World
WINTER 2011
WINTER 2011
Bunkering
World BUNKERING
LNG bunker barge design IBIA Convention Barcelona
l Do additives help? l America gets ready for the ECA l Difficult times on African coasts
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Editor’s Letter
T
his issue goes to press just after what seems to be generally regarded as one of the most successful IBIA Conventions so far. There were about 170 IBIA members at Barcelona and I managed to at least say “hello” to the vast majority. Copies of the Convention special issue of World Bunkering disappeared very quickly from our stand, which was encouraging. Equally encouraging was the feedback we received from many of you – helpful and constructive. As you may have noticed, this issue has come out slightly later than in previous years. This is deliberate and has allowed us to include a review of the Convention. Not, however, that this is another Barcelona issue. In a sense you could actually call it a Durban issue, because many of our stories and features relate in some way or another to the topics under consideration, and the possible decisions to be taken, at the UN Climate Change Conference (UNCCC) regarding greenhouse gas (GHG) emissions. In this issue we report on the latest positions of the International Maritime Organisation (IMO) and the shipping industry’s representative organisations. The big questions are: will the UNCCC set up a so-called Green Fund using shipping industry cash and will the IMO be responsible for running any scheme, most likely a bunker levy, to collect the money? Emissions and GHGs are related to a greater or lesser extent to our principal themes for this issue. We look at a wide range of topics, from blending and fuel additives, to barge design. Geographically we home in on Africa and the Americas. In South Africa suppliers have had to cope with a very challenging situation regarding fuel availability. There is some optimism, it appears, that 2012 may be a bit easier. While South Africa has had its problems, West Africa continues to attract more of the industry’s big players. Also, we have our regular, and unique, insight into the Russian bunker market where prices currently seem highly competitive. Some ship names stick in the mind, usually because of an association with a disaster. As disasters go the Cosco Busan, which hit San Francisco’s Bay Bridge four years ago and spilt a relatively small amount of bunker fuel, is hardly up there with the Torrey Canyon or the Exxon Valdez. It has, however, turned out to be a very expensive incident. On our legal page we report the final civil settlement, which has cost the owner and operator over $44 million. While the Barcelona Convention may be rapidly disappearing astern, the steaming lights of the IBIA Dinner are now well above the horizon. Whether there will still be tickets available by the time this issue is out I do not know. But the World Bunkering team will be there and look forward to catching up with as many IBIA members as possible at this highly popular event. David Hughes
World Bunkering Autumn 2011
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World
WINTER 2011
Bunkering Publisher: W H Robinson Editor: David Hughes (editor@mar-media.com) Deputy Editor: Sandra Speares (sandra.speares@mar-media.com) Sales Manager: Taj Oberai (taj.oberai@mar-media.com) Project Manager: Dawn Barley (dawn.barley@mar-media.com) Project Consultant: Alex Corboude (alex.corboude@mar-media.com)
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.
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Contact: Shazmeer Jiwan Alba Petroleum Ltd PO Box 97155 Mombasa, Kenya Tel: +254 41 2317001/2/7/8/9 Fax: +254 41 2317006 +254 41 2317010 Mobile: +254 720 630000 or +254 721 786310 E-mail: sales@albapetroleum.com
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WINTER 2011
Bunkering 31
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IBIA Reports Editor’s Letter 3 Chairman’s Introduction 9 Chief Executive’s Report 11 Noticeboard 13 New Members 15 IBIA Elections 16 AGM Notice 17 AGM Agenda 19 IBIA Dinner 21 Membership Application 22 Industry News 26 Risk Management Environment Testing Blending Fuel Additives Barge Design Interview Americas Africa
Special Features 31 33 36 38 41 44 46
Geographical Focus 49 60
Book Review IBIA Convention Barcelona Review: IBIA Convention
62 63 65
Russian Update
67
Legal News Equipment and Services
76 77
Diary
92
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REPORTS
Chairman’s Introduction
O
ur convention in the intriguing city of Barcelona is now behind us. It will remain in my memory for two reasons. First, it was an unqualified success with more delegates than at any of our previous conventions, excellent participation in all the sessions and lively and interesting debate. The social and networking events were all well attended and, as always, it was a great pleasure to renew old acquaintances and to make new ones. All of this reinforces my view that the ultimate in international bunker events is provided by your International Bunker Industry Association. Second – and somewhat tongue in cheek – the airline with which my wife and I had chosen to travel could not have scripted a more innovative sequence of ineptitudes with which to frustrate our arrival and facilitate the even later arrival of our luggage in Barcelona. I eventually became inured to the epithet ‘Stinky Bob’ although I’m told I will carry emotional scarring for a long time to come. To the taunters I caution, “Be wary, paybacks are hell”. On behalf of the IBIA Board, I would like to say a heartfelt and sincere thanks to the members of our Secretariat for their diligence and hard work in bringing the convention together and to the several volunteers who donated their time and effort towards making this event such a success. You know who you are; know also that you’re appreciated. Stand up and take a bow. Thanks are also due to the events team and staff at the Hotel Rey Juan Carlos 1 for the seamless manner in which the entire
World Bunkering Winter 2011
convention took place. A resounding thank you, too, to our many sponsors, essential to all of our activities. Your contributions are very much appreciated. We hope you draw benefit from the exposure and we look forward to your support at future IBIA events. As our Acting Chief Executive, Trevor Harrison, has mentioned in his article, IBIA’s next event is the Annual Dinner in London on 20 February 2012. This has traditionally been well attended and last February, thanks to the change to a larger venue, was the greatest gathering IBIA has ever hosted. We’re all looking forward to seeing even more of you next year. So, what will the new year bring?
There’s the new emission control area (ECA) around the United States and Canada. This is unlikely to affect domestic American shipping since most of it has burned gasoil for many years; there will undoubtedly be an impact on foreign flag ships visiting the US, however. Some recent debate has questioned the environmental advantage of switching over from residual heavy fuel oil (HFO) to gasoil. It suggests that the efficiency with which any fuel is burned (and the resultant emissions) is a function of engine-to-fuel compatibility and tuning, and that short term major adjustments are impractical when the fuel is changed from residual to distillate and vice versa, possibly creating as many issues as are solved. With lower and lower sulphur levels mandated, lubricity of gasoil is impaired. This opens a great field of opportunity for additives manufacturers. Given the variety and composition of these additives and the
Bob Lintott
varying quantities of their application, the end result might even be that, on a holistic assessment, reducing sulphur in marine fuels results in no net reduction of pollution. The upper limit for sulphur in HFO will reduce to 3.5%. Although many ports are already compliant and others will have no problem satisfying this requirement with existing streams, there remain some areas of the world for which this limit will be a challenge. Reducing sulphur by blending with low sulphur components opens up another new field of opportunity and could give rise to some entirely new challenges. All in all, shipping remains the most fuel efficient means of transporting large quantities of almost any goods over distance. From their destination port, those same goods are then loaded onto trucks and trains (and later, often from the trains onto trucks too) for final distribution. This final distribution creates a far greater carbon footprint than world shipping. IBIA will continue to work diligently with the bodies that assess and mandate emissions control. Cleaner air is in everybody’s best interests. On a cautionary note, however, we must all remember that to every action, there is an equal and opposite reaction. Thus, control of one source of pollutant might inadvertently lead to proliferation of another as suggested above. We should all be guided by caution but not afraid to embrace innovation. The Board and I wish you the very best for the coming festive season and good fortune in 2012. Bob Lintott
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Reflections on a successful Annual Convention Convention 2011
Since my report in the last edition of World Bunkering, we have had a highly successful convention in Barcelona; the venue was clearly a popular choice with the largest number of delegates ever registered for an IBIA Convention in attendance. It was, as anticipated, an enjoyable blend of formal sessions and informal gatherings in the relaxed atmosphere of a Mediterranean city in late autumn. Having emphasised to Chairman Bob Lintott the importance of timekeeping and gently suggesting that he should avoid the risk of over-running by limiting his customary output of amusing anecdotes, my words were clearly taken to heart and I was initially concerned that we would whip through the programme with strait-laced Teutonic sobriety. I need not have worried; Bob’s easy style generated a steady flow of questions to the speakers from the floor at every opportunity, encouraging lively discussion of the many topics covered with the result that refreshment breaks were consistently reached a fashionable few minutes late. Although the IBIA Convention is a gathering of friends, we are not afraid to confront and debate difficult issues; Barcelona was true to this principle with lively and sometimes controversial interchange being maintained throughout the three days on a number of topics, right up to the end of the discussions following the well-attended final speaker’s presentation. The LNG Debate
As has been well reported elsewhere, at its Barcelona meeting the Board agreed that
World Bunkering Winter 2011
the time was now right for IBIA to become more closely involved in the issues surrounding the use of LNG (liquefied natural gas) as a marine fuel. IBIA’s engagement will be led by Vice-Chairman Nigel Draffin with support from the Secretariat. I would like to encourage any Members wishing to assist IBIA with its work in the LNG field to contact either Nigel directly or the Secretariat. 2012 Annual Dinner
Looking to the future, the next major IBIA event is the Annual Dinner on 20 February at the Grosvenor House in London, where we will be hoping for yet another record attendance and where not even the most enthusiastic networker will be able to shake the hands of more than a fraction of the 1,000 plus leading and influential individuals in the bunker industry expected to be present. It is an extraordinary event and one not to be missed by anyone with a serious interest in maintaining a conspicuous presence in the industry. Events
The past few months has seen no let-up in the number of bunker-related conferences, workshops, seminars and other events where an IBIA representative is invited to speak and where IBIA endorsement is sought for the event as a whole. We are very happy to work cooperatively with event organisers where we are comfortable with the quality of the event as a whole and where we are satisfied that IBIA’s presence or endorsement will be beneficial to the Association, the membership and
Trevor Harrison, Acting Chief Executive Tel: +44(0) 23 8022 6555 Fax: +44(0) 23 8022 1777
those attending the event. One of the most valuable benefits for Members is that at many IBIA endorsed events we have negotiated a significant discount on delegate fees for them. In-Line Blending Guide
Accompanying this edition of World Bunkering mailed to Members should be a copy of IBIA’s newly published Guide to In-Line Blending; compiled by a group of experts under my inexpert chairmanship, we have, I hope, produced a useful and readable briefing document for anyone interested in the pros and cons of in-line bunker blending. Suggestions for future IBIA guides would be very welcome. The Future
Looking ahead to 2012, we anticipate that the Secretariat in Southampton and Singapore will continue to operate as it has in the recent past; the new arrangements in Singapore with the creation of IBIA (Asia) Ltd as a wholly-owned subsidiary of IBIA are working well and the local IBIA branch goes from strength to strength. It remains the case that, as a members’ organisation, we are here to meet the needs of the membership; to do that, we need to hear from you, the Members, on matters both large and small where you feel that IBIA might be able to make a difference. We, the Secretariat and the Board, look forward to hearing from you. Trevor Harrison Acting Chief Executive and Elected Board Member
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REPORTS
IBIA noticeboard Benefits to members as at 1 November 2011
THE IBIA COURSES:
IBIA Guide to Avoiding and Resolving Bunker Disputes
One Day Basic Bunkering Course
IBIA Members receive their personal copy free, but the report is offered for sale to non-Members at £50.
The charge for the Basic Bunkering Course is £200 per head for Members and £300 for non-Members.
IBIA Annual Report
The 2010/2011 report is now available. All Members will have already received their copy. The report is available free of charge to Members and non-Members. Please ask IBIA Administration for a copy.
IBIA Guide to Bunker Samplers Advanced Courses
These courses are intended for those who already have at least one year’s experience in the bunker industry. £425 per head for Members and £625 for non-Members.
IBIA PUBLICATIONS IBIA World Bunkering Magazine – free copies for Members of IBIA
Please note that non-Members are requested to subscribe to the magazine at a cost of £45, £60 or £80 depending on location. Up to 20 additional free copies of the magazine are offered to buyer Members of IBIA for forwarding to their vessels. IBIA World Bunkering Magazine – discounts on advertising
Discounted advertising rates are available for Members representing savings of between £600-800 per advertisement, depending on the advertisement size. Please contact the Advertising sales team at Maritime Media London on + 44 (0) 20 7386 6100. IBIA List of Members
If your details are not correct then please let the IBIA Administration know at ibia@ ibia.net. This publication is only available to Members.
World Bunkering Winter 2011
Sale price to non-Members £50.
IBIA Logo
IBIA Guide to Arbitration
Free bromide supplied for use by Corporate Members only.
A loose leaf book giving Arbitration procedures in thirteen countries written by lawyers. This is now available free to IBIA Members. Non-Members may purchase at a price of £50 plus postage. Evaluate the Merits of a Bunker Claim
Interpretation of specifications for bunker fuels and a guide to the question of repeatability. For sale to non-Members at £35. IBIA Glossary of Bunker and Lubricating Oil Terminology
A comprehensive guide to all those complicated terms that are in daily use in the bunkering industry. For sale to nonMembers at £45. IBIA Guide to Good Commercial Practice
On sale to non-Members at £50. 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.
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Singapore Premium Bunkering Hub
Searights Maritime Services Pte Ltd Certificate of Accreditation: MPA/AS 04 001 80 Marine Parade Road #13-05/06 Parkway Parade Singapore 449269
Tel: +65 6344 1108 Fax: +65 6344 1128 email: bunkers@searights.com.sg www.searights.com.sg
New Members Corporate
ANDREW MOORE & ASSOCIATES (S) PTE LTD Service Logan Joseph Steven Rodricks 161 Lavender Street #02-01 Lavender Place 338750 Singapore E-mail: amasing@andrew-moore.com VINNEX INVESTMENT SERVICES LTD Bunker Trader Igietemho Vincent Iyaduah No 8, Payne Crescent Apapa 23401 Nigeria E-mail: vinnex_ng@yahoo.com HANSEATIC BUNKER SERVICES GMBH Bunker Trader Martin Rasmussen Willy-Brandt-Strasse 49 5 Stock Hamburg 20457 Germany E-mail: info@hanseatic-bunker.com FT Maritime Services LTD (Fuel Trade) Bunker Trader Panos Faros 8th Floor, 6, Skouze Street Piraeus 18536 Greece E-mail: sales@ft-maritime.com NT BUNKERING CJSC Bunker Supplier Alexander Porplyak 1, Liter AB Khimicheskiy Pereulok Saint Petersburg 198095 Russia E-mail: ap@ntbunkering.com SPRING MARINE MANAGEMENT Service Jorge Luis Marrero Mora Loudovikou Sq, 6 Piraeus 18531 Greece E-mail: chartering@springmarine.com Middle East Energy Bunker Trader Mehran Ghobadian Office A1 First Floor Creek Tower Deirah 262459 Dubai E-mail: m.ghobadian@mideast-energy.com
World Bunkering Winter 2011
Terramar Oil & Services S.A. BUNKER TRADER Ginette Vukelja Corozal Processing Free Zone, Building 370 Panama City 0843-02229 B Panama E-mail: gvukelja@gmail.com individual
John Ghio Service GIBRALTAR PORT AUTHORITY North Mole Western Arm GBZ 001 GIBRALTAR E-mail: john.ghio@portofgibraltar.gi Ini Bassey Bunker Broker INYS GLOBAL LTD 70 Queensgate 2 Lord Street Watford WD17 2LQ UK E-mail: i.bassey@consultant.com Tariq Mehmood Bunker Trader ALLIED ENTERPRISES 604 D City Tower 6K Main Boulevard Gulberg II Lahore 54660 Pakistan E-mail: tariq@allied.com.pk Eildert van Slooten Bunker Trader BENCHMARK BUNKERS Ludwig Burchardstraat, 37 Antwerp 2050 Belgium E-mail: eildert@benchmarkbunkes.com OlUWAROTIMI Ige Service RIG SHIPPING AND TRADING LTD 33 Creek Road IBRU House 2nd Floor Apapa, Lagos 2341 Nigeria E-mail: rigshipping@yahoo.com
Wan Mohd Sabri Wan Mohamad Service JOHOR BUNKERING SERVICES ASSOCIATION No. 27 Jalan Helang 2 Taman Scientex Casuarina Pasir Gudang Johar 81700 Malaysia E-mail: legal@j-bunker.org.my Helle Graesdal Bunker Trader WESTERN BULK AS P.O. Box 2868 Solli Oslo 230 Norway E-mail: helle.graesdal@westernbulk.com Ahsan Majeed BUNKER BROKER OILCO MARINES 32K/c-2, Gulberg II Lahore Punjab 54000 Pakistan E-mail: ahsan@oilcotrading.com Eric Whiley Service TRADE OCEAN SHIPPING SERVICES PTD LTD 18 Forgate Square Table Bay Boulevard Foreshore Cape Town 8001 South Africa E-mail: eric@tradeocean.co.za Munir Gondal BUNKER SUPPLIER INTERNATIONAL BUNKERING CO. LTD P.O. Box 17906 Jeddah 21494 Saudi Arabia E-mail: ibco@ibcojed.com
Khalid Mehmood Bunker Trader THE FUELERS CORPORATION 505D, City Tower 6K Main Boulevard Gulberg II Lahore 54500 Pakistan E-mail: ceo@fuelers.com.pk
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ELECTIONS TO THE IBIA
BOARD OF DIRECTORS 2012
O
n 1st April 2012 three directors will reach the end of their current term of office. The three vacancies will need to be filled, in anticipation of which nominations were sought in October and five candidates have put their names forward. Three of the candidates have received the endorsement of the present Board on the recommendation of the Board Development Committee and the nominations of the two other candidates remain in place; this means that there will be an election, the results of which will be declared at the AGM on Monday 20th February 2012. As happened last year the election will be conducted electronically by the highly respected independent external body, Electoral Reform Services. Voting will take place over a period of several days. When you receive an email invitation to vote, please take the opportunity to do so by carefully following the instructions given. Further information about the election and details of the candidates will be given when the arrangements are completed. The elections are an opportunity for new people with new ideas to join the Board and be involved in running the Association. A steady turnover of Board members over a period of years is good for the Association’s health and it is important that as many members as possible cast their votes. If for any reason you anticipate being unable to vote electronically, please let the Secretariat know as soon as possible.
YOUR VOTE COUNTS; PLEASE USE IT!
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World Bunkering Winter 2011
The International Bunker Industry Association Limited 18th Annual General Meeting Monday 20 February 2012 NOTICE IS HEREBY GIVEN THAT The 18th Annual General meeting of the Association will be held at: The Cunliffe-Owen Room The Naval Club 38 Hill Street London W1J 5NS 13.00 hours on Monday 20 February 2012 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
By order of the Board Robert Lintott Chairman
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IBIA Annual General Meeting Venue: The Naval Club, Hill Street, London on Monday 20 February 2012 at 13:00 hrs AGENDA 1. Apologies for absence. 2. Approve the minutes of the last Annual General Meeting. 3. Appoint Nunn Hayward, Accountants, as auditors of the Association until the conclusion of the next Annual General Meeting. 4. Approve the Accounts of the Association for the year 2010/2011 (a summary of which is in the Annual Report of the Association included with this issue of World Bunkering). 5. Vote upon the appointment, or re-appointment, of Members of the Board pursuant to Article 46 of the Association’s Articles of Association. 6. Transact any other ordinary business.
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Reliable, efficient service in ARA and beyond Quick and timely delivery of a wide range of grades WE HAVE MOVED TO A NEW OFFICE! Our contact information: New office address: Wilhelminakade 85, Building “De Maastoren�, 36th floor, 3072 AP Rotterdam, the Netherlands New post address: PO Box 24065, 3007 DB Rotterdam, the Netherlands Tel. (24/7): +31 10 264 27 00 E-mail: Bunkers@lukoil.nl
18th IBIA Annual Dinner Monday 20 February 2012 at the Grosvenor House, a JW Marriott Hotel, London kindly sponsored by
Sponsorship opportunities available please contact: Charlotte Egan: T: +44 023 80 226 555 E: charlotte.egan@ibia.net 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. 2. Members and their guests should not leave the dining table at any time before coffee is served, except of course in case of an emergency. 3. Silence should be observed during the speeches and grace.
The 18th IBIA Annual Dinner will be held at the Grosvenor House on Park Lane, London 20 February 2012 at 19:00 hours The Champagne Reception and Three Course Dinner with Coffee, will cost ÂŁ125.00 per head + VAT This price also includes a Half Bottle of Wine per head Champagne Reception kindly sponsored by Akron Trade & Transport Fujairah
Following the meal there will be a Post-Dinner drinks bar kindly sponsored by Platts
Dress code: Black Tie Corporate Members are welcome to reserve tables, which are available for 10 or 12 people Individual Members are respectfully requested to limit their guests to a maximum of 5 (exclusive of individual member ticket) 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 The Aims of the Association • To provide an international forum to
• •
•
•
address the concerns of all sectors of the bunker industry; To improve and clarify industry practices and documentation; To represent the industry in discussion with relevant governmental and nongovernmental bodies and to make the concerns of the industry known to such bodies; To assist members in the event of disputes by identifying the options and exploring the alternatives open to them and eventually to provide a panel of experienced mediators and arbitrators; To increase the professional understanding and competence of those working in the industry.
In the beginning
Eight members of the industry conceived the International Bunker Industry in October 1992, and the association was formally registered on 29 January 1993. Since then it has expanded steadily with a worldwide membership comprising shipowners, charterers, bunker suppliers, traders, brokers, barging companies, storage companies, surveyors, port authorities, credit reporting companies, lawyers, P&I Clubs, equipment manufacturers, shipping journalists and marine consultants. In 2008, our membership stands at over 500 and is spread over 67 countries. There are three categories of membership, namely: • Individual membership: open to all people with an interest in bunkering, whether they are involved in the day-to-
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day business of bunkering ships or have an interest in the industry. Each member has one vote in association business, but this category does not allow delegation. • Corporate membership: open to companies and associations with an interest in bunkering, whether they are involved in the day-to-day business of bunkering ships or have an interest in the industry. Each member has one vote in association business, but corporate membership has the advantage of allowing companies to delegate different members of their company to participate in different working groups. • Corporate sponsor: this is the newest category and allows a company to contribute any sum they see fit to the association. In return they receive the same benefits as a corporate member but in addition have their logo printed on all IBIA publications and are offered further sponsorship opportunities ahead of other members.
ing groups and committees that report to the Board. Areas covered have included: • Education • Safety • Technical • Environmental • Commercial • Dispute Resolution • Blending The Board and the Secretariat welcome expressions of interest from members to participate in the activities of working groups and committees, and invite suggestions and proposals for further areas of engagement and research.
The board
The board is constrained to have a balance of members from each sector of the industry in order to preserve the industry-wide representation and approach of the association. The board regulates the association and is elected by the membership to perform that role. Working Groups and Committees
IBIA is an association dedicated to its membership and strives to reflect members’ wishes and react to their needs. This is achieved in part by the formation of work-
World Bunkering Winter 2011
Membership application
PLEASE PRINT VERY CLEARLY Applicants must fill out all appropriate sections including method of payment. Corporate members must give the name of the individual contact.
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Please indicate the type of membership being applied for: Individual Member £110 Free (please state reason)
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The Administrator, The IBIA Ltd, Ground Floor, Latimer House, 5-7 Cumberland Place, Southampton, Hampshire SO15 2BH, United Kingdom. Tel: +44 (0) 2380 226555 Fax: +44 (0) 2380 221777.
Industry news
Global round-up Bunker prices “increase boxship size”
Containership operators are ordering ever larger vessels even in the face of a weak freight and time charter environment during 2011, according to Braemar Seascope. The London-based shipbroker says in a statement: “This may appear to be counterintuitive. In fact, it reinforces a trend that is at least five years old.” Braemar Seascope notes that containership operators cannot control freight rates, especially in a post-liner conference competitive environment. They can, however, control the unit cost of shipping each teu through economy of scale. Ordering ever larger containerships is a direct consequence of this cost management. During the recent Containerisation International Mediterranean Freight Conference held in Istanbul, Braemar Seascope research
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manager Mark Williams highlighted the strong correlation between the price of bunker fuel oil – the largest single cost per teu movement – and the average size of containerships ordered over the past 10 years. The strength of the relationship is confirmed, the broker says, by the fall in bunker prices and average teu capacity of newbuildings ordered in 2009, though of course the ships ordered in 2009 will likely be delivering into a higher bunker price environment in 2012 and later. The trend cannot carry on for ever, though. Braemar Seascope says: “If bunker prices continue to rise, there will eventually come a point at which naval architects will find it harder to build bigger ships. The Malaccamax concept appears to be the maximum size for Asia-Europe trades and port operators will find it harder to
World Bunkering Winter 2011
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continually upgrade facilities. The new eco-designs for containerships will become ever more important in liner companies’ cost management strategies.” Suppliers reassure over 3.5% sulphur
Two major bunker suppliers, OW Bunker and CEPSA Marine Fuels (CMF), have moved to assure their customers of sufficient availability of IMO compliant fuel after 1 January 2012 despite concerns over supply, particularly in the Middle East. The announcements followed a DNV Petroleum Services warning that suppliers will face a challenge in meeting the demand for fuel oil with a sulphur content of 3.5%. This follows the Marpol Annex VI regulation that will see the global sulphur content of fuel oil reduced from 4.5%. The global sulphur limit applies to all waters other than emission control areas (ECAs), where fuel oil with a sulphur content of 1% must be used. However OW Bunker’s regional manager for Middle East and South Africa, Jesper Jervild, said in a press statement last week: “Despite recent claims, OW Bunker has already assured its customers that there will be ample supply for fuel oil with a sulphur content of 3.5% and below, not just in the Middle East, but on a global basis.” He added: “From all key ports in Europe and the US to Asia, South America and the Middle East, including Fujairah, customers will have access to quality compliant products wherever and whenever they need them. In fact we’re already providing them right now in Suez.” Mr Jervild concluded: “While supply is not an issue, with less than two months until the New Year, we would advise shipowners and operators to prepare for the transition and ensure that they have in place the most efficient and best-priced fuel procurement strategy that meets the needs and demands of their specific operations and transit routes.” In a statement CMF said it was ready to offer 3.5% sulphur content fuels at all of its ports from 15 November onwards. It said: “Thanks to Cepsa’s refineries at Tenerife, Algeciras and Huelva, CMF will guarantee the best quality of these fuels and all other products, always adapting to the market demand and international standard regulations.”
12/10/11
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A TRUSTED NAME IN BUNKERING NOW DELIVERING IN GERMANY WEST & EAST AFRICA ■
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LNG-fuelled boxship
Korean shipbuilder DSME and Hamburg-based classification society Germanischer Lloyd (GL) say that the two companies have proved, in a recently completed joint project, the feasibility of running large container vessels on LNG. GL has approved in principle a design for a 14,000 teu LNG-fuelled container vessel for DSME. “New technology is needed as cleaner transport is increasingly demanded and maritime environmental regulations are becoming ever stricter,” said Frederick Ebers, vice president and area manager for North East Asia, GL. “DSME and GL have acknowledged this challenge and agreed in 2010 to jointly start exploring technology options and safety concepts for large LNGfuelled container vessels.” Gerd-Michael Wuersig, deputy head of GL’s environmental research department and member of the IMO Correspondence Group for the development of the Code for Gas as Ship Fuel (IGF-Code) said that most technical systems have been developed and examined. The major challenge lies in how to apply these technologies, especially the one ensuring safe bunkering procedures.
World Bunkering Winter 2011
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WORKING SOLUTIONS FOR ALL YOUR BUNKERING NEEDS Addax Bunkering Services Germany GmbH Zirkusweg 2, 20359 Hamburg Tel. No: +49 40 30 23 9680 Fax No: +49 40 30 23 96820 Addax Bunkering Services E-mail: hamburg@aogltd.com AN AFFILIATE OF THE Website: www.addax-oryx.com ADDAX AND ORYX GROUP
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Industry news
Cruise ships “to call at fewer ports” after 2015 ECA changes
David Dingle, chief executive of Carnival UK, said that, in response to the 0.1% sulphur content cap in emission-controlled areas (ECAs) in 2015, cruise ships would sail more slowly and would need to call at new and fewer ports In an interview with the Travel Trade Gazette he is quoted as saying: “New ships will go down the route of creating more variety onboard, as calling at lots of ports becomes less possible. If you look at our order bookings across our brands for new ships, you can see that they are bigger than the existing ships we have.” Mr Dingle also said he backed a proposal by the Cruise Lines International Association, which has proposed a way of allowing ships to use higher sulphur fuels once the 0.1% sulphur content cap comes into force. According to Mr Dingle, the director of environmental and health programmes at CLIA, Bud Darr, is proposing an interpretation of the IMO’s fuel rules that advocates the “averaging principle” - where ships would be able to burn highersulphur fuels as long as the average emission impact for the entire journey does not surpass the overall limit. The Travel Trade Gazette reports Mr Dingle as saying that Carnival was in “full support” of CLIA’s proposal. He said: “It would mean we could maintain compliance overall but still have flexibility. The argument of ‘averaging’ is the most appropriate way the cruise industry can comply with the current laws,” he said. However he also said that the sector was still likely to alter, even if cruise lines were given leave to follow CLIA’s interpretation. He said: “We will have to become more efficient anyway, because of the rising cost of fuel, which is making all cruise companies rethink their itineraries. We may have to go to fewer ports, or run at a constant speed to keep the same configurations for the engine. This might mean that we start offering different choices of ports than we do at the moment, if we travel at a constant speed along one coast, for example.” BIMCO launches EEDI calculator
Shipping industry body BIMCO says that development and verification testing is now completed for the first version of its Energy Efficiency Design Index (EEDI) calculator, which can be
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downloaded from the BIMCO website. The announcement comes soon after BIMCO’s Marine Committee had advised its shipowner members not to build new ships without EEDI, even if a waiver is available under IMO regulations agreed this July. BIMCO has developed the easy-to-use EEDI calculator to assist its members in calculating the EEDI and plotting a ship’s index against the relevant ship type specific regulatory limits imposed by MARPOL Annex VI. The EEDI calculator is an implementation of the calculation guideline contained in IMO Circular MEPC1/Circ681. The calculation guideline is still being reviewed by MEPC and BIMCO will issue updated versions of the EEDI calculator as amendments are published in the future. BIMCO says that it hopes that the calculator will make EEDI performance of known ship designs more visible, as well as providing an easy way to assess changes in EEDI when design parameters are altered. While EEDI issues have more or less been settled for ship types such as containerships, tankers and bulk carriers, there is controversy surrounding the application of EEDI to some types including ferries. At the recent Interferry conference in Barcelona, Deltamarin concept design manager Esa Jokioinen reported on work to find a “ferry-friendly” EEDI formula within two years of it becoming mandatory for other vessels in January 2013. Studies for the European Maritime Safety Agency (EMSA) had shown that the current formula produced up to 300% scatter in ferry index values depending on their speed and capacity. He said: “The EEDI represents a power limit which is in effect a speed limit. It might be OK for some ships to reduce engine power and slow down, but how would this work for ferries taking into account schedules, redundancy and safety margins?” Ferries, Mr Jokioinen argued, needed a formula that recognised their speed dependency and defined capacity on measures like deadweight tonnage and lane metres rather than the “possibly misleading” gross tonnage calculation. The European Maritime Safety Agency is to host a workshop on the proposals in December.
World Bunkering Winter 2011
12545_2 Half Page Vertical ads_JD.qxd
Mabanaft buys Bominflot
Mabanaft, the trading division of privately-owned German conglomerate Marquard & Bahls, is buying Bominflot Bunkergesellschaft, also German-based, for an undisclosed sum, subject to approval by antitrust regulators. A statement says: “The combination of Bominflot and Matrix Marine, Mabanaft’s subsidiary in the bunkering business, will enable both companies to leverage their respective strengths in sustainable fashion over the long term to secure further growth.” Under the agreement, all bunkering operations of Bominflot and Matrix Marine will be combined into the Bominflot Group, which will operate under the Mabanaft umbrella. The companies will continue to operate under their existing names, which are well known in the market. Following the merger, Bominflot’s managing director Peter Schreiber takes charge of the Bominflot Group. Stefan Herde, managing director of Matrix Marine Holding, will be appointed as part of the Bominflot Group executive management team. Bominflot is a major independent bunker trader and supplier with more than 35 years of experience. Its business portfolio covers activities ranging from the supply of bunker fuels to lubricants, cargo trading and other services to the shipping industry. Operating around the globe with a staff of more than 300 in 36 offices worldwide, Bominflot is organised into three regions, The Americas, Europe/Africa and Far East/Middle East. Mabanaft became involved in the bunkering business in 1997 when it bought Matrix Marine Fuels based in Houston. Current locations are the US Gulf Coast, Singapore, Oman and India. Marquard & Bahls’s operations include international trading and the import and wholesale of petroleum products. The company is also active in service stations, bunker services, heating-oil retail, lubricants, biofuels and wood pellets.
13/10/11
15:43
WHEN IT COMES TO SUPPLYING YOUR BUNKERING NEEDS, WE’RE IN OUR NATURAL HABITAT As we always deliver a majestic performance and delivery
Quadrise to commence sea trials
UK-based Quadrise International announced in September that it had finalised contracts to commence sea trials of its Marine MSAR bunker fuel, moving the company a step closer to commercialisation. Quadrise is developing the emulsion fuel as a low-cost alternative to heavy fuel oil in the shipping, refining and power generation markets. The results of the sea trials evaluation programme are expected during the first half of next year. The company has signed deals with AP Møller-Mærsk, Orlen Lietuva refinery in Lithuania and AkzoNobel Surface Chemistry which, Quadrise says “define the contributions and responsibilities for all facets of the production and evaluation programme”. Quadrise’s executive chairman Ian Williams said: “These sea trials represent a key milestone for the company and, potentially, for the marine sector. QIL and its partners have worked tirelessly to get to this stage of Marine MSAR evaluation. We look forward to confirming the opportunity that this represents for the company and our partners in the marine fuels industry.” In October the company posted a loss after tax of £6.6 million ($10.4 million) mainly due to non-cash charges of £4.8 million. The company also reported cumulative tax losses of £29.6 million available for set-off against future profits, which should enable the Group to mitigate substantial tax charges anticipated in the earlier years of sustainable revenue. The company had no debt and £4.0 million in cash reserves at 30 June 2011 following a successful fund raising in March 2011. The company said it had sufficient funds for the full commercial phase.
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WORKING SOLUTIONS FOR ALL YOUR BUNKERING NEEDS 12, rue Michel-Servet P.O. Box 404 1211 Geneva 12 Switzerland Tel. No: (41-58) 702 90 40 Fax No: (41-58) 702 91 40 Addax Bunkering Services E-mail: abs@aogltd.com AN AFFILIATE OF THE Website: www.addax-oryx.com ADDAX AND ORYX GROUP
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WHEN YOU’RE BUNKERING, fUEl yoUR compEtitiVE EdgE.
timE was tHat yoU coUld taKE a RElaxEd ViEw of BUNKER pRiciNg. BUt tHosE days aRE goNE; Now it caN BitE dEEp iNto yoUR pRofit maRgiNs. so yoU NEEd to sHaRpEN Up yoUR act. Platts Bunkerwire is the industry newsletter that opens up the world of marine fuel prices and supply. It is full of performance-enhancing information that enables you to react quicker and compete better in volatile markets. Drink daily and you will see more, know more and be able to win more.
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Risk Management
Price headache gets worse
Martin Stopford
Soaring bunker costs have helped push liner companies into the red, as Sandra Speares reports.
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s operating costs continue to rise and with the shipping industry facing an overcapacity problem and low freight rates, keeping risk to a minimum is essential. The impact of high bunker prices was illustrated by Horizon Lines’ October move to discontinue its transPacific Five Star Express service linking the US West Coast with Guam and China, citing rising fuel costs among its reasons. The service was first set up in December 2010 but according to the Shanghai Container Freight Index, eastbound freight rates have fallen more than 37% in the past 12 months, from $2,400 per 40 foot container in October 2010 to approximately $1,500 in October this year. At the same time bunker fuel has risen more than 40% since the launch of the service. “We do not expect any measurable improvements in fuel prices, the freight rate environment or in this trade lane for the foreseeable future,” Horizon chief operating officer Brian Taylor said. “Growing capacity continues to outpace demand and the forecast for 2012 calls for more of the same.” Meanwhile global container shipping and logistics services provider NOL Group announced at the end of October a net loss of $91 million for the third quarter of 2011 compared to a profit of $282 million in the same period last year. The group said its APL Logistics business reported higher revenue and a 9% year-to-date gain in core earnings before interest and taxes, but said the container shipping business “incurred losses in line with an industry-wide trend. “The liner shipping industry is faced with slowing trade demand, excess capacity and fuel costs that are significantly higher than a
World Bunkering Winter 2011
year ago,” said NOL Group chief executive Ng Yat Chung. “Our urgent priority is to drive down costs and increase efficiency.” Managing counter-party risk through good due diligence and dealing with reliable suppliers is an essential element when dealing with a volatile market. Costly disputes can arise for both suppliers and their customers for non-payment of bunkers, quality and supply issues. Stringent cost control is necessary with some bunker companies reported to be restricting credit terms. Sound risk management strategies are needed, not least when according to accountants Moore Stephens vessel operating costs are expected to rise by 3.8% in 2011 and by 3.7% in 2012, and lube expenditure and crew costs identified as the categories most likely to produce the highest levels of increase. The Op Cost survey 2011 is based on responses from key players in the international shipping industry, predominantly shipowners and managers in Europe and Asia. And those responses identified lubricants as the cost category likely to increase most significantly over the two-year period – by 3.6% in 2011, and by 3.1% in 2012. According to Danish analyst Global Risk Management, although there are some dips, the oil price trend remains upwards. Global, which is part of United Shipping and Trading Company, one of Denmark’s biggest concerns, offers clients customised hedging solutions to fuel price risk. In its latest quarterly survey, Global says the outlook on oil price fundamentals has strengthened in part because of the conflict in Libya, which has taken supply out of the market. “With a former daily production of 1.6 million barrels, the conflict has now taken around 300 million barrels of oil out of
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the market. With the period of high oil prices in the spring this has an adverse effect on growth. This is part of the reason why we see lower growth numbers currently. In the coming months either supply has to increase or demand to decrease to cover the gap. Looking at the supply/demand balance, it is still very bullish for the market.” According to Global, while oil demand in China and especially for distillates “has been a bull story for the past years”, the hedge expert believes that: “Even though we see a period with lower demand growth in China – the level demand has reached is enough to keep a slightly bullish rating on oil prices. “Financial indicators are still dominating the oil market – debt crisis in both Europe and the US being the major cause. Furthermore, we are currently in an economic slowdown with lower demand. “In the longer run, the inflation expectations, solved debt crisis and recovered economic growth will support oil prices as we enter 2012. All in all, we have revised our oil price forecast for the coming period down.“ The survey says that investors are increasingly scared of betting on oil due to the bleak outlook of the economy. Investors in oil are on high alert after the IEA released strategic inventories during the summer. “The outlook for continued growth in oil demand looks more bleak as economic numbers point towards another slowdown. The money managers have cut a significant amount of their net long position on oil, but the position is still relatively high. Investors are now increasingly looking at gold as a safe haven asset.” The IEA’s decision to release strategic storage, has made a long position on oil more risky, the report says. “Further, inflation indicators are pointing lower. Generally speaking the financials as a whole have become less bullish on oil prices the past months.” Other geopolitical issues that need to be taken into account are
the situation in Iran, Nigeria and Venezuela, the report suggests. Iranian sanctions have been affecting oil production, not to mention putting oil companies, shipping lines and brokers, to name but a few segments, at risk of legal proceedings for sanctions busting. However, given the expense of the military intervention in Libya, military action in Iran seems unlikely, according to the report. However, it says that oil prices remain bullish on the back of lower production and the possibility of an uprising within the country. As far as Nigeria is concerned, the report says “a recent force majeure has been affecting exports of Nigerian crude in June and July. The reason was sabotages along with the general election in the country. Production has now stabilised, but there is still unrest in the country. Unrest in Nigeria, where another important part of the Libyan-like diesel – rich, light sweet crude is produced, is definitely not something the world economy is happy about”. Venezuelan production is picking up again now that foreign operators are being invited back, the report says. It questions whether there may be a change of leadership at the next election. Commenting on the outlook for the next decade at Moore Stephens’ recent Op Cost seminar Clarksons director Martin Stopford said that shipping’s next decade will be a cost decade not a revenue decade. While the last decade was about getting ships on the water, the emphasis now was to search for solutions to get costs down. Shipyard overcapacity will mean cheaper ships, lower earnings and a strategic focus on cost control. Bunker prices might now be $500 per tonne when the ship was designed for $50 per tonne, and low sulphur alternatives might push the prices to $900, with IEA forecasts of $1,000 to $1,500, he told delegates.
Fuel costs are significantly higher than a year ago due to a lack of supply earlier in the year
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World Bunkering Winter 2011
environment
Preparing for Durban
ICS secretary general, Peter Hinchliffe
As David Hughes reports, campaign groups and industry organisations have been setting out their stalls ahead of the UN Climate Change Conference in Durban.
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here was a flurry of activity in October and early November from the many groups that have interests at stake or who wish to push particular agendas at the impending United Nations Climate Change Conference. (UNCCC), which will be held in Durban, South Africa, from 28 November to 9 December. In September, Oxfam and WWF set out their plans for a “carbon price” of $25 per tonne on bunkers that would, they said, help cut emissions while generating $25 billion per year by 2020. The cash generated would be used both to compensate developing countries for marginally higher import costs that could result from the carbon price, and to provide more than $10 billion per year to the Green Climate Fund (GCF). The GCF was established at last year’s UNCCC in Cancun, Mexico, to channel funds for tackling climate change to developing countries, but is currently empty. The two NGOs have lobbied hard with a well thought-through campaign aimed at key players at Durban. Many, perhaps most, in the shipping industry would initially have had big problems with this plan. Fundamentally it sees shipping as a cash machine. The idea that it could really help cut emissions significantly seems unconvincing to many involved in the industry. Shipping has plenty of incentives to cut fuel use, primarily the increasing cost of bunkers. There are, essentially, two different issues that need resolving. Pressure is growing at UNCCC to include shipping in some form of emissions regime, with emphasis increasingly on its potential as a source of funds. In this respect, the focus of the shipping industry representatives is to ensure that the collection of any funds is done within an IMO framework.
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The second issue is what sort of system should be in place to reduce shipping emissions? While there was initially strong political support for an emissions trading system, the majority of the industry has now come out in favour of a simple bunker levy. In September, the International Chamber of Shipping’s (ICS) director of external relations, Simon Bennett, advocated the IMO’s proposed environmental compensation fund, based on contributions from the shipping industry linked to “fuel compensation” (a bunker levy), to the United Nations Committee on Trade and Development (UNCTAD). Speaking at a special UNCTAD meeting in Geneva to explore how the world’s sea ports should prepare for adaptation to the threat of dangerous climate change, Mr Bennett said that the IMO proposal could help ports adapt to the effects of rising sea levels – and the increased likelihood of storms, flooding and extreme weather events. An environmental compensation fund is the market based mechanism (MBM) preferred by the majority of the global shipping industry, rather than the alternative of emissions trading schemes (ETS), which have also been proposed by some governments in discussions at the IMO. ICS agreed earlier this year to a policy of preferring a bunker levy rather than an ETS if it was decided to implement some form of MBM. At that time it was thought possible that the package of technical measures developed at IMO and approved in July might be sufficient to convince governments, and the European Union, that shipping was doing enough to combat global warming. That did not seem an unreasonable assumption and was reinforced by an IMO-commissioned study into the impact of mandatory energy efficiency measures for international shipping, which shows
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that the implementation of the measures will lead to significant reductions of greenhouse gas (GHG) emissions from ships, specifically the reduction of carbon dioxide (CO2), resulting from the enhanced fuel efficiency. The study was undertaken by Lloyd’s Register in partnership with Det Norske Veritas. It found that, by 2020, an average of 151.5 million tonnes of annual CO2 reductions are estimated from the introduction of the Energy Efficiency Design Index (EEDI) for new ships and the Ship Energy Efficiency Management Plan (SEEMP) for all ships in operation, a figure that by 2030, will increase to an average of 330 million tonnes annually. Compared with business as usual (BAU), the average annual reductions in CO2 emissions and fuel consumed are estimated between 13% and 23% by 2020 and 2030 respectively. Published in mid-November as the “Assessment of IMO mandated energy efficiency measures for international shipping” the study was aimed at influencing negotiators at the Durban conference. In a statement IMO said that it would report to UNCCC on the “breakthrough adoption”, in July this year at IMO’s Marine Environment Protection Committee (MEPC), of mandatory technical and operational measures to reduce GHG emissions from international shipping. Amendments to the International Convention on the Prevention of Pollution from Ships (MARPOL), Annex VI, add a new chapter on Regulations for energy efficiency on ships. The regulations will apply to all ships of 400 gross tonnage and above and are expected to enter into force on 1 January 2013. The new chapter makes mandatory the EEDI for new ships, which, in essence, requires new ships to be designed to be more energy efficient (and thereby release less greenhouse gases). The regulations are not prescriptive: as long as the required energy-
efficiency level is attained, ship designers and builders are free to use the most cost-efficient solution or solutions for each particular ship. The new regulations also make mandatory a SEEMP for all ships. This is a plan that sets out, for an individual ship, how energy savings can be made. There are a variety of options to improve efficiency – speed optimisation, weather routeing and hull maintenance, for example – and the best package of measures for a ship to improve efficiency differs to a great extent depending upon ship type, cargo, route and other factors. The new regulations make such a shipspecific plan mandatory thereby encouraging the shipping industry to review its practices in a systematic way to find the best balance. Significant reduction of CO2 emissions from ships due to EEDI and SEEMP regulations is foreseen by the IMO study to 2050, with emission reduction due to SEEMP likely to be realised more rapidly than that for EEDI, as the effect of EEDI will occur only as and when the older, less efficient, tonnage is replaced by new and more efficient tonnage. The estimated reductions in CO2 emissions, for combined EEDI and SEEMP, from the world fleet translate into a significant annual fuel cost saving of about $50 billion in 2020 and about $200 billion by 2030; using fuel price increase scenarios that take into account the switch to low-sulphur fuel in 2020. The IMO says that the mandatory application of EEDI will drive more energy-efficient ship design and realise the CO2 emission reduction potential associated with technical innovation and the use of lower or no-carbon fuels. The mandatory use of SEEMP based on current IMO regulations will provide a procedural framework for shipping companies to recognise the importance of the operational energy-saving activities. It will significantly boost the level of awareness and, if
IMO agreement on technical regulations will reduce ships’ CO2 MARPOL Annex VI, Chapter 4 adopted July 2011
Regulations enter into force for over 90% of world fleet
EDDI requires new ships to meet agreed efficiency targets
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New ships must improve efficiency up to 20%
New ships must improve efficiency 30%
50% CO2 reduction per tonne/km (industry goal)
20% CO2 reduction per tonne/km (industry goal)
Ship Energy Efficiency Management Plan (SEEMP): mandatory implementation for all ships
2013
New ships must improve efficiency 10%
2015
2020
2025
2030
2050
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implemented properly, will lead to a positive cultural change. Investigations show that ship hydrodynamic and main engine optimisation will bring about energy-saving opportunities of around 10% with no significant additional cost of shipbuilding. However by November it was clear that considerable momentum had been building for global shipping to contribute to a Green Fund. IMO noted: “The IMO regulations represent the first-ever mandatory energy efficiency measures for an international transport sector and their adoption followed several years of work on the matter. Work is now progressing on market based measures, with intensive work to review a number of different proposals, submitted by governments and observer organisations.” It added that further work would be carried out on market based measures in 2012. Such measures would place a price on greenhouse gas emissions, thereby providing both an economic incentive for the maritime industry to invest in more fuel-efficient ships and technologies and to operate ships in a more energy-efficient manner, and a mechanism to offset growing ship emissions in other sectors. “In addition,” IMO said, “these measures can generate funds that could be used, for example, for projects to mitigate climate change in developing countries.” Speaking in Geneva, Mr Bennett had noted: “The advantage of a compensation fund linked to ships’ fuel consumption is that some of the monies raised could be readily directed by IMO to environmental projects in developing countries, such as the adaptation of ports to climate change.” However, he warned that developing nations should play close attention to discussions at IMO, and to the parallel discussions at the UNCCC, “to ensure that developed nations did not end up keeping the lion’s share of any money raised from shipping for themselves”.
ICS said it believed that any money raised from shipping through MBMs for CO2 reduction should primarily be directed to projects which improve the environment in developing nations or which allow the shipping industry and developing nations to prepare for the effects of climate change, for example protecting ports. “Shipping fully accepts the need to play its part and – if governments so decide – participate in market based measures” said Mr Bennett. “But measures to reduce CO2 emissions should not be used to treat the shipping industry as a ‘cash cow’, simply to boost the balance sheets of richer countries that are currently in economic difficulties.” In November, in a bid to press home its arguments, ICS produced a briefing document for government climate change negotiators, “Shipping, World Trade and the Reduction of CO2 Emissions”. ICS Secretary General, Peter Hinchliffe said: “The international shipping industry is firmly committed to reducing its CO2 emissions by 20% by 2020, with significant further reductions thereafter. However, the Durban Climate Change Conference needs to give the International Maritime Organisation a clear mandate to continue its vital work to help us deliver further emission reductions through the development of market based measures.” He added that the shipping industry believes that IMO was “very well placed to continue the real progress it is making on market based measures to help deliver further emissions reductions”. An ICS statement added: “This includes a possible shipping industry environmental compensation fund – with possible linkages to any ‘Green Fund’ agreed by UNFCCC. This could address the Kyoto Protocol principle of ‘common but differentiated responsibility’ (CBDR) by directing the lion’s share of any funds raised from international shipping to environment related projects in developing countries, including climate change mitigation and adaptation.”
Comparison of CO2 emissions between different modes of transport Source: NTM, Sweden
Cargo vessel over 8,000 dwt
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Cargo vessel 2,000-8,000 dwt
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Heavy truck with trailer
50 Air freight 747-400 1,200 km flight
0
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200
300 Grams per tonne-km
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540 500
600
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testing
Increased focus on testing
Geoff Murphy of Marintec
As Sandra Speares reports, accurate testing is going to be vital when implementing the new stringent guidelines on supply of bunkers.
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mplementation of the Singapore Standard Code of Practice SS600, which covers pre delivery, delivery, post delivery and documentation, further established Singapore as a key centre for bunkering, and a major port for bunker testing, according to Geoff Murphy, sales manager for Maritec Pte Ltd. Procedures outlined in the Singapore Standard SS600 guidelines encompass the requirements that assist in eliminating sharp practice and address the resolution of disputes involved in bunker supplies. The emphasis in the SS600 guidelines is on securing five representative samples during the bunkering process for analysis and retention, to ensure bunkers supplied meet the ISO8217 Standard Specified, and are in compliance with the appropriate MARPOL Annex VI regulations. Samples are to be available for the bunker surveyor, the cargo officer and the test programme laboratory, with two to remain on the vessel for MARPOL requirements and the vessel’s retention. Geoff Murphy believes that Maritec’s system of utilising a single central laboratory based in Singapore to complete all analytical tests, and issue reports is beneficial, and enables economies that can be shared with clients. Singapore is a major hub for airfreight, consequently samples are couriered from locations around the world for analysis to be carried out, and reports issued with recommendations, within 24 hours of the sample being received. Maritec operates a genuine seven days a week, 365 days a year coverage, utilising their multi-denominated team to cover all religious holidays. Samples are retained at the central location, to be available for
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further testing or subsequent evaluation with later bunker samples from the same vessel, for example for compatibility testing. Some competitive organisations operate several laboratories, or outsource testing to specialist fluid testing laboratories at other locations. This can mean that previous samples from vessels are at different locations, and that the organisations have additional overheads, Murphy says. The consequences of the phased introduction of IMO MARPOL Annex VI, international and regional regulations for the reduction in sulphur content of marine fuels, together with the EU and California port requirements for distillate fuels, is that the cost of compliance is beginning to bite, as the industry moves towards a 0.1% limit. Operational changes on vessels will increasingly be required for handling lower sulphur fuels, which will include the requirement for dual fuel systems, purging and flushing capabilities, and documented procedures, he says. Existing equipment, such as boiler and engine systems will need to be modified to deal with low viscosity fuel, with decreased lubricity, and variations in ignition and combustion characteristics, Murphy adds. Additional bunkering and storage is also needed for low-sulphur fuels on vessels operating in emission control areas, and to meet EU port requirements. These should be sufficient to avoid unnecessary mixing of different bunkers in case of incompatibility problems, and to be available for an extended port stay, although the consequences of running out have yet to be clarified, Murphy believes.
World Bunkering Winter 2011
The increase in demand for low-sulphur distillate fuel is expected to increase the potential level of catalytic fines contamination from the production process included in the fuel supplied. Concerns at the present are that the additional fuel costs required to comply with the proposed legislation, and the cost of equipment to meet the lower emissions limits – be they modified existing equipment or additional equipment such as exhaust gas scrubbers – will make short sea shipping less economic and attractive than transport by road, Murphy warns. There have been some changes in the line up of testing companies in recent times, as Guardian Marine Testing announced that it had reached a strategic agreement with Lloyd’s Register’s FOBAS in August. Under the terms of the agreement LR will take a non-controlling stake in the company. GMT says its clients will benefit from a wider database for fuel statistics and quality advice, increased global coverage and local testing facilities in Singapore. “GMT wishes to reassure all client that we will remain competitive and all prices will remain unchanged; therefore all GMT clients will still benefit from one of the leading competitively priced fuel testing providers,” the company said when the deal was announced. Meanwhile Intertek’s Lintec Testing Services is expanding its global marine fuel testing services to regional facilities in Singapore and Houston. According to the company, only about 50% of ships test their fuels, and “the remainder are taking serious and potentially expensive risks by not having their fuels analysed”. Intertek’s strengths in service, know-how and delivery bring a welcome alternative and added-value to the global marine market, the company says. Intertek has recently acquired the QinetiQ fuels and lubricants testing business, the addition of which expands Intertek’s existing testing, consulting research and expert services in the United Kingdom and beyond, according to Intertek. “Testing of lubricants for energy, industrial, transportation and governmental clients often called ‘oil condition monitoring’, is a multimillion pound global market, supporting a huge range of
moving machinery, from engine and gearbox management to windfarm turbines. Lubricant quality problems can cause costly engine and mechanism failures if not detected and addressed properly at an early stage.” In addition, Intertek says, the acquisition of the fuels and lubricants business expands its capabilities in R&D support for new fuels, lubricants, additive packages and specialist evaluations. “By acquiring the fuels and lubricants testing business from QinetiQ, Intertek increases market share in a number of key markets, allowing us to offer enhanced, higher value consulting and expertise for fuel and lubricant clients. Intertek is also looking forward to a closer working relationship with QinetiQ following this deal”, said Phil Norman of Intertek’s chemical and pharmaceutical division. Rob Little, managing director of QinetiQ Evaluation & Test Services added: “QinetiQ and Intertek will work closely to ensure a smooth transition of operations. Continuity of service to key customers remains a priority for both parties.” Shipowners have been concerned that the onus for testing for fuel quality may be veering towards the owner of the vessel rather than the supplier, although testing companies say that testing as the fuel is loaded will determine whether the bunker supplier has provided fuel which is to specification. However, it is suggested, it is the responsibility of the ship if there are problems about mixed fuel and procedures will evidently need to be in place to determine who is right and who is wrong in the event of a dispute. The move towards more eco-friendly fuels, including diesel has resulted in a number of issues including viscosity problems resulting from burning light diesel in engines that were designed to burn heavy fuel oil. There are lubricity problems, too, with the move to low-sulphur fuels because ships used to rely on lubes to lubricate the pumps. Commenting on owner concerns that ships might be left with a fuel on board that was not fit for purpose, one testing company suggested that it was “rare to have to offload fuel. Most of it is a money-back thing”. It remains to be seen how many ships end up being detained in port because they do not meet the necessary requirements, and where the legal burden will fall if this is the case.
Maritec uses a single laboratory in Singapore for all of its analytical testing
World Bunkering Winter 2011
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BLENDING
The IBIA guide to in-line blending
Trevor Harrison
Trevor Harrison introduces this useful new publication
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n April 2009, in response to requests from a number of members, the IBIA Board agreed to establish a committee to look into the issues relating to in-line blending of bunker fuels. The committee was duly established under my non-technical chairmanship and we quickly established that the first task we should undertake was to develop a short guide on the topic. Representatives from bunker fuel suppliers and users, equipment manufacturers, fuel testing organisations and others have pooled their resources to produce the guide which, in a few pages, explains the principles of fuel blending generally and the specific functionality of the differing in-line blending techniques and control systems. Areas covered include a summary of different blending techniques, in-line blender location, metering, on-line analysis of product, feedback control, testing, certification, commercial reference sampling, user operation and overall reliability. A copy of the guide is being sent to members with this copy of World Bunkering. Members are also able to download a PDF copy from the IBIA website. Further printed copies are also available for purchase by third parties from the Secretariat. I am grateful to all members of the committee for their various contributions but special thanks must go to Jon Moreau of Cameron and Jiskoot Quality Systems, Tommy Christensen of CBI and Go4 Bunker ApS, and Jon Watson of Razaghi Mayer International, each of whom made particularly useful technical contributions to the final product – a first class blend one might think. Jon Moreau, Director, Business Development at Jiskoot Quality Systems told World Bunkering: “The IBIA In-Line Blending Guide is written to provide impartial technical guidance for those who are
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considering the use of in-line blending for the physical supply of bunker fuels. It considers the issues that need review when deciding the most appropriate blending technology to meet the quality certification, profit improvement and operational needs of a facility. It will enable the reader to make an informed decision about how and if to use in-line blending within their facility and the issues they need to consider to ensure that they maximize their return on investment.�
A barge-mounted in-line blender
World Bunkering Winter 2011
Blending
Adding value
Ara Barsamian of the Refinery Automation Institute LLC describes how to use a single blend optimizer to maximize
Ara Barsamian
bunker profits quickly.
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n the current global economic downturn, we can increase profit margins in the face of constantly increasing fuel and operating costs by using a bunker blend optimization tool. By optimization I mean maximising profit; and as such, money has to be explicitly included in blend optimization calculations. There are three types of blend optimizers: • Single blend single product optimizer • Multi-blend optimizer • On-line single blend optimizer Here I am concentrating on the single blend single product optimizer (SBO) because, in terms of value, or bang for buck, it easily provides multimillion dollar benefits for a modest ten to twenty thousand dollars investment, and essentially zero risk. The multi-blend optimizers (MBOs) provide tens of millions of dollars in benefits, mostly in the reduction of inventory and freeing up of tank storage capacity. But this comes with a much higher initial investment cost, in the order of $200,000-$400,000, and the additional complexity, eg links to a refinery LP planning tool. The on-line blend optimizer (OBO) is a necessity for large (50kBPD or more) in-line blenders, with typical benefits being in the range of $5-$10 million a year or more for a significant investment in a control system and on-line analysers, of the order of $1-$2 million. Blend optimization applies equally to bunker, marine distillates, gasoline, diesel and other fuels, but I am focusing on marine bunkers. Functionality of single blend single product optimizer
components properties, available inventory, prices, product specs, and batch size • It calculates the blendability of a component for buy/sell decisions; for example, can you use the opportunistic cargo of cracker bottoms to make a desired quantity of IFO380 by also using the other blend components you have on hand? • It allows the forced use of a particular blend component in a blend to make room in the component tank for additional receipts or rundowns, or prevent overflows. The same forced use can also be done for multiple components. • It calculates the cheapest recipe to correct an off-spec product tank. Input data requirements for single blend optimization
The optimizer calculations require the following data: • Blend components quantities (inventory). Properties (from Lab) and prices (from Platt’s, OPIS, refinery LP, other traders) • Product quantity (heel) in the blend tank, heel properties (from Lab) and prices (from Platt’s, OPIS, refinery LP, other traders) • Product specifications (as specified in the contract; it could be ISO8217:10 or ISO8217:05, or custom specs as agreed) • If available from the Lab, the site measurement precision (ISO or ASTM repeatability and reproducibility); this can be used to zero out the errors between Lab tests and the blend optimizer predictions • All this information is stored on a small spreadsheet-based local data base, in the form of a case; you can store different cases for making IFO380HS or IFO380LS, IFO180HS, etc.
A single blend optimizer does the following: • It calculates the most profitable recipe based on available
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Single blend optimization output results
The results of the blend optimization provides: • The most profitable recipe • The blend components used • The blend batch size • The predicted properties of the finished product blend • The profit in $/mt (or m³, barrels, etc).
Bunker Blend Optimizer Results
Blendability testing
Blendability testing is another application of the single blend optimizer. As a trader, and potentially an independent blender or refiner, when you have an opportunistic cargo of a blendstock, say, cracker bottoms, should you buy it? Can you make any money with it? The fastest way is to run a blend for the product spec and quantity you need. This requires doing the following: • Entering the opportunistic cargo specs, eg cracker bottoms into the optimizer blend component data base • Entering the cracker bottoms offered price ($/mt) • Selecting the product spec, eg IFO380 4.5%S • Blending the batch size, eg 33,000 mt. Then, you can run a case with cracker bottoms and without, and compare the gross profit per tonne. In the example below, the gross profit/tonne without the cracker bottoms is $16.97 versus $35.15 with the cracker bottoms, for exactly the same specs and blend quantity. The single blend optimizer can also be used for storage tank capacity management. We are often faced with a situation where to make room in a tank you either have to put in an opportunistic cargo, have an emergency run-down to the tank, or simply allow an inventory build-up that threatens a tank overflow. A single blend optimizer allows us to quickly evaluate a reasonable option by manually forcing the use of x-barrels out of the subject
tank to make both room in the tank for something else, while we make a finished product blend that still meets specs, albeit at possibly a reduced profit. But we know what to expect before we actually do it. In the example below, we forced an increased use of Visbreaker resid from 34,914 tonnes to 40,000 tonnes in the blend to make room for a new resid cargo, the penalty being a decrease in gross profit from $0.50/tonne to $0.30/tonne. Yes, you can do much better financially with an MBO over a longer period of time, say ten days to a two-week time horizon rather than having a myopic view of a single blend, but it takes much more information, more expertise in using the MBO software, and the MBO software itself costs in the region of $200,000-$400,000, in comparison to less than $10,000 for the single blend optimizer. To summarise, using an SBO can improve bunker profit margins. This applies equally to marine distillate blending, gasoline, diesel or other fuels. It provides millions of dollars of annual benefits for a modest investment of $20,000, and without the elaborate training and support costs.
Typical Bunker Blend Components
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World Bunkering Winter 2011
Fuel ADditives
Adding value
Additives are seen as the new means of overcoming risks relating to low-sulphur fuels, and companies are moving with the times, Sandra Speares reports.
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uel savings, lubricity, emissions’ reduction and limiting damage to engines are just some of the areas in which putting additives into marine fuels can play a part, suppliers maintain. However, putting additives into bunker supplies, for example to reduce sulphur content, also raises concern about negative effects, including wear and tear to engines, increasing levels
CCV-412_Jiskoot_resize.indd 1
World Bunkering Winter 2011
of cat fines and other problems. Cat fines – abrasive particles made up of aluminium and silicon – can cause considerable damage to engines including engine failures. Concerns have been raised that changes made in the ISO8217:2010 as opposed to the previous standard might result in chemical waste products from ethylene including ethylene cracker residues making
10/25/10 4:48:47 PM
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Product Verification
Reducing CO2 emissions by using low-quality cutter stock can lead to operational difficulties
their way into bunker fuel in high concentrations. The demands of meeting the new low-sulphur requirements have meant that bunker fuel suppliers might have to use more cutter stock than usual in order to comply with the regulations. Low quality cutter stock has been leading to operational problems including filter choking, piston ring breakages and jammed fuel pumps, among other difficulties. With the advent of low-sulphur fuels, and with rising pressure on costs, additives suppliers’ technology is moving with the times. Additives suppliers have stepped into the breach to provide a whole range of alternatives that aim to solve the problem of low quality cutter stocks and the demand of introducing low sulphur. For example Power Research produce a range of products that not only aim to address lubricity and stability problems but also reduce sludge. The company’s PRI-D product for distillate fuels claims to enhance thermal stability and lubricity resulting in reductions in fuel injection pump wear of as much as 45%, better engine performance, reductions in carbon and fuel system deposits with improved ignition quality. Other products offered by the company cover sludge reduction and deposit prevention for heavy fuel oils. Power Research also produces microbiocides, designed to kill bacteria, algae and fungi in fuels. Infineum meanwhile is providing a range of marine fuel performance additives designed to address the problems resulting from desulphurisation, deposits in exhaust tracts, boilers and heat exchanges as well as fuel instability. Two products offered by the company include a combustion improver, which the company says reduces soot build up, reduces risk of exhaust tract fires and smoke emissions. The second product is the Infineum Combustion Chamber Cleaner, which aims to reduce deposit build up on piston rings, injection nozzles and valves as well as preventing the build up of cylinder liner lacquering, bore polish or fuel pump and injector needle seizures, with a resulting decrease in engine downtime. September saw the completion of the acquisition of Lubrizol by Warren Buffett’s Berkshire Hathaway – no small endorsement for the specialist chemicals company. The deal for Lubrizol totalled $135 per share in a transaction worth approximately $9.7 billion overall. “Lubrizol is a great addition to the Berkshire Hathaway family of companies,” said Warren Buffett, Berkshire Hathaway chief executive officer. “We expect to see continued strong performance from the
World Bunkering Winter 2011
company as it executes its growth strategies.” Lubrizol earlier in the year produced new data demonstrating that its Lubrizol 9040 Zer0 series of deposit control additives cleans internal diesel injector deposits (IDID). “While previous XUD9 and DW10 testing demonstrates the ability of Lubrizol 9040 Zer0 Series to clean nozzle coking deposits on diesel fuel injectors and protect against power loss, including in the latest common rail diesel fuel systems, the new engine test data illustrates how the product, at highly competitive treat rates, also performs deeper inside the injector to effectively clean IDID,” the company said in a statement. According to Keith Corkwell, Lubrizol’s regional business manager: “Conventional fuel deposits that accumulate at the tip of diesel injectors have always been an industry concern, but over time, deposit control additives successfully evolved to ensure adequate engine performance. Today though, as fuel and emissions legislation drive new injector designs, moving parts are becoming smaller, lighter and more intricate, all while serving in harsher environments with greater temperatures and pressures.” According to Lubrizol, even the smallest deposits can affect engine performance, and it stressed the importance of additive technology keeping pace with the move towards low sulphur and biodiesel. “Whether formulated in a premium diesel fuel or applied through a bottle directly to the fuel tank, fuel additives must not only help to keep injector nozzles clean, but must also be effective at cleaning deep inside the injector, where deposit control is now just as critical,” Corkwell said. Another company marketing a new additive programme is Enviro Petroleum, with its Enviro Plus and Eco-PTM offering. According to the company, Enviro Plus is a “safe, inexpensive liquid combustion catalyst that increases yield and power while reducing emissions. Eco-PTM is a web based marketing platform that monitors customer’s positive environmental contributions, including CO2 emissions reduction in real time.” Enviro Petroleum says the system can deliver fuel savings of 5% or more, with power or torque increases of 10% and maintenance cost reductions and CO2 savings. In adding Enviro Plus to the fuel, the fuel molecule is rearranged which allows oxygen to reach more hydrocarbons.
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BARGE design
The complexities of bunkering with LNG
Yannis Calogeras, product manager for French-based classification society Bureau Veritas examines the issues around working with LNG and its impact on bunker barge design.
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he use of LNG as fuel in the shipping industry is being driven by environmental concerns, typified by the increase in sulphur emission control areas (SECAs) and emission control areas (ECAs) aimed at reducing NOx, SOx, particulate matter (PM) and CO² emissions. There are economic reasons for this trend, too, not least that LNG is generally less expensive than HFO and much cheaper than distillate fuel. While there are undoubted benefits from the use of LNG as a fuel, and we will surely see more LNG-fuelled vessels, there are also genuine concerns. These are generally associated with lack of availability, logistics and infrastructure, issues with bunkering standards, arrangements and procedures, the design of the LNGfuelled vessel itself, and the competence and training of crews to handle LNG as an onboard fuel. Bureau Veritas (BV) has extensive experience of small shuttle LNG carriers, which possess similar characteristics to the vessels that will be utilised as LNG bunker ships. The 7,500m³ capacity Coral Methane has been in service since 2009. It operates under BV class, as will a 15,600m³ shuttle LNG carrier being built at Meyer Werft due for delivery at the end of 2012. Both ships are for Anthony Veder, and both have type C tank containment systems. The Coral Methane has both pure gas-fuelled engines and a separate engine room housing fuel oil-driven engines, while the vessel being built at Meyer Werft uses dual-fuel engine technology. In addition, BV is involved in a number of smaller specific LNG bunker vessel projects in the range of 2,500m³ to 6,500m³ capacities, for operation in a variety of different sectors. The bunkering of LNG-powered ships can be performed in a number of ways:
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• from portable tanks located on board the ship, for example using
containerised tanks or vehicle tanks that can be easily swapped when empty • from fixed shoreside storage tanks • from shoreside trucks, which will generally be utilised for small amounts • from floating non-propelled storage barges • from LNG terminals, which would be subject to relevant agreements and safety studies • from bunker ships, including multipurpose bunkering vessels that can carry both LNG and FO. Whichever method is chosen, it is important to ensure that suitable bunkering arrangements, facilities and procedures are designed that allow for convenient, repeated routine filling operations, therefore limiting disruption to the commercial operation of the vessel, while at the same time ensuring that the safety of operation remains paramount. There is some concern within the industry about the implications of performing LNG bunkering at the same time as other cargo operations, particularly for vessels that work to critical timetables and with short turnaround times in port, such as passenger ferries and containerships. However, risk studies such as HAZID and HAZOP, of which BV has extensive experience, may be performed to evaluate and address these concerns and to ensure that safety procedures and systems are adapted as necessary. The operation of LNG bunker vessels in port also requires careful consideration, especially in busy ones. LNG terminals and LNG carriers traditionally operate far away from the more congested areas in port, but this will not be possible for LNG bunker vessels. But once
World Bunkering Winter 2011
LNG type C containment system
again, suitable risk studies can be proposed to consider the issues. As for ship-to-ship (STS) transfer, BV has a great deal of experience with the Exmar/Excelerate LNG-RV vessels that have already undertaken more than 100 STS transfers. In this regard, BV has developed a guidance note for LNG STS transfer, which can be easily adapted to the specific needs of LNG bunkering. LNG bunker vessels are certified according to the IGC code as standard LNG carriers. BV has extensive experience with these vessels, having been involved with LNG sea transportation from the beginning. Such vessels will generally use dual-fuel technology in order to utilise the boil-off gas as fuel. In this particular instance, BV has rules and guidelines about safety for gas-fuelled engine installations, and
for the design and installation of dualfuel engines. BV classed the first LNG carrier with duel-fuel technology and has subsequently classed over twenty vessels with this type of propulsion system. Ideally, bunker vessels should be small, highly manoeuvrable, and able to perform short-duration shuttle operations. They should be capable of good environmental performance and need to be energyefficient, with low noise and vibration levels. They should also have high loading rates and versatile loading manifolds. They must, above all, be safe and user-friendly, with emergency release coupling and emergency shutdown systems and signal interfaces to prevent and minimise LNG release in case of failure. LNG pumps can either be fitted in the tank or be the external deepwell type, depending on the required bunker rate. Generally, type C tank containment technology will be utilised, bringing benefits that include boil-off gas handling by allowing an increase in pressure or through fuel gas consumption, partial loading capabilities and high loading rates. Other containment systems, of course, could also be considered.
The Coral Methane has both pure gas-fuelled engines and fuel oil-driven engines
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Interview
LNG, cat fines and combustibility
David Tongue
David Tongue, director of regulatory affairs at the International Chamber of Shipping, talks to Sandra Speares about some of the bunker-related issues facing the industry.
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sing LNG as a fuel on board ships has become an increasingly hot topic in recent times as owners seek to satisfy the demands of regulators with stringent environmental agendas. According to David Tongue, director of regulatory affairs at the International Chamber of Shipping, there are a number of initiatives currently underway in this area. Turid Stemre, senior advisor, Legislation and International Relations, Norwegian Maritime Directorate is co-ordinating the development of the ‘International Code of Safety for ships using gases or other low-flash point fuels’ (IGF Code) in the intersessional correspondence group. The Society of International Gas Tanker & Terminal Operators (SIGTTO) has been raising concerns that the code would appear to permit the storage of LNG as a fuel under accommodation and they view that as extremely unsafe. “That has to explored further to see what the possibilities are,” Mr Tongue says. SIGTTO, Mr Tongue says is sticking to the view that its guidance, and the guidance for the LNG Code should be paramount at all times. His view is that there should be a bit of compromise where LNG is being carried as a cargo in large amounts and where LNG is being carried as a fuel. “You have got to keep it safe, but you have to
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look at it with a bit of pragmatism, that’s the way I see it.” According to Mr Tongue, everyone talks about how efficient LNG is and how much less CO2 is generated but, he says, “One little consideration that goes with it is yes, there is 20% less CO2 than using the standard hydrocarbon fuel. Not only is it cleaner, it has more possibilities and the Far East and China are enthusiastic in going forward with the use of LNG. “However, there is a down side. LNG includes a high quantity of methane, which has 20 times the greenhouse gas effect of CO2,” Mr Tongue explains, “so you have to be careful that you don’t have any losses or slippage otherwise you actually counter the CO2 benefits.” The key point, he says, is that the approach must be holistic and “you can’t just concentrate on any single regulation – which legislators appear to be doing nowadays – without looking at others”. As far as low-sulphur fuel availability is concerned, Mr Tongue says he has not heard of any supply shortages at the moment. However, he says that when the 2016 introduction of low-sulphur fuels in ECAs and the 2020 deadline for low sulphur generally arises he believes “the refiners themselves will not be able to keep up with this issue”. His view is that nobody seems to be addressing the issue, and availability is being taken for granted. “There is going to have to be a huge paradigm shift in the refining processes to make this fuel available.”
World Bunkering Winter 2011
Another issue he raises is that of the flashpoint limit for marine fuels, which is 60 degrees on vessels but only 55 degrees for a shore supply fuel. “There have been instances recently of ships being supplied with fuel with a lower flashpoint than required by regulation. That to me is a concern.” There has been a push towards ships being allowed to use the lower flashpoint, Mr Tongue says. “I would be reluctant to back that without a little bit more background to say that this is safe.” Ship engines are generally at quite a high temperature, he says. “The chances of a low flashpoint fuel igniting I think are a little bit higher in a ship’s engine room than they are for a domestic heating installation.” So, he urges, any proposal for a reduction must be looked at very carefully. Another problem that has been brought to Mr Tongue’s attention is that with the blending of fuels to reach the low sulphur requirement and the cutter stocks being used “you are ending up in some cases with fuels with a very low combustibility”. With some of the fuels being supplied there are difficulties with starting the engine, or getting more power out of it. “That is a definite safety issue,” he says. Another issue he has heard of is higher instances of cat fines, which include abrasive particles made up of aluminium and silicon. High cat fines are leading to very high wear rates on engines. Some damage has resulted in ships having to stop and make repairs before going forward, Mr Tongue says. There is also a little inconsistency between the cat fines limits in the new ISO specifications and those recommended by engine manufacturers as the maximum permissible. “That issue is coming much more to the fore at the moment.” Mr Tongue has had the experience himself as a chief engineer when home on leave from his ship. The ship loaded bunkers with high cat fines and tried to burn the fuel for about 10 hours, putting 20,000 hours wear on the engine. Mr Tongue, needless to say, was called back from leave to deal with the problem. While his experience dates back 25 years, and he says the problem went away, however the new sulphur fuels, which use
bottom end cutter stock, will have cat fine in them. In addition he says, “You cannot use the CCAI value because it doesn’t give a realistic indication of combustibility as it does with a standard fuel, with a fuel that is, say single cut and not too badly mixed.” On these issues, Mr Tongue believes the oil companies will have to be approached and the problem highlighted. The ICS, he says, will be doing this in conjunction with other industry bodies. The ICS has also suggested that a preliminary study be made ahead of the next phase of the ECA introductions to assess fuel availability, that is due to be discussed again at the IMO at MEPC63. Commenting on a paper put forward at IMO by independent tanker owners’ organisation INTERTANKO and Norway on fuel and various parameters they wanted to be looked at, Mr Tongue said: “We were a little bit concerned about that because it put everything back on the ship, and if the ship got a non-compliant fuel it was the ship that was non compliant, not the supplier. We are talking to INTERTANKO about that. “Norway put forward a proposal at MEPC for the sampling of fuel from bunker tanks for port state control purposes. This issue is to be considered at IMO’s Bulk Liquids and Gases (BLG) sub-committee. The fuel is required to be sampled before coming on board under the current Annex VI requirements,” he says. He also believes that sampling bunker tanks as well, presumably for sulphur content, is another way of “finding the ship to be not in compliance with something”. If a ship orders fuel specifying a certain sulphur content and it is put on board, subsequent tests of the fuel showing the fuel was non compliant could leave the operator in a vulnerable position. If the fuel is subsequently tested on board the vessel and the operator is obliged to inform the authorities that it is non compliant, the ship could be in breach of the regulations. “It’s a bit of a conundrum, that one,” Mr Tongue says. “What we want to do is to have bunkers supplied on board that are fit for purpose and in accordance with the spec they have been ordered at.”
The exhaust gas system of a main engine
World Bunkering Winter 2011
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GLOBAL BUNKER SUPPLIERS AND TRADERS
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Ready for 1%?
The implementation next year of the North American Emission Control Area is concentrating minds throughout the Americas, as Sandra Speares reports.
T
ough new regulations in North America, and the Caribbean to cut emissions from ships continue to cause concern as to the likely costs of compliance and the availability of supplies of low-sulphur fuels to meet these requirements. However CEPSA, whose subsidiary CEPSA Panama operates in the ports of Balboa and Crist贸bal, is one company on record as saying
it was in no doubt that it could supply fuels to meet the 1% emission control area (ECA) requirement in all the ports that it serves. Sulphur levels will then drop further to 0.1% by 2015. With the advent of ECAs covering the US, Canada and the US Caribbean Sea, which covers coastal waters off Puerto Rico and the US Virgin Islands, added to the other ECAs already in place, the question remains whether supply will meet demand and refineries
Designing for a sustainable shipping in action: the Hornblower Hybrid is powered by diesel, hydrogen, wind and solar energy
World Bunkering Winter 2011
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keep pace with requirements. There have been reports in the press that the cruise lines – who will be widely affected by the North American ECA, as well as the European ECAs in the Baltic and the North Sea – might be favouring an interpretation of the revised Marpol Annex VI that would allow them to burn heavy fuel oil in an ECA provided the average emissions over the course of the voyage did not exceed limits laid down in the new rules. The proposal is understood to have come from the US-based Cruise Lines International Association – the trade association for the cruise industry – and has been backed by Carnival. Whether such an interpretation will be acceptable to the regulators remains to be seen, but in the meantime, Royal Caribbean has been testing Singapore-based Ecospec’s scrubbing technology, which aims to reduce sulphur, carbon dioxide and nitrous oxide, on one of its cruise ships. A recent report prepared by the California Maritime Academy to look at issues relating to the California Air Resources Board marine fuel regulations, which require the use of low-sulphur marine distillates 24 nautical miles of the coast of California found that: “While most vessel operators are successfully complying with the regulation without incident, some operators have reported operational difficulties that may be related to fuel switching from heavy fuel oil to distillate fuel.” Vessel stalling, variable engine speeds at low loads, problems starting engines and the inability to operate at full speed were listed as some of the difficulties of using low sulphur. The findings of the report said that heating of the distillate fuel resulting in viscosity below the recommended minimum level, often combined with other factors, was the cause of most operational
difficulties associated with the usage of low sulphur distillate fuel. The other factors include: worn fuel system equipment, such as fuel pumps or seals; engine adjustments not optimised for the use of distillate fuels such as rack or governor settings; and operational procedures not optimised for the use of distillate fuel. “The use of a low viscosity distillate fuel combined with worn high-pressure fuel pumps resulted in inadequate fuel injection pressures. Loss of propulsion can result under these circumstances, due to excessive leakage of fuel within the high-pressure fuel pumps. Excessively worn or leaking pumps can result in low fuel injection pressures and incomplete combustion. Therefore, it is critical that shipboard crew maintain the fuel injection pumps within manufacturer’s specifications, and ensure that fuel viscosity is maintained above two centistokes,” the report said. The recommendation is that ships carry out fuel switching tests prior to visiting California, and determine the condition of high pressure fuel pumps using the fuel pump index. Fuel viscosity needs to be specified, training needs to be provided to the crew on fuel switching exercises and other recommendations include transferring control from the bridge to the engine room if the engine proves difficult to start. Aside from the new ECA requirements, Canada recently signed the 2010 protocol to the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea. The protocol now needs to be taken to the Canadian Parliament and amendments made to the Marine Liability Act to ensure that compensation is available for victims of marine pollution and polluters are held responsible. “Canada is a trading nation that depends to a large degree on
Dolphin
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World Bunkering Winter 2011
ory Announcement
marine transport for its exports and imports, and it is vital that we compared with $281.3 million reported for the 2010 third quarter. have strong rules to protect our environment,” said Denis Lebel, According to Kirby chief executive Joe Pyne, “Our record third Minister of Transport, Infrastructure and Communities. “These quarter results were a reflection of strong United States petroamendments will provide increased levels of compensation to those chemical production levels, stable refinery production levels, and a affected by pollution from hazardous and noxious substances that is continued strong exportation market, all leading to high inland tank caused by ships and also ensure that polluters pay for any damage barge utilisation levels and favourable term and spot contract pricing. resulting from such incidents.” Kirby purchased tank barge and tug operator K-Sea in July this US bunker suppliers have been posting some good third quarter year for $604 million. K-Sea’s fleet, which is comprised of 57 tank results in recent months. For example NuStar Energy announced its barges, 54 of which are double hull, with a capacity of 3.8 million third quarter net income applicable to limited partners was $59.8 barrels and 63 tugs, operates along the East Coast, West Coast and million, or $0.92 per unit, compared to $58.4 million, or $0.90 per Gulf Coast of the United States, as well as in Alaska and Hawaii. unit, earned in the third quarter of 2010. For the nine months ended Meanwhile Pacific Rubiales subsidiary CI Pacific Fuels International 30 September 2011, net income applicable to limited partners was is set to start bunker operations at a number of ports in Columbia. $160.9 million, or $2.49 per unit, compared to $159 million, or $2.55 The company is understood to be planning to use the tanker Pacific per unit, for the nine months ended 30 September 2010. Sun for storage purposes. “Our third quarter results were better than we expected when we While the ECA system is not yet operational at the lowest provided guidance in late July,” said chief executive Curt Anastasio, sulphur levels, the costs of getting it wrong can prove expensive. The “Higher than projected revenues in our transportation segment, California Air Resources Board recently fined two shipping companies reduced operating in bothto our transportation and storageas many for failing switch to premature low-sulphur fueldeaths when within miles of the its benefits areexpenses expected include preventing asto14,000 and24relieving segments and lower than expected administrative expenses were the California Coast. Mediterranean Shipping Company and Chipolbrok respiratory symptoms for nearly five million people each year in the U.S. and Canada. The primary causes of our higher than anticipated results.” Shipping each paid $53,000 to the California Air Pollution Control monetized health-related benefits estimated to Fund be as much as $110 billion in the in follow Looking forward he said that: “With regard toare the margin-based (CAPCF) to support air quality research. TheyU.S. must also asphalt and fuels marketing segment, EBITDA should be comparable all fuel switch-over requirements and maintain accurate records. 2020. to the $111 million of EBITDA earned in 2010. Projected earnings One indication of the way ahead may be the arrival of the from our April 2011 San Antonio refinery acquisition and improved Hornblower Hybrid, a vessel that is powered by diesel, hydrogen, wind The North American ECA includes adjacent toarrived the Pacific resultsarea in our of fuelsthe marketing operations are expected to be offset by waters and solar energy, which in the portcoast, of New the York at the end of 1 weak margins in our coast asphalt operations.” October. The ferry will be operated port, running harbour Atlantic/Gulf and the eight main Hawaiian Islands. . It extends up towithin 200thenautical miles Tank barge operator Kirby Corporation also announced record cruises to see Ellis Island and the Statue of Liberty. from coasts of the United States, Canada and the French territories, except that it does not net earnings for the third quarter of $52.7 million, or $0.94 per According to the owner, Hornblower Cruises & Events, chief extend into with marine areas orsubject theConsolidated sovereigntyexecutive or jurisdiction other share, compared $30.7 million, $0.57 perto share. Terry MacRaeofsaid, “TheStates. Hybrid marks a milestone in revenues for the 2011 third quarter were a record $563.6 million sustainable maritime transportation.”
CANADA
Pacific Ocean
UNITED STATES
Atlantic Ocean Panama Canal
The North American ECA will present both challenges and opportunities
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Figure 1: Area of the North American ECA
GEoGraphical focus: americas
Renewed growth in Chile World Bunkering talks to Copec Marine Fuels’ bunker manager
Fernando Rouliez about his take on the Chilean bunker scene.
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s well as suffering the effects of the global downturn, last year Chile also had to cope with a devastating earthquake. So what are the market conditions for bunker suppliers like in Chile at the moment? World Bunkering asked Copec Marine Fuels’ bunker manager Fernando Rouliez about the effects of the economic downturn and the competitive situation in the country’s bunkering sector. Fernando Rouliez: The Chilean market is very competitive even though there are only a few bunker suppliers. Because the competition is so strong this crisis has hit everybody equally and the result was that sales are far less that the one million tonnes sold in 2008. Nevertheless, we are seeing growth in the Chilean market again in 2011, in comparison to 2010, which we estimate to be around 12%.
World Bunkering Winter 2011
The 5,000 dwt Don Pancho is one of Copec’s three double hulled bunker barges
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Copec’s 5,000 dwt Don Pancho delivers fuel to a cruise ship
® QuinnOil Panama Canal
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Physical supplier at the Panama Canal. Also available Ex pipe deliveries at Rodman Naval Station
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World Bunkering Winter 2011
World Bunkering: What is your view about the availability of bunker supplies in the future that will meet the new lowsulphur requirements. Do you think that refineries will struggle to meet the deadlines for switching to low sulphur?
FR: Copec always has been the leader in this market as it has given its customers the best service and quality in products. So we always comply with international requirements. We have imported product (IFO 380 RMG) based ISO8217:2010, which contains less than 3% sulphur. However, we can offer lower sulphur fuel if our customers need it. Regarding MGO, our product is ultra low sulphur. WB: What do you think the effect on quality will be with the switch to low sulphur? There have been concerns expressed over cat fines damage to engines.
FR: Well, obviously less sulphur levels in the fuel will always be better for engines, extending their useful life, and this change is better for the environment, too. However, the switch to low sulphur will not happen as fast as we want, because not all the refineries produce fuel at these sulphur levels. So the price of this “new product” is higher than the conventional IFO, and not all the customers like that. Nevertheless Copec is working to deliver products with lower sulphur whenever our clients request it.
WB: What are your views on using LNG for ships? Is this a popular alternative in Chile and what particular challenges are there in terms of storage?
FR: In Chile, LNG is used in the mining and electric industry only, and not for vessels. Maybe in the future we will be able to offer LNG for ships. Regarding storage, we do not have any problems, because we have big tanks to store different products in all geographic zones. WB: What developments have been particularly important for Copec in the last year and what plans do you have?
FR: Copec has made a large investment in line with our health and safety policies. We have increased our fleet by acquiring a new double hull bunker barge, the Doña Ana, which was built in Europe in 2006. This vessel brings up our domestic service and quality standards to international levels. We own three bunker barges. They are all double hulled, making our fleet unique in the Chilean industry. The 4,100 dwt Doña Ana and the 5,000 dwt Don Gonzalo and Don Pancho together cover the entire Chilean coast. Finally this year we obtained three new international certifications: ISO9001-2009; ISO1401-2004 and ISO18001-2007. Our new projects are focused on consolidation in the bunker market, both in the Southern and in the Northern Zones by barge, truck and pipe.
The Don Gonzalo is one of three Copec tankers covering the entire Chilian coast
World Bunkering Winter 2011
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af aviso 178x124mm.pdf
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Silver lining?
Complying with the North American Emission Control Area may seem an extra burden for some operators, but there could be benefits for Caribbean and Central and South American countries.
T
he initial reaction to the North American Emission Control Area (ECA) from the rest of the Americas was focused on the need to provide compliant fuel. Michael Green, technical manager of Lintec Testing Services was quoted as saying: “A greater onus will be placed on South American and Far East ports to provide fuels that comply with the new regulations to ensure that US trade links are maintained.” That is, of course, true but much of the fuel sold in the rest of the Americas, and especially in Panama and the Caribbean, is for vessels that do not trade to North American ports. Indeed there is some optimism that the enforcement of the ECA in July next year may increase transshipment via Caribbean ports. In any case the bunker sector in Panama continues to expand. In July, Aegean Marine Petroleum Network Inc announced it had been awarded a 20-year concession by the Panamanian Maritime Authority (PMA) to operate onshore storage facilities in the ports of Cristobal and Balboa in Panama on an “exclusive basis”. While its plans were subject to official approval, Aegean was also planning to commence physical supply operations in both Cristobal and Balboa. According to the company, both ports total approximately 14,000 transits a year and generate about three million tonnes of annual marine fuel sales. An Aegean statement added that the concession is part of the PMA’s efforts to expand and modernise the ports’ infrastructure and services, consistent with the current expansion of the Panama Canal. By 2014, the Panama Canal is expected to significantly increase its capacity, enabling larger ships to transit and providing greater efficiencies in global commerce. Aegean president E Nikolas Tavlarios said: “By establishing a presence on both ends of the world’s most famous canal, Aegean has significantly expanded its network for the global supply of marine fuel and strengthened its future growth prospects. We expect to realise numerous benefits from Panama’s increasing role in global maritime trade in light of the projected expansion of the Panama Canal.” In another move, Dutch tank terminal operator Royal Vopak plans to build and operate an independent storage terminal for oil products at Bahia Las Minas port, on Panama’s Atlantic coast of Panama. Meanwhile Bahamas environment minister Earl Deveaux has pointed to the opportunities that the introduction of the North American ECA may provide. He noted: “The Grand Bahama option for transshipment will likely become even more attractive at the coming into force of the North American Emission Control Area having regard for the fact that The Bahamas lies outside of that area.” Speaking at the Bahamas Shipowners Association’s annual general meeting in Oslo in early November, he outlined a number of developments aimed at boosting the country’s maritime sector, which already includes one the world’s largest ship registers.
World Bunkering Winter 2011
He referred to a proposal for a first rate deep water port at Mayaguana, one of the islands of the Southern Bahamas. He said: “This will significantly augment our already vibrant shipping industry, which is most evident in Freeport, Grand Bahama. The recent link with Panama, through Copa Airlines has already opened the Central American tourist market. We believe the growing awareness of the Bahamas, coupled with the expansion underway in Panama, will reverberate in The Bahamas’ shipping industry.” In terms of benefiting from the ECA he observed: “In Grand Bahama, we have Hutchinson Whampoa’s container facility, which has terminal berths that are the deepest in the region, capable of handling the largest container vessels in the world and serves as a major container transshipment hub for the eastern seaboard of the US and the principal east/west long-haul routes through the region. The facility has a total quay length of 1,536 metres, a depth alongside of 15.5 metres and is equipped with 16 super-post-Panamax quay cranes.” Mr Deveaux added: “The ECA will also make the Vopak oil facility in Freeport more attractive. Vopak has two terminals, one capable of taking ships up to 500,000 tonnes. Some B$300 million (US$300 million) to B$600 million are being invested in an enlarged storage facility, which is the largest in the region with a 20 million barrel capacity, that will increase to 25 to 30 million barrels within the next two or three years. It has the ability to blend and transship crude oil, bunker fuel and other petroleum products. The terminal is expected to become an international hub for crude oil and petroleum products.” The Grand Bahama Shipyard is also in Freeport and could benefit from increased traffic. They are already proving their value to cruise ship owners especially. Its three floating dry docks are able to handle some of the largest cruise ships in the world, but equally able to deal with other commercial shipping. This is a regionally strategic location for ship repairs and is proving to be very successful and contributes around B$40 million to the local economy each year.
Last year the bulk carrier, Fortune Plum, became the 1,000,000th vessel to transit through the Panama Canal since it opened in 1914. In two years the completion of a major expansion project should mean much larger vessels will be able to use the waterway and total transits should also increase, boosting prospects for the bunkering sector.
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The arrival of a leader
C
I International Fuels is one of the leading independent bunker companies in Colombia. Since its early days, it has gained many satisfied customers and now has an excellent international reputation, thanks to the strategic direction provided by the president: Jaime Alberto Ochoa MuĂąoz and the support of his vice president, and wife, Maria Mercedes. Despite this being a young company, it has successfully implemented business strategies that have allowed it to become one of the leading bunker suppliers in South America. The continuous investment in technological upgrades, equipment, industrial safety and security, plus the most modern fleet in the country, are unparalleled in the bunker business in this region. The fuel supply flag has now been hoisted in the port of Santa Marta, indicating that the physical supply of fuel to those bulk carriers that arrive to load coal at anchorage is now possible. An efficient tanker, the Intergod VII, provides this service. With a storage capacity of 2,700 tonnes, it can deliver products such as IFO, MGO and fresh water, product that were previously unavailable at anchor in this important Colombian port.
Supporting the maritime operations in Santa Marta is a bunker and hydrocarbons plant with excellent technology, two intermediate refineries, which provide MGO/MDO with ultra-low sulphur content, and the most modern battery of tanks that can store more than two and a half million gallons. Cartagena is the biggest port in Colombia and vessels choose to bunker there because prices are competitive. It offers a port system that allows for rapid entry and departure times, 24-hour bunkering with no restriction for night time deliveries and no sailing restrictions. CI International Fuels currently has five barges and a fleet of three self-owned tugs in Cartagena. They ensure that deliveries are made to the quality, quantity and to the schedule requested by the customer. Bunkers are supplied at Colombia’s other major ports including Buenaventura and Barranquilla, and services are guaranteed at any Colombian port. Buenaventura port operations incorporate three barges, one of which is the only self-propelled barge that serves the port and military base on the Pacific coast.
Tanker at anchorage in Cartagena Bay
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World Bunkering Winter 2011
Colombia is in direct competition with Panama, and the Caribbean ports, which are better placed to attract transatlantic vessels. CI International Fuels has a broad quality platform and offers its products within the framework of ISO specifications; while several internal practices are also rigorously applied to assure that customers receive the highest quality of supply and service possible. CI International fuels sources products from a range of independent suppliers in Colombia. This allows it to meet the strategic goal of providing bunker products with a low sulphur content that can meet the energy requirements of ships on route to countries that have environmental regulations in place. The journey to becoming a leading business can be full of difficulties and setbacks, but these have been overcome thanks to the vision and determination of the owners in conjunction with the great team that supports them. Today, CI International Fuels offers the market the most palatable crude oil for export available through the ports of Santa Marta and Cartagena. The company is confident that this product will have a wide take-up from customers in the global energy sector. CI International Fuels is determined to be widely recognised as being an excellent physical provider of marine fuels, as it enters the major league of the petroleum industry.
World Bunkering Winter 2011
Carrying out operations alongside at Cartagena
Supplying a US Navy frigate
MV Norwegian Pearl at Cartagena
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© Saf Marine
GEoGraphical focus: Africa
Tough times
South Africa’s bunker industry has had a difficult year but West Africa continues to grow.
I
t is no secret that disruption to supplies have had an adverse effect on the bunkering around the Cape over the past year, mainly due to shutdowns of local refineries. The general manager of South African Bunkering & Trading, Andre Baard, told World Bunkering that the two refineries had experienced “above average problems”. Cape Town had however, according to Mr Baard, been able to cope very well in the circumstances and there had been only “one or two days” when there were no avails. “Cape Town took a lot of pressure off Durban,” he said. He conceded however that the problems had hurt Durban as a bunker port and that it “takes a while” to recover. Diverse South African based shipping group Grindrod now has worldwide bunkering interests. In a statement accompanying its first half results the company said: “The South African based tanker operating joint venture with Calulo Shipping performed well, as did the local bunker tanker business.” Grindrod says its marine fuels trading operations, Cockett Marine Oil, “performed well in a highly competitive market”. Cockett’s Cape Town branch manager, Adam Lutzno, said that South Africa had seen a contraction in bunker volumes this year, mirroring a trend developed over the past half a decade. It thought within the industry that total volumes in 2011 would be about three million tonnes. “Availability of product has been erratic, with cycles of tightness equally as prevalent as markets long on fuel oil,” said Mr Lutzno. He added that refinery shutdowns, both planned and unplanned, had “as ever been a prominent feature of the supply landscape”. These problems had led to sharp spikes in demand at alternative bunker centres. World Bunkering asked Mr Lutzno: “What are the main difficulties facing the SA bunker industry?” He replied: “Ageing refineries and the consequent supply disruptions have provided the catalyst for
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small-scale demand destruction in the local industry. Product heating constraints, draft restrictions, relatively expensive port costs and the impracticality of anchorage supply serve only to exacerbate the difficulties facing the industry.” Regarding the effect of the 1% sulphur cap in emission control areas Mr Lutzno noted: “At this stage of its inception it would be imprudent to draw any conclusions on the impact on South Africa, but it is a topic that will be closely followed going forward. A major concern surrounding the cap from a shipping perspective is the escalation in operating costs, which may serve to hamper activity particularly given the current state of affairs in freight markets.” He added that South Africa currently does not have bunker low sulphur grades and there has so far been no official announcement from the local refineries regarding their ability to comply with the January 2012 implementation of the worldwide 3.5% sulphur cap. Despite the many challenges facing the South African market Mr Lutzno was surprisingly optimistic. He said: “The start of 2011 was marred by supply disruptions whereas 2012 is expected to kick off with stable production levels. Vessel traffic is forecast to increase regionally with the bulk arena leading the way in terms of trading activity. We project an increase in bunkers-only calls in Durban, which will in turn help redress the demand surge witnessed in Cape Town throughout the last quarter. Although SA refineries routinely produce fuel oil below the 3.5% sulphur limit, question marks still loom over their official conformance to new sulphur limitations.” Asked whether West Africa was continuing to compete strongly with South Africa, Mr Lutzno said that it was a misconception that West Africa and South Africa are in direct competition. He explained that while the advent of the West African offshore supply has hit bunker volumes in South Africa to some extent, the two regions do not cater to an identical clientele. He noted: “West Africa has over time become a default position for physical suppliers for excess
World Bunkering Winter 2011
tonnage and although competition remains robust, pricing is still relatively expensive and avails erratic.” According to Mr Lutzno there have been relatively few pirate attacks off West Africa recently. But he added: “Physical suppliers are however plying their trade further offshore in a bid to deter attacks. Private security companies are generally employed as a deterrent whilst a number of countries have sent naval vessels to patrol the region.” Certainly West Africa continues to attract new players, including early this year Aegean Marine Petroleum Network Inc. The company’s president E Nikolas Tavlarios said the company had commenced operations in Cape Verde in the first quarter of the year. He said: “This new start-up market provides an opportunity to increase our company’s fleet utilisation and expand its earnings potential without incrementally increasing capital expenditures.” Meanwhile OW Bunker says it is developing plans for the region that include deploying two newbuildings to further strengthen its operations. The company said that it was one of the first suppliers to seize the opportunities of the growing market, and was “looking to consolidate its leadership position within the region”. Current supplies in the region are being supported by OW Bunker’s global network, with limited availability until newbuild vessels are brought into service. As for developments elsewhere Mr Lutzno observed: “The port of Maputo has seen rapid expansion recently, particularly with the development of coal terminals. Intermittent HSFO bunkers are available in Maputo. However the Mozambican market is dominated by small gasoil parcels. As the region develops and sees more traffic a need for a more efficient bunkering infrastructure may be forthcoming.”
West Africa and South Africa may not be in direct competition but the former has benefited from refinery shutdowns at the Cape
Your African Bunker Specialists SABT means smooth bunkering in African waters.
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World Bunkering Winter 2011
www.sabunker.com
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REVIEW
Complex subject, easy guide This is the book to read before getting on the phone to your lawyers, as David Hughes notes.
B
arrister and legal consultant, and IBIA board member, Trevor Harrison has had a busy year. No sooner than the final text for Legal Issues in Bunkering had been dispatched to the printer than he found himself appointed as IBIA’s Acting Chief Executive. A quick flip through the pages will confirm that he has an extensive knowledge of the bunker industry. A former head of legal at Tramp Oil & Marine, Mr Harrison practises as a maritime arbitrator, mediator and consultant, with particular expertise in bunkering. According to its publisher this book will help its readers to avoid expensive legal mistakes and show them where to turn when things go wrong. It should be kept on the desk of every trader and broker, owner and charterer, and maritime lawyer, arbitrator, regulator and government agency, we are told. The publisher would say that of course. But in this case the claims are pretty well justified. Mr Harrison’s book is not a legal text in the usual sense of the word. For one thing, it is easy to read, helped by a slightly tongue-in-cheek style. For another, it is not aimed at turning readers into lawyers. Nevertheless lawyers may find this book of more than passing interest. Ince & Co partner Jonathan Lux, and co-author some eight years ago of Bunkers – An Analysis of the Practical, Technical and Legal Aspects says: “I am delighted to recommend Legal Issues in Bunkering to anyone with an interest in the law relating to bunkers and bunkering, and to those who have an interest in steering clear of the many legal pitfalls that can beset the global bunker industry.” What this book does do is to link industry practice with the legal issues that come into to play when things go wrong. This comprehensive book provides a wealth of information on the key legal aspects of bunkering including contracts, defaults, ship arrest and dispute resolution; there is also a section dealing with international conventions and national legislation on environmental issues relevant to bunkering. Mr Harrison has also included a number of cases which have influenced the law on bunker disputes, notably including the Fesco Angara case.
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Actually the most interesting case in the book has, being unreported, probably had no influence on case law at all. It is about a dispute involving a relatively small amount of money, Tramp Oil & Marine versus Lomat Shipping 1991, which was successfully, and against expectations, pursued by Tramp. All apparently hinged on the evidence of a bunker trader known to his colleagues as “Captain Ted”. Mr Harrison notes that Captain Ted had many talents, “one of which was the ability to talk at a great rate and with such persistence and convolution that most of his colleagues and counterparts rarely attempted to argue or counter his vigorously declared views; this was largely because they could not follow his reasoning. Instead they found it easier to watch, wait and clear up behind him if necessary.” “To the amazement of everybody else concerned,” Mr Harrrison relates, “the judge found Captain Ted a clear, concise and compelling witness.” The judge found in Tramp’s favour, “against all realistic expectation”. This example may just appear as a slightly indulgent, albeit mildly amusing, piece of trivia until you suddenly realise after reading it that Mr Harrison has cleverly ensured that the reader is well aware of the uphill task a bunker supplier would have in suing a managing agent for unpaid bunkers. Above all, it is Mr Harrison’s lightness of touch that will make this book move off the shelves.
Legal Issues in Bunkering: An Introduction to the Law Relating to the Sale and Use of Marine Fuels By Trevor Harrison First Edition, July 2011 Published by Petrospot Limited PP 201 + 36 prelims. £75/€90/$125 + P&P www.petrospot.com/books
World Bunkering Winter 2011
IBIA Annual convention
Barcelona success This year’s IBIA Annual Convention broke attendance records and covered a large range of hot topics.
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s the delegates rose from their seats for the last time, and headed towards the farewell wine tasting and lunch at the end, IBIA’s Chairman Bob Lintott summed up the mood by saying: “This has been a highly successful convention. I am especially pleased that there has been lively debate from the first to the last sessions.” IBIA’s Events Manager Charlotte Egan commented: “I would like to say a huge thank you to all the delegates who attended and supported the IBIA Annual Convention 2011. It was a great success with 170 people attending, and we have received already some excellent feedback on the conference programme and our speakers, as well as the networking events and the venue.” The “lively debate” was very evident from the early stages of the convention, when two keynote speakers put forward very different views on the impact of the 2015 0.1% sulphur cap in emission control areas (ECAs). Manuel Carlier, director general of the Spanish Shipowners’ Association (ANAVE) and a director of the European Community Shipowners’ Association (ECSA), put forward owners’ concerns. Arnaud Leroy, senior project officer for the European Maritime Safety Agency, and working with the European Commission (EC) on marine fuels countered with the case for continuing with its proposals, which in some respects exceed the International Maritime Organisation’s (IMO) ECA requirements. Mr Carlier said that it was likely that bunker costs for ship operators would increase by between 70% and 100% while operating in ECAs, and that there would be a total increase in operating costs of 25%-40%. He asked: “Can this cost be passed to customers in the freight market?” He said that while scrubber equipment suppliers claimed success in pilot applications tests, installing this
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equipment would only be cost efficient for new ships operating exclusively or mainly in ECAs. He noted the possibility of using LNG and that dual fuel engines had proved successful in large LNG tankers. He said that the methane slip problem was easy to solve in high-pressure dual engines, but that there were problems to meeting Marpol Annex VI’s Tier III NOx limits. He noted that retrofitting was relatively easy in large slow-speed engines but more complex and expensive for mediumspeed engines. He was particularly concerned about the effects on short sea shipping and pointed to a recent Finnish study, which predicted an increase in sea freight rates in the range of 25-40%, and an ISL study
The IBIA Convention saw record attendance, with plenty of lively debate and opportunities to meet fellow members
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on the Bremen Baltic route, which forecast a 46% loss of traffic with 604,000 trailers and 820,000 containers shifted to the road system. He accepted that the EC now proposes to give priority in the use of EU funds (Marco Polo II, TEN-T) and financing (EIB) to finance studies and pilot projects on scrubbers, LNG as bunker and shoreside electricity. It also proposes to allow member states to grant subsides for the same purposes. But, he said, in the short term, EU funds would only help a few dozen ships, while thousands would be affected. It was not realistic, he said, to expect states to subsidise short sea shipping in the current economic climate. Mr Leroy emphasised the need to enforce regulations and also pointed to claimed environmental and health benefits of imposing stricter sulphur limits. He also pointed to uncertainties surrounding the impact of the 0.1% sulphur cap. He was particularly doubtful about predictions of a modal shift away from shipping. He said: “Overall, the various studies offer differing conclusions as to whether a modal shift is imminent, which may in part, but not entirely, be explained by the difference in routes selected for their analyses. While the Swedish, German and ECSA studies in their high price scenario mainly foresee a substantial shift from short sea shipping to land-based modes, the COMPASS study acknowledges that there will be a cost increase and a change in transport volumes, but concludes that ’it is not expected that changes in entry/exit points or shifts in modal balance (SSS to land) will take place’.” Interferry’s executive director of EU and IMO affairs, Johan Roos, strongly challenged the suggestion that there might not be a modal shift to land-based transport once the 0.1% cap was in force in his own presentation. He said that ferry operators were “baffled” by the EC’s stance. He asked: “Who cannot see that a 30% ticket price increase will not cause a modal back-shift?” Mr Roos also dismissed the idea that the use of scrubbers could solve the problem in the short term. He said that fitting scrubbers to existing ferries in a bid to meet the 2015 0.1% sulphur cap within ECAs was not a realistic option. He said that the actual costs were much more than the scrubber lobby was suggesting. He said: “The manufacturers are saying scrubbers have payback times of 8 or 14 or 22 months on a outlay of perhaps $2 million. The ferry operators say: ‘Do you think we are stupid.’ They can calculate
costs and revenues. Installing scrubbers on a ferry may cost 5 million euros and the payback would be perhaps five or seven years.” It is not only an issue of cost according to Mr Roos. He said: “No supplier will guarantee performance.” He added that ferry operators could find that instead of meeting the 0.1% standard, the expensively installed scrubbers only performed to the equivalent of a 0.2% sulphur content cap. Or, just as bad, a scrubber might meet the 0.1% standard for 97% of the time. “We can’t use a scrubber like that,” he said. While the ferry industry is focused on what will happen in 2015, discussion in and outside the conference hall brought to light concerns that there could a be a significant problem for many tanker owners in January 2012. Several IBIA members pointed out that residual fuel produced in the Middle East currently exceeds the 3.5% limit. Since none of the countries in this region are signatories to the relevant IMO regulations (Marpol Annex VI) there is nothing in place to force suppliers there to provide IMO-compliant fuel. The general expectation was that bunker fuel taken on in the Middle East will continue to exceed the 3.5% limit, at least until there is strong market pressure for compliant fuel. This, a number of delegates warned, is likely to put VLCC owners in a difficult position. VLCCs working in the spot market will typically bunker once a cargo has been fixed and take on sufficient for the voyage. IMO regulations mean that, from January, in theory just enough noncompliant bunkers should be taken on to allow the vessel to reach a port where compliant fuel is available. That is simply not going to happen, initially at least, as charterparty terms will not allow deviations for taking on fuel. So VLCCs are likely to arrive at their destinations with fuel that breaks the legal sulphur content. That in turn is likely to attract the attention of port state control inspectors. During a discussion session led by IBIA’s Acting Chief Executive Trevor Harrison, it was agreed that IBIA would keep a close eye on developments regarding the enforcement of the 3.5% limit and would be lobbying for consistent approaches by port state control authorities. Mr Harrison also announced that IBIA’s board had taken a formal decision to “become more closely engaged in LNG matters”. He told delegates that the association would become more involved in the ongoing discussions on LNG as a fuel at the IMO. The IBIA Annual Convention 2011 at Barcelona’s Hotel Remy Juan Carlos I did, however, cover many other topics of concern to both bunker suppliers and buyers in a packed programme spread out over three days. In addition to the busy schedule of presentations and debates, the convention was a highly successful networking event, with sponsored attractions including a first night reception, a gala dinner on the second night at Barcelona’s stunning Arts Hotel and a farewell lunchtime wine tasting session on Friday. Next year, the IBIA Annual Convention will be held in Dubai, and has a provisional start date of The convention venue may have had a sturn exterior but there was a warm welcome inside for IBIA delegates 7 November.
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Review: IBIA CONVENTION
Asian update This year’s IBIA Convention may have been held in the Mediterranean but no bunker industry gathering can ignore Asia.
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conomic growth is becoming more non-OECD-centric according to Clarksons director of tanker market analysis, Simon Chattrabhuti. In a presentation to the convention on “The impact of China and India on energy shipping and demand” he demonstrated how world population and GDP growth was set to continue driving demand for shipping. One of Mr Chattrabhuti’s more striking figures was of global GDP which, at a current $63 trillion had grown 90% between 2002 and 2010. Demonstrating the increasing trend away from the traditional industrialised countries as drivers of growth, he noted that in 2000 some 81% of world growth was attributable to OECD countries. By 2010 the corresponding figure was 68%, and the proportion will continue to shrink. Perhaps the most impressive of Mr Chattrabhuti’s illustrations was one showing oil consumption per capita. He was quick to point out that he did not expect consumption levels in India or China to reach North American levels, but that it was blindingly obvious that even modest increases in consumption in those two countries will have huge implications for energy demand. When it comes to population growth, however, the picture is of relatively stable populations in India and China with the bulk of the projected 1.4 billion increase coming from Africa. While Mr Chattrabhuti looked at the big picture, Simon Neo, a director of Singapore-based Integra Fuels and an IBIA board member spoke on “Fuel Availability in the Far East.” He gave an overview of the major bunkering ports in the Far East, looking at cargo sources, specifications used and fuel quality around the region. He noted that Japan was probably the only country in the Far East that had straight run fuel oil. China imports most of its bunker fuel from South Korea, Singapore, Venezuela, Japan, Gulf etc. Hong Kong gets most of its fuel oil from Singapore, which in turn also imports and re-exports bunker fuel. As the major, and probably the biggest, fuel oil trading hub in Asia, Singapore imports around 2.5 to 3.5 million tonnes of fuel oil a month.
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Most of Singapore’s imports are of 500cSt to 1000cSt fuel oil. Fuel is then blended with cutter stocks in shore tanks. Turning to specifications Mr Neo noted that ISO8217 2010 was introduced on 1 June 2010 but so far there had not been much demand in the Far East. In Singapore it is not a requirement to use ISO8217 2010 but from 1 June 2012 it will accept ISO8217 2010 as the official spec in the event that no other standard is specified in the contract. He said that most suppliers could guarantee ISO8217 2005 but not ISO8217 2010 unless requested by buyers. He added that most buyers were also not keen on ISO8217 2010 as it carried a premium of about $10 to $20 per tonne. Looking at global off spec fuel distribution, Mr Neo noted that the highest incidence of disputes involving residual fuel was in the Middle East with 9.71%. Europe came in at 4.51% and Asia at 3.66%. Singapore was just above the Asian average at 3.81%. With the impending 3.5% global IMO sulphur cap in mind Mr Neo said that Singapore, the world’s largest bunker port had an average sulphur content of less than 3.4%. He noted that cargo traders in the region, the main providers of bunker fuel, said that they were able to meet the new sulphur requirement. Regarding the need to use low-sulphur fuel in Asia, Mr Neo said that Hong Kong was encouraging shipowners to use low-sulphur fuel or MGO while in port. The latest news was that Hong Kong was exploring the possibility of an emission control area (ECA) in the Pearl River Delta. Singapore too has encouraged shipowners or charterers to burn MGO within port limits and providing incentives to back this up. But as for Asia generally Mr Neo said: “There is no sign that the other ports will embrace ECAs.” The bunker manager for Grieg Star Shipping, Terje Cook, ended the convention programme with a lively and thought provoking presentation entitled: “Are suppliers performing to standard?” It looked at the perennial issue of bunker surveyors and market access in Singapore and outlined his recent experiences in ordering bunkers. Clearly this is a topic which will continue to attract attention.
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Reliable partnership in bunkering and oil products transportation
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«Baltic Fuel Company» Llc 13, Dubrovskaya St., St. Petersburg, Russia Tel.: +7 812 438 12 80, fax: +7 812 490 54 66 E-mail: info@balticfuel.ru, sales@balticfuel.ru Web: www.balticfuel.ru
russian Update
Affordable bunker fuel
Russian ports are beating their global competitors when it comes to price according to a report from PortNews.
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nly a few slowly changing factors affect bunker prices in Russia. This is in marked contrast to the European market, which is heavily affected by fuel stock quotes and exchange rate volatility. In Russia the basic factor – the ex-refinery price – changes no more than once a month. The ex-refinery price is, in turn, directly dependent on the export duties imposed by the Russian government. When export duties are high, a greater volume of oil products remains in the domestic market, thus reducing the selling prices of oil refineries. Another important factor is the price of transport by road or rail and interim storage of oil products at oil depots or port terminals. In addition, however, the bunker fuel price at the ports of Russia’s North-West is influenced by the indicative prices at neighbouring European ports. Europe’s largest port, Rotterdam, has become a leading indicator for bunker price adjustment in the Russian ports of the Gulf of Finland, with the possible exception of the oil port of Primorsk. Since the autumn, the price of bunker fuel in the ports of Russia’s North-West has remained stable. In mid-October, monitoring of indicative prices for bunker fuel, conducted by The PortNews Informational and Analytical Agency (www.portnews.ru), showed that the average price of IFO-380 LS at St Petersburg was $426 per tonne, $230 below that of Rotterdam. The average price for IFO-380 HS at St Petersburg was $391 per tonne versus $635 in Rotterdam. A tonne of IFO-180 LS cost $441 at St Petersburg,
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nearly $240 below the price at Europe’s largest port. The average price for IFO-180 HS was $406 per tonne, $249 less than at Rotterdam, while MGO cost $715 per tonne at St Petersburg, $238 less than at Rotterdam. According to PortNews, in the reporting period (the 42nd week of the year) a tonne of IFO-380 LS was sold in the deepwater ice-free port of Murmansk (Barents Sea) for $655, IFO-380 HS cost $632 per tonne, IFO-180 LS was $672 per tonne and MGO $932 per tonne. The bunker price at the Russian northern port of Archangelsk in the White Sea largely depends on the cost of transport and the regional dominance of oil major Rosneft, operating through its wholly-owned RN-Bunker. However, the bunker fuel price at the port is still affordable. During the reporting period the average price of IFO-380 LS in Archangelsk was $625 per tonne, IFO-380 HS was sold for $610 per tonne, IFO-180 LS cost $640 per tonne and MGO $899 per tonne. In the Pacific region, the bunker fuel price at Russian and foreign ports varies considerably. But, when comparing Russia’s Far Eastern port of Vladivostok with Singapore’s port, the price gap is less significant. The pricing in Vladivostok is, PortNews says, tied neither to stock exchange quotations nor the fuel price at this Asian giant. For example, the average cost per tonne of IFO-180 HS in the port of Vladivostok as of 20 October was $770 per tonne, while MGO was being sold there for an average of $770 per tonne, $150 below Singapore’s figure. The shipowners in the regional port largely purchase these two types of fuel. There is almost no IFO380 available in the Russian Far East ports.
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NAYADA 13 years of safety,
quality and reliability
HEAD OFFICE: Room 708, 3, Portovaya Street, Nakhodka Russia, 692900 Tel/Fax: +7 4236 629779, 679113 E-mail: bunker@nayada.biz, nayada@nayada.biz Website: www.nayada.biz
VLADIVOSTOK BRANCH: Room 412, 10a, Okeanskiy Prospect Vladivostok Russia,690091 Tel/Fax: +7 423 230 2606 E-mail:nayada@vl.ru, vl@nayada.biz
russian Update
Russian news and views
Olga Bogacheva
A round-up of developments in the bunkering scene by Olga Bogacheva. Baltic Fuel Company expands fleet
Lukoil-Bunker supplies foreign navies
The first non-self-propelled oil barge in a series for the Baltic Fuel Company, the Taisia, was launched at the Baltic Zavod shipyard on 27 September. A launching ceremony and dedication service was attended by Georgiy Poltavchenko, the new St Petersburg Governor, as well as other city officials. Mr Poltavchenko said that the new barge meets all the international safety standards. The project is seen as supporting the St Petersburg shipbuilding industry and enhancing the logistics potential of the city. The Taisia is the first of four barges expected to be launched by the end of the year in a project costing about 400 million roubles ($13m). The 6,120 dwt vessel is double hulled and has 12 cargo tanks. The company bought four river tug boats in June year. These tugs are intended for towing tanker barges along Russia’s extensive inland waterways, with operations scheduled to start in 2012.
Lukoil-Bunker has delivered fuel to a foreign naval vessel at St Petersburg. During the Fifth International Maritime Defence Show (IMDS-2011) the company supplied 195 tonnes of MGO DMA 0.1S fuel to the Dutch frigate HNLMS Van Amstel. Services for foreign military vessels involve additional legal, customs and immigration formalities and the bunkers must meet NATO fuel standards, making such operations more complicated and time consuming. However, the company says it is ready to expand bunkering services to foreign warships calling at St Petersburg to take part in international events.
Kontur expands road tanker fleet
Kontur, a part of the Baltic Fuel Company, has bought eight DAF truck-tractors and Tanker Semitrailer-30s, each with a capacity of 30 tonnes. The purchase has taken the company’s fleet to 25 road tankers, capable of transporting 29,000 tonnes of residual bunkers a month. Currently bunkering companies buy about 20,000 tonnes a month in St Petersburg. Upgraded tanker for St Petersburg
Lukoil-Bunker’s recently upgraded tanker Aginskoye has started operations in the port of St Petersburg. The vessel, with a total cargo capacity of 3,170m³ was modernised to meet MARPOL requirements at Pregol Shipyard in Kaliningrad. The intention is that the Aginskoye will supply both MGO and IFO. Previously the tanker was part of Lukoil-Bunker’s Murmansk-based operations.
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Lukoil-Bunker supplies Prirazlomnaya platform
The Murmansk branch of Lukoil-Bunker delivered diesel fuel to the new Prirazlomnaya platform while it was alongside the berth on 9 August. The operation was complicated because the fuel had to be pumped 50m to the platform. The company also refuelled the tugboats used to tow the platform to its permanent offshore location. The ice-resistant fixed platform is the first facility of this type designed and built in Russia. The 126m² platform displaces 117,000 tonnes in light conditions and has accommodation for up to 200 people. The platform is intended to perform multiple operations at Prirazlomny offshore oifield: drilling, crude oil production, storage, treatment and dispatch of the product. Prirazlomny is in the Pechora Sea, 60km offshore. The oilfield is being exploited by Gasprom and has estimated reserves of 72 million tonnes, while the maximum production rate is 6 million tonnes a year. New port for St Petersburg region
Construction of the new Bronka port, on the southern coast of the Finnish Gulf in the St Petersburg suburbs, started at the beginning of
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2011 and progress has rapidly been made, and the project is reported to be on schedule. By the autumn, sizeable areas had been reclaimed using material dredged from the basins and approach canals. The reclamation work will eventually involve moving two million cubic metres of material, resulting in about 85 hectares of new land. Reclamation and dredging operations are expected to be completed by the end of 2014. The approach canal will be 14.4 metres deep, 185 metres wide and there will be a 420 diameter turning basin. The multipurpose transshipment complex (MMTC) Bronka will consist of three specialised facilities: a container terminal, a rolling cargo terminal and a logistic centre. The container terminal will occupy 107 hectares, the rolling cargo terminal, 57 hectares and the logistic centre, 42 hectares. Frontage length of the container terminal will be 1,176 metres (5 berths) and the length of rolling cargo terminal will be 630 metres (3 berths). The first stage of MMTC Bronka will have a capacity of 1.45 million teu a year and 260,000 ro-ro units. It is expected that 90% of cargo will be transported to and from the port by road with the remainder going by rail. Bronka will also be a passenger ferry port with an expected throughput of between 50,000-100,000 a year. The new port will have several significant competitive advantages. Using it will cut about three hours off the passage time, plus its good infrastructure will mean access to the railway network and to the new St Petersburg motorway, which opened in September. The construction of Bronka is a part of a programme of developing new ports close to St Petersburg that are aimed at expanding St Petersburg’s capacity – the existing main port is located in the historic centre of the city and has reached capacity. Bronka is expected to accept its first vessel at the end of 2014 or at the beginning of 2015. Federal government investment of 15.2 billion roubles will be spent for dredging works; private companies will also invest 43.8 billion roubles. Russian Far East’s biggest bunkering supply
The Transit DV trading company undertook the biggest bunkering operation in the Far East in late August according to a report on the energyland.info website. The bunker tanker Elara DV delivered 5,500 tonnes of IFO-380 and 100 tonnes of MGO to the containership Zim Haifa. Bunkering took 18 hours, which was considered a good speed for such a large stem. Transit DV often provides bunkers to ZIM, and other ships in its fleet have also been supplied recently, including the Zim Shanghai, Zim Pusan and Zim Beijing. The bunker company has increased its market share to 20%, which now makes it a strong competitor to RN-Bunker and Gaspromneft.
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RN-Bunker supplying at Murmansk
Rosneft subsidiary RN-Bunker has deployed the 4,500 dwt RN Magellan at Murmansk. The ice-class ship started work at the port in September. The 3,000 hp, 2007-built ship has been time charted by Rosnefteflot. As well as providing bunkering services in Kola Bay, the ship will carry products between Archangelsk and Murmansk, along Kola Peninsula and to Novaya Zemlya. Nevsky Mazut buys tanker
St Petersburg-based bunker supplier Nevsky Mazut has purchased bunkering tanker Bit Fjord. This 2,000 dwt double-hull vessel, was previously used as a bitumen carrier. The new owners have renamed the vessel Alexander Gluhov. Nayada’s new tanker
Russian Far East-based company Nayada has taken delivery of a 1990-built tanker. The Zaliv Amerika DW has a pumping rate of 800m³ per hour and can carry 3,100 tonnes of heavy oil and 200 tonnes of distillates. Nayada supplies at Vladivostok, Nakhodka, Vostochny, Slavjanka, and Posjet ports in Primorje. The majority of its clients are Singaporean, Korean and Chinese brokers, and Russian shipping companies. Primorsky developments
The authorities in Primorsky Krai in the Russian Far East are developing the region’s transport and logistics systems to attract transit traffic from Asia and the Pacific. Total container turnover in Northern-Eastern Asia is estimated as between 100-150 million teu but the Russian share is only about 0.6% of this amount. These figures were presented at the Pacific Economic Congress held in Vladivostok at the end of September. Igor Hruschev, head of department of industry and transport for the Primorsky Region, told delegates that 7%-8% of the market could bring annual revenues of about $10-15 billion if attracted to Russia. Mr Hruschev said that the region’s geographical position and emerging international transport routes Primorsky-1 (SuifanheGrodekovo-Vladivostok/Vostochny ports-Southern Chinese ports) and Primorsky-2 (Hunchun-Kraskino-Zarubino ports-Pacific ports) may bring opportunities to provide services to transit cargo carriers from South Korea, Japan and China. He believed it was feasible to develop one or two hub-ports in southern Primorsky to attract cargo traffic. One of these projects may be near Zarubino in Troitsa Bay, the other at the existing Vostochny port. Setting up a special port economic zone (SPEZ) at Vostochny has been widely discussed in the region during recent years. “This idea is targeted to provide services to transit vessels. It would reduce the
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Full range of premium quality bunker fuel For every type of engine Full oil compliant with ISO 8217:2005 Client-oriented service and flexible schemes of cooperation 4 Own bunkering fleet 4 4 4 4
Tranzit DV Group Co., LTD 13, Uborevicha street, Vladivostok, 690091, Russia Tel: 7 (423) 249-11-99 Fax: 7 (423) 243-28-28
Tranzit DV Trade House Co., LTD 13, Uborevicha street, Vladivostok, 690091, Russia Tel: 7 (423) 249-11-99 Fax: 7 (423) 243-29-94
E-mail: tranzit@tranzitdv.ru, group@tranzitdv.ru
E-mail: group@tranzitdv.ru
Marine Logistics Co., Ltd Office No. 18B-18F, One Capital Place, No. 18 Luard Road, Wanchai, Hong Kong Tel: (852) 2865-0381, Fax: (852) 2865-0189 E-mail: marine.logistics@gmail.com
russian Update
number of intermediate parties in transportation chains, increase transit throughput, bring benefits to the residents of the zone and improve their market position,” Mr Hruschev added. Also, SPEZ will simplify custom formalities and improve attractiveness for the transportation flow. Design of the future port zone infrastructure in Vostochny is still to be done. But regional authorities have already estimated future container throughput. The “boom” scenario promises an annual container turnover of about 12-13 million teu; the conservative scenario puts the figure at 5-6 million teu while the pessimistic scenario puts throughput at 2-3 million teu. When the SPEZ comes into existence, the regional transport industry is expected to benefit from additional revenue of about $30-45 billion. Currently annual turnover for all Far Eastern ports is below 1 million teu. “This amount may seem fantastic but [these projections] are rather modest if compared with business results of adjacent countries,” Mr Hruschev said. Gasprom considers refinery in Murmansk region
Gasprom’s wholly-owned subsidiary, the Russian Research Institute of Natural Gas and Gas Technologies (Gasprom VNIIGAS) has begun researching the most suitable site for the construction of a new refinery. It is expected that the refinery will be built at the western coast of Kola Bay. Murmansk regional authorities anticipate that the investment of 250 billion roubles will bring about 2,000 new jobs. The output of the new refinery is expected to be more than 40% diesel fuel, petrol 10%, marine fuel IFO-380 10% and kerosene (9.8%). The schedule for implementing this project has yet to be announced. Russian port throughput to soar
According to the Russian minister of transport Igor Levitin, throughput at Russian marine ports will have grown by 46% between 2010 and 2016 to reach 770 million tonnes. He reported to the State Duma that 430 billion roubles will be invested in development of Russian ports, of which 300 billion are “extra budgetary resources”. Northern Sea Route bunkering
The Murmansk branch of Lukoil-Bunker has provided bunkering services to vessels along the Northern Sea Route. It delivered 1,400 tonnes of residual fuel oil to the bulk carrier Sanko Odyssey. Owned by the Japanese shipping company Sanko Line, it was the largest bulk-carrier ever to travel along the Northern Sea Route (dwt 74,800 tonnes). It will deliver 66,500 tonnes of iron-ore concentrate produced by EvroChim at the Kovdor ore-processing plant. This is the first transit of a Japanese vessel through the Northern Sea Route.
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St Petersburg market buoyant
The St Petersburg bunkering market is again the largest and fastest growing in Russia. According to new figures 910,000 tonnes of fuel were sold during first six months of this year, 14% more than during the corresponding period of 2010 but still 50,000 tonnes less than in 2008. About 90% of the total supplied was heavy fuel oil. Subsidiaries of the giant vertically integrated companies and also independent operators compete in The St Petersburg market. The market leader for the first half of the year is Gaspromneft Marine Bunker with total sales of 251,000 tonnes of light and heavy fuel. Lukoil-Bunker is the second with 224,000 tonnes. The third place is occupied by the Baltic Fuel Company, which delivered 95,000 tonnes of fuel. The Baltic Bunkering Company and RN-Bunker delivered 76,000 tonnes and 71,000 tonnes respectively. Recovery in Russian Far East
After suffering during the recession, the Russian Far East’s maritime economy appears to be regaining its strength, although state policy towards competition remains controversial. The global downturn hit the shipping-related industries of the Russian Far East (RFE) from early 2009 and it has taken some time to recover. The RFE is very dependent on the export of raw materials and a drop in global demand hit the region badly. One indicator of just how severe the recession was can be seen from the experience of the local bunker industry. Vitaliy Us, managing director of Tsetan Co Ltd, a bunkering supplier in the region, said that volumes plummeted by two thirds as trade dwindled. According to Mr Us, the local situation was made far worse by the introduction of prohibitive duties on export timber and imports of cars. The move wiped out what had been the staple trade for smaller RFE shipping companies, taking timber to Japan and returning with cars. Companies folded and ships were scrapped. This year has, however, seen quite a recovery. An example of this is that in the first half of 2010, major RFE-based shipping and transport company FESCO made a net loss of $28 million. This year the company has reported a first-half profit of $45 million. FESCO chief financial officer Yury Gilts attributed the improvement to increased volumes and prices. He also said that there had been a “substantial increase of domestic demand for industrial and consumer goods in the first half of 2011. This combined with FESCO’s successful development of high value-added integrated logistics services enabled us to show good operational and financial performance. We grew not only in terms of volumes, but also, in pricing”. He added: “Given the traditional seasonality of our business we expect even higher numbers in the second half of the year, which supports our positive forecast for 2011 full-year results.”
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132, Verhne-Morskaya str., Nakhodka 692917 Primorskiy, Krai, Russia Tel/Fax: +7 4236 629626 Tel/Fax: +7 4236 697060 Tel/Fax: +7 4236 645852 E-mail: tsetan@yandex.ru
Bunkering in the southern ports of Primorskiy Krai: • Vostochny • Vladivostok • Nakhodka • • Slavyanka • Zarubino •
russian Update
The positive outlook is reflected in the figures from the RFE’s ports for the first nine months of this year. Overall the region saw the throughput increase by 8% to 94.1 million tonnes. Dry cargo made up for 53.5 million tonnes of the total, representing an 11.6% increase, while liquid cargoes grew at a more modest 3.6%. Vostochny Port, which handles the largest volumes and includes the Kozmino Oil Terminal, saw throughput rise 11.3%. Only Nakhodka experienced a significant fall in cargoes, down by 7.5% to 11.1 million tonnes. While the recovery in demand for raw materials is prompting an upturn in the fortunes of the RFE’s shipping-related businesses, government intervention remains controversial. Mr Us observed that monopolistic practices were being encouraged, particularly in the bunkering industry, where he predicts there will eventually be only two or three suppliers left. Reflecting the views of smaller players in the industry, Mr Us continued: “Shipping companies, in the full sense of this word – those involved in shipping large cargoes of metal, oil, coal or
containers, are practically nonexistent in the Russian Far East. Most of these cargoes are shipped by the foreign-flag vessels. Bigger companies, which were left without state support after the collapse of the Soviet Union, were forced to move to flags of convenience.” He continued: “This situation has been caused by the bureaucratic approach to business in Russia, an unfavourable taxation system and all sorts of inspections and impositions at all levels. That is why the local companies still operating in the shipping sector are either bunkering and service companies or fishing vessel owners. “In my opinion there is no reason for optimism in the area. The state gives no support, the fleet is ageing and the owners are struggling to afford to maintain their vessels. Meanwhile the large companies continuously unite in conspiring to force the competition out of the market. I am personally not too optimistic about the future. However, I am confident that our company will carry on standing our ground and developing our business.”
While smaller players have concerns the future of the Russian bunker industry is looking brighter
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legal news
Cleaning up, in court
Bunker spills are increasingly followed by long and expensive legal proceedings, as the Cosco Busan case has recently proved.
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lmost four years after the 5,551 teu containership Cosco Busan hit the San Francisco-Oakland Bay Bridge on 7 November 2007, all the authorities involved in the case announced a “comprehensive civil settlement” with the ship’s owners and operators, “resolving all natural resource damages, penalties and response costs” that resulted from the incident. According to the US authorities, the bunker spill (which was caused when a tank was ruptured) killed thousands of birds, impacted a significant portion of the Bay’s 2008 herring spawn, spoiled miles of shoreline habitat and closed the bay and area beaches to recreation and fishing. In September, the US Department of Justice, the State of California, the city and county of San Francisco and the city of Richmond signed and lodged a consent decree that required Regal Stone Limited and Fleet Management, respectively the ship’s owners and operators to pay $44.4 million for natural resource damages and penalties, and to reimburse the governmental entities for response costs incurred as a result of the 53,000 gallon oil spill that occurred when the vessel struck the bridge. The part of the settlement for the lost human uses of the shoreline and the bay, $18.8 million, constitutes one of the largest human use recoveries for any oil spill in the US. Of this, the National Park Service is receiving approximately $9.75 million to improve coastal access and facilities in the bayside, coastal and estuarine areas of Golden Gate National Recreation Area, San Francisco Maritime
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National Historical Park and Point Reyes National Seashore. The remaining $9 million will be disbursed either directly to local government as part of the consent decree, or through a grant programme to fund shoreline recreational projects throughout the impacted spill areas. On 30 November 2007, 23 days after the spill, the United States filed a lawsuit in federal court against Regal Stone Limited, Fleet Management Ltd and the pilot, John J Cota, seeking damages for resource injuries caused by the spill and for the costs incurred in cleaning up the spill. The US asserted claims under the Oil Pollution Act, the National Marine Sanctuaries Act, the Park System Resource Protection Act and the Clean Water Act. The civil settlement follows criminal cases that were brought against both the ship’s pilot, John J Cota, and Fleet Management. Mr Cota pleaded guilty to negligently causing the discharge and killing migratory birds. He was sentenced to 10 months in 2009. Fleet Management was sentenced in 2010 after pleading guilty in the criminal case to negligently causing the discharge and obstructing justice. The company was ordered to pay $10 million in criminal penalties, including $2 million for local environmental projects, for its role in negligently causing the Cosco Busan oil discharge, and obstruction of justice charges for a subsequent cover-up in which it falsified ship records after the crash.
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EQUIPMENT AND services
Less drag
A new partnership promises improved fuel efficiency through effective monitoring of anti-fouling coatings.
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MT Argoss and International Paint have formed a partnership that the two companies claim can deliver “demonstrable and transparent improvements in performance, efficiency and environmental emissions for the global shipping fleet”. BMT Group company BMT Argoss is a consulting company that specialises in monitoring, analysing and forecasting environmental conditions with a focus on providing innovative meteorological and oceanographic solutions to the offshore, shipping, coastal and harbour sectors. The organisation’s unique ship manoeuvring simulation and ship performance monitoring services are integrated with its MetOcean data. International Paint is a subsidiary of Dutch-based AkzoNobel, the largest global paints and coatings company and a major producer of speciality chemicals. By deploying International Paint’s world class fouling control coatings in conjunction with the BMT SmartServices system, it is intended that shipowners and operators will be able to benefit from a measurable reduction in energy use and CO2 emissions. The system developed by BMT Argoss will independently monitor and report to stakeholders the performance of their vessels. BMT says SmartServices builds on the successful track record of BMT’s Smartpower product, which is an advanced onboard, realtime performance monitoring and reporting system that acquires and records data automatically from ship sensors and provides valuable ship performance information to the crew and the shorebased management.
World Bunkering Winter 2011
BMT says that, when employed as a package, the new system can be used with International Paint’s Intersmooth SPC, the world’s only self-polishing copolymer biocidal antifouling that offers 4% savings and 37 years of proven performance on over 33,000 ships, as well as Intersleek, the latest generation fluoropolymer foul release coating that offers fuel and emission savings of up to 9%. Han Wensink, managing director of BMT Argoss commented: “BMT SmartServices will clearly and transparently demonstrate any in-service performance changes when International Paint’s hull coatings have been used. Equipped with a user-friendly Webbased interface and drawing on BMT’s 24/7 access to high quality metocean data, the new system can play a major role in improving operational efficiency of the global shipping fleet.” Paul Robbins, worldwide marine marketing director at International Paint continued: “We are confident that our high performance biocidal antifoulings and foul release coatings, when used in conjunction with BMT SmartServices, will deliver quantifiable added value for shipowners and operators. One of the reasons we partnered with BMT is that the new system can accurately determine total performance levels by recording over 30,000 readings per day, providing complete transparency and evidence to owners and operators of the performance improvements our advanced hull coatings technology can deliver. The BMT system can be installed at newbuilding or as a retro-fit and, by utilising International Paint’s and BMT’s global networks, in-service support will be provided at every stage throughout the life of the coating and the monitoring system.”
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Let’S keeP thingS SiMPLe Volatile prices, uncertain delivery, and unreliable quality can quickly complicate your fuelling requirements. Across the world, our professionals are guided by a simple promise: to deliver quality fuels on time and in full – every time. For that additional assurance, our global team of customer service professionals and risk management experts are always at your disposal. At Shell, we work to keep bunkering simple for you. As it should be.
Shell Marine Products
Company News
LUKOIL-BUNKER is looking to the future
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hanges in international laws are making lower sulphur content in bunker fuel a requirement. This raises a complicated problem for bunkering companies – how will they provide the market with fuel that complies with the new environmental standards? And this is a problem that needs to have a solution by 2015. Already the demand for low-sulphur fuel is growing significantly among shipowners whose fleet operates at European ports and at SECA. This year a new product, which completely corresponds to the up-to-date environmental requirements, and is a good alternative to the more expensive gas oil, has been made available at the ports of Northwest Russia, as LUKOIL-BUNKER can now offer shipowners the unique bunker fuel, 0.1% sulphur fuel oil. At the present time, most of the oil-refining industry in Russia is not ready to produce low-sulphur fuel oil on a mass scale. Talking at the All-Russian Bunkering Forum, experts of the Research and Design Institute for Oil Refining and petrochemical industry said that the Russian refiners need to invest considerably in industry modernisation. This means that 0.1% sulphur fuel oil, produced by LUKOIL from low-sulphur crude oil, is a unique product. Because of the government resolution on equalisation of export duties on light and dark oil products, supplying fuel oil to the home market has become more profitable. Low-sulphur fuel oil at the ports of Northwest Russia is sold by a LUKOIL’s subsidiary LUKOIL-BUNKER. This direct communication with the manufacturer makes it possible for the company to receive a guaranteed amount of all grades of bunker fuel, including low-sulphur fuel oil, on a regular basis. The advantage of low-sulphur fuel oil is its lower price in comparison with distillates, while by its characteristics it is similar to the fuel of MDO DMB and MDO DMC standards. Experts estimate that using it saves about US$30-60 per ton in comparison with 0.1% sulphur gas oil, and it also means that the fuel system of vessels does not need to be reconstructed. Currently, shipowners can meet the requirements of the MARPOL Convention for sulphur content in bunker fuel in two ways. Firstly, by the onboard installation of scrubbers that purify exhaust from sulphur and other harmful discharges – an expensive solution, which is only reasonable when applied to new large-capacity vessels. The second way is to reduce sulphur content in bunker fuel up to the permissible level by equipping vessels with a fuel system that works using liquefied natural gas. But even this is only possible for new vessels that are specially designed to use it. There are more exotic solutions as well, for example, using solar cells or sails. So, the most favourable and reliable option for shipping companies today would seem to be low-sulphur fuel. Using 0.1% sulphur fuel oil as an alternative to diesel fuel with a similar sulphur content won’t result in additional costs for vessel reconstruction, plus it will make it possible for shipping companies to cut down on their expenses.
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Company News
BFC is a gateway to Russian rivers and its bunkering market
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he inland waterways of Russia are becoming more and more attractive for both foreign shipowners and oil products exporters. This year the Russian government has announced its plans to open inland waterways (rivers) in the country to foreignflag cargo vessels. Russian business has already reacted to this announcement: river transportation companies that move oil products are waiting new work with foreign partners, and are in the process of renovating their fleet to make it compliant with international safety requirements and environmental standards. Russia has a unique system of navigable rivers and channels with a huge potential for transit traffic, as well as export and import river traffic through its territory. At the same time, in comparison with European countries, this potential is still poorly realised. In order to use the logistical resources of the country’s inland water transport to the full, in 2010 the Russian Federation government approved a package of actions to make inland waterways available for foreign-flag vessel navigation. It is expected that this package of actions will be implemented in the run-up to 2015. It consists of three sections: standard and legal regulation, inland waterways infrastructure development and inland waterways management system improvement. For the time being, according to the standards of the Russian Code of Inland Water Transport (CIWT), foreign vessels have to obtain a special permit from the Russian government to sail into inland waterways. In the future, foreign-flag cargo vessels will be permitted to sail into the inland waterways if there are bilateral agreements in place between the Russian and the flag-state’s government. The conclusion of such agreements will create greater possibilities for shipping in Russian rivers, as well as providing access to the products of refineries, for example, in the central part of Russia. As inland waterways shipping develops, it will be more efficient for foreign companies to enter this market with an already existing mature player that has a reputation as a reliable partner. Baltic Fuel Company (BFC), has wide experience in operating in inland waterways, and is looking to create joint ventures with partners from other states that have corresponding inter-governmental agreements. BFC also intends to construct a port complex in St Petersburg that will handle general and other cargo.
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In experts’ opinion, it is the most promising to transport general cargo and oil products in inland waterways of Russia. Nowadays BFC is active in developing delivery of oil products by rivers. The company is realising the shipbuilding programme to construct some tankers, and plans to start operating these in the 2012 navigation. The vessels will comply with all of the international environmental standards and safety requirements, as well as passing the vetting control that is required by the leading oil refining companies, such as BP. The advantage of transporting oil products through the inland waterways is that it is possible to ship small lots and reduce transportation value compared with that of railway transportation. It is estimated that the saving, in comparison with railways, can be up to 50% depending on the destination. In 2012, BFC expects to transport about 1 million tons of oil products a year. The transportation of oil products through Russian rivers will be of interest not only to oil traders from Eastern Europe but also to the international bunkering companies that wish to enter the Russian market and have more flexible access to Russian oil products. In turn, the appearance of foreign partners in Russia’s bunker market can only improve the quality in this servicing segment and make it possible to develop a market based on economic efficiency as is the case in the rest of the world. Today, the principal trend in this field in Russia is formed not by independent companies but by the structures created by oil-producing holdings. BFC, being an independent player, runs its activities following the principles of business reasonability and its reputation as a reliable partner that finds response in the market among Russian and foreign companies’ partners. Competition of Russian public companies with joint Russianforeign companies does not make it possible for the bunker market to come down to that poor performance that is still one of the main problems in oil-producing industry in Russia.
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Company News
LUKOIL Benelux B.V. is a key player in the ARA ports
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ukoil Benelux B.V. is a prominent and reliable physical supplier of bunker fuels in the ARA region (Amsterdam-RotterdamAntwerp). We are supported by the logistic and financial strengths of our parent company Litasco SA in Geneva, Switzerland. Lukoil Benelux B.V. is part of the Russian oil major Lukoil, which has wide-scale operations outside of Russia. Our clientele vary from the well-known large and medium shipping lines to other physical suppliers and trading companies. In the last few years, we have had a market share of 10-15% in our home markets of Amsterdam and Rotterdam. In June 2010 the Credit Risk Management Committee of Litasco SA approved a strategy of further strengthening our company’s presence in ARA, by increasing credit lines for a significant number of customers and allowing more flexibility in dealing with new ones. This step clearly shows that both Litasco SA and Lukoil Benelux B.V. have adapted well to the postcrisis situation in the bunker industry in ARA and feel comfortable about exploring new market opportunities. However, we continue to monitor the situation in the market and are ready to adjust in order to successfully face new challenges and sustain the growth of our business. In July 2010 Lukoil Benelux B.V. made a decision to close its Amsterdam office and centralize the handling of all bunker enquiries through one contact point, Bunker Desk in Rotterdam. The formal closing took place at the end of July 2010. This step has proved very successful and has helped our company to optimize its bunker trade operations. Since then Lukoil Benelux B.V. has been serving its clientele more quickly and efficiently. Since September 2009, we have supplied bunker fuels to the Belgian port of Antwerp from the Zeeland Refinery (formerly Total Raffinaderij Nederland before 1 October 2011) in Flushing, where the Lukoil Group purchased a 45% stake, and from the other locations in ARA. In the second quarter of 2011, the authorities of the Port of Antwerp granted us the necessary licences for full-fledged bunker operations. We will be expanding our activities in that port, which is Europe’s second largest port, shortly. In addition to the ARA region, we are also active in the Baltic Sea, the Black Sea and the Mediterranean. 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 and Murmansk, arranging bunker fuels for a variety of shipping companies making calls in that region. Our presence will continue to grow as we develop closer ties with local physical suppliers. Since 2005, Lukoil Benelux B.V. and our Dutch partner Burando Holding have been jointly operating Service Terminal Rotterdam (STR), which enables Litasco SA and Lukoil Benelux B.V. to store fuel oils and blend them to necessary specifications. Currently new storage tanks are being constructed at STR, which will significantly increase total storage capacity of the terminal. The new tanks are expected to become operational in the first quarter of 2012. Having our own terminal and purchasing almost all of our bunker fuels from our parent company gives us a competitive advantage in the
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saturated market in which demand has been steadily picking up after the world’s 2008 economical crisis. With this competitive advantage we can 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 and bunker gasoil. Other products are available upon request. In order to ensure quick and timely deliveries to seagoing vessels or to other physical suppliers, we currently have a fleet of six time-chartered barges with deadweights ranging from about 1,630mt to 6,310mt. Provided by FTS Hofftrans, the barge operating company of our partner Burando Holding, they are all new double-hulled barges with greater bunkering capabilities. Should we require a greater capacity, we have the option of hiring other barges for spot deliveries, which range from 1,700mt up to 9,200mt, from FTS Hofftrans and alternative reliable transport companies in the ports of Rotterdam, Amsterdam, Antwerp and the other Dutch and Belgian ports. Our team of bunker traders and operators has all the necessary skills to become and remain your reliable partner: experience, expertise and a thorough knowledge of the bunker markets. They are friendly and available 24 hours a day, 7 days a week, and will be happy to help with your enquiries for the regions in which we actively operate, as well as other regions of the world. In May 2011 Lukoil Benelux B.V. moved to a new office, to the 36th floor of the tallest building in the Netherlands, the Maastoren, in the centre of Rotterdam. Our new home has given us a great deal of inspiration and energy to service our clients even better than before. We look forward to your bunker enquiries and hope to do business with you soon.
WE MOVED TO A NEW OFFICE New office address: Wilhelminakade 85, Building “De Maastoren”, 36th floor, 3072 AP Rotterdam, the Netherlands New post address: PO Box 24065, 3007 DB Rotterdam, the Netherlands Tel: 24/7: +31 10 264 27 00 E-mail: bunkers@lukoil.nl
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Company News
Rosneft Marine sets new standards across its bunker supply chain
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osneft Marine, the international trading arm of Russia’s stateowned oil company Rosneft, has made several moves to bolster its presence and improve its service in Russian ports, including the introduction of two new bunker delivery tankers. In August this year, Rosneft Marine announced that it had received its first delivery vessel to service the Black Sea Port of Tuapse. The RN-Taurus is a 3,569 deadweight tonne (dwt) state-ofthe-art bunker tanker that has pumps in each of its cargo tanks and is capable of delivering 150 cubic metres of bunker fuel an hour. It has two controllable-pitch propellers and a bow thruster with an integrated automated control system. The second bunker tanker, the RN Magellan, was delivered to the Port of Murmansk. The high-end delivery capabilities and environmentally friendly design of this 4,622 dwt bunker tanker, currently in use at Murmansk, has meant that the company is looking at the possibility of relocating it to the Port of St Petersburg. This will boost the efficiency of its fuel deliveries at St Petersburg, which is the main shipping gateway between Russia and the Baltic Sea. Vladimir Brezhnev, director of Rosneft Marine UK, said: “Rosneft Marine has continued to grow this year because we have ensured that our supply chain strategy is in line with our wider business strategy. We have invested heavily in developing our supply chain to improve our service and keep up with customer demand.” Both vessels were built in 2007 and are part of Rosneft’s plan to replace aging bunker tankers from the Soviet era in Russian ports with modern and environmentally efficient bunker tankers. The company will continue developing its bunkering fleet and intends to introduce additional vessels in the ports of St Petersburg and Arkhangelsk in the coming months. Rosneft is also looking to introduce a 6,000 dwt tanker to meet the growing demand for bunkers in ports in the Far East. “A major part of our strategy is to develop our bunkering fleet as well as modernise bunkering operations in Russian ports and bring them up to international standards,” he said. “We believe doing this enables us to provide reliable and efficient deliveries to our custom-
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ers, while at the same time working towards our business goal of better environmental protection.” Rosneft started operating its first floating refuelling station (FRS) earlier this year. The station is located 11km from Rostov near the city of Olginskaya and supplies diesel and petrol to small vessels. The station has a fixed barge and shoreside oil discharge facility. Environmental protection features include floating river booms. Rosneft intends to open several similar stations on the Don River. These recent developments across its supply chain are part of Rosneft’s overall strategy of being able to control all elements of its integrated chain – from sourcing from its refineries to delivering to its fleet of bunker tanks, through to the final stage of delivering directly to the customer’s vessel. In fact, Rosneft is one of the few companies in the bunkering business in Russia that can boast ownership of refineries and terminals that are in close proximity to key ports. These include refineries in Achinsk, Komsomolsk, Kuibyshev, Novokuibyshevsk, Syzran and Tuapse, with terminals in Arkhangelsk, Nakhodka, Syzran and Tuapse. By continuing to implement international standards across its integrated supply chain, Rosneft Marine is able to provide unparalleled assurance to its customers that they will receive the most reliable service and best-quality fuel. Rosneft’s high quality management standards have also enabled it to achieve significant cost savings and streamline logistical costs, allowing the company to offer fuel at competitive prices in all the ports it has operations in. Rosneft Marine currently has a presence as a physical bunker supplier in the Baltic, Black Sea, Russian Far North and Russian Far East.
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Company News
Trade House Tranzit-DV Co., LTD
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rade House Tranzit-DV Co., LTD. has launched deliveries to the Russian Far East markets of a broad range of oil products compliant with current environmental standards. The new program is being implemented in conjunction with the company’s strategic partners such as TNC-BP affiliates and SK Energy, South Korea. The company supplies large amounts of IFO-380 high-quality fuel oil to the bunkering market under this program. “We are establishing an IFO-380 market in this area virtually from zero. Because Russian oil refineries produce IFO-180 grade, ships using IFO-380 were meeting difficulty in bunkering with this particular fuel variety in Primorsky Region’s ports as its supply was very low. That’s why foreign vessels, particularly large-tonnage state-of-the-art ships, even when their routes passed via Primorsky Region’s ports preferred calling our Asian neighbors’ ports for bunkering – Singapore, Hong Kong, Busan, etc. The governing factor for that frequently was just lack of IFO-380 in our ports rather than oil product prices. And those who still bunkered in our ports had to fill a lighter fuel oil variety into their tanks to bring up fuel characteristics to more or less normal by mixing and adding various components. Today, we start competing with Asian ports through enhancing the bunker product spectrum. Bunker prices in Russian ports are currently more attractive than in major Asian bunkering centers,” says Valery Morozov, Executive Director of Trade House Tranzit-DV Co., LTD. Also, the company has improved bunkering logistics. The Elara-DV tanker owned by Tranzit-DV Holding has began operating as a bunkering tanker in Vostochny and Kozmino ports since early February. The decision to use a 7,000-ton tanker as a port bunkering ship has been a new approach to bunkering sector logistics. The advantage of a large-tonnage bunkering tanker is that it can deliver large oil product shipments intended for one or several vessels per one voyage. The Elara-DV is capable of taking up to 7,500 tons of cargo on its board and of discharging cargo at a rate of up to 1,000 cubic meters per hour. Such approach enables to set up a new system in the bunkering market based on the bunkering tanker’s regular voyages on an agreed schedule in accordance with customer requests. This operational mode elevates bunkering services in Primorsky Region’s ports to a higher level. Naturally enough, IFO-380 product has become asked-for by foreign vessels calling Primorsky Region’s ports from the first days of its sales. Trade House Tranzit-DV Co., Ltd. sold more than 17,000 tons of this product during first three weeks alone. In the nearest future, Vostokbunker JSC, also a member of Tranzit-DV Holding, will launch production of a broad range of oil products under its proprietary trademark “VB” for the bunker fuel market (VB-30, VB-40, VB-180, VB 380, F-5) based on fuel oil supplied to this area from TNC-BP’s oil refineries and by its South Korean partner, SK company. “We place our main focus on environmental safety. Current standards in shipbuilding, auto manufacturing, power generation both at major and small plants have been dictated by need for maximum reduction of adverse effects on the environment. Environmentally unsound engines and propulsion plants become obsolete and go out
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of use. And new ones require energy resources that meet environmental standards,” says Valery Morozov. Vostokbunker JSC produces marine fuels of VB grade (VB 30, VB 40, VB 180, VB 380). Its equipment capacity is sufficient to support monthly production of up to 100,000 tons of fuel. Its fuel products conform to ISO 8217 international standard (IFO 30, IFO 40, IFO 180, IFO 380) and their quality is confirmed by GosStandard of Russia’s certificates. The annual oil product turnover handled by Vostokbunker JSC terminal is 1 million tons. Its tank farm holding capacity is 51,000 tons. The 300-meter-long oil loading pier is equipped with a 200-mm pipeline. With pumping capacity being 500 m3/h, simultaneous transfer of two fuel varieties into two tankers is possible. The pier is capable of handling ships of up to 50,000 dwt. In-house facilities for liquid fuel storage and transshipment make it possible to perform quality control at each delivery stage. Through application of available process technologies, performance data of resulting fuel can be customized according to client’s requirements, i.e. fuel for each particular engine type can be produced. Vostokbunker JSC oil depot capacity is sufficient to have large amounts and broad range of bunkering fuel oils in stock. Trade House Tranzit-DV Co., LTD. has a number of overseas offices. Marine Logistics Limited (Hong Kong) and Marine Logistics Limited Korea operate on-line with the head office in Vladivostok which minimizes time required for decision making and transaction of deals. “Operating our own oil loading terminal and fleets, we are ready to satisfy vessel bunkering requests in a shortest time possible. Such quick response is very convenient for customer,” Trade House Director Mr. Morozov says. “Furthermore, through our representatives in Hong Kong and Seoul we provide bunkering services to vessels in Korea, Singapore, Vietnam and Thailand.” Company Profile
Group Tranzit-DV is a holding company providing a broad range of services in the markets of energy resource processing and delivery (oil products, coals, natural gas), fleet bunkering, ocean carriage. The company was established on July 18, 1995. Trade House Tranzit-DV Co., LTD. is an exclusive distributor of “SK” marine oils in the Far East of Russia and ready to deliver oil in the ports of Vladivostok, Nakhodka, Vostochny, Kozmino, Magadan and Petropavlovsk-Kamchatsky.
Bunkering requests can be made at our website: http://eng.tranzitdv.ru/tdtdv/on-line-order/
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Company News
Nayada Co. Ltd. - forging ahead in tough times
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ayada Co Ltd was incorporated in 2008 and is one of the oldest and soundest bunkering companies in the Far East of Russia. As well as the head office, which is located in Nakhodka Port, the company also has a branch in Vladivostok Port that opened in 2003. Nayada has been an IBIA member since 2007. The company has successfully worked in the Far Eastern region of Russia for more than 10 years, providing high-quality bunkering services for Russian and foreign shipowners and delivering bulk liquids on behalf of customers to all the ports in Primorsky region – Nakhodka, Vladivostok, Vostochny, Kozmino, Slavyanka, Posyet, Zarubino and Bolshoy Kamen. The average monthly volume of bunker oil sold totals 15,000-20,000 tons. Among the company’s long-established clients are well-known brokerage companies, such as World Fuel Services, Dan-Bunkering, Hanwa, Itochu Enex, KTB, Peninsula Petroleum, as well as large shipping companies, such as Nanjing Tanker Corporation, Maersk, STX Corporation and Hanaro Shipping. Nayada Co Ltd has long-term contracts to supply bunker oils with numerous petrochemicals companies. Among them are the largest Russian oil industry groups: NK Rosneft Joint Stock Company, Gazprom Neft Joint Stock Company and NK Alliance Joint Stock Company, that own oil processing plants and cargo terminals in largest ports in the Far East. As the geographical sphere of supply is constantly widening, this year the company added to its existing fleet by purchasing two tankers of 6,200 tons in total capacity. They are equipped with double freeboard and double bottom, and the construction permits the simultaneous carrying of five different types of cargoes, including those with low inflammation temperatures (below 60°C, eg gasoline, aviation kerosene, and diesel fuel). Their navigational area is unlimited and their ice class is enhanced, which is particularly important when taking into account the climate conditions in the far eastern region in winter. Currently, the company operates a fleet of six tankers, five of which are owned and one is leased. The total tonnage of the fleet is approximately 11,800 tons, which allows customers’ orders to be fulfilled for the supply of any quantity of bunker oil. All the company’s tankers have certified equipment for cargo measurements, taring, analysis and the storage of bunker oil samples, which correspond to all the necessary international requirements.
Mr. Evgeniy Gryaznykh, Director, Nayada Co., Ltd
In 2006, the company’s technical management department designed a technology for the serial manufacturing of admiralty fuel oil 0-5 (analogy of IFO-30), and in 2011 for the fuel IFO-80 and IFO-100 aboard the company’s tankers. Technical conditions have been registered and entered with the Federal Agency of Technical Regulation and Metrology and the Federal State Unitary Enterprise Standard. A sanitary and epidemiological inspection report from the Chief State Doctor of Sanitary and Epidemiological Service of the Russian Federation has also been issued. In addition to this, the company holds permission for using a conformity mark of the certification system GOST R (state standard of the Russian Federation) endorsed by the decree of State Standard of the Russian Federation No 50 dated 29 June 1998 (registration No 1333 dated 3 May 2006). Because of its long experience in the bunkering services market, its own fleet and modern technologies, Nayada Co Ltd guarantees a supply of high-quality fuel to all of its customers in the required quantity and on time. The company’s staff of more than 100 employees combines years of experience, knowledge and service, which in turn ensures that the company retains its leading position in the market. Nayada Co Ltd is a reliable and sound partner that has been offering high-quality organisation and service for thirteen years.
HEAD OFFICE: Room 708 3, Portovaya Street Nakhodka Russia, 692900 Tel/Fax: +7 4236 629779, 679113 E-mail: bunker@nayada.biz, nayada@nayada.biz Website: www.nayada.biz VLADIVOSTOK BRANCH: Room 412, 10a, Okeanskiy Prospect Vladivostok Russia, 690091 Tel/Fax: +7 423 230 2606 E-mail: nayada@vl.ru, vl@nayada.biz
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Company News
Gazpromneft Marine Bunker: market leadership is our goal
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azpromneft Marine Bunker, a subsidiary of JSC Gazprom Neft, was found in October 2007 for the year-round supply of petroleum products – fuel oil, marine fuel and lubricants – for sea and river transport. The company has five offices and two subsidiary companies; Gazpromneft shipping manages a fleet 6 bunkering vessels Gazpromneft East, Gazpromneft West, Gazpromneft Nord, Gazpromneft Zuid, Aral, Gazpromneft Zuid-West, operating in ports of St.-Petersburg, Novorossisk, Kaliningrad, Murmansk. In August Gazpromneft Marine Bunker bought the new tanker Gazpromneft Zuid-West for operations in the Black Sea, port Novorossisk. Date of construction of a vessel is 2004, earlier the tanker worked in a northwest part of the Europe on bunkering and transportations. The new tanker meets the requirements of all international regulations. Where: Gazpromneft Marine Bunker is represented in Main Sea Ports of Service in Russia, constantly expanding its geography. On 31 August Gazpromneft Marine Bunker has carried out the first bunkering on Sakhalin island, port Korsakov. • Main Sea Ports of operations: Saint-Petersburg, Kaliningrad, Murmansk, Archangelsk, Novorossisk, Tuapse, Port Kavkaz, Nakhodka, Vladivostok, Vostochnyi and Sakhalin island. • Main River Ports of operations: Saint-Petersburg, Yaroslavl, Kazan, Volgograd, Rostov-on-Don, Astrakhan, Azov, Ust-Kut, Nizhniy Novgorod. • International ports: Tallin, Riga, Klaipeda, Rostok, Konstanca The main strategic goal of Gazpromneft Marine Bunker is to enter the international bunkering markets of Europe and Asia. The first step in this direction was made at the end of 2010, when the first international bunker service was provided in the port of Istanbul (Turkey). Our clients: About 70% of the company’s services are provided for foreign shipowners. Gazpromneft Marine Bunker has contracts with major international shipping companies and traders operating in the ports of Russia. Russian shipowners are major sea and river shipping companies, as well as fishing companies. Our products: A wide range of high quality marine fuels is produced at Gazpromneft subsidiary – Omsk Oil Refinery, which is the main supplier for Gazpromneft Marine Bunker. From April 2010 a low-sulphur (less than 1%) TAS-380 marine fuel has been produced which has made Gazpromneft Marine Bunker a major bunkering company in the low-sulphur fuel oil market. Operating results: Since the date of foundation the company increased its operations nearly twice, having delivered 875,000 tonnes of fuel in the year 2008 and 1500,000 tonnes in the year 2010. In 2010 Gazpromneft Marine Bunker became on of the leading companies of the Russian bunker market increasing its sales by 17%.
Neftehim Bunker Jsc
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eftehim Bunker Jsc is an affiliate of the well-known and reputable oil product trader and bunker supplier, Neftehim Ltd, which has been operating since the year 2000. We maintain a reputation for reliably supplying the highest standards of services and excellent-quality products. Because of our outstanding business relations with the major Russian oil companies, as well as the independent oil producers, we are able to be flexible in the market and can 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 bunker delivery operations. With company growth in mind, we now have our own bunker barge, Severaynka, which is undergoing reconstruction at the Vyborg Shipyard and will be MARPOL compliant. We expect to receive this modernised vessel in September 2011. Quality control is also a matter of great importance to us, so before a bunker delivery is made to a 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 199106 Russia Tel: +7(812) 332 2363/+7 (812) 942 3140 Tel/Fax: +7(812) 332 2364 E-mail: main@nh-bunkering.ru Website: www.nh-bunkering.ru
Vasiliyevsky Island, 3rd line, 62A, St Petersburg, Russia, 199178 Tel: +7 (812) 449 49 70 Fax: +7 (812) 449 49 71 E-mail: bunkers@spb.gazprom-neft.ru
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Company News
Portugal fuel stop
JSC Bunker Company
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ased at Lisbon, Galp Energia Group, is able to offer fuel supply services to all ships visiting this warm and pleasant country. Galp Energia has professional bunkers team provide its customers with high-quality fuels and services, and the highest safety standards in all its bunker activity and the company’s bunkering products fulfil the ISO 8217: 2010 specification in all grades. To help achieve customers’ targets on the environment, the company can supply low-sulphur fuels at several ports, with the port of Lisbon being the main port for low-sulphur fuel. Optimising its logistics resources and storage capabilities Galp Energia is able to provide high-quality services and products, including a wide variety of marine distillates. Galp Energia is the main bunker supplier in Portugal, and provides bunker services using its two barges with capacities of 5,800 tonnes and 3,000 tonnes each. A 5,800 dwt double-hull barge, Bahia Tres, began operations in 2010 to support the company’s business in the ports of Sines and Setúbal, meeting all the important aspects for safety and protecting the environment. It is equipped with anti-pollution measurers and is covered by European Maritime Safety Agency regulations in the Atlantic Ocean and Mediterranean Sea. Always aware that its customers’ main concern is product cost, the company offers competitive prices without compromising product or service quality. Visiting Portugal and being supplied by Galp Energia will always be a good decision for regular customers, used to working with a professional team. We are the only refinery in Portugal and operate refineries at Sines and Matosinhos. We have an extensive product range that includes gasoline, diesel fuel, jet fuel, fuel oil, LPG, bitumen and several aromatic products. Our refining business is responsible for the supply of oil products to our retail, wholesale and LPG marketing divisions, competitors and foreign customers, as well as for the operation of our refining and logistics assets. We hold a significant position in the Portuguese crude oil products storage market. Our two refineries in Portugal together represent 20% of the Iberian refining capacity, and collectively account for the majority of Portugal’s annual domestic petroleum product requirements. We are investing approximately €1.4 billion to upgrade and improve the efficiency of our refineries, representing €1 billion for Sines and €0.4 billion for Matosinhos.
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.
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For further information contact: Galp Energia SA Tel: +3512 1724 0637/654 Fax: +3512 1724 2957 E-mail: bunkers@galpenergia.com www.galpenergia.com
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34/1, Dezhnevtsev St., 163035, Archangelsk, Russia Tel: +7 (8182) 6577 93 Fax: +7 (8182) 420327 E-mail: arkh@jsbunker.ru www.jsbunker.ru
World Bunkering Winter 2011
Company News
Tsetan Company Limited
Unicom Holding S.A.
U T
setan Company Limited provides customers with services in bunkering, transportation and trade of oil products. A young and dynamically growing company, Tsetan entered the bunkering market in 2003. At the early stage of its activity Tsetan operated one bunkering barge in the port of Nakhodka. At present the company owns three bunkering tankers, the first of which was purchased in 2003 and the other two in 2005 and 2008 respectively. Recently the a newly purchased Japanese made double-hull bunkering vessel Tsetan has been put into service, which will increase transportation and bunkering services in the ports of South Primorye. The total deadweight of Tsetan’s fleet is 5,000 tonnes, and the company’s annual cargo turnover is 50,000 tonnes. The scope of the bunkering services provided by the company covers all the ports of Southern Primorye, namely Nakhodka, Vostochny, Vladivostok, Slavyanka, Zarubino. For the past couple of years Tsetan has strengtnened its’ position on the market and has gained a reputation of reliable bunker supplier. Even in the current economical climate, when the demand for fuel has decreased in the Primorsk Krai area, the company has managed to increase the volumes of bunker supply which at the end of year 2010 constitued 70 000 tons. In addition to this Tsetan has expanded the range of clients. The main supplier of the oil products for the company is Khabarovsk Oil Refinery (Khabarovskiy NPZ). The oil products are transported in cisterns by rail and then transhipped via the oil transhipments terminals of Nakhodka, Vostochny and Vladivostok. The company aims to maintain the high profile, international image of a professional supplier of quality bunker fuel to its clients. We value our clients and take a good care of their bunkering needs. We always welcome new clients and are permanently ready to offer our services.
Tsetan Company Limited. 132, Verhne-Morskaya str. Nakhodka 692917 Primorskiy Krai Russia Tel/Fax: +7 4236 629626 Tel/Fax: +7 4236 697060 Tel/Fax: +7 4236 645852 E-mail: tsetan@yandex.ru
World Bunkering Winter 2011
nicom Holding entered the Romanian bunkering market in 1999, with the establishment of a dedicated bunkering department. Since then we have developed rapidly, gaining the knowledge and experience necessary to become the undisputed leading bunker supplier in Romania. Originally known as Unicom Bunkering, we traded under this name from 2005 to the end of 2010 when, following a merger, we were re-launched as the bunkering department of Unicom Holding. Despite this change in name, our goal has remained the same - to provide our customers with the best possible bunkering services and to develop strong and mutually profitable partnerships. We bunker at the Romanian Black Sea ports of Constanta, Agigea, Midia and Mangalia, and also at the Romanian Danube river ports of Galati, Tulcea, Braila and Drobeta Turnu Severin. At the maritime ports we deliver a full range of high-sulphur fuel oil products, from IFO-30 to IFO-380, as well as low and high-sulphur distillates. The fuel oil is delivered to ships by barge, while the gas oil can be supplied either by barge or by truck. Barge deliveries are made by our M/T “Unicom 3”. We also own the oil barge “Deltaoil”, but this is mainly used as a storage unit for fuel oil, giving us increased flexibility for dealing with large orders or short timescales. At the Danube River ports we supply only low sulphur gasoil, ULSD 10 ppm inclusive, ex-pipe, using our barge “Unicom 1”, or by truck. Presently we deliver high quality oil products that are compliant with the ISO 8217:2005 specifications, but we are soon to apply the ISO 8217:2010 standards. All our bunker deliveries are professionally managed by our experienced staff, in full accordance with the relevant legal requirements. Apart from supplying bunkers and providing our help and expertise, we have also started to offer transport services by carrying oil products for our clients on the Danube River. Currently we do this via our M/T “Astrid”, but are planning to extend our fleet in the near future. Our staff are available 24-hours a day and are ready to put their experience, expertise and knowledge at your service.
Tel: +40 21 233 27 70 Fax: +40 21 233 27 69 General E-mail: office.bunkering@unicom-group.ro Website: http://www.unicom-group.ro/holding Mr. Bogdan BURGUI – Bunker Sales Manager (maritime sales) Mob: +40.741.383.412 E-mail: bogdan.burgui@unicom-group.ro Mr. Marc BOBEICO – Bunker Sales Manager (river sales) Mob: +40.741.362.023 E-mail: marc.bobeico@unicom-group.ro
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Company News
TransOilBunker Co Ltd
T
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
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World Bunkering Winter 2011
ADDAX BUNKERING SERVICES
NEFTEHIM-BUNKER JSC
AEGEAN MARINE PETROLEUM
ORGANIZACION TERPEL S.A.
ALBA PETROLEUM LIMITED
PENINSULA PETROLEUM LTD
BALTIC FUEL COMPANY
PLATTS
BUNKERING COMPANY JSC
PETROLEOS DE PORTUGAL
C.I INTERNATIONAL FUELS LTDA
QUINN OIL COMPANY LTD
COPEC S.A.
ROSNEFT MARINE LTD
CUROIL NV
SEARIGHTS MARITIME SERVICES PRIVATE LTD.
DOLPHIN MARINE FUELS INC
SHELL MARINE PRODUCTS
GAZPROMNEFT MARINE BUNKER LTD
SOUTH AFRICAN BUNKERING & TRADING
INFINEUM UK LTD
STAATSOLIE MAATSCHAPPIJ SURINAME N.V.
JISKOOT LIMITED
TRANZIT DV
LUKOIL BENELUX B.V.
TSETAN CO. LTD.
LUKOIL BUNKER LTD
UNICOM HOLDING S.A
NAKHODKA-PORTBUNKER CO. LTD.
TSETAN CO. LTD.
NAYADA CO. LTD.
UNICOM HOLDING S.A
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World Bunkering SPRING 2012 issue Special Features: Traders Traders play a crucial role in today’s bunker industry. How do they see the future? In a time of considerable uncertainty we ask what are the strategies being employed by the big global players?
Fuel Quantity A year ago we reported on the progress of trials on Coriolis meters and the implications for the industry. Since then even higher prices a have made accurate quantity measurement and even hotter topic. Much further on are we now?
IT Our review looks at how information technology is affecting the way the bunker business works now, and the potential of IT to have a greater impact in the future.
Geographical Focus: Northern Europe Last year times were tough for Northern European suppliers. What effect has the region’s increasingly poor economic performance had? Meanwhile the enforcement of the requirements of North Sea and Baltic ECA sulphur caps and the EU alongside berth rules is becoming more stringent.
Indian Subcontinent We examine these four quite different markets. India’s economy has continued to grow on the basis of strong exports which have boosted throughput at the ports. We look at what this has meant for the Indian bunker suppliers. Sri Lanka’s new port of Hambantota is now in operation but the who should supply bunkers there has proved to be a controversial issue. In Pakistan we look at the situation following several changes in the supplier scene.
UAE & Saudi Arabia Our annual update of the UAE and Saudi markets comes just after the IMO global 3.5% sulphur content cap comes into force. Middle Eastern supplies have generally exceeded that level. How will suppliers and buyers respond?
Events Review We preview Asia Pacific Maritime to be held in Singapore in March and the International Bunker Conference which takes place in Oslo in April.
Russian Update News, Views and Analysis
Regular Features As well as our special features, we continue to carry a range of regular updates on: Industry News, Legal and Equipment, Environment, Testing, and Risk Management. The Spring Issue the focus will be on what happened at the Durban Climate Change conference. Will a Green Fund be set up and, if so, how much will shipping have to pay?.
DiARY
Looking ahead 1-2 December
14-16 March
Bunker Fuel Blending Technology & Economics
Asia Pacific Maritime
Singapore www.cconnection.org
01-02 February Optimising Bunker Management and Vessel Efficiency
London, UK www.wplgroup.com/aci/conferences/eumbf5.asp
08-11 February Shipping, Marine & Port World Expo 2012
Mumbai, India http://events.hellotrade.com/tradeshows/ shipping-marine-ports-world-expo/
20 February 18th IBIA Annual Dinner London - UK www.ibia.net
28 February – 2 March China Maritime Week Hong Kong www.bairdmaritime.com
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Singapore www.apmaritime.com
26-27 March Platts 3rd Annual European Bunker Fuel Conference
Amsterdam - Netherlands www.platts.com/ConferenceDetail/2012/ pc290/index
04-06 April SMM India
Mumbai, India http://www.biztradeshows.com/trade-events/ smm-india.html
18-20 April 33rd International Bunker Conference Oslo - Norway www.bi.no/ibc
18 -20 April Sea Japan 2012
Tokyo, Japan www.seajapan.ne.jp/en
World Bunkering Winter 2011
Let’S keeP thingS SiMPLe Volatile prices, uncertain delivery, and unreliable quality can quickly complicate your fuelling requirements. Across the world, our professionals are guided by a simple promise: to deliver quality fuels on time and in full – every time. For that additional assurance, our global team of customer service professionals and risk management experts are always at your disposal. At Shell, we work to keep bunkering simple for you. As it should be.
Shell Marine Products
ENErGY of GROWTH • • • •
High quality ISO 8217-2010 bunker fuel Quality control from oil refinery plant to end user Flexible prices Main Sea Ports of operations: Saint-Petersburg, Kaliningrad, Murmansk, Archangelsk, Novorossisk, Tuapse, Port Kavkaz, Nakhodka, Vladivostok, Vostochnyi and Sakhalin island • Main River Ports of operations: Saint-Petersburg, Yaroslavl, Kazan, Volgograd, Rostov-on-Don, Astrakhan, Azov, Ust-Kut, Nizhniy Novgorod • International ports: Tallin, Riga, Klaipeda, Rostok, Konstanca
GAZPROMNEFT MARINE BUNKER Ltd Saint Petersburg Office: Vasiliyevsky Island, 3rd line, 62A, Saint-Petersburg, Russia, 199178 Tel: +7 (812) 449 4970 Fax: +7 (812) 449 4971 E-mail: bunkers@spb.gazprom-neft.ru
Main Office: 14, Krzhyzhanovskogo street, Building 3, Moscow, Russia, 117218, Tel: +7 (495) 213 04 36 Fax: +7 (495) 213 04 37 E-mail: marinebunker@gazprom-neft.ru