end of 2010.

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

Since 2005 LUKOIL Benelux B.V. and our partner Burando have been jointly operating Service Terminal Rotterdam, which

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enables LUKOIL Benelux B.V. to store and blend fuel oils to necessary specifications. Currently, new storage tanks are being constructed at STR, which will significantly increase the total storage capacity of the terminal. The new tanks are expected to become operational by the end of 1H 2012. Having our own terminal, and purchasing almost all of our bunker fuels from our parent company LITASCO, gives us a competitive advantage in the saturated market, with continued slack demand in the post-crisis environment. Due to this competitive advantage, LUKOIL Benelux B.V. is in a position to design and implement flexible delivery strategies.

As a supplier of a wide range of grades, we receive bunker enquiries and provide quotations for the products IFO 700, 600, 500, 380, 240, 180, 120, 80, 60, 40, 30, 20 cSt, MDO DMB and MGO. We can also make other products available on request. In order to ensure quick and timely deliveries of our products to seagoing vessels or to other physical suppliers, we currently have a fleet of six timechartered barges with deadweight ranging from about 1,700 MT to 6,130 MT. Provided by FTS Hofftrans, the barge operating company of our partner Burando, they are all double-hulled barges, including several very new ones with greater bunkering capabilities. Should we require a greater capacity, we have the option of hiring other barges for spot deliveries in the range from about 1,700 MT up to 9,200 MT, with both FTS Hofftrans and alternative reliable transport companies in the ports of Rotterdam, Amsterdam and Antwerp.

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

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

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

World Bunkering Winter 2010

Company News

LEV Limited: Reliable bunker supplier

Lukoil Bulgaria Bunker Company

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L

EV Ltd was formed 1996 and since then has proved itself to be a reliable supplier. LEV Ltd arranges high-quality bunker fuels ranging from IFO180-380 to low-sulphur light fuel manufactured to ISO standards, at competitive prices. Supply marine fuels and distillates for sea-going vessels of the most exacting clients and customers, calling at the ports of the Azov Sea and Black Sea basins. Our bunkering vessels are equipped with the latest and safest bunkering technology and meet environmental guidelines for safe harbour operations. LEV Ltd offers quick, responsive service and safe delivery of competitively priced products. We operate in the following ports: Rostov-on-Don, Azov, Yeysk, Temruk, Kavkaz, Taganrog.

Bunker service requires highly qualified professionals and that’s why we take special pride in our staff.

The quality of fuel suits customers’ requirements and European conditions. The company operates its own barges of different tonnage allowing us to serve all types of vessels. We constantly monitor the quality of our work. We will never compromise on the quality of our oil or supply low-quality products for the sake of a quick profit.

Impeccable reputation is above all. Our business principal objective is to keep in touch with the market’s changing requirements, and thus to meet the needs and expectations of our customers.

At present LEV Ltd renders the following maritime services: • Sanitary and ecological servicing.

• Ship chandler services.

• Customs registration of performed operations.

• Trader activity.

• Any qualified repair on VBRP “Obuhovsky” with rise of courts up to 700 mt and from above 700 mt without rise.

• Bunkering of vessels with fuel and lubricating materials.

The main advantages of maritime services rendered by LEV LTD are as follows: • Availability of our own production and technical base conforming to modern quality level.

• Integration of services: it is possible to carry out a complete cycle of vessel servicing in a port.

• Operational efficiency, mobility and flexibility, accurate organisation of work, high skill of specialists involved as well as a developed network of representative offices.

• Quality control implemented for products and services: large permanent and proven suppliers, obligatory certification of products (conformity to international standards).

• Flexible pricing: a system of discounts and medium-term credits, price shaping in accordance with the customers’ needs and possibilities taking into account market situation.

• High level of servicing culture, hospitable and enterprising personnel.

All of the above allows us to solve any issues regarding provision for vessels in transit and local fleet.

Since 2010 LEV Ltd has been working in partnership with ALMOIL Ltd and TEKHINSNAB Ltd.

UKOIL-Bulgaria Bunker LTD is established in 2008 and become the major physical bunker supplier in Bulgaria, providing a full range of bunker fuels.

The company supplies bunker at all Bulgarian Black sea and Danube river ports. Three own and 3 under operation bunker tankers are in service to secure high quality service in respect of quantity and quality supplied.

LUKOIL-Bulgaria Bunker is ambitioned to expand its geographical area covering more ports at Black sea and Danube river. Company is pleased to announce the commencement of Bunkering operation at 61st mile and 56th kilometers of Danube.

First bunkering operation was carried out on August 2, 2010 and reached monthly volume of 2,000 – 2,500 tons MGO 0,1.

Also LUKOIL-Bulgaria Bunker starts bunker supply at Constanta.

The bunker operations will be carried out by m/t Navi - 2528 DWT. All grades of IFO and LSMGO al well will be offered to the clients there.

The company’s team, well-educated and professionally experienced is ready to provide high quality service in all above mentioned ports.

LUKOIL-Bulgaria Bunker’s clients are able to benefit from Company’s considerable purchasing power recognizing LUKOIL’s brand as guarantee for high quality at each location.

We are reliable.

We are “Lukoil” team.

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

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

Yeysk E-mail: azov_tranzit@mail.ru Tel: + 7 861 322 6002 Temruk/Kavkaz E-mail: ubs-ka@mail.ru Tel: + 7 861 486 0731 Rostov/Azov/Taganrog E-mail: levltd@ya.ru Tel: + 7 863 263 8002 World Bunkering WInter 2010

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Company News

Delivering a partnership-based relationship The future for interaction between fuel suppliers and their customers

O

ne positive catalyst of the economic and regulatory changes that the shipping industry has experienced over the past few years is the transformation in the relationship between fuel suppliers and their customers. While we continue to work in a commodity-based industry, the value that customers want and need goes way beyond the basic sourcing and delivery of products alone.

Yes, price and quality remain critical purchasing factors, but customers need counsel and advice on the myriad of issues and challenges that now surround the process of fuel procurement. From better managing and controlling costs through effective hedging and risk management, to identifying an appropriate strategy to tackle regulatory changes, as well understanding the technical challenges of switching to low sulphur-based fuels and distillates. With the implementation of a roadmap for regulation over the next 10 years that sees the transition from heavy fuel oil to cleaner fuels that will serve to radically recalibrate the nature of procurement, the importance of a strong and close relationship between shipowners, operators and their fuel suppliers has become paramount.

It is an opportunity for fuel suppliers to show customers their true value, based on demonstrating a complete understanding of the industry, globally as well as from a more localised market perspective; and, most importantly, highlighting to customers how the challenges they face within the industry can be overcome. It is a principle that OW Bunker passionately believes in; it drives our business and all customer relationships.

The environmental and regulatory challenge is a good example of this. While the revision in July 2010 of MARPOL Annex VI – which saw the mandatory use of fuel oil in Emission Control Areas (ECAs) with a sulphur content of 1.0% – caused consternation in relation to supply from certain elements within the industry, the reality is that it is a wholly manageable change, particularly for suppliers like OW Bunker, who have the global scale and purchasing strength to ensure access to plenty of quality product to meet the increase in demand.

However, by 2015, when the sulphur content in ECAs moves to 0.1%, shipowners and operators will be faced with a number of potential challenges. Firstly, from a technical perspective, managing the switch from heavy fuel oil to low-sulphur fuel oil and distillates, if not handled properly, can cause engine damage and subsequent downtime, as witnessed in California since the regulatory change (to 0.5% sulphur content) in 2009. Secondly, it is not an industry secret that the cost of distillates exceeds the current price of heavy fuel oil – currently by as much as 70%. And while there has been much talk within the industry – particularly amongst classification societies – about using LNG, the reality is that there are still many questions that need to be answered about the potential of supply and associated costs, as well as the issue with regards to the location of storage facilities in relation to bunkering ports and global oil hubs.

The pressure on developing effective risk management strategies for fuel procurement, both from a financial and operational perspec-

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tive, is therefore significantly increased.

The onus must be on the fuel supplier to help alleviate these issues for shipowners and operators. It requires a partnership-based relationship that is founded on a complete understanding of the customer’s business, their trading routes and the nature and mode of supply that is required to operate. Any risk management strategy must be multi-faceted, incorporating a range of hedging instruments that account for the volatility of oil prices and the differing costs of heavy fuel oil, LSFO and distillates based on when and where the customer requires specific products. And from a technical perspective, suppliers must be wholly engrained within their customers’ operations to ensure that the quality of products is maintained and that the technicalities of switching between different fuel types does not impact vessel performance.

To achieve this kind of relationship and ensure a positive and tangible impact on customers’ operations, suppliers must proactively calibrate their business accordingly in anticipation of change, rather than as a result of it. Not only must their operations be structured so that they have the scale to provide a range of products and services when and where customers need them, but they must have the right people that can work consultatively and take responsibility for providing the best solution to the challenges that customers face.

“In today’s economy, fuel suppliers must understand that their success is intrinsically intertwined with the success of their customers,” says Søren Christian Meyer, Global Sales Director, OW Bunker.

“There are real challenges within the industry that need to be managed and overcome. The in-depth expertise and market knowledge that quality, global independent fuel suppliers like OW Bunker have, is central to achieving this. Ultimately, it is an opportunity to become engrained within a customer’s operation, where engagement is based on partnership and working towards the same common goal of improving business performance and profitability.”

The reality is that despite the significance of the changing dynamic of the industry, it is a transition that is manageable. But only if it is based on taking a strategic approach to fuel procurement, and embracing a relationship between shipowner and supplier that is founded on values of transparency, trust and professionalism.

With over 30 years’ of experience, and an unprecedented knowledge and understanding of the industry, OW Bunker is dedicated to providing its customers with this level of service; founded solely on improving efficiencies within their operations, as well as profits, and working with them to provide solutions to the challenges that they face.

Website: www.owbunker.com

World Bunkering Winter 2010

Company News

TransOilBunker Co Ltd

Tsetan Company Limited

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he bunkering company, TransOilBunker Co Ltd, was established in 1995 by the merging of several companies operating in the Russian Far East bunker market. The company provides bunkering services to vessels in the ports of Vladivostok, Nakhodka, Vostochniy, Slavyanka, Zarubino, and Posyet, amongst others.

Since our appearance in the Far East bunker market we have gained and maintained a good reputation amongst our clients – both national and foreign – as a reliable business partner, and we are positioned in the top 10 bunkering companies in the region, with about 10% of the market share.

Our monthly average volume of bunker fuel trade is up to 10,000 tonnes of heavy fuel, and up to 3,000 tonnes of light fuel (MGO).

The company owns five bunkering barges with capacities ranging from 500 to 1,700 tonnes, one of which is equipped with blending facilities, permitting the production of lighter grades of fuels.

The largest of our tankers has unrestricted navigation, giving us the opportunity to deliver bunkers to fishing grounds at the limits of the Russian exclusive economic zone in the Okhotsk Sea, Bering Sea and Japan Sea. Additionally, we are planning to acquire another tanker with even greater capacity, in order to meet the demands of our clients who require quantities of up to 2,000 mt of fuel. The company also operates its own tank tracks for delivering fuel to shoreside customers.

It is our company policy to strictly maintain the quality of our service and fuel, to continually practice safe working procedures, and to protect the environment at every stage of the bunkering process.

Additionally, we value highly the professionalism and reliability of all personnel who work for our company.

Looking to the future, our company is focused on further development to expand its activities and attract new clients through means of cooperation with the best known bunker trading houses in Singapore, Hong Kong, South Korea, Japan, China and Europe.

Bunkering company TransOilBunker Co., Ltd 53 of., st. Aleutskaya 11 Vladivostok, 690001, Russia Tel: 007 (4232) 642-448/007 (4232) 642-449 Mobile: 007 914 704 2856 E-mail: bktob2006@yandex.ru Website: www.transoilbunker.org

World Bunkering Winter 2010

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

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

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

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

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

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

Tsetan Company Limited.

132, Verhne-Morskaya str.

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

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Company News

JSC Bunker Company

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SC Bunker Company, an IBIA (International Bunkering Industry Association) member, was the first licensed and certified bunker supplier in the Arkhangelsk port, North of Russia, for many years after its foundation in 1996.

The company has developed greatly since then, successfully competing in the area providing high-quality product and services of real value to customers, refining the process of bunkering to perfection.

The company offers a wide range of fuel oils, all meeting ISO 8217:2005 standards: • IFO 30 HS/LS (RMA 30) • IFO 40 LS/HS (RMD 80) • IFO 120 HS/LS (RME 180) • IFO 180 HS/LS (RME 180) • IFO 380 HS/LS (RMG 380) • MGO (DMA) Fuel quality is strictly controlled by the company’s certified laboratory, starting at the supply level of the product even before the fuel enters the storage tank.

Our main activity is all-season bunker supply to Russian and foreign vessels, both inside the port of Arkhangelsk, and off the port (Kandalaksha, Onega), as well as providing storage facilities, and blend-ing bunker material to ISO 8217:2005 specifications.

Since 2008, JSC Bunker Company has been annually awarded contracts as a bunker supplier of the Gas Pipeline Project in Baydaratskaya Bay where, along with fuel transportation, food-supply and sludge and garbage removal have been arranged for the convenience of the customer.

The company’s major lines of business at the moment are the purchase of bunkering fleet, as well as the active improvements and changes of its infrastructure and logistics within the bunker market to ensure prompt and smooth deliveries, to meet increasing demand.

34/1, Dezhnevtsev St., 163035, Archangelsk, Russia Tel: +7 (8182) 6577 93 Fax: +7 (8182) 420327 E-mail: arkh@jsbunker.ru www.jsbunker.ru

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Oil Marketing & Trading International (Europe) SA

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

anchorage.

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

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

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

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

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

World Bunkering Winter 2010

Company News

Pumangol Energy Bunkering WE ARE • Local physical suppliers of Marine Bunker Fuels along the coast

of West Africa • Part of the Trafigura Group of companies receiving backing from both Trafigura and Puma Energy through their worldwide network of trading offices and storage facilities.

SERVICES • We specialise in supplying bunkers at offshore positions, in high

sea, safely and effectively • Our flexibility and ability to adapt to the rapid changes is crucial

for our clients’ needs • We provide a safe and quick turn-around for the offshore fleet as

well as the merchant fleet, keeping bunkering time to a minimum • We utilise a double-hulled tanker managed by a professional and

well-trained crew, with years of experience in performing STS operations PRODUCT RANGE • Today we supply MGO DMA as per ISO 8217: 2005(E) • Near future: we are looking into loading fuel cargos, thus adding

to our product range: FO 380 cSt, RMG 380 and/or IFO 180 cSt, RME180 as per ISO 8217: 2005(E) • We will be conforming to ISO 8217: 2010(E) as soon as possible WHERE • Our tanker is normally positioned offshore at Pointe Noire,

Congo Brazzaville, from where we conduct our STS deliveries • Under normal circumstances we supply in the range of offshore

Gamba (Gabon) to offshore Soyo (Angola) • We do, however, welcome enquiries for delivery at positions

beyond the above range and will direct our tanker accordingly if the conditions are right for both client and ourselves REFERENCES • Our successful deliveries include, but are not limited to, vessels

employed or owned by: Acergy West Africa, Murphy West Africa, Saipem, ENI, Sanko Steamship, Mærsk, Delmas, INARME (part of the Grimaldi Group), Bourbon Offshore, Geogas, Clipper, Trafigura etc • Our client portfolio includes, but is not limited to: worldwide bunker traders and brokers, shipowners, offshore contractors, major oil companies etc

We provide a 24-hour service, 7 days a week. As the maritime industry is never ‘closed’ neither are we Tel: Geneva: +41 22 592 3716 / Luanda: +244 927 491 757 E-mail: bunkers@puma-energy.com

World Bunkering Winter 2010

Global Vision Bunkers

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s a result of the Group’s growing activities throughout the African continent, Global Vision Bunkers is pleased to announce the opening of a new office.

Global Vision Bunkers (Africa), situated in South Africa, is a Black Economically Empowered company drawing on local expertise to develop and expand existing markets. The company is headed up

by Shanaaz Bennett, the newly re-elected chairperson of IBIA for Southern Africa. Shanaaz has a distinguished history in bunkers, having worked for Shell, as well as two worldwide trading groups and most recently was MD of Wilhelmsen Premier Marine Fuels in South Africa.

Global draws from both contract tonnage to secure product in times of limited availability as well as being very aggressive on the spot market.

Due to the volumes handled in the region, Global is known locally for its role as international licensed reseller of Sonangol product (state supplier of Angola) and is active throughout the continent both in port and offshore. Global is working hard with locals here and right across the continent to improve infrastructure and procedures to change the region’s image.

As such, it is improving fast with four state-of-the-art newbuild tankers now in the Bay of Luanda, illustrating the type of progress in port, and now has a total of eight internationally recognised Groups operating East and West Africa offshore with products guaranteeing ISO 2005 specs.

As an ever-developing continent, Africa is still embryonic in certain areas, particularly in the bunker market. As such, for the currently uninitiated and inexperienced in the region, in-port supplies in certain areas can be still a lottery. However, with the right trained professionals building a network of reliable suppliers, much is possible.

The region’s unreliable image of the past has been at times entirely warranted but the nightmare stories that have abounded have generally been down to a lack of professionalism and shortsighted profiteering. Consequently, poor quality control from those who don’t know what they are doing and who they are dealing with, threatens to tarnish the name of a burgeoning market place.

Such is our confidence in our supply base that Global provides free Fobas testing to all clients paying via Voyager, thereby providing the added reassurance not only of the Global name in Africa but quality guarantees too.

Contact details for the new office are as follows: T: +277 9523 6000 (24-hr) F: +278 6274 2554 E: africa@globalvisionbunkers.com

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Company News

Neftehim Bunker Jsc

Hogla Far East Ltd

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H

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

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

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

Our company has access to a fleet of five different barging companies, giving us flexibility and efficiency in our bunker delivery operations.

With our company’s growth in mind, we now we have our own bunker-barge, Velta, which has nine separate cargo tanks with a total capacity of 1,600 tonnes (including MGO 230 tonnes), that enables us to supply different types of fuel. Moreover, Velta has blending equipment on board to provide a variety of fuel products.

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

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

Neftehim Bunker Jsc. Office 602 Bolshoy avenue V.o. 80 St Petersburg 199900 Russia Tel: +7(812) 332 2363/+7 (812) 942-3140 Tel/Fax: +7(812) 332 2364 E-mail: main@nh-bunkering.ru Website: www.nh-bunkering.ru

ogla Far East Ltd, established in 1999, started as a small local supplier using rented barges in the port of Vanino. Now we are involved in bunkering, fuel transportation, agency services, shiprepair services, fishing, pharmacy, and building maintenance, and we own 15 vessels.

Our main activity over the past 10 years has been the supply of high quality bunker fuel, at competitive prices, in the following ports: Vladivostok, Nakhodka, Vostochny, Vanino, Sovetskaya Gavan, and Muchke. Our fuel fully complies with ISO 8217 and MARPOL Annex VI. We control each stage of bunkering from discharging fuel from rail-tanks to loading it onto bunkered vessel from our barges.

While Singapore and Busan fuel prices rise, we are able to keep our rates stable in the Russian Far East ports. As bunkering costs have become more and more critical for any shipowner, we offer our potential customers “bunker call only” services, whereby all the formalities are fixed before a vessel arrives, and a barge supplies the vessel outside port limits. In this case the owner pays only half of port duties.

Our staff are highly experienced in customs clearance and agency services. You can check bunkering schedules and barge positions at any time. With a reputation for being a reliable supplier, we strive for long-term partnerships and offer our customers the most favourable prices and credit terms, as well as timely and safe bunkering services, 24 hours a day, seven days a week.

Dmitriy Yermakov, President of Hogla Group

Hogla Far East www.hogla.biz www.marinebusiness.ru Vladivostok Tel: +7 (4232) 455-400 Sovetskaya Gavan – Vanino Tel: +7 (42138) 4-43-48, 4-56-02

To get quotations please contact: Tel: +7-914-653-75-33 Skype: valeriy606 / michael197037

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World Bunkering Winter 2010

Company News

SMIT Amandla Marine

Gazpromneft Marine Bunker

S

E

MIT Amandla Marine’s track record in the business of bunker delivery is without parallel in South Africa. The specialist marine services company prioritises safe, accurate and on time deliveries. Over the course of the past two years, their barges have delivered over 2.5 million tonnes of fuel to vessels calling in the ports of Durban and Richards Bay, without any delays or spillage. This they are able to achieve through an effective SHE-Q management system, good communication, and ongoing training and development of crew so as to ensure that their ability to deliver a professional service to clients is guaranteed. Operating two barges in the Port of Durban and one in the Port of Richards Bay, South Africa, SMIT Amandla Marine is able to offer shipowners and operators an efficient service.

Flexible scheduling means that critical deliveries are prioritised, taking into account vessel ETA/ETD. A 24/7/365 service ensures round the clock response to delivery enquiries and direct communication between barge management and client. This ensures a seamless delivery service. For the SMIT Amandla Marine team, it is all about offering an excellent service that exceeds expectations and is safe, efficient and environmentally friendly. Says SMIT Amandla Marine Bunker Barge Manager, Gerad Singh: “We own and operate three bunker barges in Durban and Richards Bay and ensure that we are an effective link in our client’s value chain. We aim to keep communication flowing and try to stay a ‘step ahead’ by keeping clients informed and by finding solutions to any problems that could prevent bunker delivery at the best time in terms of keeping the ship on schedule.”

SMIT Amandla Marine: Durban Office, 18 Kobe Road, Bayhead Tel: +27 31 274 1100 Durban: +27 71 606 3895 Richards Bay: +27 82 875 1360

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

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

Gazpromneft Marine Bunker’s strategy focuses on operations in the Russian North-West region, the Far East, the Black Sea region and the Russian Rivers. In addition, Gazpromneft Marine Bunker is preparing to enter some marine ports in the North-West Europe and in the Black Sea. Gazprom Neft’s main oil refineries are situated in the Moscow, Yaroslavl and Omsk areas. This range of locations makes it possible to cover nearly all the ports in Russia. Currently, the company operates in the major Russian ports of St Petersburg, Kaliningrad, Ust-luga, Primorsk, Arkhangelsk, Murmansk, Vladivostok, Nakhodka, Vanino, Kavkaz, Novorossiysk, Tuapse, Yaroslavl, Kazan, Volgograd, Astrakhan, Rostov-on-Don, and Azov.

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

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

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

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

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

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

World Bunkering Winter 2010

77

Company News

Baltic Fuel Company Ltd enters Saint-Petersburg bunker market

K

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

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

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

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

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

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

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

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

The Baltic Fuel Company Ltd 13, Dubrovskaya Street Saint-Petersburg Tel: +7 (812) 438 12 80 Fax: +8 (812) 490 58 15 E-mail: info@gwbunker.spb.ru 78

cea Co. ltd

A

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

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

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

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

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

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

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

Mr. Eugeniy Moroz General Director, CEA Co. Ltd. CEA Ltd 8/1B, Fokina Street, PO BOX 91/45, Vladivostok Primorskiy Krai, Russia 690091 Tel: 007 (4232) 40-64-91 007 (4232) 52 36 93 Fax: 007 (4232) 40 66 98 E-mail: cea_bunker@hotbox.ru Website: www.cea-bunker.com World Bunkering Winter 2010

Company News

B

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

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

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

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

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

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

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

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

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

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

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

World Bunkering Winter 2010

bunkers

Portugal fuel stop

a secure quality service @ Ceuta

VILMA OIL, MADRID c/ Chile, 10 · Oficina 236 28290 Las Matas · Madrid · Spain Phone: +34 916 308 900 bunkers@vilmaoil.com · www.vilmaoil.es 79

World Bunkering SPRING 2011 issue

DiARY

Traders We catch up on how bunker traders are coping with the downturn and high bunker prices and look at what strategies are being employed to manage uncertainty and avoid becoming a casualty of the recession.

Looking ahead

Fuel Quantity

24-26 November

IT

Bunkerworld Business Exchange London, UK

www.bunkerworld.com/events

6-7 December

Gas Ship Technology Summit London, UK

http://www.informamaritimeevents.com/ KT0147WBEM

7-8 December

Fuel Management, Ship Performance & Energy Efficiency London, UK

www.informaglobalevents.com/KS0249BSWB

9-10 December

Future fuels for shipping London, UK

www.informaglobalevents.com/KS0251BSWB

20-21 January 2011

OPF ASIA 2011 Singapore

www.cconnection.org/OPFHome.htm

21 February 2011

IBIA AGM and Annual Dinner London, UK

www.ibia.net

2-3 March 2011

The Piraeus Bunker Course Piraeus, Greece

www.bunkerspot.com/eventsdetail.asp?id=12871

22-24 March 2011

FUJCON Fujairah, UAE

www.cconnection.org

6-8 April 2011

The 32nd International Bunker Conference Copenhagen, Denmark

www.bunkerconference.com

12-14 April 2011

Sea Asia 2011 Singapore 80

www.sea-asia.com

Manually checking ullages will soon be a thing of the past. Or least that is what an increasing part of the bunker supply industry now believes and at least one major customer strongly agrees.

We report on the progress of trials on Coriolis meters and the implications for the industry.

We all live in a digital world now, or so we think. But to what extent has the bunker industry embraced information technology.

Just how far are we from paperless bunkering?

Northern Europe The latest North Sea and Baltic ECA sulphur caps and the EU alongside berth rules are now being enforced. What does this mean for owners and suppliers in and increasingly competitive environment along the North European coast?

Indian Subcontinent The subcontinent comprises four very different markets, but all serving economies with strong exports of raw materials competitively priced manufacturing goods. And both Sri Lanka and India have ports well suited for bunkers-only calls. We look at what makes each of them tick and ask when the region is likely to fulfil its potential.

UAE Our annual update of the UAE market comes just before the next Fujcon conference in Fujairah, which we preview. A year ago suppliers were struggling with wafer-thin or non existent margins.

Since then there have been some withdrawals from the market, but also new entrants and news of substantial investment for the longer term.

Regular Features As well as our long-standing regular features, Industry News, Legal and Equipment and services we are bring three additional monthly updates: Environment, Testing, & Risk Management There is no lack of environmental news affecting the bunkering industry these days and in the Spring Issue the focus will be on what happened at the Cancun Climate Change conference.

On the testing front the hot issue is likely to be pre-testing as the industry starts to appreciate the implications of the recent Norwegian/Intertanko proposals.

Risk management has become increasingly important since the 2008 Credit Crunch, to both buyers and sellers. So World Bunkering will be keeping its finger on the pulse of this key and growing sector.

World Bunkering Winter 2010

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

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